THE OFFER AND RELATED TRANSACTIONS

rStar, its majority-stockholder Gilat, and Gilat To Home Latin America (Holland) N.V., a subsidiary of Gilat ("GTH Latin America"), entered into an acquisition agreement pursuant to which, among other things, rStar agreed to make an offer to exchange up to 6,315,789 shares of rStar common stock, for cash and Gilat ordinary shares. rStar currently does not own any Gilat ordinary shares. Gilat granted rStar an option to purchase up to 466,105 Gilat ordinary shares that are being offered to rStar stockholders in exchange for shares of rStar common stock validly tendered and not properly withdrawn. Under the option, in consideration for providing rStar with the Gilat ordinary shares for the offer, Gilat will receive that number of shares of rStar common stock equal to 60% of the number of shares of rStar common stock validly tendered and not properly withdrawn in the offer. Therefore, if 6,315,789 shares of rStar common stock are validly tendered and not properly withdrawn, Gilat will be entitled to receive 3,789,473 shares of rStar common stock under the option. rStar intends to exercise this option upon the closing of the offer. From its existing cash reserves, rStar will fund the cash consideration, up to $6,000,000, offered in exchange for shares of rStar common stock validly tendered and not properly withdrawn.

The acquisition agreement also provides that rStar will acquire all of the outstanding capital stock of StarBand Latin America (Holland) B.V. ("StarBand Latin America"), a wholly-owned subsidiary of GTH Latin America, in exchange for 43,103,448 shares of rStar common stock. rStar's acquisition of StarBand Latin America is referred to as the "Acquisition" in this offer to exchange/prospectus. Under the acquisition agreement, GTH Latin America has the right to assign all or part of these shares of rStar common stock to Gilat, its affiliates or to StarBand Communications, Inc. ("StarBand US"). Gilat has reached an agreement in principle with StarBand US, pursuant to which StarBand US will be entitled to receive, upon closing of the Acquisition and subject to other conditions, that number of shares of rStar common stock equal to 15% of the total number of shares of rStar common stock that will be outstanding following consummation of the Acquisition and the offer (or approximately 15,600,000 shares of rStar common stock, assuming that the maximum number of shares of rStar common stock are tendered in the offer) from the 43,103,448 shares of rStar common stock that GTH Latin America would otherwise have received in connection with the Acquisition. For more information regarding the Acquisition, see "The Acquisition Agreement -- The Acquisition."

The completion of the offer is subject to, among other things, the closing of the Acquisition.

For purposes of this offer to exchange/prospectus, the capitalized term "Transactions" means, collectively, the offer and the Acquisition.

THE COMPANIES

GILAT SATELLITE NETWORKS LTD.

Gilat, a corporation formed under the laws of Israel, was incorporated in 1987. The principal executive office of Gilat is located at 21/D Yegia Kapayim Street, Daniv Park, Kiryat Arye, Petah Tikva, Israel and its phone number is
(972) 3-925-2000.

Gilat, with its global subsidiaries, is a leading provider of telecommunications solutions based on VSAT (very small aperture technology) satellite network technology. Gilat provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and markets interactive broadband data services. Gilat is also a joint venture partner with EchoStar Communications Corporation, Microsoft Network LLC and ING Furman Selz Investors, in StarBand US, America's first

consumer, always-on, nationwide, two-way, high-speed satellite Internet service provider. For more information on Gilat, see "Certain Information Regarding Gilat" beginning on page .

RSTAR CORPORATION

rStar is a Delaware corporation, headquartered in San Ramon, California. rStar was founded in June 1997 and until March 2001, operated under the name ZapMe! Corporation. rStar develops, provides and manages satellite-based networks for large-scale deployment across user communities of interest. rStar's core products include remote high-speed Internet access, data delivery, high-quality video and networking services distributed through its satellite broadband Internet gateway and bi-directional solutions. rStar's technology assures instantaneous, consistent, secure and reliable delivery of content within the rStar network.

rStar is headquartered at 3000 Executive Parkway, Suite 150, San Ramon, California 94583 and its phone number is (925)543-0300.

OPINION OF CIBC WORLD MARKETS CORP. (SEE PAGE )

In connection with its evaluation of the offer, a special committee consisting of independent directors of rStar received a written opinion from CIBC World Markets Corp. as to the fairness, from a financial point of view, to the holders of rStar common stock, other than Gilat and its affiliates, of the consideration to be received in the offer by such holders. The full text of CIBC World Markets' written opinion dated September 7, 2001 is attached as Annex B to this offer to exchange/prospectus. You are encouraged to read this opinion carefully in its entirety for a description of the assumptions made, matters considered and limitations on the review undertaken.

CIBC WORLD MARKETS' OPINION IS ADDRESSED TO THE SPECIAL COMMITTEE OF RSTAR'S BOARD OF DIRECTORS AND RELATES ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE CONSIDERATION PROVIDED FOR IN THE OFFER. THE OPINION DOES NOT ADDRESS ANY OTHER ASPECT OF THE OFFER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER SHARES IN THE OFFER OR AS TO ANY OTHER MATTERS RELATING TO THE OFFER OR RELATED TRANSACTIONS.

THE OFFER

Attached to this offer to exchange/prospectus as Annex A is the acquisition agreement governing the offer and related transactions. You are encouraged to read this agreement because it is the legal document that covers the Transactions.

Summary of the Offer

rStar is offering, upon the terms and conditions set forth in this offer to exchange/prospectus and the related Letter of Transmittal, $0.95, net to the seller in cash, and 0.0738 of a Gilat ordinary share, for each outstanding share of rStar common stock that is validly tendered prior to the expiration of the offer, and not properly withdrawn, up to a maximum of 6,315,789 shares, subject to the proration provisions described in this offer to exchange/prospectus. Gilat and its corporate affiliates have agreed not to tender any of their shares of rStar common stock in the offer. You will not receive any interest on any cash that rStar pays you, even if there is a delay in making the exchange.

rStar will not deliver any fractional Gilat ordinary shares in connection with the offer. rStar stockholders whose shares are accepted in the offer will instead receive cash for any fractional Gilat ordinary share they would otherwise be entitled to receive.

Material Conditions to the Offer (see page )

rStar shall complete the offer only if specific conditions are satisfied or, in some cases waived, including the following:

- rStar stockholders must have approved the acquisition agreement and the transactions described in the acquisition agreement;

- Gilat's registration statement, of which this offer to exchange/prospectus is a part, must have been declared effective by the SEC;

- rStar and Gilat must have completed the Acquisition;

- the acquisition agreement must not have been terminated in accordance with its terms; and

- the absence of any law, court order or regulatory action seeking to delay or prohibit the offer.

For more information on conditions to the offer, see "The Offer -- Conditions to the Offer."

rStar also reserves its right (subject to Gilat's prior consent and the other terms of the acquisition agreement) to waive any condition (other than the conditions relating to the absence of a law, court order or regulatory action seeking to delay or prohibit the offer, and the effectiveness of the registration statement for the Gilat ordinary shares to be issued in the offer) by giving oral or written notice of any waiver to the exchange agent and by making a public announcement.

Timing of the Offer

The offer is currently scheduled to expire at 12:00 midnight, New York City time, on November [ ], 2001, subject to the satisfaction or waiver of the conditions to the offer.

Extension, Termination and Amendment (see page )

rStar expressly reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement), at any time or from time to time, to extend the period of time during which the offer remains open, and can do so by giving oral or written notice of the extension to the exchange agent. If a decision is made to extend the offer, rStar will make an announcement to that effect no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During an extension, all shares of rStar common stock previously tendered and not properly withdrawn will remain subject to the offer, subject to your right to withdraw your shares of rStar common stock. You should read the discussion under the caption "The Offer -- Withdrawal Rights" for more details.

Subject to the SEC's applicable rules and regulations, rStar also reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) at any time or from time to time, to delay acceptance for exchange of any shares of rStar common stock pursuant to the offer or to terminate the offer and not accept for exchange or exchange any shares of rStar common stock not previously accepted for exchange or exchanged, upon the failure of any of the conditions of the offer to be satisfied.

If the registration statement, of which this offer to exchange/prospectus is a part, has not been declared effective at the initial expiration of the offer, rStar (subject to Gilat's prior consent and the other terms of the acquisition agreement) intends to extend the offer and announce the extension via the PR Newswire no later than 9:00 a.m., New York City time, on [ ], 2001.

Subject to applicable SEC rules and regulations law, rStar further reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) and regardless of whether any of the events described in "The Offer -- Conditions to the Offer" have occurred or are deemed by rStar to have occurred, to amend the offer in any respect (including, without limitation, by decreasing or increasing the consideration offered in the offer or by decreasing or increasing the number of shares being sought in the offer). Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later

than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced expiration date of the offer.

For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or a U.S. Federal holiday and consists of the time period from 12:01 am through 12:00 midnight, New York City time.

Any public announcement made pursuant to the offer will be disseminated promptly to stockholders in a manner reasonably designed to inform stockholders of any extension, termination, delay or amendment. Without limiting the manner in which rStar may choose to make a public announcement, except as required by applicable law (including Rules 13(e)-4(d)(2) and 13e-4(e)(3) under the Exchange Act which require that any material change in the information published, sent or given to the stockholders in connection with the offer be promptly sent to stockholders in a manner reasonably calculated to inform stockholders of the change), rStar will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a press release to the PR Newswire or comparable service.

Exchange of Shares of rStar Common Stock and Delivery of the Consideration

(see page )

Upon the terms and subject to the conditions to the offer, including the terms and conditions of any extension, delay or amendment, rStar will accept for exchange, and will exchange, shares of rStar common stock validly tendered and not properly withdrawn as promptly as practicable after the expiration date. However, if the offer is oversubscribed, as expected, rStar will exchange shares of rStar common stock on a pro rata basis. This means that rStar will purchase from each tendering stockholder the number of shares validly tendered and not withdrawn by such stockholder multiplied by a proration factor. Because of the difficulty in determining the number of shares validly tendered and not withdrawn, rStar does not expect to announce the final proration factor or accept shares pursuant to the offer until approximately seven Nasdaq National Market trading days after the expiration of the offer.

Withdrawal Rights (see page )

Your tender of shares of rStar common stock pursuant to the offer is irrevocable, except that shares of rStar common stock tendered pursuant to the offer may be properly withdrawn at any time prior to the expiration date of the offer and, unless rStar previously accepted them for exchange pursuant to the offer, may also be withdrawn at any time after [ ], 2001.

Procedure for Tendering Shares of rStar Common Stock (see page )

For you to validly tender your shares of rStar common stock pursuant to the offer you should do one of the following:

- if you hold your shares in your own name, you must deliver your share certificate(s) and a properly completed and duly executed Letter of Transmittal to the exchange agent for the offer, at one of the addresses appearing on the back cover page of this offer to exchange/prospectus prior to the expiration of the offer; or

- if you hold your shares in "street name" through a broker, you may direct your broker to tender your shares through the book-entry transfer procedures of The Depositary Trust Company. The exchange agent must receive a confirmation of receipt of your shares of rStar common stock by book-entry transfer and a properly completed and duly executed Letter of Transmittal; or

- if your stock certificates are not immediately available or you cannot comply with the book-entry transfer procedure before the expiration date, you must comply with the guaranteed delivery procedures outlined in "The Offer -- Procedure for Tendering Shares of rStar Common Stock -- Guaranteed Delivery."

For more information on how to tender your shares in the offer, please see "The Offer -- Procedure for Tendering Shares of rStar Common Stock."

RISK FACTORS (SEE PAGE )

In deciding whether to tender your shares of rStar common stock pursuant to the offer, you should carefully read this offer to exchange/prospectus and the documents to which rStar and Gilat refer you. You should also carefully consider the risk factors discussed under the captions "Risk Factors -- Risks Related to the Offer" and "Risk Factors -- Risks Related to Gilat."

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE )

Generally, the receipt of Gilat ordinary shares and cash in exchange for your shares of rStar common stock will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under state, local or foreign income or other tax laws. Also, if you do not complete and sign the Substitute Form W-9 included with the Letter of Transmittal you may be subject to "backup withholding" of U.S. federal income tax.

TAX MATTERS ARE VERY COMPLICATED. THE TAX CONSEQUENCES OF THE OFFER TO YOU WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR FOR A FULL UNDERSTANDING OF THE TAX CONSEQUENCES OF THE OFFER TO YOU.

For more information concerning the U.S. federal income tax consequences to U.S. holders resulting from the offer, see "Taxation."

REGULATORY MATTERS

Other than the SEC declaring effective Gilat's registration statement of which this offer to exchange/ prospectus is a part, neither rStar nor Gilat believes that any additional material governmental filings are required with respect to the offer.

ACCOUNTING TREATMENT (SEE PAGE )

Gilat will account for the Transactions as a purchase of an additional interest in rStar for financial reporting purposes.

COMPARATIVE RIGHTS OF STOCKHOLDERS OF RSTAR AND GILAT (SEE PAGE )

Gilat ordinary shares are being offered along with cash for your shares of rStar common stock tendered pursuant to the offer. Because rStar is a corporation organized under the laws of Delaware and Gilat is a corporation organized under the laws of Israel, there are differences between the rights of rStar stockholders and the rights of Gilat stockholders.

BACKGROUND OF THE OFFER AND RELATED TRANSACTIONS

PAST CONTACTS BETWEEN RSTAR AND GILAT

rStar was founded in June 1997 and completed its initial public offering in October 1999. On March 19, 2001, it changed its name to rStar Corporation from ZapMe! Corporation.

In 1998, rStar began to purchase VSAT (very small aperture terminal) data communications equipment (including satellite uplink equipment and satellite receiver cards) from Gilat. In 1999, the parties expanded their business relationship to cover purchase of services and equipment from Spacenet. In December 1998 and February 1999, Gilat purchased 548,648 shares of rStar common stock in privately negotiated transactions for $5.00 per share.

On June 11, 1999, rStar and Spacenet entered into a service agreement whereby Spacenet was to provide rStar with equipment, installation, maintenance and space segment for a fixed fee per school installment. The service agreement provided for a minimum of 500 school sites to be installed within 3-months of the effective date, a minimum 3-year service term per site, and a fixed monthly fee per site. Commencing in July 1999, Spacenet began installing and leasing satellite equipment, as well as providing the space segment and operation and maintenance services under the service agreement. The service agreement was amended in July 1999 to adjust pricing, and amended and restated in September 1999, to expand Spacenet's responsibilities to provide a complete end-to-end, two way broadband solution and to increase the minimum number of sites to 2,000.

Sales to rStar by Gilat and its affiliates amounted to $447,000 in 1998, $35,812,192 in 1999 and $26,742,000 in 2000. Gilat provided financing terms for a portion of these sales. Such financing obligations were included in rStar's financial statements as capital lease obligations.

In 1999, rStar provided advertisement services to Spacenet for which Spacenet paid a total of $360,000. On December 30, 1999, Gilat and rStar entered into an agreement for advertising and consulting services for Gilat and its subsidiaries. The services under this agreement were substantially geared to

provide information to assist Gilat in the launch of new satellite-to-home services to be offered by StarBand US. rStar provided a beta test network for new product features and development concepts, and StarBand US paid for the costs of these services.

Yoel Gat, a co-founder of Gilat, its Chairman and CEO, was a director of rStar from June 1999 through October 1999. On October 15, 1999, Mr. Gat resigned from rStar's Board of Directors, but Gilat retained observer rights on the Board of Directors, which give Gilat's designee the opportunity to participate in most Board of Directors discussions.

In February 2000, Spacenet began discussions with rStar regarding technical support of key vertical enterprise markets of interest to Spacenet. Spacenet informed rStar of its intent to build web-based networks for vertical market segments, combining Gilat's satellite technology with a customized browser to enable e-commerce transactions between small to medium-sized businesses and their suppliers.

Spacenet provided rStar with specifications for the development of a demonstration system for presentation to potential supplier partners and users. Beginning on April 3, 2000, rStar attended a series of business development meetings sponsored by Spacenet. In the course of these meetings, Spacenet presented its service concept to key suppliers in the food service, automotive repair and pharmacy market segments, and collected market research regarding applications and other technical requirements necessary for these vertical markets.

