YUPI INTERNET INC, S-1/A, 2000-03-07

YUPI INTERNET INC
S-1/A, 2000-03-07
BUSINESS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 2000
REGISTRATION STATEMENT NO. 333-94891

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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 2
TO
FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------
YUPI INTERNET INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 7375 65-0796526
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

YUPI INTERNET INC.
830 LINCOLN ROAD, SECOND FLOOR
MIAMI BEACH, FLORIDA 33139
(305) 604-0366
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
OSCAR L. COEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
YUPI INTERNET INC.
830 LINCOLN ROAD, SECOND FLOOR
MIAMI BEACH, FLORIDA 33139
(305) 604-0366
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:

STEPHEN A. HURWITZ, ESQ. NANCY A. SPANGLER, ESQ.
WILLIAM B. SIMMONS, ESQ. PIPER MARBURY RUDNICK & WOLFE LLP
TESTA, HURWITZ & THIBEAULT, LLP COMMERCE EXECUTIVE PARK III, SUITE 610
125 HIGH STREET 1850 CENTENNIAL PARK DRIVE
BOSTON, MASSACHUSETTS 02110 RESTON, VIRGINIA 20191
(617) 248-7000 (703) 391-7100
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
---------------

CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value 8,050,000 shares $ 15.00 $ 120,750,000.00 $ 45,540.00
===============================================================================================================
<FN>
(1) Includes 1,050,000 shares that the underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
(3) Paid in connection with the original filing on January 18, 2000.
</FN>
</TABLE>

---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 7, 2000

7,000,000 Shares

[YUPI LOGO]

Common Stock

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

All of the shares of common stock are being offered by Yupi. Prior to this
offering, there has been no public market for our common stock. The initial
public offering price is expected to be between $13.00 and $15.00 per share.

We have granted the underwriters a 30-day option to purchase a maximum of
1,050,000 additional shares of common stock to cover over-allotments of shares.

Application has been made to list our common stock on the Nasdaq National
Market under the symbol "YUPI."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 5.

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS TO YUPI
------------- --------------- -------------
Per Share ......... $ $ $
Total ............. $ $ $

Delivery of the shares of common stock will be made on or about ,
2000.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

CREDIT SUISSE FIRST BOSTON

DONALDSON, LUFKIN & JENRETTE

BANC OF AMERICA SECURITIES LLC

SG COWEN

The date of this prospectus is , 2000
<PAGE>

[INSIDE COVER PICTURE]
<PAGE>

Description of Artwork

INSIDE FRONT COVER

Clockwise from the top of the page are twelve pictures of various pages
on Yupi's several Web sites.

The Yupi logo appears in the middle in the page.

INSIDE FRONT COVER GATEFOLD

Background of gatefold pages shows arrows pointing in four directions.

Left page:

The top half of the page has the following text: "content". The
following text appears immediately below this text: "Through our relationships
with leading media companies, including Sony, News Corp., Fox, and Universal
Music Group, we offer users high-quality entertainment content. We also provide
a wide variety of business features, including access to The Wall Street Journal
of the Americas, as well as sports, health, womens', travel, and children's
content. Below this text appear the logos of "Sony," "News Corporation" and
"Fox" and three pictures of various pages on Yupi's Web site.

The bottom half of the page has the following text: "consultative ad
sales". The following text appears immediately below this text: "Our sales and
marketing professionals have extensive experience in the media, advertising, and
consumer products industries. This enables them to adopt a consultative approach
to selling advertising on our sites. We assist advertisers in conducting market
research and help them assess the effectiveness of their advertising efforts by
providing feedback on user traffic, demographics, and other information." Below
this text appear the names of the following companies: Banamax, Bellsouth, Dell,
Fox, Heineken, Nortel Networks, Pepsi, Procter & Gamble, Siemens.

Right page:

The top half of the page has the following text: "attracting new
visitors". The following text appears immediately below this text: "We employ
traditional and grassroots advertising to promote the Yupi.com brand to a broad
spectrum of Spanish speakers. In 1999, we began television and outdoor
advertising in Hispanic markets in the United States and expanded our efforts to
include online, pan-regional cable television, radio, and print advertising in
Latin America and Spain. We have also engaged in a variety of co-promotions,
such as sponsoring a Heineken USA tour of Latin musical artists." Below this
text appears several photographs of Yupi advertisements appearing on billboards,
print ads and other media.

The bottom half of the page has the following text: "comprehensive
services". The following text appears below this text: "Our proprietary search
engine delivers results exclusively in Spanish. Our employees manually select
and categorize the sites in our Spanish-language database which we believe
provides users with more relevant search results than computer-generated
databases. Mi.Yupi.com allows users to design the look and feel, as well as the
content, of their personal homepages. MiCasa.Yupi.com enables them to create
their own Yupi-hosted Web sites. We also offer a language translator, free
e-mail, chats, forums and virtual greeting cards." Below this text appears a
picture of Yupi's home page.

Center of gatefold:

The Yupi logo appears in the center of the right and left pages
described above.

<PAGE>

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TABLE OF CONTENTS

PAGE
-----
PROSPECTUS SUMMARY .................... 1
RISK FACTORS .......................... 5
SPECIAL NOTE REGARDING FORWARD-
LOOKING STATEMENTS ................. 16
TRADEMARKS ............................ 16
USE OF PROCEEDS ....................... 17
DIVIDEND POLICY ....................... 17
CAPITALIZATION ........................ 18
DILUTION .............................. 19
SELECTED HISTORICAL FINANCIAL DATA..... 20
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL DATA ..................... 22
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS .......... 24

PAGE
-----
BUSINESS .............................. 29
MANAGEMENT ............................ 41
CERTAIN TRANSACTIONS .................. 47
PRINCIPAL SHAREHOLDERS ................ 48
DESCRIPTION OF CAPITAL STOCK .......... 50
SHARES ELIGIBLE FOR FUTURE SALE ....... 55
UNDERWRITING .......................... 57
NOTICE TO CANADIAN RESIDENTS .......... 59
LEGAL MATTERS ......................... 60
EXPERTS ............................... 60
ADDITIONAL INFORMATION ................ 61
INDEX TO FINANCIAL STATEMENTS ......... F-1

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

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

DEALER PROSPECTUS DELIVERY OBLIGATION

UNTIL , 2000 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL
DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING
AS AN UNDERWRITER AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

i
<PAGE>

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY.

YUPI INTERNET INC.

We are a leading online Spanish language destination, delivering a wide
variety of content and services and an intuitive navigational experience to a
broad and diverse community of Spanish speakers around the world. We attract
users through grass roots, traditional media and online marketing efforts, and
we provide them with aggregated entertainment, news and other content through
relationships with media companies, including our shareholders, Sony and News
Corp. We also provide our users with relevant search results exclusively in
Spanish through our proprietary search engine. For the year ended December 31,
1999, we had revenues of approximately $3.2 million and a net loss, excluding a
deemed dividend on our preferred stock, of approximately $35.0 million.

We work with our advertisers and marketers to design, execute and evaluate
online advertising and promotional campaigns that segment and target our users.
As of February 28, 2000, we had approximately 3.8 million registered users.
According to I/PRO, in January 2000, our sites generated approximately 132
million page views and we recorded approximately 9.1 million visits to our
sites, with an average duration of approximately 15 minutes per visit.

Our target market of Spanish-speaking Internet users represents one of the
fastest growing groups of Internet users today. IDC estimates that the number
of Spanish-speaking Internet users outside the United States will increase from
approximately 8.3 million in 1999 to 20.6 million in 2002. Forrester Research
estimates that by the end of 2000, there will be approximately 3.6 million U.S.
Hispanic Internet users. Jupiter Communications estimates that the percentage
of Latin Americans outside of Brazil using the Internet will increase from
approximately 1.0% in 1999 to 4.7% in 2003, representing a compound annual
growth rate of approximately 50%, compared to an estimated rate of
approximately 12% in the United States for the same period. As Internet usage
in Latin America increases, we believe that Spanish-speaking Internet users
will become a more diverse group. According to Nazca S & S, the percentage of
Internet users from the highest socio-economic level in the eight largest Latin
American countries declined from 41% in 1997 to 30% in 1999 and the percentage
of female Internet users increased from 24% to 38% during the same period.

We believe Yupi provides an effective medium for advertisers and marketers
to reach this increasingly diverse audience. We attract users and increase
usage by providing:

/bullet/ aggregated quality content from leading media companies and
publications, such as BMG Entertainment, Cinemark, COMPUTER WORLD, News
Corp., PC WORLD, Sony, Universal Music Group, THE WALL STREET JOURNAL OF
THE AMERICAS, Warner Bros. Studios and WRIGHT INVESTOR SERVICES;

/bullet/ relevant search and intuitive navigational services, through our
proprietary search engine and a database of Spanish language sites that
has been manually reviewed and categorized by our Spanish-speaking
employees, as well as through AltaVista's proprietary Spanish language
database; and

/bullet/ our simple and efficient presentation of content that allows users
to quickly navigate through our sites.

Our large and diverse online user base enables us to conduct targeted
marketing analyses for advertisers and marketers. We provide advertisers and
marketers with a wide range of media

1
<PAGE>

consulting services, including strategic planning and creative development. In
addition, we provide them with access to real-time feedback on user traffic,
click-through rates, demographics, online surveys and other information that
allows them to reach their target markets more easily and cost effectively.

Our objective is to be the most valuable medium for advertisers and
marketers to reach the Spanish-speaking online community. To achieve this goal,
we intend to:

/bullet/ attract new users and broaden our audience by continuing our
marketing efforts,
cross-promotional activities and acquiring existing Internet sites;

/bullet/ continue to strengthen audience loyalty and increase frequency of
use by furnishing diverse content, pursuing additional strategic
alliances, enhancing the functionality of our core services and
introducing user loyalty and affinity programs;

/bullet/ create value for advertisers and marketers by continuing to offer
consulting services, such as strategic planning, collection and
aggregation of user demographic information, online research and analysis
of advertising data; and

/bullet/ expand electronic commerce opportunities.

Our ability to achieve our objectives is subject to numerous risks and
uncertainties, many of which are beyond our control. These risks are more fully
discussed elsewhere in this prospectus under the heading "Risk Factors."

We were incorporated in Florida on October 20, 1997. Our principal
executive offices are located at 830 Lincoln Road, Second Floor, Miami Beach,
Florida 33139, and our telephone number is (305) 604-0366.

2
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common stock offered ........................... 7,000,000 shares

Common stock to be outstanding
after this offering ........................... 42,746,141 shares

Use of proceeds ................................ For general corporate purposes, including
working capital. See "Use of Proceeds."

Proposed Nasdaq National Market symbol ......... YUPI
</TABLE>

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The number of shares of common stock to be outstanding after this offering
is based on our shares outstanding at December 31, 1999. This information
excludes:

/bullet/ 10,000,000 shares of common stock reserved for issuance under our
Stock Incentive Plan, of which 9,288,439 shares are issuable upon exercise
of stock options outstanding as of December 31, 1999;

/bullet/ 4,000,000 shares of common stock reserved for issuance under our
2000 Stock Option and Incentive Plan; and

/bullet/ 200,000 shares of common stock reserved for issuance under our
2000 Employee Stock Purchase Plan.

ASSUMPTIONS

Unless otherwise specified, all information in this prospectus:

/bullet/ assumes no exercise of the underwriters' over-allotment option;

/bullet/ reflects the filing of an amended and restated articles of
incorporation;

/bullet/ reflects the mandatory conversion of all outstanding shares of
preferred stock into an aggregate of 19,558,460 shares of common stock
upon the closing of this offering; and

/bullet/ does not reflect any adjustment to the conversion ratios for the
Class B Convertible Preferred Stock and Class C Convertible Preferred
Stock in the event the initial public offering price of the common stock
offered by this prospectus is less than $15.295 per share. At an assumed
initial public offering price of $14.00 per share, an aggregate of 582,468
additional shares of common stock would be issued upon conversion of the
Class B Convertible Preferred Stock and Class C Convertible Preferred
Stock. See "Description of Capital Stock--Conversion of Outstanding
Preferred Stock."

3
<PAGE>

SUMMARY FINANCIAL DATA

The statement of operations data for the period from October 20, 1997
(date of incorporation) through December 31, 1997 and the years ended December
31, 1998 and 1999 and the balance sheet data as of December 31, 1999 are
derived from the audited consolidated financial statements appearing elsewhere
in this prospectus. The historical results are not necessarily indicative of
the operating results to be expected in the future. For more information, see
"Unaudited Pro Forma Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------------
PRO FORMA
ACTUAL AS ADJUSTED(2)
-------------- ---------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents ........... $ 48,611,519 $137,711,519
Working capital ..................... 44,556,464 133,656,464
Total assets ........................ 86,635,660 175,735,660
Convertible preferred stock ......... 110,672,402 --
Total shareholders' equity .......... 78,602,084 167,702,084

<FN>
- ----------------
(1) The pro forma summary statement of operations data reflects the
acquisitions of CiudadFutura.com/trademark/ in March 1999 and
Bogota.com/trademark/ in August 1999 as if they were completed on January
1, 1999. These acquisitions were accounted for using the purchase method
of accounting.

(2) The pro forma as adjusted summary balance sheet data reflects the
conversion of all outstanding shares of preferred stock into 19,558,460
shares of common stock upon the closing of this offering; a deemed dividend
on convertible preferred stock of approximately $23.9 million representing
the beneficial conversion feature embedded in the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock on the date of their
issuance, which dividend will be recognized upon conversion; and the sale of
7,000,000 shares of common stock in this offering at an assumed initial
offering price of $14.00 per share, after deducting the estimated
underwriting discounts and commissions and estimated offering expenses.
</FN>
</TABLE>

4
<PAGE>

RISK FACTORS

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY
CONSIDER THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO BUY OUR COMMON STOCK.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION
OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER. IN THIS CASE, THE TRADING PRICE
OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.

WE HAVE ONLY BEEN IN BUSINESS FOR A SHORT PERIOD OF TIME AND YOUR BASIS FOR
EVALUATING US IS LIMITED

We were incorporated in October 1997. You must consider the risks,
expenses and uncertainties that an early stage company like ours faces,
particularly in the new and rapidly evolving Internet market. Because we have
only recently begun to develop our sales organization and expand our commercial
operations, our past results and rates of growth may not be meaningful and you
should not rely on them as an indication of our future performance.

WE HAVE INCURRED SUBSTANTIAL LOSSES, WE EXPECT CONTINUED LOSSES AND CONTINUED
LOSSES MAY HARM OUR BUSINESS AND THE VALUE OF OUR COMMON STOCK

We have never been profitable. As of December 31, 1999, we had an
accumulated deficit of approximately $40.9 million. We expect to continue to
incur significant losses for the foreseeable future. Although our revenues have
grown in recent quarters, our expenses have grown even faster, and we expect to
increase spending significantly. Accordingly, we will need to generate
significantly higher revenues to achieve profitability. We may not be able to
do so. The failure to attain profitability will have a material adverse effect
on our business and on the value of our common stock.

IF IN THE FUTURE WE ARE ABLE TO RECORD BARTER TRANSACTIONS AS REVENUE, IT MAY
BE DIFFICULT TO EVALUATE OUR HISTORICAL FINANCIAL RESULTS

We have historically engaged in a substantial amount of barter activity.
Barter activity consists of arrangements in which we exchange advertising space
on our network predominately for advertising space in print media, on
television and radio stations, or for placement of our promotions in areas of
high commercial traffic, rather than for cash payment. Under current accounting
rules and our revenue recognition policy, these barter transactions may not be
reported as revenue unless we are able to reliably measure the cash value of
these transactions. For the value of a barter transaction to be reliably
measurable, we must conduct a cash-only transaction that is similar to that
barter transaction. Through December 31, 1999, we have not reported any barter
transactions as revenue. If in future periods we are able to meet the standard
that allows us to report barter transactions as revenue, we may recognize
substantially increased revenue compared to prior periods. In such an event,
our past results and rates of growth may not be meaningful and you should not
rely on them as an indication of our future performance. In addition, because
barter transactions do not generate cash, we may be unable to fund our
operations if we are unable to increase our cash revenue.

SEASONAL FACTORS MAY ADVERSELY AFFECT OUR FIRST QUARTER OPERATING RESULTS WHICH
MAY CAUSE THE TRADING PRICE OF OUR COMMON STOCK TO DECLINE

Historically, advertising expenditures in Latin America have been lower
during the first calendar quarter of each year. As a result, our advertising
revenues may be lower during the first calendar quarter as compared to other
quarters. If our revenues decrease during the first quarter, or do not grow at
the rate anticipated by public market analysts, the trading price of our common
stock may decline.

5
<PAGE>

THE UNPREDICTABILITY OF OUR QUARTERLY RESULTS MAY ADVERSELY AFFECT THE TRADING
PRICE OF OUR COMMON STOCK

Our future revenues and results of operations may fluctuate from quarter
to quarter due to a combination of factors, many of which are outside of our
control and any of which may cause our stock price to fluctuate. The primary
factors that may affect us include the following:

/bullet/ our ability to attract and retain users;

/bullet/ the start-up nature of our business, which means we have not begun
to achieve consistency in revenue and expense growth;

/bullet/ our acquisition and internal growth strategy, which means that we
expect to frequently add new activities to our business, leading to
increased expenses;

/bullet/ promotional activities by us or our competitors, which could cause
heavier Internet usage in some quarters compared to others;

/bullet/ currency fluctuations that affect reported revenues and expenses
from our Latin American and Spanish operations;

/bullet/ seasonal variations in advertising from quarter to quarter, which
would lead to fluctuating advertising revenues; and

/bullet/ heavier retail purchasing activity in some quarters compared to
others, which would contribute to fluctuating electronic commerce
revenues.

Accordingly, you should not rely on quarter-to-quarter comparisons of our
results of operations as an indication of our future performance. In future
periods our results of operations may be below the expectations of public
market analysts and investors. This failure to meet expectations could cause
the trading price of our common stock to decline.

BECAUSE WE DERIVE A SUBSTANTIAL PORTION OF OUR REVENUES FROM A LIMITED NUMBER
OF ADVERTISERS, IF WE ARE UNABLE TO MAINTAIN THESE RELATIONSHIPS OR ATTRACT
ADDITIONAL ADVERTISERS, OUR REVENUES WOULD BE ADVERSELY AFFECTED

For the year ended December 31, 1999, we derived approximately 50.6% of
our revenue from three advertisers. We expect that in the foreseeable future we
will continue to depend on a limited number of advertisers for a substantial
portion of our revenues. If our relationship with these advertisers is
terminated or adversely affected for any reason, or if we fail to develop other
advertising relationships, our advertising revenues may decline or grow at a
rate slower than anticipated.

IF THE INTERNET IS NOT WIDELY ACCEPTED AS A MEDIUM FOR ADVERTISING AND COMMERCE
IN OUR MARKETS, PARTICULARLY IN LATIN AMERICA, OUR ADVERTISING AND ELECTRONIC
COMMERCE REVENUES MAY DECLINE OR GROW AT SLOWER RATES THAN ANTICIPATED AND OUR
BUSINESS WILL SUFFER

We expect to receive a substantial amount of our revenue for the
foreseeable future from Internet advertising, and to a lesser extent, from
facilitating electronic commerce transactions. If the Internet is not accepted
as a medium for advertising and commerce in our markets, especially in Latin
America, our advertising and electronic commerce revenues may decline or grow
at slower rates than anticipated and our business will suffer. The Internet
advertising and electronic commerce markets are new and rapidly evolving in
Spanish-speaking communities, particularly in Latin America. As a result, we
cannot gauge their effectiveness or the long-term market acceptance of online
advertising and electronic commerce.

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<PAGE>

Many of our current or potential advertisers and electronic commerce
merchants have limited experience using the Internet for advertising and
electronic commerce and historically have not devoted a significant portion of
their budgets to Internet-based activities. Advertisers and marketers have
invested substantial resources in other methods of conducting business, and
companies may choose not to advertise or sell their products or services on our
sites if they do not perceive our audience demographic to be desirable or
advertising on our sites to be effective.

IF STANDARDS TO MEASURE ADVERTISING EFFECTIVENESS ARE NOT DEVELOPED, THE
INTERNET MAY NOT BE ACCEPTED AS AN ADVERTISING MEDIUM AND WE MAY NOT BE ABLE TO
ATTRACT ADVERTISERS TO OUR SITES

No standards have been widely accepted for measuring the effectiveness of
Internet advertising. In particular, few companies that measure Internet
traffic currently offer their services in many of our target markets, including
Latin America. Standards may not develop sufficiently to support the Internet
as an effective advertising medium. If these standards do not develop,
advertisers may choose not to advertise on the Internet in general or,
specifically, on our sites. This decision may cause our advertising revenue to
decline or grow at slower rates than anticipated.

IF INTERNET USE BY SPANISH-SPEAKING USERS DOES NOT GROW, THE NUMBER OF USERS
VISITING OUR SITES MAY DECLINE OR GROW MORE SLOWLY THAN ANTICIPATED WHICH MAY
LIMIT OUR ABILITY TO GENERATE ADVERTISING AND ELECTRONIC COMMERCE REVENUES

The Internet market in Latin America and in other Spanish-speaking markets
is in an early stage of development. The continued growth of Internet usage in
these markets, may be inhibited for various reasons, including:

/bullet/ cost of Internet access;

/bullet/ concerns about security, reliability, and privacy;

/bullet/ difficulty of use; and

/bullet/ quality of service.

Our ability to generate advertising and electronic commerce revenues depends on
attracting an increased number of users to our sites. Consequently, if Internet
use in these markets does not grow, the number of users visiting our sites may
decline or grow more slowly than we anticipate which may limit our ability to
generate revenues.

UNDERDEVELOPED TELECOMMUNICATIONS INFRASTRUCTURE MAY LIMIT THE GROWTH OF THE
INTERNET IN LATIN AMERICA AND ADVERSELY AFFECT OUR BUSINESS

Access to the Internet requires a relatively advanced telecommunications
infrastructure. The telecommunications infrastructure in many parts of Latin
America is not as well-developed as that in the United States or Western
Europe. The quality and continued development of this infrastructure in Latin
America will have a substantial impact on our ability to deliver our services
and on the market acceptance of the Internet in Latin America in general. If
the Latin American telecommunications infrastructure does not improve, the
Internet will not gain broad acceptance. If access to the Internet in Latin
America does not continue to grow or grows more slowly than we anticipate, our
business, financial condition and results of operations will be materially and
adversely affected.

UNDERDEVELOPED DISTRIBUTION INFRASTRUCTURE MAY LIMIT THE GROWTH OF ELECTRONIC
COMMERCE IN LATIN AMERICA AND ADVERSELY AFFECT OUR ABILITY TO GENERATE
INCREASED ELECTRONIC COMMERCE REVENUES

Our current business plan depends on the growth of our electronic commerce
revenues. Execution of electronic commerce transactions requires a relatively
advanced distribution infrastructure. Currently, this distribution
infrastructure, which includes roads, airports, ports and

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<PAGE>

warehouse facilities, in many parts of Latin America is not as well-developed
as in the United States or Western Europe. If further improvements to the
distribution infrastructure in Latin America are not made, the volume of
electronic commerce transactions may not increase or may increase more slowly
than we anticipate. If electronic commerce opportunities in Latin America do
not grow or grow more slowly than anticipated, our ability to generate
increased electronic commerce revenues will be limited, which would materially
and adversely affect our business, financial condition and results of
operations.

LACK OF CREDIT CARD OWNERSHIP MAY LIMIT THE GROWTH OF ELECTRONIC COMMERCE IN
LATIN AMERICA AND ADVERSELY AFFECT OUR ABILITY TO GENERATE INCREASED ELECTRONIC
COMMERCE REVENUES

Unlike consumers in the United States and Western Europe, most Latin
Americans do not own credit cards. Credit cards are often required to conduct
electronic commerce transactions. If credit card ownership by Latin Americans
using the Internet does not increase, or another payment infrastructure is not
adopted, the growth of electronic commerce in Latin America may be limited. If
electronic commerce opportunities in Latin America do not grow, or grow more
slowly than anticipated, our ability to generate increased electronic commerce
revenues will be limited, which would materially and adversely affect our
business, financial condition and results of operations.

VOLATILE SOCIAL AND POLITICAL CONDITIONS IN LATIN AMERICA MAY DECREASE INTERNET
AVAILABILITY AND USAGE AND ADVERSELY AFFECT OUR ABILITY TO ATTRACT ADVERTISERS

A substantial portion of our revenue is, and will continue to be,
dependent upon economic activity in Latin America. Social and political
conditions in Latin America are volatile and may cause our operations to
fluctuate. This volatility could make it difficult for us to achieve our
desired growth in revenues and earnings. Historically, volatility in Latin
America has been caused by:

/bullet/ significant governmental influence over many aspects of local
economies;

/bullet/ political instability;

/bullet/ unexpected changes in regulatory requirements;

/bullet/ social unrest;

/bullet/ slow or negative economic growth;

/bullet/ imposition of trade barriers; and

/bullet/ wage and price controls.

We have no control over these matters. Resulting volatility may decrease
Internet availability and usage, create uncertainty regarding our operating
climate and adversely affect our advertising revenue, all of which may
adversely impact our business.

CURRENCY FLUCTUATIONS AND GENERAL ECONOMIC CONDITIONS IN LATIN AMERICA MAY
RESULT IN DECREASED INTERNET USAGE AND ADVERTISING EXPENDITURES IN OUR MARKETS

The currencies of many countries in Latin America have experienced
substantial depreciation and volatility. Currency fluctuations, as well as high
interest rates, inflation and high unemployment, have materially and adversely
affected the economies of these countries. Poor general economic conditions in
Latin American countries may cause a decrease in our user base and cause our
advertisers to reduce their spending, which could adversely impact our business
and cause our revenue to decline unexpectedly.

In addition, if we generate an increased amount of revenue in currencies
other than the U.S. dollar, currency losses could occur as a result of currency
depreciation.

8
<PAGE>

IF WE ARE UNABLE TO DEVELOP OUR BRANDS, WE MAY NOT BE ABLE TO ATTRACT USERS,
ADVERTISERS AND MARKETERS TO OUR SITES

Developing our Yupi.com brand and the brands of our other sites is
critical to expanding our user base and revenues. We believe the importance of
brand recognition will increase as the number of Spanish language Internet
sites grows. To attract and retain Internet users, advertisers and marketers,
we intend to substantially increase our expenditures to strengthen brand
loyalty. Our success in promoting and enhancing our brands will also depend on
our success in providing high quality content, features and functionality. If
we fail to promote our brands successfully, users, advertisers and marketers
may not perceive our services to be of high quality, and consequently, will not
be attracted to our sites.

IF WE FAIL TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH CONTENT
PROVIDERS, ELECTRONIC COMMERCE MERCHANTS AND TECHNOLOGY PROVIDERS, WE MAY NOT
BE ABLE TO ATTRACT AND RETAIN USERS OR ADVERTISERS

We have focused on establishing relationships with leading content
providers, electronic commerce merchants, and technology and infrastructure
providers. Our business depends heavily on these relationships. Because most of
our agreements with these third parties are not exclusive, our competitors may
seek to work with these same parties and adversely impact our relationships. We
might not be able to maintain these relationships or replace them on
financially attractive terms. If these same third parties do not adequately
perform their obligations, or if they reduce their activities with us, compete
with us, or provide their services to competitors, we may have more difficulty
attracting and retaining users and advertisers. This result could cause our
business, financial condition and results of operations to be materially and
adversely affected. Also, while we intend to actively seek additional strategic
relationships in the future, our efforts may prove unsuccessful.

OUR MARKET IS HIGHLY COMPETITIVE AND OUR FAILURE TO COMPETE SUCCESSFULLY COULD
LIMIT OUR ABILITY TO ATTRACT AND RETAIN USERS, ADVERTISERS AND ELECTRONIC
COMMERCE MERCHANTS

Many companies provide Internet sites and online destinations targeting
Spanish-speaking people. Competition for users, advertisers and marketers is
intense and is expected to increase significantly in the future because there
are no substantial barriers to entry in our market. Companies may be successful
in competing against us if they are able to offer more compelling content or
services, promote their brand more effectively or bundle their content and
services with related products or services that we cannot offer. If we are
unable to compete successfully we may be unable to attract and retain users,
advertisers and electronic commerce merchants.

Increased competition could also result in lower advertising rates, price
reductions and lower profit margins any one of which could materially and
adversely affect our business, results of operations and financial condition.

OUR FAILURE TO EFFECTIVELY MANAGE OUR EXPANDING OPERATIONS COULD IMPAIR OUR
FUTURE GROWTH

We have recently experienced a period of rapid growth which has placed
significant strain on our managerial, operational and financial resources. To
accommodate this growth, we must implement new or upgraded operating and
financial systems, procedures and controls throughout many different locations.
We may not succeed with these efforts. Our failure to efficiently expand and
integrate these areas could cause our expenses to grow, revenues to decline or
grow more slowly than expected and could otherwise impair our growth.

OUR BUSINESS AND GROWTH WILL SUFFER IF WE ARE UNABLE TO HIRE AND RETAIN KEY
PERSONNEL THAT ARE IN HIGH DEMAND

We depend on the services of senior management and key technical
personnel. In particular, our success depends on the continued efforts of our
President and Chief Executive Officer, Oscar Coen, and Chief Technical Officer,
Carlos Cardona. The loss of the services of these executive officers or any

9
<PAGE>

of our key management, sales or technical personnel could have a material
adverse effect on our business, financial condition and results of operations.
In addition, our success is largely dependent on our ability to hire highly
qualified managerial, sales and technical personnel. These individuals are in
high demand, and we may not be able to attract the staff we need. The
difficulties and costs of personnel growth are compounded by our international
operations.

IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE OUR ACQUIRED BUSINESSES, THE QUALITY
OF OUR SITES MAY SUFFER, AND USERS MAY BE LESS LIKELY TO VISIT OUR SITES

Our operations have grown in part due to our acquisition of local
Internet-based businesses including our:

/bullet/ March 1999 acquisition of CiudadFutura.com in Spain;

/bullet/ August 1999 acquisition of Bogota.com in Colombia;

/bullet/ October 1999 acquisition of Claqueta.com in Spain; and

/bullet/ November 1999 acquisition of La Cosa Interactive in Argentina.

We are now involved in integrating the operations, personnel and services
of these businesses. We also expect to acquire or form relationships with other
Internet companies in Latin America, Spain and the United States, and will
therefore need to integrate their operations, personnel and services with ours.
If we are unable to integrate all of these businesses, the quality of our sites
may suffer and our users may be less likely to use our sites. This failure
could have a material adverse effect on our business, financial condition and
results of operations.

WE MAY NOT BE ABLE TO IDENTIFY OR FINANCE ACQUISITIONS OR JOINT VENTURES IN THE
FUTURE, WHICH WOULD LIMIT OUR GROWTH PROSPECTS

In our business strategy, we continually review possible acquisitions,
joint ventures and strategic alliances that we expect to complement our
existing business, increase our user traffic, enhance our content offerings or
increase our advertising and electronic commerce revenues. We do not know if we
will succeed in identifying future joint ventures, acquisitions or alliances or
in financing these transactions. A failure to identify or finance these future
transactions may impair our growth.

OUR ACQUISITIONS AND JOINT VENTURES INVOLVE RISKS AND UNCERTAINTIES THAT MAY
HARM OUR BUSINESS OR CAUSE US NOT TO PERFORM AS EXPECTED

Our acquisitions and joint ventures could result in numerous risks and
uncertainties, including:

/bullet/ the need to raise additional funds through public or private
financings, which may result in dilution to existing shareholders and
substantially increase our debt;

/bullet/ difficulties in assimilating the operations, personnel,
technologies, services and products of acquired companies;

/bullet/ conflicts of interest with joint venture partners;

/bullet/ the risks of entering geographic or business markets in which we
have limited or no prior experience;

/bullet/ the diversion of management's attention from our other business
concerns;

/bullet/ the risk that an acquired business will not perform as expected or
that it will have unforeseen liabilities; and

/bullet/ loss of key personnel of acquired organizations.

10
<PAGE>

IF OUR ADVERTISING PRICING MODEL, BASED ON THE NUMBER OF TIMES AN ADVERTISEMENT
IS DELIVERED TO USERS, IS NOT SUCCESSFUL, WE MAY BE UNABLE TO ACHIEVE OR
MAXIMIZE PROFITABILITY

Different pricing models are used to sell advertising on the Internet, and
models we adopt may not prove to be the most profitable. Advertising based on
impressions, or the number of times an advertisement is delivered to users,
currently comprises substantially all of our revenues. When minimum guaranteed
impression levels are not met, we defer recognition of the corresponding
revenues until guaranteed levels are achieved. If they are not achieved, we may
be required to provide additional impressions after the contract term, which
would reduce our advertising inventory, thereby reducing our anticipated
advertising revenues. This requirement could have a material adverse effect on
our business, financial condition and results of operations.

In addition, it is difficult to predict which pricing model, if any, will
emerge as the industry standard. This uncertainty makes it difficult to project
our future advertising rates and revenues. Our advertising revenues could be
adversely affected if we are unable to adapt to new forms of Internet
advertising or if we do not adopt the most profitable pricing model or
advertising form.

UNEXPECTED NETWORK INTERRUPTIONS CAUSED BY SYSTEM FAILURES MAY RESULT IN
REDUCED USER TRAFFIC, REDUCED REVENUE AND HARM TO OUR REPUTATION

In the past, we have experienced:

/bullet/ system disruptions;

/bullet/ inaccessibility of our network;

/bullet/ long response times;

/bullet/ impaired quality; and

/bullet/ loss of important reporting data.

Although we are in the process of improving our sites to reduce the frequency
of these events, we may not be successful. If we experience delays and
interruptions, user traffic may decrease and our brand could be adversely
affected. Because our revenues depend on the number of individuals who use our
sites, our business may suffer if improvement efforts are unsuccessful. We
maintain our central production servers at the New Jersey data center of Exodus
Communications. A failure by Exodus to protect its systems against damage from
power loss, telecommunications failure, break-ins, fire, natural disasters or
other events causing unexpected network disruptions could have a material
adverse effect on our business, financial condition and results of operations.

CONCERNS ABOUT SECURITY OF ELECTRONIC COMMERCE TRANSACTIONS AND
MISAPPROPRIATION OF CONFIDENTIAL INFORMATION FROM OUR SITES MAY REDUCE THE USE
OF OUR SITES AND IMPEDE OUR GROWTH

A significant barrier to electronic commerce and confidential
communications over the Internet has been the need for security. The use of our
sites could decline if any well-publicized security failure occurs.
Unauthorized persons could attempt to penetrate our network security. If
successful, they could misappropriate confidential information concerning our
users or cause interruptions in our services. We may incur significant costs to
protect against the threat of security breaches or to alleviate problems caused
by these breaches. Security breaches could have a material adverse effect on
our business, financial condition and results of operations.