In June 2000, Spacenet delivered to rStar a specification for a customized browser for technical support of Spacenet's vertical initiatives. The parties agreed that rStar would be compensated for its technology, based on a revenue share model, to be negotiated prior to conclusion of the first vertical initiative transaction, which has not yet occurred.

As a consequence of and during the above activities, Gilat developed a strong interest to acquire rStar's infrastructure in order to accelerate vertical market initiatives.

In June 2000, rStar began discussing with Gilat potential changes in its traditional education business and the ability to reposition rStar with a focus on the vertical opportunities in an effort to improve its financial performance. On July 11, 2000, Yoel Gat met with Lance Mortensen and Rick Inatome, at that time rStar's Chairman and CEO, respectively, to discuss the potential acquisition of all or part of rStar by Gilat.

From July 2000 through September 2000, representatives of Gilat and rStar discussed and reviewed several proposed transactions for Gilat's investment in, or acquisition of, rStar.

On September 27, 2000, rStar and Gilat decided to effect the transaction by way of a tender offer to acquire 51% of the capital stock of rStar, subject to
(i) final agreement on pricing and other terms, (ii) approval of the contemplated transaction by the Boards of Directors of rStar and Gilat, and
(iii) other customary matters.

In October 2000, rStar announced a shift of its business focus and resources to implement and manage industry-specific private networks for businesses to communicate with their vendors and customers via bi-directional satellite-delivered Internet connections. Prior to that announcement, rStar's principal focus was building an advertiser-supported network serving the educational market.

For some time, the Board of Directors and management of rStar have evaluated entering into strategic relationships and considered strategic acquisitions of companies with complimentary businesses and technologies. Since announcing its exit from the school-based model, rStar has focused on exploring a number of potential relationships with its corporate partners, including developer relationships and potential equity investments by Gilat.

On October 3, 2000, rStar, Gilat and certain principal stockholders of rStar entered into a tender offer agreement pursuant to which Gilat would make a cash tender offer to purchase (at a price of $2.32 per share) up to the number of outstanding shares of rStar common stock, which together with the shares that Gilat beneficially owned, would constitute 51% of the outstanding shares of rStar common stock. Also,

under the tender offer agreement, certain principal stockholders granted Gilat an option to purchase their shares of rStar common stock, at an option price of $2.32 per share, to the extent necessary to provide Gilat with beneficial ownership of 51% of the outstanding shares of rStar common stock if less than 51% of the outstanding shares of rStar common stock were tendered in the cash tender offer. Gilat and rStar issued a joint press release announcing the cash tender offer.

On October 17, 2000, Gilat commenced its cash tender offer.

On November 27, 2000, Gilat accepted for payment, and paid for, 16,793,752 shares tendered in its cash tender offer. Such shares represented approximately 38% of the outstanding shares of rStar common stock.

NEGOTIATIONS BETWEEN RSTAR AND GILAT

On December 6, 2000, as contemplated by the tender offer agreement and by a letter agreement, dated December 6, 2000, between Gilat and certain principal stockholders of rStar, Gilat exercised its option, in part, to purchase 4,196,550 shares of rStar common stock.

On December 19, 2000, December 20, 2000, and January 9, 2001, Messrs. Mortensen and Gat met and held conference calls regarding, among other matters, the potential acquisition by rStar of a portion of Gilat's operations in Latin America. Among other concepts, the parties discussed the possibility of consolidating portions of Gilat's operations in Latin America into a Gilat subsidiary that would be acquired by rStar.

On January 5, 2001, Gilat exercised the remainder of its option, and purchased 879,141 shares of rStar common stock from certain principal stockholders of rStar, as contemplated by the tender offer agreement and the letter agreement. As a result of the shares purchased in the cash tender offer and pursuant to the option, Gilat beneficially owned approximately 51% of the outstanding shares of rStar common stock.

On January 10, 2001, Lance Mortensen met with Yoel Gat and Amiel Samuels, Vice-President, Broadband Networks of Gilat, and discussed rStar's school business, the status of its vertical networks, and Gilat's operations in Latin America.

On February 8, 2001, Messrs. Mortensen and Gat met and discussed in further detail the potential for rStar's acquisition of the StarBand Latin America business and the possible structure such deal would take.

On February 16, 2001, Mr. Mortensen visited the offices of Gilat Latin America Inc. in Sunrise, Florida and met with senior officers involved in the daily operations and management of Gilat's business activities in Latin America. At the meeting, the parties discussed information with respect to the business model and operations of the StarBand Latin America business, including the risks associated with the economic and political environment in Latin America, the structure of the proposed transactions and the manner by which Gilat would contribute various assets to the newly-formed entity.

From late February through the end of March 2001, Messrs. Mortensen and Samuels held nearly daily conference calls to discuss the potential structure and terms of the proposed acquisition of the StarBand Latin America business.

On March 1, 2001, Mr. Mortensen and Michael Arnouse, a director of rStar, met with the financial advisor for Gilat and senior officers of the StarBand Latin America business. During the meeting, Gilat's financial advisor and senior officers of the StarBand Latin America business conducted a presentation at which information with respect to the proposed StarBand Latin America business was distributed and discussed, including the current Gilat operations in Latin America, the risks involved in implementing and providing new technologies in Latin America, the growth strategy and the projected growth of the StarBand Latin America business. The parties discussed the manner in which StarBand Latin America would be formed including the expected contribution by Gilat and its affiliates of rights to (i) implement, operate and market broadband Internet access services and voice services to consumers and small

office/home office subscribers across Latin America, and (ii) provide in Latin America a bundled product with direct-to-home television service using a single satellite dish. The parties also discussed Gilat's ongoing commitment to StarBand Latin America to provide in Latin America such new technologies and products as Gilat develops and makes available to its affiliates in the United States, including StarBand US.

The parties explored the possibility of increasing stockholder value by undertaking a tender offer for a portion of the outstanding rStar common stock. The parties noted the market price of the rStar common stock and considered whether it would be a prudent use of rStar's financial resources to buy back a portion of the outstanding rStar common stock. The parties discussed the possibility of Gilat participating in the offer.

Following the meeting, Messrs. Mortensen and Arnouse recommended to rStar's Board of Directors that rStar continue discussions and due diligence regarding the proposed acquisition of the StarBand Latin America business.

Throughout March 2001, representatives of rStar held several conference calls with representatives of Gilat and its financial advisor to further review, among other things, the business model and the valuation analysis of the StarBand Latin America business.

On March 21, 2001, Messrs. Mortensen and Gat held a conference call and agreed that formal discussions should begin with respect to rStar's acquisition of StarBand Latin America. They decided to consider, in connection with the proposed acquisition of the StarBand Latin America business by rStar, satisfaction of rStar's outstanding capital lease obligation and other accrued liabilities to Spacenet with rStar common stock. Messrs. Mortensen and Gat discussed the general parameters of the proposed transactions, including possible price ranges. They agreed to further discuss the proposed transactions and the acquisition of StarBand Latin America by rStar.

On or about March 28, 2001, officers and counsel of Gilat and representatives of rStar met to discuss the proposed transactions. rStar and Gilat agreed to a non-binding term sheet outlining a series of transactions, including (i) the proposed issuance of rStar common stock to Gilat in exchange for the cancellation of all or a portion of rStar's outstanding indebtedness to Spacenet; (ii) rStar's acquisition of the StarBand Latin America business, and
(iii) the offer.

On April 2, 2001, counsel to Gilat provided counsel to rStar with a proposed draft original acquisition agreement.

On April 4, 2001, the rStar's Board of Directors formed a special committee comprised of Messrs. Appleby and Arnouse, independent directors (the "Special Committee"), to consider the proposed transactions.

Between April 4 and April 5, 2001, representatives of rStar, Gilat and their respective counsel met frequently with each other to discuss and negotiate numerous aspects of the proposed transactions. At this time, the Special Committee retained CIBC World Markets to evaluate the fairness, from a financial point of view, of the aggregate consideration to be provided for in the offer and related transactions.

On April 7, 2001, the Special Committee and Mr. Mortensen discussed with CIBC World Markets the StarBand Latin America business and preliminary matters relating to the proposed transactions.

On April 10, 2001, Mr. Appleby, representing the Special Committee, and Mr. Mortensen held a conference call with representatives of Gilat regarding the structure of the proposed transactions and the terms of a definitive original acquisition agreement. On the same day, the Special Committee and CIBC World Markets discussed due diligence and other matters relating to StarBand Latin America and the proposed transactions.

On April 15, 2001, Messrs. Mortensen and Gat held further discussions about the proposed transactions.

On April 18, 2001, the Special Committee and the respective officers and counsel of rStar and Gilat met to continue drafting a definitive original acquisition agreement. rStar's counsel advised the Special Committee and Mr. Mortensen of their fiduciary obligations in considering the proposed transactions and reviewed with the full Board of Directors the terms of the proposed transactions and the status of the negotiations.

On April 19, 2001, the Special Committee reviewed, considered, and further evaluated StarBand Latin America, Gilat and the proposed transactions, along with the related documents and agreements relating to the proposed transactions. Also at this meeting, CIBC World Markets reviewed with the Special Committee its financial analysis of the aggregate consideration to be provided for in the offer and related transactions.

On April 22, 2001, the Special Committee again convened telephonically to consider the proposed transactions. Mr. Mortensen, rStar's legal counsel and CIBC World Markets participated in the telephonic meeting. rStar's legal counsel reviewed with the Special Committee the terms of the proposed transactions. Also at this meeting, CIBC World Markets delivered to the Special Committee its oral opinion, which opinion was confirmed by delivery of a written opinion dated April 23, 2001, the date of the original acquisition agreement, as to the fairness, from a financial point of view, of the aggregate consideration provided for in the offer and related transactions. At the conclusion of the meeting, the Special Committee unanimously approved the proposed transactions and recommended the proposed transactions to the Board of Directors. Thereafter, the entire Board of Directors convened a meeting and discussed the recommendations of the Special Committee. After a review and discussion of the terms of the proposed transactions, and discussions regarding the financial and other effects of the proposed transactions on rStar and its stockholders, the Board of Directors approved the proposed transactions and authorized the officers of rStar to finalize and execute the original acquisition agreement and any other related documents.

On April 23, 2001, rStar, Gilat and GTH Latin America executed and delivered the definitive original acquisition agreement, and rStar and Gilat issued a joint press release announcing the proposed transactions.

On May 21, 2001, pursuant to the original acquisition agreement, rStar satisfied its outstanding capital lease and other accrued obligations to Spacenet through the issuance of 19,396,552 shares of rStar common stock to an affiliate of Spacenet, Gilat Satellite Networks (Holland) B.V. The total present value of rStar's capital lease and other accrued liabilities owed to Spacenet was approximately $45 million. This debt for equity swap transaction between rStar and Spacenet is referred to in this offer to exchange/prospectus as the "Spacenet Transaction." Following the completion of the Spacenet Transaction, Amiel Samuels and Sasson Darwish were appointed to rStar's Board of Directors.

Between July 22, 2001 and July 31, 2001, representatives of rStar, Gilat and GTH Latin America held numerous telephone conferences to discuss the status of the StarBand Latin America business, due diligence matters and the manner in which StarBand Latin America would operate after the closing of the Acquisition. The parties also discussed various business opportunities, including Gilat's operations in Mexico. At that time, Gilat requested that the terms of the Acquisition be modified so that StarBand Latin America's right to conduct its business in Mexico would be non-exclusive rather than exclusive.

Further, Gilat requested that, in connection with the offer, rStar increase the consideration paid by it to Gilat upon the exercise of the option from nominal consideration to shares of rStar common stock. After numerous conference calls, the parties decided to amend the original acquisition agreement and the terms of the offer to: (i) reflect that StarBand Latin America will have non-exclusive rights to provide telephony and Internet access services to consumers and small office/home office subscribers in Mexico, (ii) increase the maximum number of shares that may be tendered in the offer to 6,315,789 shares of rStar common stock, (iii) provide for a special cash distribution payable to rStar stockholders of record as of a certain date in the event that the StarBand Latin America business fails to meet certain net income targets, (iv) provide that Gilat will guarantee rStar's obligation to make the special cash distribution (if any) in the event that rStar is unable to fulfill its obligation, (v) provide that Gilat will be entitled to additional shares of rStar common stock consideration in the event that the StarBand Latin America

business exceeds certain net income targets and (vi) increase the consideration that Gilat will receive in exchange for providing rStar with the Gilat ordinary shares for the offer under the option.

On July 31, 2001, Mr. Mortensen reported the status of his discussions with Gilat to Messrs. Arnouse and Appleby, the members of the Special Committee. The parties discussed the revised terms of the Acquisition, the offer and the option including, the impact the proposed changes would have to the non-Gilat shareholders.

From early July through the end of August, representatives of rStar, Gilat and their respective counsel held frequent telephonic conferences to discuss and negotiate numerous aspects of the proposed revisions to the Acquisition and the offer, including exchanging drafts of revisions to the original acquisition agreement, the master agreement, rStar's Certificate of Incorporation and the option. The "master agreement" refers to the form of master agreement attached as an exhibit to the acquisition agreement concerning the services and supply arrangement between GTH Latin America, Gilat and Gilat To Home Latin America, Inc., a subsidiary of Gilat.

On September 7, 2001, the Special Committee convened telephonically to consider the revised terms of the Transactions contained in the acquisition agreement. Mr. Mortensen, rStar's legal counsel and CIBC World Markets participated in the telephonic meeting. rStar's legal counsel reviewed the revised terms of the Transactions. CIBC World Markets delivered to the Special Committee its oral opinion, which opinion was confirmed by delivery of a written opinion dated September 7, 2001, the date of the acquisition agreement, to the effect that, as of that date and based on and subject to the matters described in its opinion, the consideration to be received by the holders of rStar common stock, other than Gilat and its affiliates, in the offer was fair, from a financial point of view, to such holders. At the conclusion of the meeting, the Special Committee unanimously approved the Transactions and recommended the Transactions to the Board of Directors. Thereafter, the Board of Directors convened a meeting and discussed the recommendations of the Special Committee. After a review and discussion of the terms of the proposed Transactions, and discussions regarding the financial and other effects of the proposed Transactions on rStar and its stockholders, the Board of Directors approved the proposed Transactions and authorized the officers of rStar to finalize and execute the acquisition agreement and any other related documents.

On September 7, 2001, rStar, Gilat and GTH Latin America executed and delivered the definitive acquisition agreement and on September 10, 2001 rStar and Gilat issued a joint press release announcing the revised terms of the Transactions.

REASONS FOR THE OFFER AND THE RELATED TRANSACTIONS

REASONS FOR GILAT'S BOARD RECOMMENDATION; FACTORS CONSIDERED

In approving the acquisition agreement, the offer, the Acquisition, and the other transactions described in the acquisition agreement, Gilat's Board of Directors considered a number of factors.

In its evaluation, Gilat's Board of Directors considered several potential benefits of the acquisition agreement, the most important of which included the following:

- the Acquisition would provide an opportunity to obtain funding for Gilat's initial business plan for StarBand Latin America;

- the Acquisition would provide an opportunity for Gilat to expand its presence in the Latin American consumer and small office/home office markets for telephony and high-speed Internet access services more quickly than Gilat would likely achieve on its own due to rStar's funding of the initial business plan for StarBand Latin America and rStar's existing broadband technology;

- the Acquisition and the offer would enable Gilat to develop more fully the potential synergies between rStar and other Gilat subsidiaries and achieve a more consistent business organization among Gilat's various businesses worldwide; and

- the Spacenet Transaction would allow Gilat's wholly-owned subsidiary, Spacenet, to obtain satisfaction of rStar's outstanding capital lease and other accrued obligations.

Gilat's Board of Directors consulted with senior management, as well as its legal counsel and financial advisors, in reaching its decision.

In its evaluation of the acquisition agreement, Gilat's Board of Directors reviewed several other factors, including, but not limited to, the following:

- historical information concerning Gilat's and rStar's respective businesses, financial performance and condition, operations, technology and management;

- the view of Gilat's management of the financial condition, results of operations and businesses of Gilat and rStar before and after giving effect to the Acquisition, the offer, as well as the Spacenet Transaction, and the determination of these transactions' collective effect on Gilat's and rStar's stockholder value;

- current financial market conditions and historical market prices, volatility and trading information;

- the consideration rStar stockholders will receive in the offer;

- the consideration that Gilat will receive under the option;

- the belief by Gilat's senior management that the terms of the acquisition agreement are reasonable; and

- the potential impact of the acquisition and offer on Gilat's and rStar's customers and employees.

Gilat's Board of Directors also considered the risk factors set forth under "Risk Factors -- Risks Related to the Offer."

The foregoing discussion of the information and factors considered by Gilat's Board of Directors is not intended to be exhaustive, but includes the material factors it considered. In view of the variety of factors considered in connection with its evaluation of the transaction, Gilat's Board of Directors did not find it practicable to, and did not quantify or otherwise assign relative weight to, the specific factors considered in reaching its determination. In addition, individual directors may have given differing weights to different factors. After weighing all of the different factors, Gilat's Board of Directors approved the acquisition agreement and the other transactions contemplated by the acquisition agreement.

REASONS FOR RSTAR'S BOARD APPROVAL; FACTORS CONSIDERED

rStar entered into the proposed transactions, specifically the Acquisition, to acquire an operating business in the satellite-based telephony and Internet access services industry in Latin America. rStar's Board of Directors and the Special Committee determined that following the consummation of the proposed transactions, rStar would have the potential to realize long-term improved operating results and a stronger competitive position. The Board of Directors and the Special Committee have approved the acquisition agreement and the proposed transactions contemplated thereby and have identified several potential benefits from the proposed transactions that should contribute to the success of rStar and create better value for its stockholders. The Board of Directors and the Special Committee believe that the StarBand Latin America business, along with the contributions made to StarBand Latin America by Gilat and certain of its affiliates including GTH Latin America, will enable rStar to enter into a market that has a great deal of potential and will provide rStar with many benefits including:

- the opportunity to accelerate the development of new product initiatives;

- increased capacity across the entire organization through the addition of approximately 90 experienced StarBand Latin America employees;

- Gilat's experience in the development of voice and data services and its existing relationships with Latin American partners;

- the likelihood of realizing superior benefits through the expansion into the growing Latin American Internet market;

- the expectation that the Acquisition would yield a stronger management team for rStar;

- information concerning the existing StarBand Latin America business, historical performance and operations and competitive position; and

- increased liquidity due to the reduced outstanding debt obligations of rStar as a result of the conversion of the capital lease liability into rStar common stock.

In connection with its deliberations, the Board of Directors and the Special Committee reviewed a number of additional positive factors relevant to the proposed transactions. The material factors include:

- the Board of Directors' belief that the exchange ratios in the acquisition agreement and other related proposed transactions are favorable given the recent trading prices of rStar common stock;

- the high likelihood that the Transactions would be consummated, in light of the fact that the offer and the Acquisition are not subject to any financing contingency;

- diversification of technologies and product portfolio offerings that would result from the Acquisition;

- access to greater financial resources allowing rStar to develop a greater range of products;

- the opportunity the offer affords rStar's stockholders to reduce their exposure to the risks associated with the uncertainty of implementing a new business plan;

- the difficulties in competing against larger companies with greater financial resources;

- the financial protection to be afforded to rStar stockholders (other than Gilat and its corporate affiliates) by the terms of the Special Distribution; and

- the opinion dated September 7, 2001 of CIBC World Markets addressed to the Special Committee as to the fairness, from a financial point of view, to the holders of rStar common stock, other than Gilat and its affiliates, of the consideration to be received in the offer, as more fully described below under the caption "Opinion of CIBC World Markets Corp."

The Board of Directors and the Special Committee also considered a variety of potentially negative factors in its deliberations concerning the proposed transactions including:

- the loss of control over the future operations of rStar due to the resignations of three current Board of Directors members and the President and Chief Executive Officer of rStar;

- the control that will be exerted by Gilat since its beneficial ownership of shares of rStar common stock would increase upon consummation of the Transactions to approximately 85% (subject to Gilat's assignment to StarBand US of approximately 15,600,000 shares of rStar common stock that GTH Latin America would have otherwise received in the Acquisition, as described in "Summary -- The Offer and Related Transactions");

- the risks associated with the expansion of rStar's operations into a new field and into the Latin American markets;

- the additional shares of rStar common stock which may be issued to Gilat under the acquisition agreement if the StarBand Latin America business exceeds its net income targets; and

- the risk that the benefits associated with the Transactions may not be achieved.

After reviewing these potentially negative factors, the Board of Directors and the Special Committee concluded that they were outweighed by the positive factors described above and accordingly determined that the proposed transactions were fair to, and in the best interests of rStar and its stockholders. The Board of Directors and the Special Committee also considered the actual and potential conflicts of interest described under the caption "Interests of Certain Persons in the Transactions." In view of the wide variety

of factors considered by the Board of Directors and the Special Committee, they did not find it practicable to quantify, or otherwise attempt to assign relative weights to, the specific factors considered in making their determination. Consequently, the Board of Directors and the Special Committee did not quantify the assumptions and results of their analysis in reaching their determination that the proposed transactions were fair to, and in the best interests of, rStar and its stockholders. In addition, it is possible that different members of the Board of Directors and the Special Committee assigned different weights to the various factors described above.

OPINION OF CIBC WORLD MARKETS CORP.

The Special Committee engaged CIBC World Markets to evaluate the fairness, from a financial point of view, of the consideration provided for in the offer. On September 7, 2001, at a telephonic meeting of the Special Committee held to evaluate the revised terms of the Transactions contained in the acquisition agreement, CIBC World Markets rendered to the Special Committee an oral opinion, which opinion was confirmed by delivery of a written opinion dated September 7, 2001, to the effect that, as of that date and based on and subject to the matters described in its opinion, the consideration to be received by holders of rStar common stock, other than Gilat and its affiliates, in the offer was fair, from a financial point of view, to such holders.

The full text of CIBC World Markets' written opinion dated September 7, 2001, which describes the assumptions made, matters considered and limitations on the review undertaken, is attached to this offer to exchange/prospectus as Annex B. CIBC WORLD MARKETS' OPINION IS ADDRESSED TO THE SPECIAL COMMITTEE AND RELATES ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE CONSIDERATION PROVIDED FOR IN THE OFFER. THE OPINION DOES NOT ADDRESS ANY OTHER ASPECT OF THE OFFER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER SHARES IN THE OFFER OR AS TO ANY OTHER MATTERS RELATING TO THE OFFER OR RELATED TRANSACTIONS. THE SUMMARY OF CIBC WORLD MARKETS' OPINION DESCRIBED BELOW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION. YOU ARE ENCOURAGED TO READ THE OPINION CAREFULLY IN ITS ENTIRETY.

In arriving at its opinion, CIBC World Markets:

- reviewed the acquisition agreement and related documents, including forms of the master agreement and the option agreement attached as exhibits to the acquisition agreement;

- reviewed audited financial statements of rStar and Gilat for the fiscal years ended December 31, 1998, December 31, 1999 and December 31, 2000;

- reviewed unaudited financial statements of rStar and Gilat for the six months ended June 30, 2001;

- reviewed financial forecasts and other information relating to rStar and StarBand Latin America provided to or discussed with CIBC World Markets by the managements of rStar and Gilat, and reviewed and discussed with the management of Gilat publicly available financial forecasts relating to Gilat;

- reviewed historical market prices and trading volumes for rStar common stock and Gilat ordinary shares;

- held discussions with rStar's and Gilat's senior managements and other representatives with respect to the businesses and prospects for future growth of rStar, Gilat and StarBand Latin America;

- reviewed and analyzed publicly available financial data for companies CIBC World Markets deemed comparable to rStar, Gilat and StarBand Latin America;

- performed discounted cash flow analyses of rStar, Gilat and StarBand Latin America using assumptions of future performance prepared or discussed with CIBC World Markets by rStar's and Gilat's managements;

- reviewed public information concerning rStar, Gilat and StarBand Latin America; and

- performed other analyses and reviewed and considered other information and factors, including the pro rata nature of the offer, as CIBC World Markets deemed appropriate.

In rendering the opinion, CIBC World Markets relied on and assumed, without independent verification or investigation, the accuracy and completeness of all of the financial and other information that rStar, Gilat and their employees, representatives and affiliates provided to or discussed with CIBC World Markets. With respect to the financial forecasts and other information relating to rStar and StarBand Latin America, which the managements of rStar and Gilat provided to or discussed with CIBC World Markets, CIBC World Markets assumed, at the direction of rStar's and Gilat's managements, without independent verification or investigation, that the forecasts and information were reasonably prepared on bases reflecting the best available information, estimates and judgments of rStar's and Gilat's managements as to the future financial condition and operating results of rStar and StarBand Latin America, as the case may be. With respect to publicly available financial forecasts relating to Gilat, which CIBC World Markets reviewed and discussed with Gilat's management, CIBC World Markets assumed, at the direction of Gilat's management, without independent verification or investigation, that the forecasts were prepared on bases reflecting reasonable estimates and judgments as to the future financial condition and operating results of Gilat. CIBC World Markets relied, at the direction of rStar's and Gilat's managements, without independent verification and investigation, on the assessments of rStar's and Gilat's managements as to StarBand Latin America's existing and future technology and products and the risks associated with its technology and products. CIBC World Markets assumed, with rStar's consent, that in the course of obtaining the necessary regulatory or third party approvals and consents for the Transactions, no delay, limitation, restriction or condition will be imposed that would have a material adverse effect on rStar or StarBand Latin America or the contemplated benefits to rStar of the Transactions. CIBC World Markets also assumed, with rStar's consent, that the Transactions and other transactions contemplated by the acquisition agreement and related documents will be consummated in all material respects in accordance with their terms, without waiver, modification or amendment of any material conditions or agreements.

CIBC World Markets did not make or obtain any independent evaluations or appraisals of the assets or liabilities, contingent or otherwise, of rStar, Gilat, StarBand Latin America or affiliated entities. CIBC World Markets expressed no opinion as to rStar's, Gilat's or StarBand Latin America's underlying valuation, future performance or long-term viability, or the prices at which rStar common stock or Gilat ordinary shares would trade upon or after announcement or consummation of the Transactions. CIBC World Markets did not express any view as to, and its opinion does not address, the underlying business decision of rStar to effect the Transactions. CIBC World Markets was not requested to consider the relative merits of the Transactions as compared to any alternative business strategies that might exist for rStar or the effect of any other transaction in which rStar might engage. In connection with CIBC World Markets' engagement, CIBC World Markets was not requested to, and CIBC World Markets did not, participate in the negotiation or structuring of the Transactions. CIBC World Markets' opinion was necessarily based on the information available to it and general economic, financial and stock market conditions and circumstances as they existed and could be evaluated by CIBC World Markets as of the date of its opinion. Although subsequent developments may affect its opinion, CIBC World Markets does not have any obligation to update, revise or reaffirm its opinion. The Special Committee imposed no other instructions or limitations on CIBC World Markets with respect to the investigations made or the procedures followed by CIBC World Markets in rendering its opinion.

This summary is not a complete description of CIBC World Markets' opinion to the Special Committee or the financial analyses performed and factors considered by CIBC World Markets in connection with its opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to summary description. CIBC World Markets believes that its analyses and this summary must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative

description of the analyses, could create a misleading or incomplete view of the processes underlying CIBC World Markets' analyses and opinion.

In performing its analyses, CIBC World Markets considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond rStar's, Gilat's and StarBand Latin America's control. No company, transaction or business used in the analyses as a comparison is identical to rStar, Gilat, StarBand Latin America or the Transactions, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed.

The estimates contained in CIBC World Markets' analysis and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of businesses or securities do not necessarily purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, CIBC World Markets' analyses and estimates are inherently subject to substantial uncertainty.

The type and amount of consideration payable in the Transactions was determined by rStar or through negotiation between rStar and Gilat and the decision to enter into the Transactions was solely that of the Special Committee. CIBC World Markets' opinion and financial analyses were only one of many factors considered by the Special Committee in its evaluation of the Transactions and should not be viewed as determinative of the views of the Special Committee or rStar's management with respect to the Transactions or the consideration provided for in the Transactions.

The following is a summary of the material financial analyses underlying CIBC World Markets' opinion to the Special Committee with respect to the offer.
THE FINANCIAL ANALYSES SUMMARIZED BELOW INCLUDE INFORMATION PRESENTED IN TABULAR FORMAT. IN ORDER TO FULLY UNDERSTAND CIBC WORLD MARKETS' FINANCIAL ANALYSES, THE TABLES MUST BE READ TOGETHER WITH THE TEXT OF EACH SUMMARY. THE TABLES ALONE DO NOT CONSTITUTE A COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES. CONSIDERING THE DATA IN THE TABLES BELOW WITHOUT CONSIDERING THE FULL NARRATIVE DESCRIPTION OF THE FINANCIAL ANALYSES, INCLUDING THE METHODOLOGIES AND ASSUMPTIONS UNDERLYING THE ANALYSES, COULD CREATE A MISLEADING OR INCOMPLETE VIEW OF CIBC WORLD MARKETS' FINANCIAL ANALYSES.

       eLEARNING                TRADITIONAL EDUCATION           OUTSOURCING/SYSTEMS INTEGRATION
       ---------                ---------------------           -------------------------------
- Centra Software, Inc.  - DeVry Inc.                         - eCollege.com
- Click2learn.com, Inc.  - ITT Educational Services, Inc.     - The Management Network Group, Inc.
- DigitalThink, Inc.     - Learning Tree International, Inc.  - Sapient Corporation
- Mentergy Ltd.          - Sylvan Learning Systems, Inc.
- SkillSoft Corporation

CIBC World Markets reviewed enterprise values, calculated as equity market value plus net debt, as multiples of calendar years 2001 and 2002 estimated revenues and earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA. CIBC World Markets also reviewed equity market values as a multiple of calendar years 2001 and 2002 estimated earnings per share, commonly referred to as EPS. All multiples were based on closing stock prices on September 5, 2001. Estimated financial data for the selected companies were based on publicly available research analysts' estimates and estimated financial data for rStar were based on internal estimates of rStar's management.

CIBC World Markets then applied a range of selected multiples of calendar years 2001 and 2002 estimated revenues, EBITDA and EPS derived from the selected companies to corresponding financial data of rStar in order to derive an implied equity reference range for rStar. This analysis indicated the following implied per share equity reference range for rStar, as compared to the implied value of the offer consideration based on the average closing price of Gilat ordinary shares for the 30-day period ended September 5, 2001:

IMPLIED EQUITY REFERENCE RANGE FOR RSTAR  IMPLIED OFFER CONSIDERATION
----------------------------------------  ---------------------------
        $0.77 - $0.85 per share                 $1.84 per share

Discounted Cash Flow Analysis. CIBC World Markets performed a discounted cash flow analysis of rStar to estimate the present value of the unlevered, after-tax free cash flows that rStar could generate for the second half of fiscal year 2001 through the end of fiscal year 2005, based on internal estimates of rStar's management. CIBC World Markets calculated a range of estimated terminal values by applying EBITDA terminal value multiples ranging from 8.0x to 10.0x to rStar's estimated EBITDA for fiscal year 2005. The present value of the estimated cash flows and terminal values were calculated using discount rates ranging from 16.0% to 20.0%. This analysis indicated the following implied per share equity reference range for rStar, as compared to the implied value of the offer consideration based on the average closing price of Gilat ordinary shares for the 30-day period ended September 5, 2001:

IMPLIED EQUITY REFERENCE RANGE FOR RSTAR  IMPLIED OFFER CONSIDERATION
----------------------------------------  ---------------------------
        $0.44 - $0.52 per share                 $1.84 per share

     VSAT COMPANIES       SATELLITE EQUIPMENT COMPANIES
     --------------       -----------------------------
- STM Wireless, Inc.      - Andrew Corporation
- ViaSat, Inc.            - EMS Technologies, Inc.
                          - Radyne Comstream Inc.

CIBC World Markets reviewed enterprise values as multiples of calendar years 2001 and 2002 estimated revenues and EBITDA. CIBC World Markets also reviewed equity market values as a multiple of calendar years 2001 and 2002 EPS. All multiples were based on closing stock prices on September 5, 2001. Estimated financial data for the selected companies and Gilat were based on publicly available research analysts' estimates.