COMPUTER VIRUSES OR ATTEMPTS BY THIRD PARTIES TO DISRUPT OUR SERVICES MAY CAUSE
OUR SYSTEMS TO INCUR DELAYS OR INTERRUPTIONS AND MAY REDUCE THE USE OF OUR
SITES AND IMPEDE OUR GROWTH

Computer viruses or attempts by third parties to disrupt our services may
cause delays in our systems or other service interruptions. If any of these
disruptions are prolonged or are highly

11
<PAGE>

publicized, our reputation could be greatly damaged and our user traffic could
decline. In addition, the inadvertent transmission of computer viruses could
expose us to material losses or litigation and material liability.

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATIONS AND LEGAL
UNCERTAINTIES AFFECTING THE INTERNET WHICH COULD PLACE RESTRICTIONS ON INTERNET
USE AND INCREASE OUR COSTS OF DOING BUSINESS

Until now, governmental regulations have not materially restricted use of
the Internet in our markets. However, the legal and regulatory environment
pertaining to the Internet is uncertain and may change. Uncertainty and new
regulations could increase our costs of doing business and prevent us from
delivering our services over the Internet. The growth of the Internet may also
be significantly slowed. These circumstances could delay growth in demand for
our sites and limit the growth of our revenues. In addition to new laws and
regulations, existing laws may be applied to the Internet. New and existing
laws may cover issues, including:

/bullet/ sales and other taxes;

/bullet/ user privacy;

/bullet/ pricing controls;

/bullet/ characteristics and quality of products and services;

/bullet/ consumer protection;

/bullet/ cross-border commerce;

/bullet/ libel and defamation;

/bullet/ copyright, trademark and patent infringement;

/bullet/ pornography;

/bullet/ antitrust and competition; and

/bullet/ other claims based on the nature and content of Internet
materials.

WE MAY BECOME SUBJECT TO CLAIMS REGARDING FOREIGN LAWS AND REGULATIONS WHICH
MAY BE COSTLY, TIME CONSUMING AND DISTRACTING

Because we have employees, property and business operations in the United
States, Spain and throughout Latin America, we are subject to the laws and the
court systems of many jurisdictions. We may face claims based on foreign
jurisdictions for violations of their laws. These laws may be changed or new
laws may be enacted in the future. International litigation is often expensive,
time consuming and distracting. Accordingly, any of these matters could have a
material adverse effect on our business, financial condition and results of
operations.

UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY ADVERSELY
AFFECT OUR BUSINESS

We regard our copyrights, service marks, trade names, trademarks, trade
secrets and other intellectual property as critical to our success.
Unauthorized use of our intellectual property by third parties may adversely
affect our business and our reputation. We rely on trademark and copyright law,
trade secret protection and confidentiality and license agreements with our
employees, customers, suppliers and others to protect our intellectual property
rights. Despite these precautions, it may be possible for third parties to
obtain and use our intellectual property without authorization.

12
<PAGE>

Furthermore, the validity, enforceability and scope of protection of
intellectual property in Internet-related industries is uncertain and still
evolving. The laws of some foreign countries are uncertain or do not protect
intellectual property rights to the same extent as do the laws of the United
States.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE TIME
CONSUMING AND EXPENSIVE AND, IF WE ARE NOT SUCCESSFUL, COULD SUBJECT US TO
SIGNIFICANT DAMAGES AND DISRUPT OUR BUSINESS

We cannot be certain that we do not or will not infringe valid patents,
copyrights or other intellectual property rights of third parties. We may be
subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. We may
incur substantial expenses in defending against these third party infringement
claims, regardless of their merit. Successful infringement claims against us
may result in substantial monetary liability or may materially disrupt the
conduct of our business.

WE MAY BE SUBJECT TO CLAIMS BASED ON THE CONTENT WE PROVIDE ON OUR SITES WHICH
MAY EXPOSE US TO LIABILITY AND ADVERSELY AFFECT OUR BUSINESS

The laws in the United States, Spain and in Latin American countries
relating to the liability of companies providing online services, like ours,
for activities of their visitors, are currently unsettled. Claims have been
made against online service providers and networks in the past for defamation,
negligence, copyright or trademark infringement, obscenity, personal injury or
other reasons based on the nature and content of information posted online by
their visitors. We could be subject to similar claims and incur significant
costs in their defense. In addition, we could be exposed to liability for the
selection of listings that may be accessible through our sites or through
content and materials that users may post in classifieds, message boards, chat
rooms or other interactive services. If any information provided through our
services contains errors, third parties could make claims against us for losses
incurred in reliance on the information. We offer Internet-based email
services, which expose us to potential liabilities or claims resulting from:

/bullet/ unsolicited email;

/bullet/ lost or misdirected messages;

/bullet/ illegal or fraudulent use of email; or

/bullet/ interruptions or delays in email service.

Investigating and defending these claims is expensive, even if they do not
result in liability and the expenses we incur may materially and adversely
affect our business, financial condition and results of operations.

WE MAY BE SUBJECT TO CLAIMS BASED ON PRODUCTS SOLD ON OUR SITES WHICH MAY
EXPOSE US TO LIABILITY AND ADVERSELY AFFECT OUR BUSINESS

We offer third party products and services on our sites under arrangements
where we receive a portion of the revenues generated from these transactions.
These arrangements may expose us to additional claims including product
liability or personal injury from these products and services, even when the
products or services are not ours. These claims may require us to incur
significant expenses in their defense or satisfaction. While some of our
agreements with these parties may provide that we will be indemnified against
these liabilities, such indemnification may not be adequate. Although we carry
general liability insurance, our insurance may not cover all potential claims
to which we are exposed or may not be adequate to indemnify us for all
liability that may be imposed. Liabilities not covered by our insurance could
have a material adverse effect on our business, financial condition and results
of operations or could result in criminal penalties. In addition, the increased
attention focused on liability issues as a result of these lawsuits and
legislative proposals could adversely impact the overall growth of Internet
use.

13
<PAGE>

OUR ABILITY TO COLLECT PERSONAL DATA ON OUR USERS MAY BE RESTRICTED AND MAY
LIMIT OUR ABILITY TO GENERATE ADVERTISING AND ELECTRONIC COMMERCE REVENUE

We must comply with applicable data protection laws, including a European
Union directive that limits our ability to collect and use information relating
to our users. Spain has adopted legislation implementing the standards of this
directive. Increased public awareness of privacy issues and changes to
legislation could limit our ability to use personal information about our users
to attract advertisers and marketers, which could adversely affect our
business, financial condition and results of operations.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL CAPITAL, WE MAY BE UNABLE TO CONDUCT OUR
BUSINESS AS PLANNED

We expect the net proceeds from this offering, together with our current
cash and cash equivalents, will be sufficient to meet our requirements for at
least the next 12 months. After that, we expect that we will need to raise
additional funds. The actual amount and timing of our future capital
requirements may differ from our estimates depending on many factors,
including:

/bullet/ our ability to generate cash from operations;

/bullet/ technological developments;

/bullet/ competitive developments;

/bullet/ new business activities, including new market developments or new
opportunities in our industry; and

/bullet/ the occurrence of additional acquisitions.

Our ability to obtain additional financing will be subject to a number of
factors, including our operating performance, market conditions and investor
sentiment. We cannot be certain that we will be able to obtain additional
financing on favorable terms, if at all. Further, if we issue additional equity
securities, shareholders may experience additional dilution and the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of common stock. If we cannot raise funds on acceptable terms,
if and when needed, we may be unable to further develop or enhance our sites,
take advantage of future opportunities, grow our business or respond to
competitive pressures or unanticipated requirements, which could seriously harm
our business.

OUR STOCK PRICE MAY BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES FOR
INVESTORS PURCHASING SHARES IN THIS OFFERING

Prior to this offering, you could not publicly buy or sell our common
stock. An active public market for our common stock may not develop or be
sustained after this offering. We will negotiate and determine the initial
public offering price with the representatives of the underwriters. You may be
unable to sell your shares of common stock at or above the initial public
offering price, which may result in substantial losses to you. The market price
of our common stock may fluctuate significantly in response to the following
factors, some of which are beyond our control:

/bullet/ variations in our quarterly operating results;

/bullet/ changes in securities analysts' estimates of our financial
performance;

/bullet/ changes in market valuations of similar companies;

/bullet/ announcements by us or our competitors of new or enhanced products
or of significant contracts, acquisitions or strategic relationships;

/bullet/ additions or departures of key personnel; and

14
<PAGE>

/bullet/ future sales of our common stock or other securities.

OUR STOCK PRICE COULD BE ADVERSELY AFFECTED BY SHARES OF OUR COMMON STOCK
BECOMING AVAILABLE FOR SALE

If our existing shareholders sell a large number of shares of our common
stock, the market price of the common stock could decline significantly. The
perception in the public market that our existing shareholders might sell
shares of common stock could depress the market price of our common stock.
Immediately after this offering, 42,746,141 shares of our common stock will be
outstanding. Of these shares, 7,000,000 are included in this offering and will
be available for immediate resale in the public market. The remaining
35,746,141 shares of our common stock will become available for resale in the
public market at various times in the future. Substantially all of these
remaining 35,746,141 shares are subject to lock-up agreements restricting the
sale of such shares for 180 days from the date of this prospectus. However, the
underwriters can waive this restriction and allow these shareholders to sell
their shares at any time. Sales of our common stock in the public market might
also make it more difficult for us to sell equity securities in the future at a
time and price we deem appropriate. For a more detailed description, see
"Shares Eligible for Future Sale."

PURCHASERS IN THIS OFFERING WILL INCUR IMMEDIATE, SUBSTANTIAL DILUTION

The initial public offering price of our common stock is substantially
higher than the book value per share of our outstanding common stock. As a
result, investors purchasing common stock in this offering will incur immediate
and substantial dilution. In the past, we issued options to acquire common
stock at prices significantly below the initial public offering price. If these
outstanding options are exercised, there will be further dilution to investors
in this offering.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND FLORIDA LAW COULD PREVENT
OR DELAY A CHANGE IN CONTROL OF YUPI THAT SHAREHOLDERS CONSIDER FAVORABLE

Provisions of our articles of incorporation and bylaws, as well as
provisions of Florida law, could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our shareholders. If such a
change in control is delayed or prevented, the market price of our common stock
may decline. For more information, see "Description of Capital
Stock--Anti-Takeover Effects of Provisions of the Florida Business Corporation
Act and Our Charter."

INSIDERS WHO WILL CONTINUE TO HAVE SUBSTANTIAL CONTROL OVER US AFTER THIS
OFFERING MAY HAVE INTERESTS DIFFERING FROM THOSE OF OTHER SHAREHOLDERS AND
COULD DELAY OR PREVENT A CHANGE IN CORPORATE CONTROL

Upon completion of this offering, our executive officers, directors and
principal shareholders will beneficially own, in the aggregate, approximately
60.9% of our outstanding common stock. As a result, these shareholders will be
able to exercise control over all matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions, including mergers, consolidations and sale of substantially all
of our assets. This could have the effect of delaying or preventing a change of
control of Yupi.

WE HAVE BROAD DISCRETION TO USE THE PROCEEDS FROM THIS OFFERING, AND THE
FAILURE OF MANAGEMENT TO APPLY THESE FUNDS EFFECTIVELY COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS

We plan to use a substantial portion of the proceeds from this offering
for general corporate purposes. Therefore, we will have broad discretion as to
how we spend the proceeds, and shareholders may not agree with how we use the
proceeds. We may not be successful in investing the proceeds from this offering
in our operations or external investments in ways that will yield favorable
returns. See "Use of Proceeds."

15
<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," and elsewhere in this prospectus constitute
forward-looking statements. These statements relate to future events or our
future financial performance, and are identified by terminology such as "may,"
"will," "should," "expects," "scheduled," "plans," "intends," "anticipates,"
"believes," "estimates," "potential," or "continue" or the negative of such
terms or other comparable terminology. These statements are only predictions.
Actual events or results may differ materially. In evaluating these statements,
you should specifically consider various factors, including the risks outlined
under "Risk Factors." These factors may cause our actual results to differ
materially from any forward-looking statement.

Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
statements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform these statements to
actual results.

TRADEMARKS

Yupi/trademark/, Yupi.com/trademark/, CiudadFutura.com/trademark/,
Bogota.com/trademark/, Claqueta.com/trademark/, MiYupi.com/trademark/, La Cosa
Interactive/trademark/, MiCasa.Yupi.com/trademark/, Metabusca.com/trademark/
and the Yupi logo are our trademarks. Other trademarks or service marks
appearing in this prospectus are the property of their respective holders.

16
<PAGE>

USE OF PROCEEDS

Our net proceeds from the issuance and sale of 7,000,000 shares of common
stock in this offering are estimated to be approximately $89.1 million, at an
assumed initial public offering price of $14.00 per share, after deducting
underwriting discounts and commissions and estimated offering expenses. If the
underwriters' over-allotment option is exercised in full, we estimate that we
will receive an additional $13.7 million. We intend to use the proceeds from
this offering as follows:

/bullet/ approximately $40.0 million to fund branding and advertising
activities;

/bullet/ approximately $4.0 million for payment of the promissory note
bearing interest of 9% per annum issued in connection with the acquisition
of CiudadFutura.com; and

/bullet/ approximately $45.1 million for working capital and general
corporate purposes.

However, changing business conditions and unforeseen circumstances could cause
the actual amounts used for these purposes to vary from these estimates.

A portion of the proceeds may also be used to acquire or invest in
complementary businesses or products or to obtain the right to use
complementary technologies. We have no specific understandings, commitments or
agreements with respect to any such acquisition or investment.

Pending such uses, the proceeds of this offering will be invested in
short-term, interest-bearing, investment-grade securities, certificates of
deposit or direct or guaranteed obligations of the United States.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and
do not anticipate paying cash dividends in the foreseeable future. We currently
intend to retain future earnings, if any, to fund the expansion and growth of
our business. Payment of future dividends, if any, will be at the discretion of
our Board of Directors after taking into account various factors, including our
financial condition, operating results, current and anticipated cash needs and
plans for expansion.

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<PAGE>

CAPITALIZATION

The following table shows our capitalization as of December 31, 1999:

/bullet/ on an actual basis; and

/bullet/ on a pro forma as adjusted basis to reflect the conversion of our
preferred stock into an aggregate of 19,558,460 shares of common stock upon
the closing of this offering; a deemed dividend on convertible preferred
stock of approximately $23.9 million representing the beneficial conversion
feature embedded in the Class B Convertible Preferred Stock and Class C
Convertible Preferred Stock on the date of their issuance, which dividend
will be recognized upon conversion; the filing of an amended and restated
articles of incorporation; and the sale by us of 7,000,000 shares of common
stock in this offering at an assumed initial public offering price of
$14.00 per share after deducting underwriting discounts and commissions and
estimated offering expenses.

This information should be read in conjunction with our consolidated
financial statements and notes thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------------------
PRO FORMA
ACTUAL AS ADJUSTED
--------------- ----------------
<S> <C> <C>
Shareholders' equity:
Preferred Stock, $0.01 par value; 647,009 shares authorized and
no shares issued and outstanding, actual; 5,000,000 shares
authorized and no shares issued or outstanding, pro forma
as adjusted ...................................................... $ -- $ --
Class A Convertible Preferred Stock, $0.01 par value, 428,762
shares authorized, issued and outstanding, actual; no shares
authorized, issued or outstanding, pro forma as adjusted ......... 13,160,468 --
Class B Convertible Preferred Stock, $0.01 par value; 4,924,229
shares authorized, and 2,955,016 shares issued and
outstanding, actual; no shares authorized, issued or
outstanding, pro forma as adjusted ............................... 33,898,805 --
Class C Convertible Preferred Stock, $0.01 par value; 6,000,000
shares authorized, and 5,858,698 shares issued and
outstanding, actual; no shares authorized, issued or
outstanding, pro forma as adjusted ............................... 63,613,129 --
Common Stock, $0.0001 par value, 60,000,000 shares authorized
and 16,187,681 shares issued and outstanding, actual;
300,000,000 shares authorized and 42,746,141 shares issued
and outstanding, pro forma as adjusted ........................... 1,619 4,275
Additional paid-in capital .......................................... 12,603,771 236,257,276
Deferred stock-based compensation ................................... (3,775,665) (3,775,665)
Accumulated other comprehensive income .............................. (12,718) (12,718)
Accumulated deficit ................................................. (40,887,325) (64,771,084)
------------- -------------
Total shareholders' equity ....................................... 78,602,084 167,702,084
------------- -------------
Total capitalization ............................................. $ 78,602,084 $ 167,702,084
============= =============
</TABLE>

18
<PAGE>

DILUTION

Our pro forma net tangible book value at December 31, 1999 was
approximately $47.2 million, or $1.32 per share of common stock. Pro forma net
tangible book value per share represents the amount of total tangible assets
less total liabilities, divided by 35,746,141 shares of common stock
outstanding after giving effect to the conversion of all shares of preferred
stock into common stock upon the closing of this offering. After giving effect
to the sale of 7,000,000 shares of common stock offered by this prospectus at
an assumed initial public offering price of $14.00 per share and after
deducting underwriting discounts and commissions and estimated offering
expenses, our pro forma net tangible book value as of December 31, 1999 would
have been approximately $136.3 million, or $3.19 per share. This represents an
immediate increase in pro forma net tangible book value of $1.87 per share to
existing shareholders and an immediate dilution of $10.81 per share to new
investors purchasing shares of common stock in this offering. The following
table illustrates this dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share .................................. $ 14.00
Pro forma net tangible book value per share at December 31, 1999 ................. $ 1.32
Increase attributable to this offering ......................................... 1.87
-------
Pro forma net tangible book value per share after this offering .................. 3.19
--------
Net tangible book value dilution per share to new investors in this offering ..... $ 10.81
========
</TABLE>

The following table summarizes, at December 31, 1999, on the pro forma
basis described above, the total number of shares purchased, the consideration
paid to us and the average price per share paid by the existing shareholders
and by new investors purchasing shares of common stock in this offering at an
assumed initial public offering price of $14.00 per share before deducting the
underwriting discounts and commissions and estimated offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------------ --------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ --------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Existing shareholders ......... 35,746,141 83.6% $112,661,681 53.5% $ 3.15
New investors ................. 7,000,000 16.4 98,000,000 46.5 14.00
---------- ----- ------------ -----
Totals ..................... 42,746,141 100.0% $210,661,681 100.0%
========== ===== ============ =====
</TABLE>

The foregoing table and calculation exclude, as of December 31, 1999:

/bullet/ 9,288,439 shares of common stock issuable upon exercise of outstanding
stock options, at a weighted average exercise price of $1.49 per
share;

/bullet/ 711,561 shares of common stock available for issuance under our Stock
Incentive Plan;

/bullet/ 4,000,000 shares of common stock available for issuance under our 2000
Stock Option and Incentive Plan; and

/bullet/ 200,000 shares of common stock available for issuance under our 2000
Employee Stock Purchase Plan.