CIBC World Markets then applied a range of selected multiples of estimated calendar years 2001 and 2002 revenues, EBITDA and EPS derived from the selected companies to corresponding financial data of Gilat in order to derive an implied equity reference range for Gilat. This analysis indicated the following implied per share equity reference range for Gilat, as compared to the closing price of Gilat ordinary shares on September 5, 2001:

IMPLIED EQUITY REFERENCE RANGE FOR GILAT  CLOSING PRICE ON 9/05/01
----------------------------------------  ------------------------
       $18.69 - $27.49 per share              $10.06 per share

Discounted Cash Flow Analysis. CIBC World Markets performed a discounted cash flow analysis of Gilat to estimate the present value of the unlevered, after-tax free cash flows that Gilat could generate for the second half of fiscal year 2001 through the end of fiscal year 2005, based on publicly available research analysts' estimates for Gilat. CIBC World Markets calculated a range of estimated terminal values by applying EBITDA terminal value multiples ranging from 10.0x to 12.0x to Gilat's estimated EBITDA for fiscal year 2005. The present value of the estimated cash flows and terminal values were calculated using

discount rates ranging from 15.0% to 17.0%. This analysis indicated the following implied per share equity reference range for Gilat, as compared to the closing price of Gilat ordinary shares on September 5, 2001:

IMPLIED EQUITY REFERENCE RANGE FOR GILAT  CLOSING PRICE ON 9/05/01
----------------------------------------  ------------------------
       $14.51 - $24.77 per share              $10.06 per share

Other Factors. In rendering its opinion, CIBC World Markets also reviewed and considered other factors, including:

- selected research analysts' reports for Gilat, including stock price estimates of those analysts;

- historical trading prices of rStar common stock ranging from a low of $0.35 to a high of $2.50 per share for the 52-week period ended August 31, 2001;

- historical trading prices of Gilat ordinary shares ranging from a low of $9.36 to a high of $81.88 per ordinary share for the 52-week period ended August 31, 2001;

- the relationship between movements in rStar common stock, movements in the common stock of selected eLearning companies, traditional education companies and outsourcing/systems integration companies, and movements in the Nasdaq Composite Index; and

- the relationship between movements in Gilat ordinary shares, movements in the common stock of selected VSAT and satellite equipment companies, and movements in the Nasdaq Composite Index.

Miscellaneous

rStar has agreed to pay CIBC World Markets an aggregate fee of $750,000 for its opinion services. In addition, rStar has agreed to reimburse CIBC World Markets for its reasonable out-of-pocket expenses, including reasonable fees and expenses of its legal counsel, and to indemnify CIBC World Markets and related parties against liabilities, including liabilities under the federal securities laws, relating to, or arising out of, its engagement.

The Special Committee selected CIBC World Markets based on CIBC World Markets' reputation and expertise. CIBC World Markets is an internationally recognized investment banking firm and, as a customary part of its investment banking business, is regularly engaged in valuations of businesses and securities in connection with acquisitions and mergers, underwritings, secondary distributions of securities, private placements and valuations for other purposes. CIBC World Markets in the past has provided services to Gilat unrelated to the Transactions, including acting as a dealer manager in connection with Gilat's tender offer for rStar common stock in October 2000, for which services CIBC World Markets has received compensation. In the ordinary course of business, CIBC World Markets and its affiliates may actively trade the securities of rStar and Gilat for their own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.

THE OFFER

BASIC TERMS; PRORATION

Subject to the terms and conditions of this offer, rStar is offering to exchange up to 6,315,789 shares of rStar common stock that are validly tendered and not properly withdrawn before the expiration date, for $0.95 in cash and 0.0738 of a Gilat ordinary share, per share, net to the seller. You will not receive any interest on any cash that rStar pays you, even if there is a delay in making the exchange. The 6,315,789 shares of rStar common stock that rStar is offering to exchange, represents approximately 10% of the total number of shares of rStar common stock outstanding and approximately 29% of the outstanding shares of rStar common stock not held by Gilat or its corporate affiliates, based upon the total number of shares of rStar common stock outstanding as of October [ ], 2001.

Under the acquisition agreement, Gilat granted rStar an option to purchase up to 466,105 Gilat ordinary shares that are being offered to rStar stockholders in exchange for shares of rStar common stock validly tendered and not properly withdrawn. Under the option, in consideration for providing rStar with the Gilat ordinary shares for the offer, Gilat will receive that number of shares of rStar common stock equal to 60% of the total number of shares of rStar common stock validly tendered and not properly withdrawn. Therefore, if 6,315,789 shares of rStar common stock are validly tendered and not properly withdrawn, Gilat will be entitled to receive 3,789,473 shares of rStar common stock under the option. rStar intends to exercise this option upon the closing of the offer. From its existing cash reserves, rStar will fund the cash consideration, up to $6,000,000, offered in exchange for shares of rStar common stock validly tendered and not properly withdrawn.

You will not receive any fractional Gilat ordinary shares. Instead you will receive cash in an amount equal to the market value of any fractional shares you would otherwise have been entitled to receive as described below.

The term "expiration date" means 12:00 midnight, New York City time, on
[ ], November [ ], 2001, unless rStar (subject to Gilat's prior consent and the other terms of the acquisition agreement) extends the period of time during which the offer will remain open, in which case the term expiration date means the latest time and date on which the offer, as so extended, expires.

Only whole shares of rStar common stock validly tendered and not properly withdrawn will be accepted in the offer. Fractional shares of rStar common stock will not be accepted in the offer.

Upon the terms and subject to the conditions to the offer, if more than 6,315,789 shares of rStar common stock have been validly tendered and not properly withdrawn prior to the expiration date, rStar will accept and exchange only 6,315,789 shares of rStar common stock on a pro rata basis (with appropriate adjustments to avoid the exchange of fractional shares of rStar common stock) from each stockholder who has validly tendered shares of rStar common stock in the offer based upon the number of shares validly tendered and not properly withdrawn by each stockholder prior to the expiration date. Therefore, all of the shares of rStar common stock that a stockholder tenders in the offer may not be accepted even if they are validly tendered and not properly withdrawn before the expiration date.

If proration of tendered shares of rStar common stock is required, rStar will determine the proration factor as promptly as practicable following the expiration date. The proration factor for each stockholder who has validly tendered shares in the offer is based upon the number of shares validly tendered and not properly withdrawn by each stockholder prior to the expiration date. Because of the difficulty in determining the number of shares of rStar common stock validly tendered and not properly withdrawn, rStar does not expect that it will be able to announce the final proration factor or exchange any shares validly tendered in the offer until about seven Nasdaq National Market trading days after the expiration date (due in part to the guaranteed delivery procedures described below in "The Offer -- Procedure for Tendering Shares of rStar Common Stock.") The preliminary results of any proration will be announced by press release as promptly as practicable after the expiration date. After the expiration date, stockholders may obtain preliminary proration information from the exchange agent and also may be able to obtain the information from their brokers.

rStar's directors and executive officers collectively beneficially own approximately 11,159,370 shares of rStar common stock and are eligible to tender any or all of their shares of rStar common stock into the offer. In addition, Gilat's directors and executive officers collectively beneficially own approximately 330,000 shares of rStar common stock, and are also eligible to tender their shares of rStar common stock in the offer. If the respective directors and executive officers of rStar and Gilat validly tender all of their shares of rStar common stock in the offer, the offer will be oversubscribed and the proration provisions will apply.

You may be subject to U.S. federal income tax consequences if you tender your shares of rStar common stock in the offer. These tax consequences may be relevant to your decision to tender your shares of rStar common stock. See "Taxation."

The offer is not conditioned on any minimum number of shares of rStar common stock being tendered. The offer is, however, subject to other conditions. See "The Offer -- Conditions to the Offer."

EXTENSION, TERMINATION AND AMENDMENT

rStar expressly reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) at any time or from time to time, to extend the period of time during which the offer remains open, and rStar can do so by giving oral or written notice of the extension to the exchange agent. If rStar decides to extend the offer, rStar will make an announcement to that effect no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During an extension, all shares of rStar common stock previously tendered and not properly withdrawn will remain subject to the offer, subject to your right to withdraw your shares of rStar common stock. See "The Offer -- Withdrawal Rights" for more details.

If the registration statement, of which this offer to exchange/prospectus is a part, has not been declared effective at the initial expiration of the offer, rStar intends to extend (subject to Gilat's prior consent and the other terms of the acquisition agreement) the offer and announce the extension via the PR Newswire no later than 9:00 a.m., New York City time, on [ ], 2001.

Subject to compliance with SEC's applicable rules and regulations, rStar also reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) regardless of whether or not any of the events described in "The Offer -- Conditions to the Offer" have occurred or are deemed by rStar to have occurred, to delay acceptance for payment of, and payment for, any shares by giving oral or written notice of the extension to the exchange agent and making a public announcement of the extension. rStar also expressly reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) to terminate the offer and reject for payment and not pay for any shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for shares upon the occurrence of any of the conditions specified in "The Offer -- Conditions to the Offer" by giving oral or written notice of the termination or postponement to the exchange agent and making a public announcement of the termination or postponement. The reservation of the right to delay payment for shares that have been accepted for payment is limited by Rule 13e-4(f)(5) under the Exchange Act, which requires that rStar must pay the consideration offered or return the shares tendered promptly after termination or withdrawal of a tender offer.

Subject to compliance with SEC's applicable rules and regulations, rStar further reserves the right (subject to Gilat's prior consent and the other terms of the acquisition agreement) and regardless of whether any of the events set forth in "The Offer -- Conditions to the Offer" have occurred or are deemed by rStar to have occurred, to amend the offer in any respect (including, without limitation, by decreasing or increasing the consideration offered in the offer to holders of shares or by decreasing or increasing the number of shares being sought in the offer). Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 9:00 a.m., New York City time, on the first business day after the last previously scheduled or announced expiration date. Any public announcement made pursuant to the offer will be disseminated promptly to stockholders in a manner reasonably designed to inform stockholders of the change. Without limiting the manner in which rStar may choose to make a public announcement, except as required by applicable law (including Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act), rStar will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a press release to the PR Newswire or comparable service.

If the terms of the offer or the information concerning the offer are materially changed, or if a material condition of the offer is waived, the offer will be extended to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. These rules provide that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities

sought) will depend on the facts and circumstances, including the relative materiality of the terms or information. If:

(1) the consideration offered for the shares of rStar common stock is increased or decreased or the number of shares of rStar common stock sought in this offer is increased (by more than 2% of the outstanding shares of rStar common stock) or decreased, and

(2) the offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of the change in the offer is first published, sent or given in the manner specified above,

then, in each case, the offer will be extended until the expiration of a period of ten business days from the date that notice of the change is first published. If rStar makes a material change to other terms of the offer or to the information concerning the offer, rStar will extend the offer, if required by applicable law, for a period of five business days to allow you to consider the amended terms of the offer. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or U.S. Federal holiday and consists of the time period from 12:01 am through 12:00 midnight, New York City time.

EXCHANGE OF SHARES OF RSTAR COMMON STOCK AND DELIVERY OF THE CONSIDERATION

Upon the terms and subject to the conditions to the offer (including if the offer is extended or amended, and the terms and conditions of any such extension or amendment), rStar will accept and exchange up to 6,315,789 shares of rStar common stock validly tendered and not properly withdrawn prior to the expiration date, subject to the satisfaction or waiver of the conditions to the offer.

For purposes of the offer, rStar will be deemed to have accepted for exchange (and therefore exchanged), subject to the proration provisions of this offer, shares of rStar common stock that are validly tendered and not properly withdrawn from the offer only when, as and if rStar gives oral or written notice to the exchange agent of its acceptance of the shares for exchange pursuant to this offer. As soon as practicable after receipt of such notice, the exchange agent for the offer will arrange for delivery of the Gilat ordinary shares and the cash payment (including cash instead of fractional Gilat ordinary shares) to the tendering stockholders. The exchange agent will act as agent for tendering stockholders for the purpose of receiving the consideration and transmitting such consideration to you. You will not receive any interest on any cash that rStar pays you, even if there is a delay in making the exchange.

In all cases, exchange for tendered shares of rStar common stock accepted for exchange pursuant to the offer will be made promptly, subject to possible delay in the event of proration, but only after timely receipt by the exchange agent of certificates for those shares (or of a timely confirmation of a book-entry transfer of such shares in the exchange agent's account, at The Depositary Trust Company, which is referred to as "DTC"), and a properly completed and duly executed Letter of Transmittal (or manually signed facsimile of the Letter of Transmittal), or, in the case of a book-entry transfer, an agent's message, and any other required documents.

If rStar does not accept any tendered shares of rStar common stock for exchange pursuant to the terms of and conditions to the offer, or if certificates are submitted for more shares of rStar common stock than are tendered, rStar will return certificates for such unexchanged shares of rStar common stock without expense to the tendering stockholder or, in the case of shares of rStar common stock tendered by book-entry transfer to the exchange agent's account at DTC pursuant to the procedures set forth below under the discussion "The Offer -- Procedure for Tendering Shares of rStar Common Stock" those shares of rStar common stock will be credited to an account maintained with DTC, as soon as practicable following the expiration or termination of the offer.

rStar will generally pay all stock transfer taxes, if any, payable on the transfer to rStar or Gilat of shares of rStar common stock exchanged pursuant to the offer. If, however, the cash payment and delivery of Gilat ordinary shares for the exchanged shares of rStar common stock is to be made to or (in the circumstances permitted by the offer) if unexchanged shares of rStar common stock are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the

name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to the person will be deducted from the consideration offered for shares of rStar common stock unless satisfactory evidence of the payment of the stock transfer taxes, or exemption from payment of the stock transfer taxes, is submitted. See Instruction 7 of the Letter of Transmittal.

FRACTIONAL SHARES OF GILAT ORDINARY SHARES

You will not receive any fractional Gilat ordinary shares pursuant to the offer. Instead, each tendering stockholder who would otherwise be entitled to a fractional Gilat ordinary share will receive cash in an amount equal to the product of (x) the fractional interest that such tendering stockholder would otherwise be entitled to receive pursuant to the offer by (y) the average closing price of Gilat ordinary shares as reported on the Nasdaq National Market for the five consecutive trading days ending on the trading day immediately prior to the date on which rStar accepts tendered shares in the offer.

WITHDRAWAL RIGHTS

Your tender of shares of rStar common stock pursuant to the offer is irrevocable, except that shares of rStar common stock may be withdrawn at any time prior to the expiration date and, unless rStar previously accepted the tendered shares of rStar common stock for exchange pursuant to the offer, may also be withdrawn at any time after [ ], 2001.

For a withdrawal to be effective, the exchange agent must timely receive from you a written or facsimile transmission notice of withdrawal at one of its addresses or numbers set forth on the back cover of this offer to exchange/prospectus. Your notice of withdrawal must include your name, address, social security number, the certificate number(s) and the number of shares of rStar common stock to be withdrawn as well as the name of the registered holder, if it is different from that of the person who tendered those shares of rStar common stock.

A financial institution must guarantee all signatures on the notice of withdrawal unless those shares of rStar common stock have been tendered for the account of any eligible institution (i.e. an institution that is a member of the Securities Transfer Agent Medallion Program, the New York Stock Exchange, Inc. Medallion Signature Program or the Stock Exchange Medallion Program). Most banks, savings and loan associations and brokerage houses are able to provide these signature guarantees for you.

If shares of rStar common stock have been tendered pursuant to the procedures for book-entry transfer discussed under the caption entitled "The Offer -- Procedure for Tendering Shares of rStar Common Stock," any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn shares of rStar common stock and must otherwise comply with DTC's procedures. If certificates have been delivered or otherwise identified to the exchange agent, the name of the registered holder and the serial numbers of the particular certificates evidencing the shares of rStar common stock withdrawn must also be furnished to the exchange agent, as stated above, prior to the physical release of the certificates.

rStar will decide (subject to Gilat's prior consent and the other terms of the acquisition agreement) all questions as to the form and validity (including time of receipt) of any notice of withdrawal and rStar's decisions shall be final and binding. Neither rStar, the exchange agent, the information agent nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or will incur any liability for failure to give any notification. Any shares of rStar common stock properly withdrawn will be deemed not to have been validly tendered for purposes of the offer. However, you may retender withdrawn shares of rStar common stock by following one of the procedures discussed under the caption entitled "The Offer -- Procedure for Tendering Shares of rStar Common Stock" at any time prior to the expiration date.

If the offer is extended, or rStar is delayed in its exchange of shares or is unable to exchange shares pursuant to the offer for any reason, then, without prejudice to rStar's rights under the offer, the exchange

agent may, subject to applicable law, retain tendered shares on rStar's behalf, and the shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in this section. rStar's reservation of the right to delay payment for shares of rStar common stock that are accepted for exchange is limited by Rule 13e-4(f)(5) under the Exchange Act, which requires rStar to pay the consideration offered or return the shares tendered promptly after termination or withdrawal of a tender offer.

PROCEDURE FOR TENDERING SHARES OF RSTAR COMMON STOCK

For you to validly tender shares of rStar common stock pursuant to the offer:

(a) (1) a properly completed and duly executed Letter of Transmittal in the form provided with this offer to exchange/prospectus, along with any required signature guarantees, or in connection with a book-entry transfer, an agent's message instead of the Letter of Transmittal, and any other required documents, must be received by the exchange agent at one of its addresses set forth on the back cover of this offer to exchange/prospectus, and

(2) certificates for tendered shares of rStar common stock must be received by the exchange agent at such address or those shares of rStar common stock must be tendered pursuant to the procedures for book-entry transfer set forth below (and a confirmation of receipt of such tender received (this confirmation is referred to as a "book-entry confirmation") in each case before the expiration date of the offer, or

(b) you must comply with the guaranteed delivery procedures set forth below under "Guaranteed Delivery."

No alternative, conditional or contingent tenders will be accepted.

The term "agent's message" means a message, transmitted by electronic means by DTC to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the shares of rStar common stock, which are the subject of that book-entry confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that rStar may enforce that agreement against that participant.

Signature Guarantees. Signatures on all Letters of Transmittal must be guaranteed by an eligible institution (i.e. an institution that is a member of the Securities Transfer Agents Medallion Program, the New York Stock Exchange, Inc. Medallion Signature Program or the Stock Exchange Medallion Program), except in cases in which shares of rStar common stock are tendered either:

- by a registered holder of shares of rStar common stock who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the Letter of Transmittal; or

- for the account of an eligible institution.

If the certificates for shares of rStar common stock are registered in the name of a person other than the person who signs the Letter of Transmittal or if the cash payment and the Gilat ordinary shares, or certificates for shares of rStar common stock not accepted for exchange or not tendered, are to be issued to a person other than the registered holder(s), then the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the certificates, with the signature(s) on the certificates or stock powers guaranteed by an eligible institution. If the Letter of Transmittal or stock powers are signed or any certificate is endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing, and unless rStar waives that requirement, they should submit proper evidence satisfactory to rStar of their authority to so act.

Book-Entry Transfer. The exchange agent will establish accounts with respect to the shares for purposes of the offer at DTC within two business days after the date of this offer to exchange/prospectus.

Any financial institution that is a participant in DTC's system may make book-entry delivery of shares or rStar common stock by causing DTC to transfer these shares into the exchange agent's account in accordance with DTC's procedure for transfer. However, although delivery of shares of rStar common stock may be effected through a book-entry transfer into the exchange agent's account at DTC, an agent's message in connection with a book-entry transfer, and any other required documents, must, in any case, be received by the exchange agent at one or more of its addresses set forth on the back cover of this offer to exchange/prospectus prior to the expiration date, or the guaranteed delivery procedures described below must be followed.

Delivery of the Letter of Transmittal or any other documents to the DTC does not constitute delivery to the exchange agent.

Guaranteed Delivery. If you wish to tender shares of rStar common stock pursuant to the offer and your certificates are not immediately available or you cannot deliver the certificates to the exchange agent prior to the expiration date or cannot complete the procedure for book-entry transfer on a timely basis, your shares of rStar common stock may be tendered, if all of the following conditions are satisfied:

- you make your tender by or through an eligible institution;

- a properly completed and duly executed notice of guaranteed delivery, substantially in the form enclosed with this offer to exchange/prospectus, is received by the exchange agent as provided below on or prior to the expiration date; and

- the certificates for all tendered shares, in proper form for transfer (or confirmation of book-entry transfer of the shares into the exchange agent's account at DTC as described above under "Book-Entry Transfer"), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile of the Letter of Transmittal) with any required signature guarantees or, in the case of a book-entry transfer, an agent's message, and all other documents are received by the exchange agent within three Nasdaq National Market trading days after the date of execution of such notice of guaranteed delivery.

You may deliver the notice of guaranteed delivery by hand or transmit it by facsimile transmission or mail to the exchange agent and you must include a signature guarantee by an eligible institution in the form set forth in that notice.

In all cases, rStar will exchange shares of rStar common stock tendered and accepted for exchange pursuant to the offer only after timely receipt by the exchange agent of certificates for shares of rStar common stock (or timely confirmation of a book-entry transfer of tendered securities into the exchange agent's account at DTC as described above) properly completed and duly executed Letter of Transmittal (or a manually signed facsimile of the Letter of Transmittal), or an agent's message in connection with a book-entry transfer, and any other required documents.

Return of Unexchanged Shares of rStar Common Stock. If any tendered shares are not exchanged, or if less than all shares evidenced by a stockholder's certificate(s) are tendered, certificates for unexchanged shares will be returned as promptly as practicable after the expiration or termination of the offer or, in the case of shares tendered by book-entry transfer at DTC, the shares will be credited to the appropriate account maintained by the tendering stockholder at DTC, in each case without expense to the stockholder.

Determination of Validity; Rejection of Shares of rStar Common Stock; Waiver of Defects; No Obligation to Give Notice of Defects. rStar will determine all questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of shares of rStar common stock (subject to Gilat's prior consent and the other terms of the acquisition agreement) and rStar's determination shall be final and binding on all parties. rStar reserves the absolute right (subject to Gilat's prior consent and the other terms of the acquisition agreement) to reject any or all tenders of any shares of rStar common stock that it determines are not in proper form or the acceptance for exchange of or the exchange of may, in the opinion of rStar's counsel, be unlawful. rStar also reserves the absolute right

(subject to Gilat's prior consent and the other terms of the acquisition agreement) to waive any defect or irregularity in any tender with respect to any particular shares of rStar common stock or any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholder. No tender of shares will be deemed to have been properly made until all defects or irregularities have been cured by the tendering stockholder or waived by rStar. rStar will not, and none of the exchange agent, the information agent or any other person, will be obligated to give notice of any defects or irregularities in tenders, nor will any of them incur any liability for failure to give any notice.

Binding Agreement. rStar's acceptance for exchange of shares of rStar common stock tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering stockholder and rStar upon the terms of and conditions to the offer.

Lost or Destroyed Certificates. Stockholders whose certificates for part or all of their shares of rStar common stock have been lost, stolen, misplaced or destroyed must complete and check the appropriate box in the Letter of Transmittal pertaining to lost or mutilated certificates and contact the exchange agent at (781) 575-3400 for information regarding the necessary forms and instructions to replace any mutilated, lost, stolen or destroyed certificates. Stockholders are requested to contact the exchange agent immediately in order to permit timely processing of this documentation.

CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED TO THE EXCHANGE AGENT AND NOT TO RSTAR OR GILAT. ANY DOCUMENTS

INTERESTS OF CERTAIN PERSONS IN THE TRANSACTIONS

GILAT

In connection with the Acquisition, rStar will issue 43,103,448 shares of rStar common stock to GTH Latin America. Also under the option, in consideration for providing rStar with the Gilat ordinary shares necessary for the offer, Gilat will receive 60% of the number of shares of rStar common stock tendered in the offer. Accordingly, it is expected that after the completion of the Transactions, Gilat's beneficial ownership of the outstanding shares of rStar common stock will increase from approximately 65.6% to

approximately 85% (subject to Gilat's assignment to StarBand US of approximately 15,600,000 shares of rStar common stock that GTH Latin America would have otherwise received in the Acquisition, as described under "Summary -- The Offer and Related Transactions" and assuming that the maximum number of shares of rStar common stock are tendered in the offer).

rStar's current Chief Executive Officer and three members of rStar's Board of Directors (Lance Mortensen, Charles Appleby, and Michael Arnouse) have agreed to resign upon the closing of the Acquisition. Because Gilat will beneficially own approximately 85% of the outstanding shares of rStar common stock after the completion of the Transactions (subject to Gilat's assignment to StarBand US of approximately 15,600,000 shares of rStar common stock that GTH Latin America would have otherwise received in the Acquisition, as described under "Summary -- The Offer and Related Transactions" and assuming that the maximum number of shares of rStar common stock are tendered in the offer), Gilat will be able to elect a majority of the members of rStar's Board of Directors who, in turn, will appoint a Chief Executive Officer for rStar to replace Mr. Mortensen.

THE VOTING AGREEMENT

On April 23, 2001, certain rStar stockholders, including Gilat and its subsidiary, Gilat Satellite Networks (Holland) B.V., and three members of rStar's current Board of Directors who collectively own approximately 81.6% of the outstanding shares of rStar common stock, entered into a voting agreement. Under the terms of this voting agreement, each stockholder has agreed to vote all of their shares of rStar common stock in favor of the acquisition agreement and the transactions contemplated thereby.

rSTAR EMPLOYMENT AGREEMENTS

rStar has an employment agreement in place with its Chief Executive Officer which contains severance payments that will become payable upon the closing of the Acquisition. Upon the consummation of the Acquisition, rStar's Chief Executive Officer will become entitled to the following benefits:

- 200% of his current base salary (or $550,000);

- 200% of any performance bonus he would have been entitled to receive had he remained employed;

- 100% vesting of all unvested options for shares of rStar common stock, at an exercise price of $1.00 per share; and

- the continuation of certain employee health benefits for a period of eighteen (18) months.

rStar also may be liable to several executive officers under their employment agreements and arrangements if rStar terminates their employment without cause or if the executive terminates his employment for good cause. "Good cause" is defined under these agreements and arrangements to include (i) a material reduction of the duties, title, authority or responsibilities; (ii) a material reduction of the facilities or perquisites; (iii) a reduction in the base salary; (iv) a material reduction in the kind or level of employee benefits, including bonuses; (v) the relocation of the facility or a location more than sixty (60) miles from his residence; or (vi) failure to obtain the assumption of the employment agreement by any successor entity.

THE ACQUISITION AGREEMENT

The following is a summary of the material terms of the acquisition agreement. For a more complete understanding of the acquisition agreement, you should carefully read the acquisition agreement, which is attached hereto as Annex A and is incorporated herein by reference.

THE OFFER

TERMS OF THE OFFER

The acquisition agreement provides for the commencement by rStar of a tender offer to exchange up to 6,315,789 shares of rStar common stock. Gilat and its corporate affiliates have agreed not to tender their shares of rStar common stock in the offer. The acquisition agreement provides that the consideration that will be offered to rStar stockholders in the offer shall consist of cash and Gilat ordinary shares. The acquisition agreement further provides that Gilat shall provide rStar with the Gilat ordinary shares for the offer pursuant to the option described below under "The Acquisition Agreement -- The Offer -- The Option."

The acquisition agreement prohibits rStar, without the consent of Gilat, from changing, modifying, amending or terminating the offer. Subject to SEC rules and regulations, if circumstances make it inadvisable to proceed with the offer and if Gilat and rStar mutually agree, rStar:

- shall not be required to accept for exchange or, exchange any tendered shares of rStar common stock and

- may (1) delay the acceptance for exchange of any tendered shares of rStar common stock and (2) terminate or amend the offer as to any shares of rStar common stock for which rStar has not then paid.

EXPIRATION AND CONSUMMATION OF THE OFFER

The offer shall expire on the closing date of the Acquisition. Payment by rStar for all of the shares of rStar common stock validly tendered and not previously withdrawn shall be made as soon as practicable after the closing date of the Acquisition. The acquisition agreement provides that the offer shall be terminated and rStar, subject to applicable SEC rules and regulations, shall not accept for exchange or exchange any shares of rStar common stock tendered in the offer if the acquisition agreement is terminated or the Acquisition is not consummated for any reason.

THE OPTION

rStar currently does not hold any Gilat ordinary shares. Under the acquisition agreement, Gilat has granted rStar an option to purchase up to 466,105 Gilat ordinary shares that are being offered to rStar stockholders in exchange for their shares of rStar common stock in the offer. Under the option, in consideration for providing rStar with the necessary Gilat ordinary shares, Gilat shall receive that number of shares of rStar common stock equal to 60% of the number of shares of rStar common stock tendered in the offer. Assuming that 6,315,789 shares of rStar common stock are tendered in the offer, Gilat will be entitled to receive 3,789,473 shares of rStar common stock under the option.

THE ACQUISITION

The acquisition agreement provides that rStar (or its wholly-owned subsidiary, if mutually agreed to by the parties) shall acquire from GTH Latin America all of the issued and outstanding shares of the common stock, par value EURO 0.01, of StarBand Latin America, in exchange for 43,103,448 shares of rStar common stock. GTH Latin America has the right to assign all or part of its right to the 43,103,448 shares of rStar common stock to Gilat, its corporate affiliates or to StarBand US. The closing of the Acquisition shall take place as soon as practicable after the last of the conditions set forth in the acquisition agreement, including rStar stockholder approval of the acquisition agreement, is satisfied or

waived (subject to applicable law) but in no event later than the fifth business day after the last condition is satisfied or waived, or on such other date mutually agreed to by the parties. However, without the mutual agreement of the parties to the acquisition agreement, in no event shall the closing of the Acquisition occur later than November 30, 2001.

The acquisition agreement provides that if rStar, GTH Latin America and Gilat agree, rStar may assign its rights, but not its obligations, to acquire StarBand Latin America to a wholly-owned subsidiary of rStar formed specifically to consummate the Acquisition. Also, except as provided for in the acquisition agreement and subject to applicable SEC rules and regulations, the right of Gilat and GTH Latin America to assign or otherwise transfer the shares of rStar common stock that they receive in connection with the Transactions is not prohibited or otherwise limited in any way.

ADDITIONAL SHARE CONSIDERATION

In addition to the 43,103,448 shares of rStar common stock to be issued to GTH Latin America in connection with the Acquisition, the acquisition agreement provides that in the event that the StarBand Latin America business exceeds certain agreed upon net income targets during each of the one year periods ended June 30, 2003 and June 30, 2004, with respect to each such year, Gilat will be entitled to receive, as additional consideration for the Acquisition, additional shares of rStar common stock. Specifically,

- if the net income (as defined below) for the StarBand Latin America business for the period from July 1, 2002 through June 30, 2003, is greater than or equal to $4,100,000 but no more than $4,900,000, rStar shall be obligated to issue 2,685,382 shares of rStar common stock to Gilat;

- if the net income for the StarBand Latin America business for the period from July 1, 2002 through June 30, 2003 is greater than or equal to $4,900,000, rStar shall be obligated to issue 5,370,765 shares of rStar common stock to Gilat;

- if the net income for the StarBand Latin America business for the period from July 1, 2003 through June 30, 2004, is greater than or equal to $27,500,000 but no more than $33,000,000, rStar shall be obligated to issue 2,685,382 shares of rStar common stock to Gilat; and

- if the net income for the StarBand Latin America business for the period from July 1, 2003 through June 30, 2004 is greater than or equal to $33,000,000, rStar shall be obligated to issue 5,370,765 shares of rStar common stock to Gilat.

The "net income" for the StarBand Latin America business means rStar's consolidated net income (excluding extraordinary items of gain or all and before the amortization of goodwill and other intangible assets) generated during the applicable period by the StarBand Latin America business as reflected on audited financial statements of the StarBand Latin America business.

Qualified Public offering. rStar's obligation to issue the additional share consideration terminates upon the completion of a firmly underwritten public offering of shares of rStar common stock raising gross proceeds to rStar of at least $25 million, with a price of rStar common stock of at least $2.32 per share. The parties have agreed that neither Gilat nor its corporate affiliates will participate in any such offering.

Assignment. Gilat has the right to assign all or part of its right to the additional share consideration to any of its corporate affiliates or to StarBand US.