If the underwriters' over-allotment is exercised in full, the number of
shares held by new investors will increase to 8,050,000, or 18.4% of the total
number of shares of common stock outstanding after this offering.

19
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA

The statement of operations data for the period from October 20, 1997
(date of incorporation) through December 31, 1997 and the years ended December
31, 1998 and 1999 and the balance sheet data as of December 31, 1998 and 1999
are derived from the audited consolidated financial statements included
elsewhere in this prospectus. The balance sheet data as of December 31, 1997
has been derived from our audited financial statements not included in this
prospectus. The historical results are not necessarily indicative of the
operating results to be expected in the future. For more information, see
"Unaudited Pro Forma Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF YEAR ENDED
INCORPORATION) TO DECEMBER 31,
DECEMBER 31, ----------------------------------
1997 1998 1999
------------------ --------------- ----------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ............................................... $ 2,095 $ 77,147 $ 3,206,932
Operating expenses:
Product and technology development .................... 6,053 36,164 4,812,909
Sales and marketing ................................... 300 14,221 25,807,111
General and administrative ............................ 16,477 1,832,944 4,560,499
Depreciation and amortization ......................... 742 2,197 2,204,116
Stock-based compensation .............................. -- 62,973 338,590
----------- ------------ -------------
Total operating expenses ............................ 23,572 1,948,499 37,723,225
----------- ------------ -------------
Loss from operations ................................... (21,477) (1,871,352) (34,516,293)
Other income (expense):
Interest income ....................................... -- -- 379,021
Interest expense ...................................... -- (1,739) (859,444)
Other ................................................. -- -- (2,639)
----------- ------------ -------------
-- (1,739) (483,062)
----------- ------------ -------------
Loss before income taxes ............................... (21,477) (1,873,091) (34,999,355)
Income taxes ........................................... -- -- --
----------- ------------ -------------
Net loss ............................................... (21,477) (1,873,091) (34,999,355)
Deemed dividend on convertible preferred stock ......... -- -- (3,983,202)
----------- ------------ -------------
Net loss available to common shareholders .............. $ (21,477) $ (1,873,091) $ (38,982,557)
=========== ============ =============
Basic and diluted net loss per common share ............ $ (0.00) $ (0.16) $ (2.40)
Weighted average number of shares used in computing
basic and diluted net loss per common share .......... 10,625,000 11,903,777 16,269,836
Pro forma basic and diluted net loss per
common share(1) ...................................... $ (2.42)
Pro forma weighted average number of shares used in
computing basic and diluted net loss per
common share(1) ...................................... 16,439,087
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, 1999
-------------------------- -----------------------------------
PRO FORMA
1997 1998 ACTUAL AS ADJUSTED(2)
------------ ----------- -------------- ---------------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .................... $ 11,213 $106,425 $48,611,519 $137,711,519
Working capital (deficit) .................... (24,297) 10,337 44,556,464 133,656,464
Total assets ................................. 14,458 211,174 86,635,660 175,735,660
Convertible preferred stock .................. -- -- 110,672,402 --
Total shareholders' equity (deficit) ......... (21,052) 73,115 78,602,084 167,702,084

<FN>
- ----------------
(1) The pro forma selected statement of operations data reflects the
acquisitions of CiudadFutura.com and Bogota.com as if they were completed
on January 1, 1999. These acquisitions were accounted for using the
purchase method of accounting.

(2) The pro forma as adjusted balance sheet data reflects the conversion of all
outstanding preferred stock into an aggregate of 19,558,460 shares of common
stock upon the closing of this offering; a deemed dividend on convertible
preferred stock of approximately $23.9 million representing the beneficial
conversion feature embedded in the Class B Convertible Preferred Stock and
Class C Convertible Preferred Stock on the date of their issuance, which
dividend will be recognized upon conversion; and the sale of 7,000,000
shares of common stock in this offering at an assumed initial public
offering price of $14.00 per share, after deducting underwriting discounts
and commissions and estimated offering expenses.
</FN>
</TABLE>

21
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

The following sets forth unaudited pro forma consolidated statement of
operations data for Yupi for the year ended December 31, 1999 giving effect to:

/bullet/ the acquisition of the operations of Planificacion y Estrategia en
Internet, S.L. and Illimited, S.L., or CiudadFutura.com, in March 1999
for $10.1 million in cash and a promissory note; and

/bullet/ the acquisition of the operations of Proveedora de Servicios para
Red Bogota.com Ltda., or Bogota.com, in August 1999 for $2.0 million in
cash and 261,765 shares of our common stock valued at approximately $1.0
million.

The acquisitions of CiudadFutura.com and Bogota.com have been accounted
for using the purchase method of accounting. The aggregate purchase price for
CiudadFutura.com and Bogota.com of approximately $13.1 million, including
transaction costs, was substantially allocated to property rights of trade
names and Internet domain names.

The pro forma statement of operations information assumes that the
acquisitions of CiudadFutura.com and Bogota.com had been completed as of
January 1, 1999. The pro forma financial information does not purport to
present our financial condition or results of operations had these transactions
occurred on these dates and is not necessarily indicative of our results of
operations for future periods.

The historical statement of operations data of Yupi has been derived from
the audited financial statements included elsewhere in this prospectus. The
statement of operations data includes financial data for CiudadFutura.com and
Bogota.com for the period from January 1, 1999 to their respective dates of
acquisition. The pro forma adjustments relating to the acquisitions of these
entities are based upon available information and assumptions that we consider
reasonable under the circumstances. Final adjustments could differ from these
adjustments.

22
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
PRO FORMA
ACTUAL CIUDADFUTURA.COM BOGOTA.COM ADJUSTMENTS PRO FORMA
---------------- ------------------ ------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Revenues .......................... $ 3,206,932 $72,161 $ 124,000 $ -- $ 3,403,093
Operating expenses:
Product and technology
development .................... 4,812,909 10,693 24,000 -- 4,847,602
Sales and marketing .............. 25,807,111 1,297 24,000 -- 25,832,408
General and administrative ....... 4,560,499 5,581 91,000 -- 4,657,080
Depreciation and
amortization ................... 2,204,116 -- 14,000 737,376(a) 2,955,492
Stock-based compensation ......... 338,590 -- -- -- 338,590
------------- ------- --------- ---------- --------------
Total operating
expenses .................... 37,723,225 17,571 153,000 737,376 38,631,172
------------- ------- --------- ---------- --------------
Income (loss) from operations ..... (34,516,293) 54,590 (29,000) (737,376) (35,228,079)
------------- ------- --------- ---------- --------------
Other income (expense):
Interest income .................. 379,021 12 -- -- 379,033
Interest expense ................. (859,444) (10) -- -- (859,454)
Other ............................ (2,639) -- (10,000) -- (12,639)
------------- ------- --------- ---------- --------------
(483,062) 2 (10,000) -- (493,060)
------------- ------- --------- ---------- --------------
Net income (loss) before
income taxes .................... (34,999,355) 54,592 (39,000) (737,376) (35,721,139)
Income taxes ...................... -- -- -- -- --
------------- ------- --------- ---------- --------------
Net income (loss) ................. (34,999,355) 54,592 (39,000) (737,376) (35,721,139)
Deemed dividend on
convertible preferred stock ..... (3,983,202) -- -- -- (3,983,202)
------------- ------- --------- ---------- --------------
Net income (loss) available to
common shareholders ............. $ (38,982,557) $54,592 $ (39,000) $ (737,376) $ (39,704,341)
============= ======= ========= ========== ==============
Basic and diluted net loss per
common share .................... $ (2.40) $ (2.42)
Number of shares used in
computing basic and diluted
net loss per common share ....... 16,269,836 -- -- 169,251 16,439,087

<FN>
- ----------------
(a) Reflects the amortization over five years of intangible assets acquired in
connection with the acquisitions of CiudadFutura.com and Bogota.com. Total
intangible assets acquired in connection with the CiudadFutura.com and
Bogota.com acquisitions amounted to $10.1 million and $3.0 million,
respectively. The adjustments of $333,907 and $403,469 associated with
these acquisitions represent amortization expense of two months for
CiudadFutura.com and amortization expense of eight months for Bogota.com,
respectively.
</FN>
</TABLE>

23
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH "SELECTED HISTORICAL
FINANCIAL DATA," "UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA" AND OUR
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH UNDER "RISK
FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

We are a leading online Spanish-language destination, delivering content,
services and search and navigation capabilities to a wide and diverse community
of Spanish speakers around the world. We aggregate entertainment, news and
other content for our users, and our search engine provides users with search
results exclusively in Spanish.

We were incorporated in October 1997. For the first eighteen months of
operations after our incorporation, we focused primarily on enhancing the
capabilities of our proprietary search engine, expanding our database of
Spanish language sites and entering into agreements with content providers for
purposes of developing our sites. In April 1999, we began to focus on
developing our sales organization and increasing the scale of our commercial
operations.

We derive our revenues principally through the sale of advertisements and
sponsorships on our sites. Advertisements are sold on a cost-per-thousand
impressions, or CPM, basis and sponsorships are sold at a fixed rate for a
given period of time. We record advertising revenues at the time advertisements
are displayed and we record sponsorship revenues ratably over the period of
sponsorship.

In addition to the sale of advertisements for cash, we also exchange
advertisements on our sites for promotions with our advertisers. These
arrangements are commonly referred to as barter transactions. We typically
enter into these arrangements because we receive opportunities to promote our
brands in both traditional and non-traditional media. Examples of these
arrangements have included promotions of our brands on store shelves where our
advertisers' products were sold as well as signage identifying Yupi as the
co-sponsor of a musical concert series. For financial reporting purposes, we
establish the value of barter transactions based on the value of similar
cash-only transactions. Advertising surrendered for cash is considered similar
to advertising surrendered in a barter transaction if both are in the same
media and within the same advertising vehicle and both have reasonably similar
characteristics with respect to circulation, prominence, duration, demographics
and timing. For the period from inception to December 31, 1999, we did not have
sufficient revenue from similar cash-only advertising sales to establish a
basis of value for our barter transactions. Accordingly, we did not record the
revenue or the expense portion of these transactions in our financial
statements.

We also derive revenues from electronic commerce transactions conducted on
our sites. Revenues from these activities have primarily been commission-based
and have been insignificant to date. We expect to derive a greater proportion
of our revenues from these activities in the future.

We aggregate content from numerous sources. This content is edited,
translated, formatted and reviewed for relevance by our staff. We display
content developed by third parties through agreements under which we agree to
share revenues, pay a flat fee, or provide co-branded presence on our sites.

Between April 1999 and August 1999, we sold shares of Class A Convertible
Preferred Stock which provided aggregate proceeds of approximately $13.0
million. We used the proceeds from this

24
<PAGE>

transaction to complete the acquisitions of CiudadFutura.com and Bogota.com, to
begin hiring personnel in all areas, and to begin a significant advertising and
branding campaign. Additionally, we completed the private placement of Class B
Convertible Preferred Stock in October 1999 and Class C Convertible Preferred
Stock in November 1999, for a total purchase price of approximately $101.7
million.

We completed the acquisitions of CiudadFutura.com in March 1999,
Bogota.com in August 1999, Claqueta.com in October 1999 and LaCosa Interactive
in November 1999. The aggregate purchase price for these acquisitions was
approximately $14.1 million, primarily paid for in cash and debt. Although
these acquisitions involved established sites with significant user traffic,
these sites had minimal revenues associated with them prior to our acquisition.
The acquisitions were accounted for under the purchase method of accounting.

We have a limited operating history and have incurred losses in every
quarter of operations. Our accumulated deficit as of December 31, 1999 is $40.9
million and we expect to continue to incur losses as we build brand identity
and support infrastructure to allow us to maintain our position as a leader in
the Spanish language Internet market.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our statements
of operations. The information for the period from October 20, 1997 (date of
incorporation) through December 31, 1997 and the years ended December 31, 1998
and 1999 is derived from our audited consolidated financial statements.

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) TO YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------------- -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues .................................... $ 2 $ 77 $ 3,207
Operating expenses:
Product and technology development ......... 6 36 4,813
Sales and marketing ........................ -- 14 25,807
General and administrative ................. 16 1,833 4,560
Depreciation and amortization .............. 1 2 2,204
Stock-based compensation ................... -- 63 339
----- ------- ---------
Total operating expenses .................. 23 1,948 37,723
----- ------- ---------
Loss from operations ........................ (21) (1,871) (34,516)
Other expense, net .......................... -- (2) (483)
----- ---------- ---------
Net loss .................................... $ (21) $(1,873) $ (34,999)
===== ========= =========
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998 AND
PERIOD FROM OCTOBER 20, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997

REVENUES. Revenues increased to $3.2 million for the year ended December
31, 1999 from $77,000 for the year ended December 31, 1998 and $2,000 for the
partial year ended December 31, 1997. The increase for each period was the
result of an increase in the number of advertisers that displayed
advertisements on our sites. For the year ended December 31, 1999, we had 55
advertisers and sponsors on our sites.

PRODUCT AND TECHNOLOGY DEVELOPMENT. Product and technology development
expenses consist primarily of payroll and benefits for employees dedicated to
the design and maintenance of our technology infrastructure as well as for
employees involved in the aggregation and editing of content

25
<PAGE>

for our sites. Product and technology development expenses also include fees
paid to content providers and connectivity costs for our network. Product and
technology development expenses increased to $4.8 million for the year ended
December 31, 1999 from $36,000 for the year ended December 31, 1998 and from
$6,000 for the partial year ended December 31, 1997. The primary reason for the
increase for each period was the increase in headcount from one as of December
31, 1997 to four as of December 31, 1998 and to 104 as of December 31, 1999.

SALES AND MARKETING. Sales and marketing expenses consist primarily of
advertising in various types of media, public relations, and payroll and
benefits for employees dedicated to marketing and sales efforts. Sales and
marketing expenses for the year ended December 31, 1999 increased by
approximately $25.8 million over the year ended December 31, 1998 and the
partial year ended December 31, 1997. The increase in sales and marketing
expenses is attributable primarily to the following: the expansion of our
domestic and international branding campaign beginning in the third quarter of
1999 which amounted to approximately $13.2 million, the increase in number of
employees in the sales and marketing department from zero as of December 31,
1997 and 1998 to 49 as of December 31, 1999, and the charge of approximately
$10.0 million recorded during the fourth quarter of 1999 in connection with
services provided to us by Sony Corporation of America as part of its purchase
of Class B Convertible Preferred Stock in October 1999. As of December 31,
1999, we had approximately $19.3 million of deferred marketing costs that we
will record as expense over a three-year period associated with the agreement
with Sony.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist of
professional and legal fees, occupancy, travel, and payroll and benefits for
employees in the corporate, accounting, human resources and legal departments.
General and administrative expenses increased to $4.6 million for the year
ended December 31, 1999 from $1.8 million for the year ended December 31, 1998
and from $16,000 for the partial year ended December 31, 1997. The increase in
general and administrative expenses is attributable partially to an increase in
the number of employees in these departments from zero as of December 31, 1997
to one as of December 31, 1998 and to 35 as of December 31, 1999. Additionally,
our professional and legal fees increased from approximately $54,000 for the
year ended December 31, 1998 to $1.5 million for the year ended December 31,
1999. We recorded a charge of approximately $1.6 million during the fourth
quarter of 1998 in connection with the settlement of a dispute between our
founders and an individual who participated in our development prior to
incorporation. In connection with that settlement, the individual received an
ownership interest in Yupi in exchange for agreeing to end the dispute. The
charge was recorded based on the estimated fair value of the shares that the
individual received.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses
consist primarily of amortization of trade names and Internet domain names
relating to our acquisitions. Depreciation and amortization expenses for the
year ended December 31, 1999 increased by approximately $2.2 million over the
year ended December 31, 1998 and the partial year ended December 31, 1997 due
to the acquisitions of Ciudadfutura.com, Bogota.com, Claqueta.com and LaCosa
Interactive, all of which were completed during 1999.