SPECIAL DISTRIBUTION

Under the acquisition agreement, rStar's current certificate of incorporation will be amended, subject to rStar stockholder approval, to provide rStar stockholders with the right to the Special Distribution. Pursuant to the proposed amendments to rStar's current certificate of incorporation, in the event that the StarBand Latin America business does not achieve certain net income targets agreed to by the parties during each of the one year periods ended June 30, 2003 and June 30, 2004, rStar stockholders of record as of June 30, 2003 or June 30, 2004 will be entitled to their pro rata share of a Special Distribution equal

to either $2.5 million or $5 million in cash, depending upon the net income of the StarBand Latin America business realized during those one year periods. Specifically,

- if the net income for the StarBand Latin America business for the period from July 1, 2002 through June 30, 2003 is less than or equal to $1,600,000, the Special Distribution shall be $5,000,000;

- if the net income for the StarBand Latin America business for the period from July 1, 2002 through June 30, 2003 is greater than $1,600,000 and less than or equal to $2,500,000, the Special Distribution shall be $2,500,000;

- if the net income for the StarBand Latin America business for the period from July 1, 2002 through June 30, 2003 is greater than $2,500,000, the Special Distribution shall be zero,

- if the net income for the StarBand Latin America business for the period from July 1, 2003 through June 30, 2004 is less than or equal to $11,000,000, the Special Distribution shall be $5,000,000,

- if the net income for the StarBand Latin America business for the period from July 1, 2003 through June 30, 2004 is greater than $11,000,000 and less than or equal to $16,500,000, the Special Distribution shall be $2,500,000; and

- if the net income for the StarBand Latin America Business for the period from July 1, 2003 through June 30, 2004 is greater than $16,500,000, the Special Distribution shall be zero.

Qualified Public Offering (the "QPO"). The Special Distribution rights shall expire upon the completion of a firmly underwritten public offering of shares of rStar common stock raising gross proceeds to rStar of at least $25 million, with a price of rStar common stock of at least $2.32 per share. The parties have agreed that neither Gilat nor its corporate affiliates will participate in any such offering.

Guaranty. If rStar is unable to make the Special Distribution to its stockholders for any reason, Gilat shall make a cash capital contribution to rStar to the extent and in an amount necessary for rStar to satisfy its obligations to make the Special Distribution.

Waiver by Gilat and GTH Latin America. Under the acquisition agreement, Gilat and GTH Latin America, on their own behalf and on behalf of their corporate affiliates:

- waive any and all claims or rights they have to the Special Distribution;

- agree that until the earlier of (x) June 30, 2004 and (y) the date on which the Special Distribution is actually paid to the holders of shares of rStar common stock, or (z) the date of the QPO (the "Special Distribution Expiration Date"), their ability to sell, assign or otherwise transfer their shares of rStar common stock is subject to certain restrictions, including the receipt by rStar of a certificate of waiver from a proposed-transferee of shares of rStar common stock, under which such proposed-transferee waives its rights to the Special Distribution; and

- agree that the certificates representing the rStar common stock acquired pursuant to the acquisition agreement shall bear a legend indicating the limitations of transferability.

Restrictions on New Issuances. The acquisition agreement provides that until the date immediately following the Special Distribution Expiration Date, rStar will not:

- sell or issue any additional shares of rStar common stock, other than (i) shares of rStar common stock issued upon the exercise of stock options that are outstanding as of the closing of the Acquisition and (ii) shares of rStar common stock issuable pursuant to employee stock option plans or other stock based compensation plans. However, the number of shares of rStar common stock that rStar may issue under employee stock option plans or other stock based compensation plans cannot exceed (in the aggregate) 1% of the issued and outstanding shares of rStar common stock as of the closing of the offer on a fully diluted basis. All shares of rStar common stock issued under clauses (i) and (ii) above shall be entitled to the Special Distribution;

- issue any securities convertible into or exchangeable for shares of rStar common stock, except to the extent that any such securities are not convertible into or exchangeable for shares of rStar common stock (the "Qualified Convertible Securities"); or

- enter into any agreement that by its terms legally prohibits rStar from making the Special Distribution.

However, the acquisition agreement further provides that rStar shall not be precluded or restricted from issuing:

- shares of rStar common stock or securities convertible into or exchangeable for shares of rStar common stock (other than Qualified Convertible Securities) in a private transaction if, prior to such issuance, rStar receives a certificate of waiver from the person who will receive such shares of rStar common stock or such convertible securities, as the case may be, agreeing, among other things, to waive its right to the Special Distribution; or

- any class of capital stock of rStar other than rStar common stock or any securities convertible into or exercisable or exchangeable for shares of a class of capital stock of rStar other than rStar common stock.

Other Terms of the Special Distribution. The proposed amendments to rStar's Third Amended and Restated Certificate of Incorporation also provide that:

- rStar, at its option, can satisfy its obligation to make the Special Distribution by distributing the maximum amount of such distribution at any time prior to the required payout date thereof;

- until rStar's obligation to pay the Special Distribution has been terminated or satisfied rStar is (i) prohibited from paying, declaring or setting apart for payment any dividend or distribution on any class or series of its capital stock other than the rStar common stock (other than dividends payable in the form of additional shares of rStar's capital stock) and (ii) subject to certain limitations, prohibited from redeeming, purchasing or otherwise acquiring any shares of any class or series of rStar's capital stock other than the rStar common stock, or any right, warrant or option to acquire any shares of rStar capital stock;

- the amount of the Special Distribution (if any) shall increase at a rate of 7% per annum if it is not paid by the required payout date therefor; and

- the Special Distribution shall be $5,000,000 for each of the years ending June 30, 2003 and June 30, 2004 if rStar fails to complete and announce or deliver audited financial statements for that particular year to the holders of rStar common stock by December 31, 2003 and December 31, 2004, respectively.

THE VOTING AGREEMENT

The acquisition agreement provides that certain principal stockholders of rStar, including Gilat, shall enter into a voting agreement according to which such rStar stockholders would agree to vote all of their shares of rStar common stock in favor of Acquisition and the other transactions described in the acquisition agreement. On April 23, 2001, rStar and the principal stockholders of rStar, including (i) Gilat and its subsidiary, Gilat Satellite Networks (Holland) B.V., (ii) The Mortensen 2000 Family Resource Trust, The Mortensen Charitable Trust certain (which are entities controlled by Lance Mortensen),
(iii) CAVCO of North Florida, Inc. (an entity controlled by Charles Appleby), and (iv) The Arnouse Charitable Trust (an entity controlled by Michael Arnouse) and Michael Arnouse, executed the voting agreement. These rStar stockholders collectively hold approximately 81.6% of the outstanding shares of rStar common stock.

rSTAR BOARD OF DIRECTORS

Under the terms of the acquisition agreement, three members of rStar's current board of directors (Lance Mortensen, Charles Appleby and Michael Arnouse) and rStar's Chief Executive Officer will resign effective upon the closing date of the Acquisition.

REPRESENTATIONS AND WARRANTIES

The acquisition agreement contains a number of customary representations and warranties made by each party. All representations and warranties of the parties expire on the second anniversary of the closing of the Acquisition. Some of the representations of Gilat, GTH Latin America and rStar are subject to a "material adverse effect" qualifier. This qualifier limits the scope of the representations and warranties to only those circumstances that generally would have a material adverse affect on the business, assets or financial condition of the party giving the representation in the case of rStar, Gilat and GTH Latin America or, in the case of StarBand Latin America, a material adverse effect on the ability of StarBand Latin America to own its assets and operate its business or on the financial condition of StarBand Latin America as reflected on the pro forma consolidated statements that give effect to the Acquisition, which are included in rStar's proxy statement requesting, among other things, stockholder approval of the acquisition agreement and the Transactions.

CONDUCT OF THE BUSINESS OF STARBAND LATIN AMERICA PENDING THE CLOSING OF THE ACQUISITION

Gilat and GTH Latin America have agreed that prior to the closing of the Acquisition, except with the prior consent of rStar (which consent shall not be unreasonably withheld), they shall, and shall cause the other affiliates and subsidiaries of Gilat that participate in the conduct and operations of the StarBand Latin America business (the "Gilat Business Entities") to:

- conduct their respective operations with respect to the StarBand Latin America business in the ordinary course, including complying with all applicable laws relating to the StarBand Latin America business and maintaining books and records of the StarBand Latin America business in accordance with applicable laws and past practices;

- maintain satisfactory relationships with suppliers, distributors, customers and others business partners with respect to the operations of the StarBand Latin America business;

- take no action that would materially adversely affect the ability of rStar, Gilat or GTH Latin America to consummate the transactions contemplated by the acquisition agreement;

- use commercially reasonable efforts to preserve the StarBand Latin America business; and

- conduct their respective operations in a manner that will not result in any event that is materially adverse to the financial condition, properties, assets, liabilities, business, operations or result of operations of Gilat and its subsidiaries taken as a whole.

In addition, Gilat and GTH Latin America have agreed that prior to the closing of the Acquisition, except with the prior consent of rStar (which consent shall not be unreasonably withheld), they shall not, nor will they permit any of the Gilat Business Entities in connection with the conduct of the StarBand Latin America business:

- borrow any material amount of money other than through lines of credit in the ordinary course of business;

- increase compensation for any employees of the StarBand Latin America business except in the ordinary course of business;

- pay or agree to pay any pension retirement allowance or other employee benefits to employees of the StarBand Latin America business except as required by law;

- grant severance or termination pay to, or enter into any employment or severance agreement with, any existing employee of the StarBand Latin America business;

- enter into any contracts, including leases, in excess of $100,000; or

- make any capital expenditures of more than $100,000.

CONDUCT OF rSTAR PENDING THE CLOSING OF THE ACQUISITION

rStar has agreed that prior to the closing of the Acquisition, unless contemplated by the acquisition agreement, it shall not undertake (or agree to undertake) the following, except with the prior consent of Gilat (which consent shall not be unreasonably withheld):

- amend its Certificate of Incorporation or Bylaws;

- issue any shares of rStar common stock or options to purchase shares of rStar common stock other than the shares related to its currently outstanding options and the Acquisition;

- split, combine or reclassify any shares of its capital stock, declare, set aside or pay any dividend or other distribution in respect to its capital stock or purchase, redeem or otherwise acquire any shares of its capital stock;

- enter into transaction exceeding $100,000;

- increase employee, director or officer compensation (except in the ordinary course of business consistent with past practice);

- pay or agree to pay any pension, retirement allowance or other employee benefit not required, or enter into or agree to enter into any agreement or arrangement with such director or officer or employee, past or present, relating to any such pension, retirement allowance or other employee benefit, except as required under currently existing agreements, plans or arrangements; grant any severance or termination pay to, or enter into any employment or severance agreement with any employee, officer or director except consistent with commercially acceptable standards; or adopt any new pension plan, welfare plan, multiemployer plan, employee benefit plan, benefit arrangement, or similar plan or arrangement, which was not in existence as of April 23, 2001;

- enter into any business contracts, except for (i) business contracts for the purchase, sale or lease of goods or services involving payments or receipts by Gilat or its affiliates not in excess of $100,000, or (ii) leases for rental space in an amount not to exceed $100,000 for any lease;

- enter into any agreement in principle or an agreement with respect to any sale, transfer, lease, license, pledge, mortgage, or other disposition or encumbrance of a material amount of rStar's assets, or any enter into a material business contract or any amendment or modification of any material business contract or any release or relinquishment of any material business contract rights;

- authorize or commit to make capital expenditures with respect to and in connection with the operation of rStar's business in excess of $100,000;

- make any changes in its accounting methods or accounting practices; or

- settle any action or suit in excess of $200,000 without the consent of GTH Latin America.

REVIEW OF rSTAR'S EXPENDITURES

Under the acquisition agreement, the parties have agreed that all cash expenditures by rStar equal to or greater than $25,000 are subject to prior review and approval by Gilat. In addition, prior to the closing of the Acquisition, other than in the ordinary course consistent with past practices, rStar shall not take any action that may materially affect rStar's cash and cash equivalent holdings, which, as of September 7, 2001, equaled at least $36 million, without the express consent of both Gilat and rStar's Chief Executive Officer.

CONDITIONS TO CLOSING THE ACQUISITION

There are numerous conditions that have to be satisfied or waived before the closing of the Acquisition. They are as follows:

THE OBLIGATIONS OF EACH PARTY

The respective obligations of each party to effect the transactions contemplated by the acquisition agreement are subject to the following conditions:

- the approval by rStar's stockholders of the acquisition agreement and the transactions contemplated thereby;

- the absence of any judgment, order, decree, statute, law, ordinance, rule or regulation adopted by any court or other governmental entity of competent jurisdiction or other legal restraint or prohibition in effect preventing the consummation of the transactions contemplated by the acquisition agreement;

- the absence of any action or proceeding been instituted by any governmental authority seeking to prevent consummation of the transactions contemplated by the acquisition agreement;

- the approval by a majority of the board of directors of rStar of the Acquisition and the other transactions contemplated by the acquisition agreement;

- the declaration by the SEC that Gilat's registration statement for the Gilat ordinary shares to be offered to rStar stockholders in exchange for their shares of rStar common stock is effective and the absence of any stop order or other similar proceeding threatened by the SEC or any other state securities administrator with respect to Gilat's registration statement;

- the receipt by the parties to the acquisition agreement of all necessary third party consents and governmental consents, which consents are in full force and effect as of the closing date of the Acquisition; and

- the receipt by the parties of confirmation that the Fourth Amended and Restated Certificate of Incorporation has been filed by with the Secretary of State of the State of Delaware.

THE OBLIGATION OF rSTAR

The obligation of rStar to consummate the Acquisition are subject to the satisfaction or waiver of the following conditions:

- if reasonably requested by rStar, the receipt of an opinion of special Netherlands counsel, Israeli counsel and/or a special United States counsel to Gilat and its affiliates, dated as of the closing date of the Acquisition in form and substance customary for the type of transactions contemplated by the acquisition agreement;

- the material accuracy of the representations and warranties made by Gilat and GTH Latin America as of the closing date of the Acquisition and receipt by rStar of certificates from an executive officer of Gilat and an executive officer of GTH Latin America attesting to the foregoing and dated as of the closing date of the Acquisition;

- the performance or compliance by Gilat and GTH Latin America with their respective agreements, covenants, obligations and conditions required by the acquisition agreement as of the closing of the Acquisition and receipt by rStar of certificates from an executive officer of Gilat and an executive officer of GTH Latin America attesting to the foregoing and dated as of the closing date of the Acquisition;

- the execution by the parties of the master agreement, the voting agreement and the option; and

- all corporate and other proceedings in connection with the transactions contemplated by the acquisition agreement and all documents incidental thereto shall be reasonably satisfactory in form, scope and substance to rStar and its counsel and rStar and its counsel shall have received all such other counterpart originals or certified or other copies of such documents as rStar and its counsel may reasonably request.

THE OBLIGATION OF GILAT AND GTH LATIN AMERICA

The obligation of Gilat and GTH Latin America to consummate the Acquisition are subject to the satisfaction or waiver of the following conditions:

- if reasonably requested by Gilat or GTH Latin America, the receipt of an opinion of rStar's counsel, dated as of the closing date of the Acquisition, in form and substance customary for the type of transactions contemplated by the acquisition agreement;

- the material accuracy of the representations and warranties made by rStar as of the closing of the Acquisition and receipt by Gilat and GTH Latin America of a certificate from an executive officer of rStar attesting to the foregoing and dated as of the closing date of the Acquisition;

- the performance or compliance by rStar with its respective agreements, covenants, obligations and conditions required by the acquisition agreement as of the closing of the acquisition agreement and receipt by Gilat and GTH Latin America of a certificate from an executive officer of rStar attesting to the foregoing and dated as of the closing date of the Acquisition;

- the execution by the parties of the voting agreement and the option;

- the resignation of certain members of rStar's board of directors; and

- all corporate and other proceedings in connection with the transactions contemplated by the acquisition agreement and all documents incidental thereto shall be reasonably satisfactory in form, scope and substance to GTH Latin America and its counsel and GTH Latin America and its counsel shall have received all such other counterpart originals or certified or other copies of such documents as GTH Latin America and its counsel may reasonably request.

ADDITIONAL COVENANTS AND AGREEMENTS

The parties have also agreed to the following:

REASONABLE EFFORTS

Each of rStar, Gilat and GTH Latin America agree to use its reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper and advisable consummate the transactions described in the acquisition agreement and to cooperate with each other, including using its reasonable best efforts to obtain all necessary waivers, consents and approvals from other parties to loan agreements, material leases and other material contracts, to obtain all necessary consents, approvals and authorizations as are required to be obtained from appropriate governmental authorities, and to effect all necessary registrations and filings, including filings with the SEC and submissions of information requested by governmental authorities. Also, under the acquisition agreement, Gilat and GTH Latin America shall use their respective best efforts to take, or cause to be taken, all action reasonably necessary to form StarBand Latin America and to transfer and assign the assets of the StarBand Latin America business, which are identified in the schedules attached to the acquisition agreement, to StarBand Latin America.

NO SOLICITATION

The acquisition agreement provides that rStar and all of its affiliates (other than Gilat) will not:

- directly or indirectly (through any directors, officers, employees, agents, representatives or otherwise) solicit, initiate, facilitate or encourage (including by way of furnishing or disclosing non-

public information) any inquiries or the making of any proposal with respect to any merger, consolidation or other business combination involving rStar or its subsidiaries or the acquisition of all or any significant assets or capital stock of or by rStar (a "Transaction Proposal"); or

- negotiate, explore or otherwise engage in discussions with any person (other than Gilat or GTH Latin America and their representatives) with respect to any Transaction Proposal; or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the transactions contemplated by the acquisition agreement.

However, prior to the consummation of the Acquisition, if the board of directors of rStar determines in good faith, after consultation with outside counsel, that it is necessary to respond to an unsolicited superior proposal in order to comply with its fiduciary duties to rStar's stockholders under applicable law, the board of directors of rStar may:

- withdraw or modify its approval or recommendation of the Acquisition and the acquisition agreement and the other transaction contemplated by the acquisition agreement, or

- approve or recommend an unsolicited superior proposal or terminate the acquisition agreement (and concurrently with or after such termination, if it so chooses, cause rStar to enter into any agreement with respect to any unsolicited superior proposal), but in each of the cases, no action shall be taken by rStar pursuant to this clause until a time that is after the fifth business day following GTH Latin America's receipt of written notice advising GTH Latin America that the board of directors of rStar has received an unsolicited superior proposal, specifying the material terms and conditions of such unsolicited superior proposal and identifying the person making such unsolicited superior proposal, to the extent making such identification does not breach the fiduciary duties of rStar's Board of Directors as advised by outside legal counsel.

If rStar's Board of Directors takes any action to amend or withdraw its recommendation or approve or recommend an unsolicited superior proposal, then rStar must within two business days of such action pay GTH Latin America an amount equal to 3% of the value of consideration payable by rStar to GTH Latin America in connection with the Acquisition and reimburse Gilat and GTH Latin America for any of their out of pocket expenses (including the fees and expenses of outside professionals).

An "unsolicited superior proposal" means any bona fide, unsolicited, written proposal made by a third party to enter into an agreement with respect to a transaction proposal on terms that the board of directors of rStar determines in its good faith judgment (after consultation with outside counsel and a financial advisor of nationally recognized reputation) to be more favorable to rStar's stockholders than the Acquisition and the other transactions contemplated by the acquisition agreement.

Under the acquisition agreement, rStar must immediately advise GTH Latin America of any Transaction Proposal, the material terms of such Transaction Proposal, and to the extent such disclosure is not a breach of the board of directors' fiduciary duties (as advised by outside legal counsel), the identity of the person making such transaction proposal.

CONDUCT OF THE PARTIES AFTER THE CLOSING OF THE ACQUISITION

LISTING OF SHARES

Gilat and GTH Latin America have agreed to use their respective commercially reasonable efforts to ensure that following the closing of the Acquisition rStar remains a public company traded on the Nasdaq National Market or, if such listing is impracticable, list or quoted on the American Stock Exchange, the NASDAQ -- Small Cap or on the bulletin board (in that order of priority). The parties, however, acknowledge that rStar's continued listing on the Nasdaq National Market is subject to the outcome of the Nasdaq qualification hearing that was held on August 9, 2001 and that there can be no assurance that the Listing Qualification Panel's determination will be favorable to rStar. If the Listing Qualification Panel's determination is unfavorable, shares of rStar common stock could be immediately delisted from the Nasdaq National Market.

OPERATION OF STARBAND LATIN AMERICA

Gilat and GTH Latin America have also agreed to operate rStar and its subsidiaries in a manner consistent with the operation of the StarBand Latin America business, including the voice services, as currently conducted, for a period of one year following the closing of the Acquisition and thereafter as determined by a majority of independent directors of rStar's Board of Directors as being in the best interests of rStar's stockholders.

OTHER TRANSACTIONS

Under the acquisition agreement, Gilat and GTH Latin America have also agreed not to:

- permit rStar to pay or declare any dividends or any other distributions for the longer of (x) a period of one year following the closing of the Acquisition or (y) the Special Distribution Expiration Date;

- permit rStar or any of its subsidiaries to enter into any material transactions with Gilat or any of Gilat's affiliates on terms that are materially less favorable to rStar and/or its subsidiaries than similar arms-length transactions with unaffiliated third parties for a period of two years following the closing of the Acquisition;

- charge rStar or any of its subsidiaries for any administrative services (such as legal, financial and accounting services) in excess of Gilat's actual cost to perform such services, except as described in the master agreement, for the longer of (x) a period of three years following the closing of the Acquisition or (y) the Special Distribution Expiration Date; and

- amend or alter the master agreement among rStar, Gilat and certain of Gilat's affiliates, in a manner that is materially detrimental to the business interests of StarBand Latin America or rStar during the term of the master agreement (including any automatic renewals of the term of the master agreement).

TERMINATION OF THE ACQUISITION AGREEMENT

TERMINATION BY MUTUAL AGREEMENT

The acquisition agreement may be terminated at any time by the written consent of rStar and GTH Latin America. Also, either rStar or GTH Latin America may terminate the acquisition agreement, if the transactions contemplated by the acquisition agreement shall not have been consummated by 5:00 p.m. Eastern Standard Time on November 30, 2001, unless such date shall have been extended by mutual consent and provided that neither party may terminate the acquisition agreement if the failure to consummate the transactions contemplated by the acquisition agreement by November 30, 2001 is a result of a breach by such party of its representations, warranties or agreements under the acquisition agreement.

TERMINATION BY rSTAR

rStar can terminate the acquisition agreement if any of the conditions to rStar's obligations have not been met, or if it becomes apparent that these conditions will not have been fulfilled by the closing date of the Acquisition, unless such failure is due to the failure of rStar to perform or comply with any of covenants, agreement or conditions set forth in the acquisition agreement to be performed or complied with by rStar prior to the closing of the Acquisition. Additionally, rStar can also terminate the acquisition agreement in accordance with the provisions described above in "The Acquisition Agreement -- Additional Covenants and Agreements -- No Solicitation."

TERMINATION BY GTH LATIN AMERICA

GTH Latin America can terminate the acquisition agreement:

- if any of the conditions to GTH Latin America's obligations have not been met, or if it becomes apparent that these conditions will not have been fulfilled by the closing date of the Acquisition, unless such failure is due to the failure of Gilat or GTH Latin America to perform or comply with any of covenants, agreement or conditions set forth in the acquisition agreement to be performed or complied with by Gilat and GTH Latin America prior to the closing of the Acquisition;

- if rStar, or any of its officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative of rStar breaches the non-solicitation provisions described in described above in "The Acquisition Agreement -- Additional Covenants and Agreements -- No Solicitation;" or

- the Board of Directors of rStar or any committee of the Board, shall have withdrawn or modified in any manner adverse to Gilat or GTH Latin America its approval or recommendation of the acquisition agreement or the Acquisition and the other transactions contemplated by the acquisition agreement or failed to reconfirm its recommendation within five business days after a written request to do so, or approved or recommended any Transaction Proposal or the Board of Directors of rStar or any committee of the Board shall have resolved to take any of the foregoing actions.

AMENDMENT

The acquisition agreement may be amended by rStar, Gilat and GTH Latin America at any time prior to the closing of the Acquisition by an instrument in writing signed by each party to the acquisition agreement.

THE MASTER AGREEMENT

Under the acquisition agreement, at or prior to the closing of the Acquisition, StarBand Latin America will enter into a master agreement pursuant to which StarBand Latin America will receive certain services and products and rights from Gilat necessary to conduct its business in Latin America. A form of the master agreement has been filed as an exhibit to Gilat's registration statement, filed with the SEC on October 11, 2001.

Parties. The parties to the master agreement are StarBand Latin America, Gilat, GTH Latin America, and Gilat to Home Latin America, Inc., a subsidiary of GTH Latin America.

Services and Supplies. Gilat and its subsidiaries will grant to StarBand Latin America the non-exclusive rights in Mexico and the exclusive rights in the other Latin American countries (including, among others Brazil, Argentina, Peru, Colombia and, subject to certain restrictions, Chile) to (i) implement, operate and market its broadband Internet access services and voice services to consumers and small office/home office subscribers, (ii) provide a bundled product with direct-to-home television service using its single satellite dish technology and (iii) provide such new technologies and products related to the foregoing as Gilat may in the future develop or make available to StarBand US, which shall be offered to StarBand Latin America and/or its subsidiaries upon commercially reasonable terms via a two-way satellite-based network. Gilat has agreed, on behalf of itself and its affiliates, not to offer services that compete with StarBand Latin America's services to residential and Soho customers throughout Latin America, except that StarBand US will not be limited from conducting its business in Mexico and provided that Gilat and its affiliates shall not be limited or otherwise restricted from conducting business with certain entities in Chile.

Under the master agreement, Gilat will provide StarBand Latin America with the facilities, telecommunications equipment, licensed software and services that it will use in its business, including:

- customer premises equipment, network operations equipment, software necessary for the network to operate, the multicast system (where applicable) and optional services in connection with hub operation, technical support and Internet connectivity;

- transition services, including information technology, real estate and administrative services such as financial, legal, accounting and tax services for a period until StarBand Latin America establishes its own systems and processes. StarBand Latin America will reimburse Gilat for the actual costs incurred with respect to such services. The transition services will also include research and development support. Gilat shall use its commercially reasonable efforts to accommodate any reasonable requests by StarBand Latin America for additional or modified transition services. StarBand Latin America may, in its discretion and upon 90 days' written notice, cancel one or more of the transition services at any time without penalty or payment obligation, with some exceptions; and

- optional services, including installation, operation and maintenance, access to satellite transmission and reception facilities and services and any other services required by StarBand Latin America to operate its business at prevailing and customary market prices.

Generally, pricing terms will be renegotiated every two years.

The master agreement contains a most favored nations clause under which all services, products and other items provided by Gilat and its affiliates shall be on terms no less favorable than the best terms offered by Gilat to any other party for comparable products sold in comparable quantities on comparable terms and conditions.

Exclusivity. Gilat is required to use its best commercial efforts to maintain price and technological competitiveness of the products and services provided to StarBand Latin America under the master agreement. So long as the products and services provided by Gilat remain competitive with respect to their pricing and technological competitiveness and Gilat and its affiliates meets their respective delivery and support obligations, StarBand Latin America will be required to purchase all of the products and services performing similar functionality to the products and services provided by Gilat and its affiliates under the master agreement, solely from Gilat and its affiliates.

Term. The master agreement has a term of five years, and thereafter automatically renews for additional five-year terms.

CERTAIN INFORMATION REGARDING GILAT

References in this section to "we," "our," "us" and similar references refer to Gilat, and not to rStar.

GENERAL

Gilat, with its global subsidiaries, is a leading provider of products and services for satellite-based communications networks. We design, develop, manufacture, market and service products that enable complete end-to-end telecommunications and data networking solutions, as well as broadband Internet solutions, based on VSAT satellite earth stations, related central station (hub) equipment and software. We also provide service offerings which include access to satellite transponder capacity, installation of network equipment, on-line network monitoring and network maintenance and repair services. We distribute our products and services worldwide through our own direct sales force, service providers and agents and, in certain circumstances, joint ventures, alliances and affiliated companies.

Our networks are primarily used for:

- on-line data delivery and transaction-oriented applications including point-of-sale (for example, credit and debit card authorization), inventory control and real time stock exchange trading;

- telephone service in areas that are underserved by the existing telecommunications services or in remote locations without service; and

- IP-based networking applications such as corporate intranets, corporate training and other broadband multicasting applications, as well as consumer broadband Internet applications.

DIRECTORS AND EXECUTIVE OFFICERS OF GILAT

The following table and the text below it sets forth the name, citizenship, present principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each of our directors and executive officers, as well as a description, if applicable, of any criminal, judicial or administrative proceedings involving such director or executive officer. Unless otherwise indicated, the current business address of each person is c/o Gilat Satellite Networks Ltd., 21 Yegia Kapayim Street, Kiryat Arye, Petah Tikva, 49130, Israel and their telephone number is (972) 3-925-2000.

             NAME                 PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS      CITIZENSHIP
             ----                -----------------------------------------------  -----------------
Yoel Gat.......................  Chairman of the Board of Directors and Chief          Israel
                                 Executive Officer
Amiram Levinberg...............  President, Chief Operating Officer and Director       Israel
Shlomo Tirosh..................  Director                                              Israel
                                 Address: Mentergy Ltd., 21/D Yegia Kapayim
                                 Street, P.O. Box 3675, Petah Tikva, 49130
                                 Israel Tel: (972) 3-925-5000
Dov Tadmor.....................  Director                                              Israel
                                 Address: Saridar Investments Ltd., 37 Shaul
                                 Hamelech Ave., Tel-Aviv, 64928, Israel Tel:
                                 (972) 3-696-6996
John F. Connelly...............  Director                                           United States
                                 Address: GE American Communication Inc., Four
                                 Research Way, Princeton, NJ 08540-6684 Tel:
                                 (609) 987-4448
Lori Kaufmann..................  Director                                          Israel, United
                                 Address: 60 Ha'sharon Street, Ra'anana, 43352,      States and
                                 Israel Tel: (972) 9-956-1621                        Switzerland
Dr. Gideon Kaplan..............  Vice President, Technology                            Israel
Yoav Leibovitch................  Vice President, Finance and Administration and        Israel
                                 Chief Financial Officer
Joshua Levinberg...............  Senior Vice President, Business Development           Israel
Erez Antebi....................  Vice President and General Manager for Asia,     Israel and Canada
                                 Africa and Pacific Rim
Nick Supron....................  President and Chief Executive Officer, Spacenet    United States
                                 Address: Spacenet Inc., 1750 Old Meadow Rd.
                                 McLean, Va. 22102 Tel: (703) 848-1012
Sheldon Revkin.................  Director and Vice Chairman, Spacenet               United States
                                 Address: Spacenet Inc., 1750 Old Meadow Rd.
                                 McLean, Va. 22102 Tel: (703) 848-1012
David R. Shiff.................  Vice President, Sales and Marketing, Spacenet      United States
                                 Address: Spacenet Inc., 1750 Old Meadow Rd.
                                 McLean, Va. 22102 Tel: (703) 848-1012
Robert Givens..................  President, Gilat Europe Address: 267 Blvd.         United States
                                 Pereire, 75017 Paris, France Tel: 33 (0)1 58 56     and France
                                 73 00

             NAME                 PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS      CITIZENSHIP
             ----                -----------------------------------------------  -----------------
Giora Oron.....................  Chief Executive Officer, Gilat to Home Latin          Israel
                                 America
                                 (Netherlands Antilles) N.V. Address: 1560
                                 Sawgrass Corporate Parkway, Sunrise, Florida
                                 33323 Tel: (954) 858-1600
Amit Ancikovsky................  Vice President and Chief Financial Officer,           Israel
                                 Gilat to Home Latin America (Netherlands
                                 Antilles) N.V.
                                 Address: 1560 Sawgrass Corporate Parkway,
                                 Sunrise, Florida 33323 Tel: (954) 858-1600

YOEL GAT is a co-founder of Gilat and has been its Chief Executive Officer and a Director since Gilat's inception and, since July 1995, has served as the Chairman of the Board of Directors. Mr. Gat is a member of the Stock Option and Compensation Committees of the Board. Until July 1995, Mr. Gat also served as the President of Gilat. From 1974 to 1987, Mr. Gat served in the Israel Defense Forces ("IDF"). In his last position in service, Mr. Gat was a senior electronics engineer in the Israel Ministry of Defense ("IMOD"). Mr. Gat is a two-time winner of the Israel Defense Award (1979 and 1988), Israel's most prestigious research and development award. Mr. Gat is also Chairman of the Board of Directors of KSAT, in which Gilat holds a minority interest. Mr. Gat also served as the Chairman of the MOST Consortium and is a director of ILAN-GAT Engineering Ltd., a civil contracting company whose shares are publicly traded on the Tel Aviv Stock Exchange and of which members of his family are major shareholders. Mr. Gat is Chairman of the Board of Directors of StarBand US. Mr. Gat received a bachelor of science degree in electrical engineering and electronics from the Technion -- Israel Institute of Technology and a masters degree in management science from the Recanati Graduate School of Business Administration of Tel Aviv University, where he concentrated on information systems.