STOCK-BASED COMPENSATION. We recognize stock-based compensation expenses
if the estimated fair value of the underlying stock at the date that options
are granted to employees exceeds their exercise price. This cost is recognized
over the vesting period of the options, which is generally four years. Options
and stock grants to non-employees in lieu of cash payments are recorded as
either sales and marketing or general and administrative expense based on the
value of such instruments in the period that the services are provided.
Stock-based compensation expense for the year ended December 31, 1999 increased
to $339,000 from $63,000 during the year ended December 31, 1998 due to
additional options granted to new employees.

OTHER EXPENSE, NET. Other expense, net for the year ended December 31,
1999, increased by approximately $481,000 over the year ended December 31, 1998
and the partial year ended December 31, 1997. In connection with the private
placement of Class A Convertible Preferred Stock

26
<PAGE>

in April 1999, we recognized an interest charge of approximately $669,000
representing the estimated fair value of equity acquisition rights granted to a
lender in connection with a line of credit and the estimated fair value of
certain options granted by our then-principal shareholders to the lender.
Interest expense during the year ended December 31, 1999 was partially offset
by interest income of approximately $379,000 earned from investment of funds
raised during the private placements of preferred stock.

NET LOSS. As a result of the factors discussed above, the net loss for the
year ended December 31, 1999 was approximately $35.0 million. Net loss
available to common shareholders was approximately $39.0 million for the year
ended December 31, 1999 as a result of a deemed dividend on our convertible
preferred stock equal to approximately $4.0 million.

LIQUIDITY AND CAPITAL RESOURCES

From incorporation, we have financed our operations through private sales
of our common stock and convertible preferred stock. Through December 31, 1999
we had raised approximately $81.6 million in cash through such sales, almost
all of which was raised in the second half of 1999.

Net cash used in operating activities was approximately $19,000 for the
period from October 20, 1997 (date of incorporation) to December 31, 1997,
$120,000 for the year ended December 31, 1998 and $21.4 million for the year
ended December 31, 1999. This use of cash was primarily attributable to our net
losses in each of those periods. In 1998, the Company recorded a net loss of
approximately $1.9 million, including a non-cash charge of approximately $1.6
million in connection with a settlement recorded as a general and
administrative expense. For the year ended December 31, 1999 the Company
recorded a net loss of approximately $35.0 million, including non-cash expenses
of $12.2 million relating to depreciation and amortization and non-cash
marketing expenses.

Net cash used in investing activities was approximately $4,000 for the
period from October 20, 1997 (date of incorporation) to December 31, 1997,
$16,000 for the year ended December 31, 1998 and $11.0 million for the year
ended December 31, 1999. The use of cash for the year ended December 31, 1999
was primarily attributable to the acquisitions of CiudadFutura.com and
Bogota.com, which represented $8.5 million of cash payments as of December 31,
1999. In connection with the CiudadFutura.com acquisition, we issued a $4.0
million promissory note with an annual interest rate of 9% due March 2000.

Net cash provided by financing activities was approximately $34,000 for
the period from October 20, 1997 (date of incorporation) to December 31, 1997,
$231,000 for the year ended December 31, 1998 and $80.9 million for the year
ended December 31, 1999. The proceeds were derived mainly from the sale of
shares of Class A Convertible Preferred Stock, Class B Convertible Preferred
Stock and Class C Convertible Preferred Stock.

As of December 31, 1999, we had approximately $48.6 million in cash and
cash equivalents. We expect to continue to incur losses and to utilize cash in
our operations for the next several years. We believe that the net proceeds
from this offering, together with our current cash and cash equivalents, will
be sufficient to meet our anticipated requirements for at least the next 12
months. We expect that we will need to raise additional funds, including
through equity offerings, in the future in order to complete a successful
implementation of our strategy. The actual amount and terms of our future
capital requirements may differ from our estimates. We cannot assure you that
additional funding will be available to us in amounts or on terms acceptable to
us, if at all. If we cannot raise funds on acceptable terms, if and when
needed, we may be unable to further develop or enhance our sites, take
advantage of future opportunities, grow our business or respond to competitive
pressures or unanticipated requirements, which could seriously harm our
business.

YEAR 2000 READINESS

The Year 2000 issue refers to the potential for system and processing
failures of date-related calculations, and is the result of computer-controlled
systems using two digits rather than four to

27
<PAGE>

define the applicable year. For example, computer programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, operate our sites, send invoices, or engage
in similar normal business activities.

To date, we have not experienced any material Year 2000 issues and have
been informed by our material suppliers and vendors that they have also not
experienced material Year 2000 issues. We have not spent a material amount on
Year 2000 compliance issues. Most of our expenses have related to the operating
costs associated with time spent by employees and consultants in the evaluation
process and Year 2000 compliance matters generally.

If we fail to identify and remedy any non-compliant internal or external
Year 2000 problems, or Year 2000 problems create a systemic failure beyond our
control, including a prolonged telecommunications or electrical failure or a
prolonged failure of third party software on which we rely, we could be
prevented from operating our business and permitting users access to our sites.
Such an occurrence would have a material adverse effect on our business.

MARKET RISK

To date, our results of operations have not been impacted materially by
inflation in the United States, Spain or in the countries that comprise Latin
America.

Although a substantial portion of our revenues are denominated in U.S.
dollars, a small percentage of our revenues are denominated in foreign
currencies. As a result, our revenues may be impacted by fluctuations in these
currencies and the value of these currencies relative to the U.S. dollar. In
addition, a portion of our monetary assets and liabilities and our accounts
payable and operating expenses are denominated in foreign currencies.
Therefore, we are exposed to foreign currency exchange risks. However, revenues
derived from foreign currencies historically have not comprised a material
portion of our revenues. As a result we have not tried to reduce our exposure
to exchange rate fluctuations by using hedging transactions. However, we may
choose to do so in the future. We may not be able to do this successfully.
Accordingly, we may experience economic loss and a negative impact on earnings
and equity as a result of foreign currency exchange rate fluctuations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
Historically, we have not entered into derivative contracts to hedge existing
risks or for speculative purposes. Accordingly, we do not expect the adoption
of the new standard on January 1, 2001 to affect our financial statements.

In January 2000, the Emerging Issues Task Force issued a consensus
statement on Issue No. 99-17, "ACCOUNTING FOR ADVERTISING BARTER TRANSACTIONS."
This statement defined criteria to be used in assessing the fair value of
barter transactions that involve a non-monetary exchange of advertising. The
statement also identified new disclosure requirements related to these
transactions. Our historical financial statements and related disclosures have
been presented consistent with this statement.

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BUSINESS

YUPI

We are a leading online Spanish language destination, delivering a wide
variety of content and services and an intuitive navigational experience to a
broad and diverse community of Spanish speakers around the world. Through
relationships with media companies, including our shareholders, Sony and News
Corp., and over 100 other content providers, we aggregate entertainment, news
and other content for our users. We also provide our users with relevant search
results exclusively in Spanish through our proprietary search engine.

We offer advertisers and marketers a valuable medium to reach a diverse
Spanish-speaking online audience, and help them design, execute and evaluate
online advertising and promotional campaigns that segment and target our users.

INDUSTRY OVERVIEW

The Spanish-speaking world includes over 380 million people living in more
than 23 countries, and in 1998, represented an aggregate gross domestic product
of approximately $1.9 trillion. Spanish speakers represent one of the fastest
growing groups of Internet users today. IDC estimates that the number of
Spanish-speaking Internet users outside the United States will increase from
approximately 8.3 million in 1999 to 20.6 million in 2002. In addition,
Forrester Research estimates that by the end of the year, there will be
approximately 3.6 million U.S. Hispanic Internet users. Jupiter Communications
estimates that the percentage of Latin Americans outside of Brazil using the
Internet will increase from approximately 1.0% in 1999 to 4.7% in 2003,
representing a compound annual growth rate of approximately 50%, compared to an
estimated rate of approximately 12% in the United States for the same period.
This growth is projected to occur despite Latin America's poor
telecommunications infrastructure and low bandwidth capacity. According to IDC,
in 1998 Latin Americans were 25% more likely than users in the United States to
access the Internet at speeds of 33.6 kilobits per second or lower.

As the telecommunication infrastructure in Spanish-speaking countries
improves, we believe that the Spanish-speaking online audience will become
increasingly diverse and that Internet usage will continue to spread across
genders and across wider age and income brackets. According to Nazca S & S, the
percentage of Internet users from the highest socio-economic level in the eight
largest Latin American countries declined from 41% in 1997 to 30% in 1999 and
the percentage of female Internet users increased from 24% to 38% during the
same period. As the Spanish-speaking Internet community diversifies, we believe
that advertisers will increase their online expenditures to reach targeted
audiences of consumers. In addition, we believe that online advertising
expenditures targeted at the Spanish-speaking community will increase as
advertisers become more aware of how to execute and evaluate online advertising
campaigns. Forrester Research estimates that online advertising revenues in the
Spanish-speaking world outside of the United States will increase from $34
million in 1999 to over $1.1 billion by 2004, which will represent 3.4% of
total advertising spending in the region.

IDC estimates that commerce spending over the World Wide Web among
Spanish-speaking users outside of the United States will increase from $890
million in 1999 to $11.1 billion in 2002, representing a compound annual growth
rate of 132.0%. We believe that much of this consumer spending will be in the
music and entertainment categories. According to Nazca S & S, Latin Americans
visit sites with music-related content more frequently than sites in any other
category. In addition, art, culture and film are among the top ten most
frequently visited categories of sites. According to IDC, Latin Americans who
use the Internet at home buy more music-related products than any other item
available online.

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THE YUPI SOLUTION

BENEFITS TO USERS

AGGREGATE QUALITY CONTENT

By aggregating content from many different sources, we encourage longer
and more frequent visits to our sites. We aggregate branded Spanish language
content through relationships with well-known global entertainment and other
content providers such as:

/bullet/ Cinemark /bullet/ Sony
/bullet/ COMPUTER WORLD /bullet/ Universal Music Group
/bullet/ LATIN TRADE /bullet/ THE WALL STREET JOURNAL OF
THE AMERICAS
/bullet/ News Corp. /bullet/ Warner Bros. Studios
/bullet/ PC WORLD /bullet/ WRIGHT INVESTOR SERVICES

Our content and media relationships enable us to provide our users with a
broad selection of entertainment and news content, including preferred exposure
to artists, and access to music, television and movie information and products.
Recently, we posted on our sites exclusive interviews and promotions with Ricky
Martin, Antonio Banderas, Robin Williams, Harrison Ford, Edward James Olmos,
Winona Ryder, Enrique Iglesias, Jennifer Lopez and other popular entertainers.
In addition, our relationship with Sony provides us with limited periods of
exclusive access to Sony's content as well as digital downloads of online
premieres of new music to the Spanish-speaking world. We also provide special
coverage of events such as film festivals, the Pan American Games, the World
Cup and other sports and entertainment events of interest to our users.

Typically, our agreements with content providers are non-exclusive, have
renewable one-year terms and require us to share revenues, pay a flat fee or
provide co-branded presence on our sites.

PROVIDE RELEVANT SEARCH AND NAVIGATION CONVENIENCE

We have designed an easy-to-use search engine and a database of Spanish
language sites that have been manually selected and categorized by our
Spanish-speaking employees. We believe our database provides users with more
relevant search results than does a computer-generated database, because we
manually review these sites. In addition, we offer users access to AltaVista's
proprietary Spanish language database.

We have designed Yupi.com to allow users who access the Internet at slower
connection speeds to effectively navigate our site. In a survey conducted by
IDC, Latin Americans were 25% more likely than users in the United States to
access the Internet at speeds of 33.6 kilobits per second or lower. We deliver
a simple and efficient presentation of content because we believe our users
value the opportunity to quickly navigate through the Internet.

DEVELOP LOYAL COMMUNITY OF USERS

We encourage our users to join and actively participate in our online
communities. We host personal Web sites for our users and offer other services
including chats and forums to encourage development of interest-focused online
communities. One of our virtual communities, CiudadFutura.com, is a source of
diverse collaborative content in areas of local and special interest. We
promote and compensate approximately 200 selectively chosen contributors who
maintain and update specific content Web sites on CiudadFutura.com.

BENEFITS TO ADVERTISERS AND MARKETERS

PROVIDE ACCESS TO A WIDE AUDIENCE. We provide advertisers and marketers
access to our diverse and fast-growing online audience. As of February 28,
2000, we had approximately 3.8 million

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registered users. In January 2000, our sites generated approximately 132
million page views and we recorded approximately 9.1 million visits to our
sites.

CONDUCT TARGETED MARKETING ANALYSES. Our large and diverse online user
base enables us to conduct targeted marketing analyses for advertisers and
marketers seeking to reach particular demographic segments of the
Spanish-speaking market. In addition, we target, track and analyze user data
and campaign effectiveness for our advertisers and marketers. We provide our
advertisers and marketers with access to real-time feedback on user traffic,
click-through rates, demographics, online surveys and other information that
allows them to reach their target markets more easily and cost effectively.

PROVIDE MEDIA CONSULTING SERVICES. We provide advertisers and marketers
with media consulting services ranging from campaign planning to creative
development. Our marketing professionals have extensive senior management
experience in Latin America obtained at leading advertising, media and consumer
products companies, including Young & Rubicam, Grey Advertising, Sony, Viacom,
Procter & Gamble and Pillsbury. Our local presence allows us to maintain strong
relationships and to address the specific needs of local advertisers and
businesses. We currently have offices in Miami Beach, Los Angeles, Mexico City,
Buenos Aires, Bogota, Madrid and Barcelona, and expect to open additional
offices in major cities in Venezuela, Peru, Ecuador, Puerto Rico, Chile and the
Dominican Republic during 2000.

BRANDING AND USER ACQUISITION

We attract users to our sites using a combination of grass roots,
traditional media and online marketing efforts. Our grass roots efforts have
included:

/bullet/ being the exclusive Internet advertiser in AVANZANDO, a
family-oriented Spanish language magazine published by Procter & Gamble,
that was distributed door-to-door during the second half of 1999 to over
4.5 million households in the United States and Puerto Rico;

/bullet/ "Mes de Yupi" at Blockbuster Video, a month long promotion in
which customers received Yupi merchandise in over 172 Blockbuster outlets
throughout Mexico; and

/bullet/ sponsorship of events at social clubs and other entertainment
venues.

We have entered into agreements with local ISPs under which we create
co-branded portals for their subscribers. In addition, we license our branded
search engine to other Internet sites that target Spanish-speaking users. These
arrangements provide us with valuable branding opportunities as well as access
to additional Spanish speakers. In addition, our content relationships provide
us with co-branding opportunities on other Internet properties.

OUR STRATEGY

Our objective is to be the most valuable medium for advertisers and
marketers to reach the Spanish-speaking online community. To achieve this goal,
we intend to:

ATTRACT NEW USERS AND BROADEN AUDIENCE PROFILE

We plan to further expand our audience and increase its diversity by:

/bullet/ continuing our grass roots marketing efforts and other innovative
techniques to attract a diverse group of Spanish speakers to our sites;

/bullet/ aggressively increasing brand awareness by expanding our
traditional media and online marketing efforts;

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/bullet/ emphasizing cross-promotional activities with other media and
consumer product companies;

/bullet/ increasing the number of links to our sites from other sites;

/bullet/ expanding our local presence by growing internally, acquiring
existing Internet sites and forming relationships with local distribution
and content providers; and

/bullet/ offering new and existing services to small businesses, small
offices and home offices in our target markets.

CONTINUE TO BUILD AUDIENCE LOYALTY AND INCREASE FREQUENCY OF USE

We intend to strengthen user loyalty and increase usage of our sites by:

/bullet/ furnishing branded content from our existing relationships with
Sony, News Corp. and other content providers to provide users with a rich
and informative experience;

/bullet/ pursuing strategic alliances and acquisitions to expand our
content and service offerings to meet the needs of the growing
Spanish-speaking Internet audience;

/bullet/ enhancing the functionality of our core services and expanding the
database of Spanish language sites used in our search engines;

/bullet/ introducing user loyalty and affinity programs; and

/bullet/ continuing to address telecommunications capacity constraints in
our target market through both technology and design enhancements.

CREATE VALUE FOR ADVERTISERS AND MARKETERS

We believe that the combination of our large and growing audience and our
integrated marketing solutions enhances the value of our sites to advertisers
and marketers. To increase the value of our sites, we will continue to:

/bullet/ provide access to a large, attractive Spanish-speaking audience
and deliver targeted advertising and direct marketing services;

/bullet/ offer consultation services, including:

--strategic planning and creative development;

--collection and aggregation of user demographic information through
promotions and personalization services for campaign planning purposes;

--online research allowing advertisers and marketers to target specific
segments of our Spanish-speaking audience; and

--analysis of advertising data; and

/bullet/ expand electronic commerce opportunities, including:

--integration of electronic commerce opportunities for our users into our
content and community offerings;

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--expansion of our electronic commerce environment, including hosting and
maintenance, to third party merchants to offer products and services to
our users; and

--creation of transaction opportunities for businesses interested in
engaging in commerce to and from Latin America.

CONTENT, COMMUNITY AND SERVICES

We offer the following content, community and services to our users:

CONTENT

ENTERTAINMENT. Through our relationships with leading media companies we
provide our users with diverse, high quality entertainment content. This
content includes exclusive interviews with major motion picture stars and
performers such as Antonio Banderas, Harrison Ford, Chayanne, Robin Williams,
Winona Ryder and other popular celebrities. In addition, through Claqueta.com
and CiudadFutura.com, we provide coverage and reviews of Ibero-American movies.
Other entertainment content that can be found on our sites includes LAS ALAS
DEL AMOR, our online soap opera, interactive games, jokes and exclusive music
downloads.

BUSINESS. We offer a wide variety of business content to our users,
including access to THE WALL STREET JOURNAL OF THE AMERICAS, BANK RATE MONITOR,
Spanish language BUSINESS WIRE, AMERICA ECONOMIA, AMBITO FINANCIERO,
Patagon.com, LATIN TRADE, WRIGHT INVESTOR SERVICES and ZONA FINANCIERA. Through
these relationships we provide broad coverage of major domestic and
international markets. In addition, we provide financial calculators, stock and
bond quotes and specialized news coverage.

NEWS. We have developed a proprietary technology that categorizes and
indexes the news feeds we receive from Agencia EFE, Reuters and Notimex. This
technology allows our users to search our news offerings by keyword, country,
date or topic. In addition, our users can read Spanish versions of headlines
and news summaries from THE WASHINGTON POST, THE NEW YORK TIMES, LE MONDE, THE
LOS ANGELES TIMES, EL PAIS, FINANCIAL TIMES, LE PARISIEN, LE SOIR, O GLOBO,
CORRIERE DELLA SERA, THE MIAMI HERALD and DIARIO ABC. We also provide our users
headlines and news articles from several local newspapers in Latin America and
Spain.

SPORTS. In addition to aggregating sports information from our content
providers, we provide special event coverage. In 1999, this coverage included
the Pan American Games, Formula 1 car racing, the Copa America soccer
championship, the World Series and the Tour de France. Through our relationship
with Fox Sports, a subsidiary of News Corp., we provide our users with
additional sports coverage.

TECHNOLOGY. We provide our users with access to articles, reports and
other information from technology publications, including COMPUTER WORLD, PC
WORLD and International Data Group's newswire.

CHILDREN. We provide extensive content selected for children, including
cartoons, online kids' clubs, games, comics and movie information. We also
cover items of particular interest to children, such as Pokemon, Stuart Little
and Shakira.

SOCIETY/CULTURE. We provide a wide variety of content relating to
literature, art and religion. We also provide access to online fashion shows,
museums and sites of interest to women. Additional topics include news and
information regarding society, people and culture which we tailor to local
interests.

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OTHER. We also provide content on other subjects, including education,
law, politics, health, tourism and weather.

COMMUNITY

CIUDADFUTURA.COM. An online community providing diverse, collaborative
content created by over 200 contributors. This site includes content oriented
around community, entertainment and information. Our community-building
activities include chats, moderated chats, forums, virtual postcards, online
clubs, such as our popular club based on last names, personal matchmaking and
online games, including a popular chess site. We provide entertainment and
information in areas, such as love, music, astrology, tarot, horoscope, I
Ching, comics and content of particular interest to women, including beauty,
exercise and health.

MICASA.YUPI.COM. A personal Web site creation and hosting service that
assists users in creating their own Web sites through the use of templates and
a step-by-step wizard tool and also contains the manually-reviewed Web sites of
our users.

CHATS. Our users can instantly and easily communicate with each other. We
present live chats with well-known Spanish-speaking celebrities and experts on
specific topics.

FORUMS. Our online message boards have advanced features, including
country and keyword search capabilities, as well as features that enable users
to create their own personal forums.

SERVICES

SEARCH ENGINE. Yupi.com's proprietary search engine was among the first to
deliver results exclusively in Spanish. Our Spanish-speaking employees manually
select and categorize the sites in our Spanish language database. We believe
our database provides users with more relevant search results than does a
computer-generated database, because we manually review and categorize these
sites. We license our search engines, Yupi.com and Metabusca.com, to thousands
of other sites. Through our relationship with AltaVista, our users also have
access to AltaVista's extensive database of Web sites.

ELECTRONIC COMMERCE. We provide an international and regional electronic
commerce environment to our users. Our electronic commerce offering currently
includes:

/bullet/ CONTEXTUALIZED ELECTRONIC COMMERCE--hyperlinks placed within
content areas throughout our sites allow our users to purchase products
relevant to the content of the page being viewed;

/bullet/ YUPI COMPRAS AND CIUDADFUTURA.COM COMPRAS--shopping channels that
facilitate the purchase of a wide variety of products;

/bullet/ YUPI HIPOTECAS--our users can obtain financing online for
properties located in the United States through our relationship with
Mortgage.com;

/bullet/ HOTEL RESERVATIONS--our users can make reservations at hotels
worldwide through our relationship with Hotel Reservation Network; and

/bullet/ DOMAIN NAME REGISTRATION--our users can register domain names
online through our relationship with Network Solutions.

MI.YUPI.COM. A personalized version of Yupi.com that allows users to
select and design the look and feel as well as content of their personal
homepages based on their tastes and preferences. In addition, when users
personalize their homepages, we gain valuable user profiles that allow
advertisers and marketers to better reach their target audience.

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LANGUAGE TRANSLATOR. We provide instant, Internet-based translation into
six languages for single words, sentences and entire Web sites.

CLASSIFIEDS. Our classifieds have an easy-to-use interface that includes
features such as search by country, region, category and other detailed keyword
and advanced search capabilities. In addition, our classifieds are easily
administered and can be accessed and updated directly by the person posting the
classified.

FREE EMAIL. Our licensed email services allow our users to send electronic
messages anywhere in the world, from an easy-to-understand Spanish language
platform.

VIRTUAL GREETING CARDS/POSTCARDS. Our proprietary virtual postcard service
allows users to design and send free electronic greeting cards over the
Internet.

MARKETING

Our marketing campaign is designed to attract and retain Spanish-speaking
users, advertisers and marketers. From October 1997 to July 1999, we focused
our limited resources on collecting quality Spanish language content and
improving the functionality of our various services. Our marketing efforts were
limited to banner exchanges with other Spanish language Internet sites.

In July 1999, we expanded our marketing campaign in an effort to promote
the Yupi.com brand to a broad spectrum of Spanish speakers. For example, we
conducted co-promotions with advertisers, including:

/bullet/ sponsorship of a Heineken U.S.A. tour of Latino musical artists
targeting U.S. Hispanics;

/bullet/ outdoor promotions in conjunction with the Hallmark Entertainment
film, ALICE IN WONDERLAND;

/bullet/ promotion hosted by Yupi.com with Sony, United Airlines and
Intercontinental Hotels for tickets to attend Ricky Martin's concert tour;
and

/bullet/ "Team of the Century" promotion in conjunction with Fox Sports
where our users voted for their favorite soccer players.

In addition, we began television and outdoor advertising in Hispanic
markets in the United States, such as Los Angeles, New York and Miami and
expanded our media efforts to include online advertising, pan-regional cable
television, radio and print advertising in Latin America and Spain.

In 2000, we intend to increase our marketing efforts using the following:

/bullet/ banner advertising with links to our sites;

/bullet/ broadcast and cable television;

/bullet/ print media, including trade magazines, general circulation
newspapers and magazines and business journals;

/bullet/ billboard and other outdoor advertising; and

/bullet/ grass roots and local marketing efforts.

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In addition to our pan-regional marketing efforts we intend to localize
our marketing efforts in specific key traffic countries, including the United
States, Puerto Rico, Mexico, Spain, Argentina, Colombia, Chile and Venezuela.

SALES

Our ability to attract a large and diverse audience of Spanish-speaking
Internet users gives advertisers and marketers the opportunity to focus their
efforts on highly attractive target markets. We believe that our growing sales
organization, with its consultative approach, and the diversity of our audience
will attract additional advertisers and marketers to our sites.

OUR SALES ORGANIZATION

Prior to August 1999, we used a media sales company to sell advertising on
our sites. Upon completion of our equity financing in November 1999, we began
to expand our sales organization. We educate advertisers and marketers about
the benefits of using our sites as an effective medium to reach the
Spanish-speaking community. By employing a consultative approach, we seek to
establish long term relationships with advertisers, advertising agencies and
marketers.

Our sales force has extensive experience in the media, advertising and
consumer products industries obtained at leading companies, including Young &
Rubicam, Grey Advertising, USA Networks, Viacom, Procter & Gamble, Pillsbury
and Knight Ridder. As a result, we are able to provide our advertisers with
assistance in developing effective Internet advertising campaigns that serve
their needs. As of December 31, 1999, we had an internal sales force of nine
professionals located in the United States, Spain, Mexico, Argentina and
Colombia. We plan to significantly increase our sales force as we expand our
business.

ADVERTISING SERVICES

We offer a variety of advertising opportunities to our clients, including:

/bullet/ banner advertising;

/bullet/ contextual links to merchandise and services;

/bullet/ online sweepstakes, contests and promotions;

/bullet/ event sponsorships; and

/bullet/ channel sponsorships.

We enable advertisers to target their advertisements at the local,
regional and interest-specific level. By providing a broad array of channels of
interest, we offer advertisers expanded brand communications options.

Our sales organization assists advertisers in conducting market research,
analyzing the effectiveness of their advertising campaigns by gathering user
feedback and providing monitored, statistical information relating to user
traffic on our sites. We provide our advertisers and marketers with real-time
feedback on user traffic, click-through rates, demographics, online surveys and
other information. Advertisers seek cost effective ways to gather and track
information, obtain user feedback and continuously assess their market and
customers. We enable advertisers to quickly and accurately assess the
effectiveness of their advertising campaign.

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OUR ADVERTISERS

In 1999, we had 55 advertisers and sponsors on our sites of which 42
advertised on or sponsored our sites during the fourth quarter of 1999. Our
advertisers have included:

/bullet/ Banamex /bullet/ Patagon.com
/bullet/ BellSouth /bullet/ Pepsi USA
/bullet/ Dell Computers /bullet/ Procter & Gamble
/bullet/ Fox /bullet/ Siemens
/bullet/ Hallmark Entertainment /bullet/ Televideos Services, Inc.
/bullet/ Heineken USA /bullet/ USA Networks
/bullet/ Nortel Networks

We have derived substantially all of our revenues to date from the sale of
advertising and sponsorships on our sites. Typically, our agreements with
advertisers have terms of two to four months. During 1999, each of BellSouth,
Patagon.com and Televideos Services, Inc. accounted for at least 10% of our
revenues.

Historically, advertising expenditures in Latin America have been lower
during the first calendar quarter of each year because:

/bullet/ that period includes the summer months in most of Latin America;

/bullet/ many users in our target market take extended vacations during
these months; and

/bullet/ schools and universities in our target market are generally
closed during this time.

As a result, our advertising revenues may be lower during the first quarter as
compared to other quarters.

SONY RELATIONSHIP

In October 1999, we sold shares of our Class B Convertible Preferred Stock
to Sony in exchange for $5.0 million in cash and an agreement by Sony to
perform $29.3 million in future services. Under the terms of this agreement,
Sony provided us a "menu" of potential services that we may select over the
agreement's anticipated three year term. The services we may select include
access to content, promotion of Yupi on Sony's Internet sites and its Latin
American and Spanish television properties and inclusion on Sony enhanced CDs
of links to our sites.

TECHNOLOGY

We have a reliable systems architecture that is able to cost effectively
handle increasing and variable volumes of user traffic. We make our sites
available using Dell-based, Microsoft Windows NT servers, Sun Microsystems
servers and EMC disk arrays as our central production servers, currently
located at the facilities of Exodus Communications in New Jersey. Exodus
provides comprehensive facilities management services, including monitoring of
all production servers 24 hours a day, seven days a week. We have implemented
an environment in which each server can function separately. In Argentina,
Colombia, Mexico, Spain and the United States, we maintain data centers for
content and Internet development and staging.

Additional components of our server architecture enable us to administer
content, log traffic and serve advertisements. The connectivity layer of our
server architecture is operated with Cisco equipment. The Exodus server farm
facilities provide up to 200 megabits per second of bandwidth access over our
Internet connections. All of our facilities are protected by multiple power
supplies.

We use in-house and third party monitoring software for our servers,
processes and network connectivity. Reporting and tracking systems generate
daily traffic, demographic and advertising

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reports. All of our production systems are copied to backup tapes each night
and regularly stored in a storage facility on Exodus's premises as well as in a
storage facility in South Florida.

Our sites must accommodate a high volume of traffic and deliver frequently
updated information. Components or features of our network have in the past
suffered outages or experienced slower response times because of equipment or
software down time. We are in the process of designing a mirrored co-location
site at another location to increase our availability and reliability, perform
load balancing of traffic and increase the serviceability of our sites.

COMPETITION

Many companies provide content, connectivity services and electronic
commerce opportunities to Spanish-speaking Internet users located in Latin
America, the United States and Spain. As such, these companies compete with us
for user traffic, advertising relationships and revenues and strategic partners
and alliances. Although the market for online Spanish language content is
relatively new and evolving, we expect competition for users and revenues from
advertising and electronic commerce to increase significantly in the future
because there are no substantial barriers to entry in our target markets.

We compete against providers of Spanish language content, including ISPs,
portals, directories, content sites, Internet communities and Internet sites
maintained by governmental and/or educational institutions.

We face competition on a country-specific and pan-regional level. Our
primary competitors include, among others, StarMedia Network, Inc., Terra
Networks, S.A., America Online Latin America, Inc. and El Sitio, Inc. We also
face competition from Internet companies that provide products and services
primarily in English, but that also offer similar products and services in
Spanish such as Yahoo!, America Online, Lycos and Prodigy. These competitors
may create or collect content that is better than ours or achieves greater
market acceptance. New competitors may emerge and acquire significant market
share. Some of our established competitors and potential new competitors may
have better brand recognition and greater financial, technical and marketing
resources than us.

Our ability to compete successfully depends on many factors, including:

/bullet/ the quality of the content provided by us and our competitors;

/bullet/ how easy our services are to use;

/bullet/ sales and marketing efforts;

/bullet/ the prices that we charge our advertisers and electronic commerce
merchants; and

/bullet/ performance of our technology.

We also compete with traditional forms of media, including newspapers,
magazines, radio and television for advertising revenue. If advertisers view
the Internet or our sites as an ineffective advertising medium, they may be
reluctant to allocate a portion of their advertising budget to advertising on
our sites and on the Internet.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

We regard our copyrights, service marks, trademarks, trade secrets and
other intellectual property as critical to our success. We rely on trademark
and copyright law, trade secret protection and confidentiality and/or license
agreements with our employees, customers, suppliers and others to protect our
intellectual property rights. Despite our precautions, it may be possible for
third parties to

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obtain and use our intellectual property without authorization. Furthermore,
the validity, enforceability and scope of protection of intellectual property
in Internet-related industries are uncertain and still evolving. The laws of
some foreign countries are uncertain or do not protect intellectual property
rights to the same extent as do the laws of the United States.

We are pursuing the registration of our trademarks and service marks in
the United States, Spain and in key countries of Latin America. We may not be
able to secure adequate protection for our trademarks in the United States and
other countries. Policing unauthorized use of our marks is also difficult and
expensive. In addition, it is possible that our competitors will adopt product
or service names similar to ours, thereby impeding our ability to build brand
identity and possibly leading to customer confusion. Our inability to protect
our trademarks and service marks would have a material adverse effect on our
business, financial condition and results of operations.

Many parties are actively developing chat, homepage, search and related
Internet technologies. We expect these developers to continue to take steps to
protect these technologies, including seeking patent protection. There may be
patents issued or pending that are held by others and that cover significant
parts of our technology, business methods or services. For example, we are
aware that a number of patents have been issued for electronic commerce,
Internet-based information indexing and retrieval and online direct marketing.
Disputes over rights to these technologies are likely to arise in the future.
We cannot be certain that our products do not or will not infringe valid
patents, copyrights or other intellectual property rights held by third
parties. We may be subject to legal proceedings and claims from time to time
relating to the intellectual property of others in the ordinary course of our
business. If we determine that licensing this intellectual property is
appropriate, we may not be able to obtain a license on reasonable terms or at
all. We may also incur substantial expenses in defending against third party
infringement claims, regardless of the merit of these claims. Successful
infringement claims against us may result in substantial monetary liability or
may prevent us from conducting all or part of our business.

We also intend to continue to license technology from third parties,
including our email, chat and ad-serving technology. The market is evolving and
we may need to license additional technologies to remain competitive. We may
not be able to license these technologies on commercially reasonable terms or
at all. In addition, we may fail to successfully integrate any licensed
technology into our services. Our inability to obtain any of these licenses
could delay product and service development until alternative technologies can
be identified, licensed and integrated.

GOVERNMENT REGULATION

There are currently few laws or regulations directly applicable to access
to or commerce on the Internet. However, due to the increasing use of the
Internet, various legislative and regulatory proposals are under consideration
by various governments and governmental agencies or bodies. Laws or regulations
may be adopted or applied with respect to the Internet relating to issues such
as the following:

/bullet/ sales and other taxes;

/bullet/ user privacy;

/bullet/ pricing controls;

/bullet/ characteristics and quality of services and products;

/bullet/ consumer protection;

/bullet/ cross-border electronic commerce;

/bullet/ libel and defamation;

39
<PAGE>

/bullet/ pornography;

/bullet/ copyright, trademark and patent infringement; and

/bullet/ other claims based on the nature and content of Internet
materials.