AMIRAM LEVINBERG is a co-founder of Gilat and has been a Director and Chief Operating Officer since its inception, and since July 1995, has served as its President. Mr. Levinberg is a member of the Stock Option and Compensation Committees of the Board. Until July 1995, he served as Vice President of Engineering. In this capacity, he supervised the development of Gilat's OneWay and Skystar Advantage VSATs. Mr. Levinberg is also a director of Mentergy Ltd. (formerly Gilat Communications Ltd.). From 1977 to 1987, Mr. Levinberg served in a research and development unit of the IDF, where he managed a large research and development project. He was awarded the Israel Defense Award in 1988. Mr. Levinberg is a graduate of the Technion -- Israel Institute of Technology, with a bachelor of science degree in electrical engineering and electronics and masters of science degree in digital communications.

SHLOMO TIROSH is a co-founder of Gilat and has been a member of the Board of Directors since its inception, serving as Chairman of the Board of Directors until July 1995. Mr. Tirosh is a member of the Audit Committee of the Board. Since July 1990, Mr. Tirosh has been serving as Chairman of the Board and President of Mentergy, and from 1990 to 2001 as Chief Executive Officer of Mentergy. From 1964 to 1987, Mr. Tirosh served in the IDF, where he held a variety of professional and field command positions (retiring with the rank of colonel). From 1980 to 1985, he headed a large research and development unit and, from 1985 to 1987, he managed a large-scale technology project for the IMOD. In 1988, he received the Israel Defense Award. Mr. Tirosh holds a bachelor of arts degree (summa cum laude) in economics from Bar-Ilan University in Ramat Gan.

DOV TADMOR has been a Director of Gilat since July 1994 and is a member of the Audit Committee of the Board. Mr. Tadmor served as Managing Director of the Discount Investment Corporation Ltd. ("DIC") and DIC Financial Management Ltd. ("DICFM") from 1985 until March 1999. Mr. Tadmor holds a bachelor of law degree from the School of Law and Economics in Tel Aviv.

In August 1999, an indictment was filed by the Tel Aviv District Attorney's Office in the Tel Aviv Magistrate's Court alleging certain violations of the Israeli Securities Law by DIC and certain of its officers, including Mr. Dov Tadmor, in his capacity as the former Managing Director of DIC. The indictment alleges that DIC's annual and quarterly financial statements for the period 1990-1995 that were sent to the Tel Aviv Stock Exchange and to the Israel Companies Registrar omitted the financial

statements of three private Israeli companies of which DIC was a shareholder, and that this omission was made in order to mislead. In December 1999, Mr. Tadmor and the other defendants pleaded not guilty to the charges, although one of the defendants subsequently entered into a plea agreement with the prosecution. The court commenced evidentiary proceedings in May 2000, which are continuing.

LORI KAUFMANN has been a director of Gilat since November 2000 and is a member of the Audit, Compensation and Stock Option Committees. Ms. Kaufmann has been an independent consultant in Israel and the United States since 1993. From October 1998 to October 2000, Ms. Kaufmann was vice president of MainXchange, an Internet-based financial services company. In 1991, Ms. Kaufmann co-founded HK Associates, an Israeli marketing and management consulting firm that served many of Israel's leading high technology companies, including, in 1991, Gilat. Ms. Kaufmann was employed by HK Associates until 1993. From 1989 to 1990, Ms. Kaufmann was a senior economist at Israel Chemicals Ltd., an Israeli chemicals firm. Ms. Kaufmann holds a bachelor of arts degree (magna cum laude) in international relations from Princeton University and a masters in business administration from Harvard Business School.

JOHN F. CONNELLY was appointed a Director in January 1999 pursuant to our agreement with GE Americom for the acquisition of Spacenet. Since 1992, Mr. Connelly has served as Chairman and Chief Executive Officer of GE Americom. Mr. Connelly joined the General Electric Company in 1967, and has served in a number of capacities at General Electric and its affiliates since that time. Mr. Connelly holds a bachelor of science degree from Niagara University and a masters in business administration from St. John's University.

GIDEON KAPLAN joined Gilat in 1989 as Vice President of Technology. From late 1987 to 1989, Dr. Kaplan was employed as a research engineer with Qualcomm, Inc., a mobile satellite communications and cellular radio company. From 1978 to 1987, Dr. Kaplan served in a research and development unit of the IDF and received the Israel Defense Award in 1984. Dr. Kaplan received a bachelor of science degree in electrical engineering, a master of science degree and doctorate in electrical engineering from the Technion -- Israel Institute of Technology.

YOAV LEIBOVITCH joined Gilat in early 1991 as Vice President of Finance and Administration and Chief Financial Officer. Since joining Gilat, Mr. Leibovitch has also served as acting Chief Financial Officer of Gilat Inc. From 1989 to 1990, Mr. Leibovitch worked in the United States at Doubleday Books and Music Clubs as special advisor for new business development. From 1985 to 1989, he was the Financial Officer of a partnership among Bertelsmann, A.G., a large German media and communications company; Clal Corporation, a major Israeli industrial holding company; and Yediot Aharonot, an Israeli daily newspaper. Mr. Leibovitch is a graduate of the Hebrew University of Jerusalem with a bachelor of arts degree in economics and accounting and a masters degree in business administration specializing in finance and banking. Mr. Leibovitch is a Certified Public Accountant in Israel.

JOSHUA LEVINBERG is a co-founder of Gilat and, since June 1999, serves as Senior Vice President for Business Development of Gilat, having previously served in that position from 1994 to April 1998. At that time, Mr. Levinberg became Chief Executive Officer of Gilat to Home Latin America (Netherlands Antilles) N.V. until June 1999. From 1989 until September 1994, he served as Executive Vice President and General Manager of Gilat Satellite Networks, Inc. From 1987 until the formation of Gilat Satellite Networks, Inc. in 1989, Mr. Levinberg was Vice President of Business Development of Gilat. From 1985 to 1987, Mr. Levinberg held various positions, including Manager of System Development and Marketing Manager at the Israeli subsidiary of DSP Group Inc., a U.S. company specializing in digital signal processing. From 1979 to 1985, he worked in the Communications Engineering Department of Elrisa Ltd., a manufacturer of sophisticated weapons and communications systems. Mr. Levinberg is a graduate of Tel Aviv University, with a bachelor of science degree in electrical engineering and electronics. Amiram Levinberg, a Director, President and Chief Operating Officer of Gilat and Joshua Levinberg are brothers.

EREZ ANTEBI currently serves as Gilat's Vice President, General Manager for Asia, Africa and Pacific Rim. From September 1994 until the beginning of 1998, he served as Vice President and General Manager of Gilat Inc. Mr. Antebi joined Gilat in May 1991 as product manager for the Skystar

Advantage VSAT product. From August 1993 until August 1994, he served as Vice President of Engineering and Program Management of Gilat Inc. Prior to joining Gilat, Mr. Antebi worked for a private importing business from 1989 to 1991, after having served as marketing manager for high frequency radio communications for Tadiran Limited, a defense electronics and telecommunications company, from 1987 to 1989, and as a radar systems development engineer at Rafael, the research and development and manufacturing arm of the IDF, from 1981 to 1987. Mr. Antebi received a bachelor of science degree and master of science degree in electrical engineering from the Technion -- Israel Institute of Technology.

NICK SUPRON joined Spacenet in January 2001 as President and Chief Executive Officer. Prior to joining Spacenet and since 1999, Mr. Supron was a private investor and management consultant. Between 1984 and 1999, he served in various positions with GTECH Corporation, commencing as a senior corporate consultant to the CEO and culminating as Senior Vice President of world-wide operations. From 1982 to 1984, Mr. Supron was a Senior Corporate Consultant for Tenneco Oil Company and he served as a senior project manager engineer between 1978 and 1980 for Brown & Root. Mr. Supron received a masters in business administration degree from Harvard Business School and a BSME from the Rice University in Houston.

SHELDON (SHELLY) REVKIN joined Spacenet in January 1999 as President and Chief Operating Officer until January 2001, when he assumed the position of Vice Chairman. Prior to joining Spacenet, Mr. Revkin was Senior Vice President and General Manager of the Wireless Networks Division of Hughes Network Systems, Inc. Mr. Revkin joined Hughes in 1978 and held several executive-level marketing, sales and operations positions within the company. Mr. Revkin holds a bachelor of science degree in electrical engineering from Pratt Institute in New York City, a master of science degree in electrical engineering from Polytech University in Brooklyn, New York, and a masters of business administration degree in finance and marketing from Lynchburg College in Lynchburg, Virginia. Mr. Revkin is a member of Eta Kappa Nu, Tau Beta Pi and the Institute of Electrical and Electronics Engineering ("IEEE").

DAVID R. SHIFF joined Spacenet in December 1998 as Vice President of Sales and Marketing. Prior to joining Spacenet, Mr. Shiff spent 15 years with Hughes Network Systems, a division of Hughes Electronics. For the last two years, he served as Assistant Vice President, North American Sales, for the Satellite Networks Division of Hughes. Mr. Shiff holds a degree in mechanical engineering from the University of Wisconsin.

ROBERT GIVENS joined Gilat in the Spring of 2000 as President of Gilat Europe. Prior to joining Gilat, Mr. Givens was employed by Global One Communications S.A. from 1996 until 2000, first as Chief Financial Officer and then as Executive Vice President and General Manager for Europe and Eastern Europe. From 1982 to 1996, Mr. Givens operated Profit Development, a transition management company he founded to provide temporary management for European and American companies undergoing corporate change. Prior to 1982, he held various management and financial positions with Groupe Chargeurs from 1977 to 1981, Corning Glass Works from 1976 to 1977, Fairchild Camera and Instrument Corp. from 1972 to 1976, SmithKline Beecham from 1970 to 1972 and Ford Motor Company from 1968 to 1970. Mr. Givens received a bachelor of science degree in finance from Miami University and a masters degree in international business administration from Columbia University and continued his studies in post graduate accounting at the Wharton School.

GIORA ORON joined Gilat to Home Latin America (Netherlands Antilles) N.V. in 1997 as Vice President, Operations and, in December 2000, became Chief Operating Officer. From 1992 to 1997 he was the General Manager for Espro Engineering (1992) Ltd., a company engaged in the design, production and marketing of portable digital audio guide systems based on voice compression technology. Between 1986 and 1992, Mr. Oron was the Chief Engineer for Voice of America, Israel, a plan for the installation and operation of the largest high frequency radio system in the world. From 1969 to 1984, Mr. Oron served in the IDF, Israeli Defense Forces where he attained the rank of Commander-Lieutenant Colonel. Mr. Oron holds a bachelor of science in electronic engineering from the Technion -- Israel Institute of Technology.

AMIT ANCIKOVSKY joined Gilat in 1999 as a Controller and, in 2000, became Chief Financial Officer of Gilat to Home Latin America (Netherlands Antilles) N.V. From 1997 to 1999, Mr. Ancikovsky served as deputy to a Vice President at Israel Discount Bank Ltd., Israel's third largest bank. From August 1996 to July 1997, he worked at the law office of Baratz, BarNatan, Gilat & Co. From 1988 to 1991, Mr. Ancikovsky served in the IDF, where he won an excellency award for his work on a team responsible for IT implementation. Mr. Ancikovsky holds a bachelor of arts in accounting and economics and a law degree, both from the Hebrew University of Jerusalem, as well as a master of science in accounting and finance from Tel Aviv University.

INTERESTS OF GILAT'S DIRECTORS AND EXECUTIVE OFFICERS

Gilat's directors and executive officers are eligible to tender their shares of rStar common stock in the offer. As of October [ ], 2001, Gilat's directors and officers collectively hold approximately 330,000 shares of rStar common stock which represents less than 1% of the outstanding shares of rStar common stock. There are no arrangements or agreements between such directors and executive officers of Gilat and rStar with respect to the shares of rStar common stock they hold. Also, other than the voting agreement described in this offer to exchange/prospectus, there are no arrangements or agreements between rStar and Gilat with respect to the shares of rStar common stock that Gilat directly or indirectly holds. For a description of the voting agreement, see the discussion under "The Acquisition Agreement -- The Voting Agreement."

Based on Gilat's records and on information provided to Gilat by its directors and members of its senior management, neither Gilat nor any of its directors or executive officers, nor any of Gilat's subsidiaries has effected any transaction involving shares of rStar common stock during the 60 day period prior to October [ ], 2001.

                                                                 SHARES       PERCENTAGE
                                                              BENEFICIALLY   BENEFICIALLY
         5% STOCKHOLDERS, DIRECTORS AND OFFICERS(2)             OWNED(1)        OWNED
         ------------------------------------------           ------------   ------------
5% STOCKHOLDERS:
Gilat Satellite Networks Ltd.(3)............................   41,814,643       64.95%
  21 Gilat Yegia Kapayim Street
  Kiryat Arye
  Petah Tikva 49130, Israel
Lance Mortensen(4)..........................................    6,430,875        9.99%
Michael Arnouse(5)..........................................    3,617,554        5.62%
  545 Madison Ave
  New York, NY 10022
CURRENT DIRECTORS:
Charles Appleby(6)..........................................      813,335        1.26%
  9250 Baymeadows Road
  Suite 220
  Jacksonville, FL 32256
Amiel Samuels(7)............................................       56,000           *
Sasson Darwish(8)...........................................           --          --
EXECUTIVE OFFICERS:
Robert Edwards(9)...........................................      101,566           *
Christophe Morin(10)........................................       46,874           *
Jay Scott(11)...............................................       74,916           *
David Wallace(12)...........................................       18,250           *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (9
  persons)..................................................   11,159,370       17.33%

(1) The number of shares owned is determined in accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the individual or entity has voting power or investment power and also any shares which the individual or entity has the right to acquire within 60 days of September 27, 2001 through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares shown as beneficially owned.

(2) Unless otherwise indicated, the address of each of the individuals or entities named above is: c/o rStar Corporation, 3000 Executive Parkway, Suite 150, San Ramon, CA 94583.

(3) Based on Schedule 13D/A filed with the SEC on May 21, 2001, Gilat held shared voting as to 41,814,643 of such shares. Gilat indicates that it had no sole voting, sole dispositive, or shared dispositive power over such shares.

(4) Includes options to purchase 300,000 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Mortensen is Chairman of the Board, Chief Executive Officer and President of rStar.

(5) Includes options to purchase 40,000 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Arnouse is a director of rStar.

(6) Includes options to purchase 6,667 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Appleby is a director of rStar.

(7) Includes shares of rStar common stock that are controlled by Mr. Samuel's spouse. Mr. Samuels disclaims beneficial ownership of these shares. Mr. Samuel's address is c/o Gilat Satellite Networks Ltd., 21 Gilat Yegia Kapayim Street, Kiryat Arye, Petah Tikva 49130, Israel.

(8) Mr. Darwish's address is 424 Madison Avenue, 16th Floor, New York, New York, 10017.

(9) Includes options to purchase 101,038 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Edwards is Senior Vice President, Administration and Chief Financial Officer of rStar.

(10) Includes options to purchase 46,874 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Morin is Vice President -- Marketing of rStar.

(11) Includes options to purchase 72,916 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Scott is Chief Operating Officer of rStar.

(12) Includes options to purchase 17,800 shares of rStar common stock exercisable within 60 days of September 27, 2001. Mr. Wallace is Vice President, General Counsel and Secretary of rStar.