The adoption or application of any of these laws or regulations may
negatively affect the growth in the use of the Internet, which could, in turn,
decrease the demand for our sites, increase our costs of doing business, or
otherwise have a material adverse effect on our business.

EMPLOYEES

As of December 31, 1999, we had 188 employees, 113 of whom were based in
Miami Beach, Florida. None of our employees is subject to a collective
bargaining agreement. We believe that our relations with our employees are
good.

FACILITIES

Our principal executive offices occupy approximately 5,000 square feet in
Miami Beach, Florida pursuant to a lease that expires in April 2000. We
recently entered into a new seven year lease covering 15,000 square feet in
Miami Beach and expect to relocate our principal executive offices to this new
location in March 2000. We also lease office space in other cities, including
Los Angeles, Bogota, Buenos Aires, Madrid and Mexico City with lease terms
ranging from month-to-month up to three years.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

40
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of Yupi and their ages and positions
as of January 12, 2000 are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- ----- -------------------------------------------------------------
<S> <C> <C>
Oscar L. Coen ..................... 36 President, Chief Executive Officer and Director
Luis E. San Miguel ................ 40 Senior Vice President, Chief Financial Officer and Treasurer
Victor Gutierrez .................. 54 Senior Vice President, Chief Operating Officer
Marlena Delgado-Coen .............. 38 Executive Vice President, Managing Director
Carlos Cardona .................... 25 Senior Vice President, Chief Technology Officer and Director
Jackie O'Brien .................... 31 Senior Vice President of Marketing
Rudy Vila ......................... 41 Senior Vice President of Entertainment/Content
Scott Tonneberger ................. 35 Vice President of International Operations
Damaris Valero .................... 33 Vice President of Global Sales
Ariel Bentata(1) .................. 30 Director
Juan Carlos Campuzano(2) .......... 39 Director
Camilo Cruz(1)(2) ................. 39 Director
Fred Ehrlich ...................... 38 Director
David R. Parker(1) ................ 56 Director

<FN>
- ----------------
(1) Member of the compensation committee
(2) Member of the audit committee
</FN>
</TABLE>

OSCAR L. COEN joined Yupi in May 1998 and has been our President since May
1999, our Chief Executive Officer since November 1998 and a director since
February 1999. From July 1997 to February 1998, Mr. Coen was an investment
banker with Preferred Capital Markets, an institutional investment banking and
securities firm, where he specialized in early stage technology and
biotechnology companies. From March 1996 to July 1997, Mr. Coen worked at First
Meridian Corporation, where he specialized in business development and
financing in Latin America. From October 1993 to December 1995, Mr. Coen was a
Vice President of Development and Sales advising emerging markets portfolio
managers for A.B. Laffer, V.A. Canto & Associates, an economic consulting firm.
Mr. Coen earned his undergraduate degree in Economics at INTEC in the Dominican
Republic, as well as an M.B.A. in International Finance and an M.B.A. in Public
Accounting from St. John's University. Mr. Coen is married to Ms. Delgado-Coen.

LUIS E. SAN MIGUEL has been our Senior Vice President, Chief Financial
Officer and Treasurer since July 1999. Prior to joining Yupi, Mr. San Miguel
was Chief Financial Officer of AnswerThink Consulting Group from its inception
in April 1997. From July 1994 to April 1997, Mr. San Miguel was Vice President
of Finance for the Strategic Services Consulting division of KPMG Peat Marwick.
From April 1991 to July 1994, Mr. San Miguel held a number of corporate
financial positions, including Director of Cash Management and Divisional
Controller, at Burger King Corp. Mr. San Miguel began his career in the audit
department of Peat Marwick Mitchell in 1981. Mr. San Miguel holds a B.S. in
Accounting and Finance from Fordham University and is a Certified Public
Accountant in the State of Florida.

VICTOR GUTIERREZ has been our Senior Vice President and Chief Operating
Officer since May 1999. From June 1991 to May 1999, Mr. Gutierrez worked in
various positions at Young & Rubicam Latin America, including Vice President,
Business Affairs Latin America, Worldwide Financial Director on the agency's
global Colgate-Palmolive account, and, most recently, as Vice Chairman, where
he managed more than 23 advertising agencies throughout the region. From 1987
to 1991, he owned fast food franchises and private retail outlets. From 1972 to
1987, Mr. Gutierrez served in various management capacities, including Chief
Financial Officer at J. Walter Thompson Advertising.

41
<PAGE>

MARLENA DELGADO-COEN has been our Executive Vice President and Managing
Director since January 1999. From April 1997 to January 1999, Ms. Delgado-Coen
was the co-owner of Delbrey, an advertising agency. From August 1996 to March
1997, Ms. Delgado-Coen was the General Manager of Young & Rubicam Advertising.
From November 1991 to December 1995, Ms. Delgado-Coen served as President of
FoVa/Grey Advertising, one of the largest Hispanic advertising agencies in the
United States. From October 1988 to November 1991, she served in various
capacities at Grey Advertising. From October 1986 to September 1988, Ms.
Delgado-Coen worked for Procter & Gamble in various sales and marketing
positions. Ms. Delgado-Coen holds a B.S. in Marketing from Barry University and
an M.B.A. from University of Miami in Florida. Ms. Delgado-Coen is married to
Mr. Coen.

CARLOS CARDONA founded Yupi and has been a Senior Vice President since
October 1997, our Chief Technology Officer since November 1998 and a director
since our incorporation. Prior to founding Yupi, Mr. Cardona worked from May
1996 to November 1996 for Internet Solutions Inc., an Internet development
company, where he was a Web designer and programmer. Mr. Cardona holds a B.S.
in Computer Engineering from Florida Atlantic University.

JACKIE O'BRIEN was named our Senior Vice President of Marketing in January
2000. Ms. O'Brien served as our Vice President, Marketing from November 1998 to
December 1999. From January 1995 to November 1998, Ms. O'Brien worked at Young
& Rubicam Advertising, where she held various management positions, including
most recently, Vice President and Director of Business Development for Latin
America. Ms. O'Brien holds a B.S. in Marketing from Fordham University.

RUDY VILA was named our Senior Vice President of Entertainment/Content in
January 2000. Mr. Vila served as our Vice President of Entertainment from
February 1999 to December 1999. Prior to joining Yupi, Mr. Vila was Vice
President of Business Development for PolyGram Records Latin America. From 1994
to 1996, Mr. Vila held various positions at Columbia Pictures, including Vice
President / Head of International Marketing and as Regional Vice President at
Latin America--Columbia Tri-Star Pictures. Mr. Vila holds an M.B.A. from St.
John's University.

SCOTT TONNEBERGER has been our Vice President of International Operations
since December 1999. From May 1999 to November 1999, Mr. Tonneberger held the
position of Vice President, Strategic Services at Yupi. From June 1998 to May
1999, Mr. Tonneberger was Vice President of Latin America for Copernicus, a
market strategy consulting firm. From January 1996 to June 1998 Mr. Tonneberger
was involved in Client Services for The Market Segment Group, a marketing
research firm specializing in market research for various ethnic groups. From
July 1994 to December 1995, Mr. Tonneberger worked at Research International, a
market research company, as Director of Global Client Services. From June 1987
to June 1994, Mr. Tonneberger held various positions at FoVa/Grey Advertising,
including Account Director and Vice President of Strategic Services. Mr.
Tonneberger holds a Masters in International Studies from John Hopkins
University and an M.B.A. from Columbia University.

DAMARIS VALERO has been our Vice President of Global Sales since October
1999. From June 1997 to September 1999, Ms. Valero was Vice President of Sales
and Business Development for Universal Television Networks Group in Latin
America. From July 1993 to February 1997, Ms. Valero held various positions at
Music Television Networks Latin America, including Senior Vice President of
advertising and affiliate sales. From 1989 to 1993, Ms. Valero was Director of
International Sales for Telemundo Group Inc. From 1986 to 1989, Ms. Valero
worked for the Pillsbury Company in various sales positions. Ms. Valero holds
an M.B.A. from St. Joseph's University.

ARIEL BENTATA has been a director since February 1999. Mr. Bentata served
as our Secretary from November 1998 to December 1999. Mr. Bentata is of-counsel
to the law firm of Bentata Hoet and Associates, concentrating on cross-border
transactions primarily in Latin America. Mr. Bentata is also a director of
Latin American Access, an Internet business and strategy consulting company for
Spanish and Portuguese language Internet markets. He was formerly Latin
American counsel for MTV Networks-Latin America from January 1997 to December
1998 and of-counsel to the Miami law firm of Steel Hector & Davis LLP from July
1993 to October 1996.

42
<PAGE>

JUAN CARLOS CAMPUZANO has been a director since April 1999. Mr. Campuzano
is a director of the general partner of Interprise Technology Partners, L.P.,
which is a shareholder of Yupi. From August 1992 to January 1999, Mr. Campuzano
was a portfolio manager with INVESCO Capital Management, Inc., where he also
served as a Managing Director of the International Group focusing on business
development efforts in Latin America. From August 1982 to July 1990, Mr.
Campuzano was a general practice manager with Coopers & Lybrand.

CAMILO CRUZ has been a director since our incorporation. Mr. Cruz served
as our President until May 1999. In 1990, Mr. Cruz founded and is President of
Taller Del Exito, Inc., a company which provides training and consulting
services to businesses in Latin America. Mr. Cruz is also a corporate and
motivational speaker in Latin America, Europe and the United States. Mr. Cruz
holds a Ph.D. in Analytical Spectroscopy from Seton Hall University.

FRED EHRLICH has been a director since November 1999. Since July 1999, Mr.
Ehrlich has served as President of New Technology & Business Development of
Sony Music Entertainment Inc., an affiliate of Sony Corporation of America,
which is a shareholder of Yupi. From October 1994 to June 1999, Mr. Ehrlich
served as Vice President/General Manager of New Technology & Business
Development of Sony Music Entertainment Inc. From August 1991 to September
1994, Mr. Ehrlich served as Vice President and General Manager of Columbia
Records. From August 1988 to August 1991, Mr. Ehrlich served as Vice President
of Columbia Records.

DAVID R. PARKER has been a director since April 1999. Mr. Parker is
founder and Managing Principal of Interprise Technology Partners, L.P., a
venture capital fund focused on Internet and information technology investments
founded in January 1999. From 1992 to May 1998, Mr. Parker was Chairman of
ProSource Distribution Services, Inc. a leading U.S. food services distributor
which was sold for cash to AmeriServe Inc. in May 1998. From May 1998 to August
1998, Mr. Parker was Vice Chairman of AmeriServe Inc., overseeing the
integration of ProSource into AmeriServe and remained on the board of directors
until he resigned from the board in November 1999. Mr. Parker is a director of
Tupperware, Inc. and Applied Graphics Technologies Inc. Mr. Parker received a
bachelors degree in Engineering from the University of Texas and an M.B.A. from
Harvard University, where he was a Baker Scholar.

COMMITTEES OF THE BOARD OF DIRECTORS

Our compensation committee consists of Messrs. Bentata, Cruz and Parker.
It reviews and evaluates the salaries and incentive compensation of our
management and key employees and makes recommendations concerning these matters
to the Board of Directors. Our compensation committee also administers our
stock plans.

Our audit committee consists of Messrs. Campuzano and Cruz. It reviews the
results and scope of audits and other services provided by our independent
public accountants and reviews our system of internal accounting and financial
controls.

DIRECTOR COMPENSATION

Directors who are our employees receive no additional compensation for
their services as directors. Directors who are not our employees do not receive
compensation for their services as directors, but are reimbursed for travel
expenses and other out-of-pocket costs incurred in connection with the
attendance at meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year ended December 31, 1999, the members of our compensation
committee were Messrs. Bentata, Cruz, Parker and Michael Shalom, a former
director. None of our executive officers has served as a director or member of
the compensation committee of any other entity whose

43
<PAGE>

executive officers served as a director or member of our compensation
committee. See "Certain Transactions" for a description of relationships
between Yupi and each of Messrs. Bentata and Parker.

EXECUTIVE COMPENSATION

The following table shows the total compensation paid or accrued for the
year ended December 31, 1999 to our Chief Executive Officer and our three other
most highly compensated executive officers whose total compensation paid or
accrued for the year ended December 31, 1999 exceeded $100,000. These
individuals are collectively referred to below as the named executive officers.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARD
--------------------- ----------------------
SECURITIES
NAME AND PRINCIPAL POSITION SALARY BONUS UNDERLYING OPTIONS(#)
- ----------------------------------------------------------- ----------- ------- ----------------------
<S> <C> <C> <C>
Oscar L. Coen
President, Chief Executive Officer and Director ......... $122,189 $-- 754,977
Marlena Delgado-Coen
Executive Vice President, Managing Director ............. 116,529 -- 475,925
Carlos Cardona
Senior Vice President, Chief Technology Officer
and Director ............................................ 113,540 -- 195,592
Jackie O'Brien
Senior Vice President of Marketing ...................... 111,934 -- 239,480
</TABLE>

OPTION GRANTS

The following table shows each grant of stock options during 1999 to each
of our named executive officers. No stock appreciation rights were granted to
the named executive officers in 1999.

The figures representing percentages of total options granted to employees
in the last fiscal year are based on options for a total of 5,371,653 shares
granted to our employees during 1999.

The potential realizable value is calculated based on the term of the
option at the time of grant. Stock appreciation of 5% and 10% is assumed
according to rules of the Securities and Exchange Commission and does not
represent our prediction of our stock price performance.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE
- ------------------------------ ---------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Oscar L. Coen ................ 754,977(1) 14.2% 2.6400 5/13/09
Marlena Delgado-Coen ......... 75,925(2) 1.4 0.0001 1/1/02
354,786(1) 6.7 2.6400 5/13/09
45,214(1) 0.8 8.0000 12/6/09
Carlos Cardona ............... 195,592(1) 3.7 2.6400 5/13/09
Jackie O'Brien ............... 239,480(1) 4.5 2.6400 5/13/09

<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM(3)
NAME 0% 5% 10%
- ------------------------------ ------------- -------------- --------------
<S> <C> <C> <C>
Oscar L. Coen ................ $8,576,539 $15,223,752 $25,421,883
Marlena Delgado-Coen ......... 1,062,942 1,230,490 1,414,779
4,030,369 7,154,091 11,946,494
271,284 669,372 1,280,117
Carlos Cardona ............... 2,221,925 3,944,020 6,586,051
Jackie O'Brien ............... 2,720,493 4,829,000 8,063,865

<FN>
- ----------------
(1) 28% of these options will vest on the one year anniversary of the date of
grant and 2% per month thereafter until fully vested.
(2) These options are fully vested.
(3) Amounts represent hypothetical gains that could be achieved for the options
if exercised at the end of the option term. These amounts represent
assumed rates of appreciation in the value of our common stock from an
assumed initial public offering price of $14.00. Actual gains, if any, on
stock option exercise depend on the future performance of the common
stock. The amounts reflected in the table may not necessarily be achieved.
</FN>
</TABLE>

44
<PAGE>

YEAR-END OPTION VALUES

The following table shows information regarding exercisable and
unexercisable stock options held as of December 31, 1999 by each named
executive officer. No options were exercised by these individuals during 1999.
There was no public trading market for our common stock as of December 31,
1999. The value of unexercised in-the-money options has been calculated by
multiplying the difference between the exercise price per share and an assumed
initial public offering price of $14.00 per share by the number of shares
underlying the options.

AGGREGATED FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Oscar L. Coen ................ 2,256,550 754,977 $31,537,543 $8,576,539
Marlena Delgado-Coen ......... 75,925 400,000 1,062,942 4,301,653
Carlos Cardona ............... 536,450 195,592 7,497,425 2,221,925
Jackie O'Brien ............... 64,075 239,480 897,044 2,720,493
</TABLE>

EMPLOYEE BENEFIT PLANS

STOCK INCENTIVE PLAN

The Stock Incentive Plan provides for the grant of stock-based awards to
employees, officers and directors of, and consultants, distributors or other
persons who render valuable services to, Yupi and its subsidiaries, including
incentive stock options, non-qualified stock options and other equity-based
awards. Incentive stock options may be granted only to our employees. A total
of 10,000,000 shares of common stock may be issued upon exercise of options or
other awards granted under the Stock Incentive Plan. As of December 31, 1999,
there were outstanding options to purchase an aggregate of 9,288,439 shares of
common stock pursuant to the Stock Incentive Plan.

Our Stock Incentive Plan is administered by the Board of Directors and the
compensation committee. The Stock Incentive Plan provides that the Board of
Directors and the compensation committee each has the authority to select the
persons to whom awards are granted and determine the terms of each award,
including the number of shares of common stock to be granted. Subject to the
discretion of the Board of Directors and the compensation committee, payment of
the exercise price of an award may be made in cash, shares of common stock,
delivery of a promissory note representing the aggregate exercise price of the
award, or by any other method approved by the Board of Directors or the
compensation committee consistent with Section 422 of the Internal Revenue Code
and Rule 16b-3 under the Securities Exchange Act of 1934. Awards are not
assignable or transferable, except by will or the laws of descent and
distribution, and in the case of non-qualified stock options only, to a family
member of the optionholder or an entity established for the benefit of an
optionholder's family member.

2000 STOCK OPTION AND INCENTIVE PLAN

The 2000 Stock Option and Incentive Plan provides for the grant of
stock-based awards to employees, officers and directors of, and consultants or
advisors to, Yupi and its subsidiaries, including incentive stock options and
non-qualified stock options and other equity-based awards. Incentive stock
options may be granted only to our employees. A total of 4,000,000 shares of
common stock may be issued upon the exercise of options or other awards granted
under the 2000 Stock Option and Incentive Plan. No awards have been granted to
date under the 2000 Stock Option and Incentive Plan.

45
<PAGE>

The 2000 Stock Option and Incentive Plan is administered by the Board of
Directors and the compensation committee. The 2000 Stock Option and Incentive
Plan provides that the Board of Directors and the compensation committee each
has the authority to select the persons to whom awards are granted and
determine the terms of each award, including the number of shares of common
stock to be granted. Payment of the exercise price of an award may be made in
cash, shares of common stock, a combination of cash and stock or by any other
method approved by the Board or compensation committee, consistent with Section
422 of the Internal Revenue Code and Rule 16b-3 under the Exchange Act. Options
granted under the 2000 Stock Option and Incentive Plan are not assignable or
transferable except by will or the laws of descent and distribution, and in the
case of non-qualified stock options only, to a family member of the
optionholder or an entity established for the benefit of an optionholder's
family member.

Each of the Board of Directors or compensation committee may, in its sole
discretion, amend, modify or terminate any award granted or made under the 2000
Stock Option and Incentive Plan, so long as such amendment, modification or
termination would not materially and adversely affect the participant. Each of
the Board or compensation committee may also, in its sole discretion,
accelerate or extend the date or dates on which all or any particular option or
options granted under the 2000 Stock Option and Incentive Plan may be
exercised.

2000 EMPLOYEE STOCK PURCHASE PLAN

The 2000 Employee Stock Purchase Plan provides for the issuance of a
maximum of 200,000 shares of common stock. The 2000 Employee Stock Purchase
Plan is administered by the Board of Directors and the compensation committee.
All employees of Yupi whose customary employment is for more than 20 hours per
week and for more than three months in any calendar year and who have completed
more than 90 days of employment with Yupi on or before the first day of any
six-month payment period are eligible to participate in the 2000 Employee Stock
Purchase Plan. Outside directors and employees who would own 5% or more of the
total combined voting power of value of Yupi's common stock immediately after
the grant may not participate in the 2000 Employee Stock Purchase Plan.

To participate in the 2000 Employee Stock Purchase Plan, an employee must
authorize Yupi to deduct an amount not less than one percent nor more than 10
percent of a participant's total cash compensation from his or her pay during
six-month payment periods. The first payment period will commence on a date to
be determined by the Board of Directors and end on December 31, 2000.
Thereafter, the payment periods will commence on the first day of January and
July, and end on the last day of the following June and December, respectively,
of each year, but in no case shall an employee be entitled to purchase more
than 1,000 shares in any one payment period. The exercise price for the option
granted in each payment period is 85% of the lesser of the average market price
of the common stock on the first or last business day of the payment period, in
either event rounded up to the nearest cent. If an employee is not a
participant on the last day of the payment period, such employee is not
entitled to exercise his or her option, and the amount of his or her
accumulated payroll deductions will be refunded. Options granted under the 2000
Employee Stock Purchase Plan may not be transferred or assigned. An employee's
rights under the 2000 Employee Stock Purchase Plan terminate upon his or her
voluntary withdrawal from the plan at any time or upon termination of
employment. No options have been granted to date under the 2000 Employee Stock
Purchase Plan.

46
<PAGE>

CERTAIN TRANSACTIONS

On March 30, 1999, Yupi, IFX Corporation, an affiliate of IFX Online,
Inc., Oscar Coen, an executive officer and director of Yupi, Ariel Bentata, a
director of Yupi, Camilo Cruz, a director of Yupi, and Carlos Cardona, an
executive officer and director of Yupi, entered into an agreement under which
these four individuals granted IFX Corporation the right to purchase from them
an aggregate of 647,525 shares of our common stock at a price per share of
$0.9264. IFX Corporation can exercise this right at any time before March 30,
2001. Additionally, in connection with this agreement, we agreed to provide a
variety of services to IFX Corporation, including advertising banners with a
contract value of $200,000 and personalization home page services.

On April 23, 1999, we sold 45,620 shares of our Class A Convertible
Preferred Stock in a private financing to IFX Online, Inc. at $21.92 per share
and sold an aggregate of 223,500 shares of our Class A Convertible Preferred
Stock in a private financing to IFX Online, Inc. and Interprise Technology
Partners, L.P. at $31.32 per share. Between May 13, 1999 and August 2, 1999, we
sold an aggregate of 159,642 shares of our Class A Convertible Preferred Stock
in a series of private financings to Interprise Technology Partners, L.P. at
$31.32 per share.

On August 23, 1999, we borrowed $2.0 milllion from Interprise Technology
Partners, L.P. On September 9, 1999, we borrowed $1.0 million from Interprise
Technology Partners, L.P. Each loan was secured by certain assets of Yupi,
evidenced by a promissory note, and accrued interest at 8% per annum. On
November 5, 1999, these loans were discharged in exchange for 260,869 shares of
our Class C Convertible Preferred Stock and $44,274 for accrued but unpaid
interest on the promissory notes.

On October 27, 1999, we sold 2,955,016 shares of our Class B Convertible
Preferred Stock in a private financing to Sony Corporation of America at a
price of $11.60 per share for an aggregate purchase price of $34.3 million,
consisting of $5.0 million in cash and an agreement between Yupi and Sony
Corporation of America under which Sony agreed to provide services relating to
the marketing and promotion of our sites.

On November 5, 1999 and November 10, 1999, we sold an aggregate of
5,858,698 shares of our Class C Convertible Preferred Stock in a private
financing at a price of $11.50 per share to purchasers, including Interprise
Technology Partners, L.P.

On November 24, 1999, Victor Gutierrez, an executive officer of Yupi,
borrowed $75,000 from Yupi. On October 27, 1999 and November 30, 1999, Rudy
Vila, an executive officer of Yupi, borrowed $20,000 and $70,000, respectively,
from Yupi. Each of these loans is unsecured, is evidenced by a promissory note
and bears interest at 8% per annum. Each of these loans is due one year from
the date made.

We have obtained legal services from a law firm of which Ariel Bentata, a
director of Yupi, is of-counsel. We paid this law firm, in part, by granting it
options to purchase an aggregate of 31,450 shares of our common stock at
$0.0025 per share for legal services rendered and related disbursements through
January 1999. For the year ended December 31, 1999, we paid this law firm
approximately $154,000 (including the estimated fair value of options on the
date of grant) for legal services rendered and related disbursements.

Pursuant to the terms of two sales and maintenance agreements between Yupi
and Netera, Inc., a company in which Interprise Technology Partners, L.P. has a
material interest, for the year ended December 31, 1999, we paid Netera
$649,187 for computer networking services. David Parker, a director of Yupi and
a Managing Principal of the general partner of the general partner of
Interprise Technology Partners, L.P., is a director of Netera.

We believe all transactions set forth above were made on terms no less
favorable to us than would have been obtained from unaffiliated third parties.
We have adopted a policy providing that all future transactions between Yupi
and our executive officers, directors, principal shareholders and their
affiliates shall be on terms no less favorable to Yupi than could be obtained
by Yupi from unrelated third parties, and such transactions shall be approved
by a majority of the outside independent and disinterested members of our Board
of Directors.

47
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table shows information regarding beneficial ownership of
our common stock as of December 31, 1999, and as adjusted to reflect the sale
of the shares of common stock offered by this prospectus by:

/bullet/ our named executive officers;

/bullet/ each of our directors;

/bullet/ each person known by us to be the beneficial owner of more than 5%
of our common stock; and

/bullet/ all of our executive officers and directors as a group.

Unless otherwise noted below, the address of each person listed on the
table is c/o Yupi Internet Inc., 830 Lincoln Road, Second Floor, Miami Beach,
Florida 33139 and, to our knowledge, each person has sole voting and investment
power over all shares indicated, except when authority is shared by spouses
under applicable law and except as set forth in the footnotes to the table.

For purposes of calculating the percentage beneficially owned, the number
of shares deemed outstanding before the offering includes:

/bullet/ 16,187,681 shares of common stock outstanding as of December 31,
1999; and

/bullet/ 19,558,460 shares of common stock issuable upon conversion of the
preferred stock, which will be automatically converted upon the closing of
this offering.

For purposes of calculating the percentage beneficially owned, the number
of shares deemed outstanding after the offering includes:

/bullet/ all shares deemed to be outstanding before the offering; and

/bullet/ 7,000,000 shares being sold in this offering, assuming no exercise
of the underwriters' over-allotment option.

In computing the number of shares beneficially owned by a person and the
percentage ownership by that person, shares of common stock issuable under
stock options exercisable within 60 days of December 31, 1999 are deemed
outstanding but are not deemed outstanding for computing the percentage
ownership of any other person.

48
<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
NUMBER OF SHARES -----------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED BEFORE OFFERING AFTER OFFERING
- ---------------------------------------------- ------------------- ----------------- ---------------
<S> <C> <C> <C>
Oscar Coen(1) ................................ 2,576,186 6.7% 5.7%
Carlos Cardona(2) ............................ 5,298,950 14.6 12.2
Marlena Delgado-Coen(3) ...................... 131,362 * *
Jackie O'Brien(4) ............................ 72,075 * *
Ariel Bentata(5) ............................. 1,614,550 4.4 3.7
Juan Carlos Campuzano ........................ -- -- --
Camilo Cruz(6) ............................... 4,098,950 11.3 9.5
Fred Ehrlich(7) .............................. 2,980,712 8.3 7.0
David R. Parker(8) ........................... 8,329,951 23.3 19.5
Sony Corporation of America .................. 2,980,712 8.3 7.0
550 Madison Avenue
New York, NY 10022
Interprise Technology Partners, L.P. ......... 8,329,951 23.3 19.5
1001 Brickell Bay Drive, 30th Floor
Miami, FL 33131
IFX Online, Inc.(9) .......................... 3,554,700 9.8 8.2
17701 Biscayne Blvd., 3rd Floor
Aventura, FL 33160
All executive officers and directors
as a group (14 persons)(10) ................ 25,136,511 62.7 53.4

<FN>
- ----------------
* Less than 1%
(1) Includes 15,975 shares of common stock held jointly with Ms. Delgado-Coen,
48,036 shares of common stock held by a trust of which Mr. Coen is the
trustee, and 2,256,500 shares of common stock issuable upon exercise of
stock options. Also includes the right to purchase 225,650 shares of
common stock from Mr. Cruz.
(2) Includes 536,450 shares issuable upon exercise of stock options.
(3) Includes 15,975 shares of common stock held jointly with Mr. Coen, 16,012
shares of common stock held by a trust of which Ms. Delgado-Coen is the
trustee, and 75,925 shares of common stock issuable upon exercise of stock
options.
(4) Includes 64,075 shares of common stock issuable upon exercise of stock
options.
(5) Includes 361,475 shares of common stock issuable upon exercise of stock
options. Also includes the right to purchase 245,275 shares of common
stock from Mr. Cardona and the right to purchase 19,625 shares of common
stock from Mr. Cruz. Also includes an aggregate of 884,575 shares of
common stock held by two revocable trusts established by Mr. Bentata.
(6) Includes 3,335,875 shares of common stock held by a revocable trust of
which Mr. Cruz is the trustee and 536,450 shares of common stock issuable
upon exercise of stock options.
(7) Includes 2,980,712 shares of common stock beneficially owned by Sony
Corporation of America. Mr. Ehrlich is the President of New Technology &
Business Development of Sony Music Entertainment Inc., an affiliate of
Sony Corporation of America. Mr. Ehrlich disclaims benefical ownership of
these shares.
(8) Includes 8,329,951 shares of common stock beneficially owned by Interprise
Technology Partners, L.P. Mr. Parker is the Managing Principal of the
general partner of the general partner of Interprise Technology Partners,
L.P. Mr. Parker disclaims beneficial ownership of these shares, except to
the extent of his pecuniary interest therein.
(9) Includes the right of IFX Corporation, an affiliate of IFX Online, Inc.,
to purchase an aggregate of 647,525 shares of common stock from the
following individuals: 226,625 shares of common stock from each of Messrs.
Cruz and Cardona, 90,675 shares of common stock from Mr. Coen, and 103,600
shares of common stock from Mr. Bentata. Also includes 170,250 shares of
common stock owned by IFX Inc., an affiliate of IFX Corporation and IFX
Online, Inc.
(10) Includes 3,853,150 shares issuable upon exercise of stock options. Also
includes those shares of common stock referenced in footnotes 7 and 8.
Also includes Mr. Coen's right to acquire 225,650 shares of common stock
from Mr. Cruz, Mr. Bentata's right to acquire 245,275 shares of common
stock from Mr. Cardona and Mr. Bentata's right to acquire 19,625 shares of
common stock from Mr. Cruz.
</FN>
</TABLE>

49
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Following this offering, our authorized capital stock will consist of
300,000,000 shares of common stock, par value $.0001 per share, and 5,000,000
shares of preferred stock, par value $.01 per share.

The following summary of our securities and various provisions of our
Fourth Amended and Restated Articles of Incorporation and our Amended and
Restated By-Laws is not intended to be complete and is qualified by reference
to the provisions of applicable law and to our Fourth Amended and Restated
Articles of Incorporation and Amended and Restated By-Laws included as exhibits
to the Registration Statement of which this prospectus is a part. See
"Additional Information."

COMMON STOCK

At December 31, 1999, there were 16,187,681 shares of common stock
outstanding, which were held of record by 84 shareholders, and 9,242,476 shares
of preferred stock outstanding, which were held of record by 22 shareholders.
All outstanding shares of preferred stock will be automatically converted into
an aggregate 19,558,460 shares of common stock upon the closing of this
offering. In addition, as of December 31, 1999, there were outstanding stock
options for the purchase of a total of 9,288,439 shares of common stock. Based
upon the number of shares outstanding as of December 31, 1999 and giving effect
to the issuance of the shares of common stock offered by Yupi hereby and the
conversion of the preferred stock into common stock, there will be 42,746,141
shares of common stock outstanding upon the closing of this offering.

Holders of common stock are entitled to one vote per share for each share
held of record on all matters submitted to a vote of shareholders. The holders
of common stock are entitled to receive ratably lawful dividends as declared by
the Board of Directors. However, these dividends are subject to preferences of
holders of any outstanding shares of preferred stock. In the event of a
liquidation, dissolution or winding up of the affairs of Yupi, whether
voluntary or involuntary, the holders of common stock will be entitled to
receive pro rata all of the remaining assets of Yupi available for distribution
to its shareholders. The pro rata distribution would be junior to the rights of
the holders of any outstanding shares of preferred stock. The common stock has
no preemptive, redemption, conversion or subscription rights. The rights,
powers, preferences and privileges of holders of common stock are junior to,
and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which Yupi may designate and issue in the future.

PREFERRED STOCK

The Board of Directors is authorized, subject to any limitations
prescribed by Florida law, without further shareholder approval, to issue from
time to time up to 5,000,000 shares of preferred stock, in one or more series.
The Board of Directors is also authorized, subject to the limitations of
Florida law, to establish the number of shares to be included in each series
and to fix the voting powers, preferences, qualifications and special or
relative rights or privileges of each series. The Board of Directors is
authorized to issue preferred stock with voting, conversion and other rights
and preferences that could adversely affect the voting power or other rights of
the holders of common stock.

We have no current plans to issue any preferred stock. However, if we do
so, the issuance of preferred stock or of rights to purchase preferred stock
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from attempting to acquire, a majority of the
outstanding voting stock of Yupi.

CONVERSION OF OUTSTANDING PREFERRED STOCK

Our outstanding preferred stock automatically converts into common stock
upon the closing of this offering. The conversion ratio for the Class A
Convertible Preferred Stock is 25-for-1. The

50
<PAGE>

outstanding shares of Class A Convertible Preferred Stock are convertible into
an aggregate of 10,719,050 shares common stock. The conversion ratio for the
Class B Convertible Preferred Stock is approximately 1.009-for-1 and the
conversion ratio for the Class C Convertible Preferred Stock is 1-for-1. The
outstanding shares of Class B Convertible Preferred Stock are convertible into
an aggregate of 2,980,712 shares of common stock, and the outstanding shares of
Class C Convertible Preferred Stock are convertible into an aggregate of
5,858,698 shares of common stock. If the initial public offering price per
share is less than $15.295, the conversion ratio of the Class C Convertible
Preferred Stock will be adjusted so that the initial public offering price per
share is equal to 133% of the price per share of the shares of common stock
issued upon conversion of the Class C Convertible Preferred Stock. A similar
adjustment will also be made to the conversion ratio of the Class B Convertible
Preferred Stock. At an assumed initial public offering price of $14.00, these
adjustments would result in the issuance of an additional 541,930 shares of
common stock upon the conversion of the Class C Convertible Preferred Stock,
and an additional 40,538 shares upon the conversion of the Class B Convertible
Preferred Stock. In connection with the sale of the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock, upon the closing of
this offering we will record a deemed dividend on these shares equal to
approximately $23.9 million.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE FLORIDA BUSINESS CORPORATION ACT,
OUR CHARTER AND OUR BY-LAWS

The following provisions of the Florida Business Corporation Act, our
Fourth Amended and Restated Articles of Incorporation and our Amended and
Restated By-Laws could have the effect of preventing or delaying a person from
acquiring or seeking to acquire a substantial interest in, or control of, Yupi.

ELECTION AND REMOVAL OF DIRECTORS

Our Amended and Restated By-Laws provide that directors shall be elected
annually, at the annual meeting of shareholders, by a plurality of the votes
cast by the shares entitled to vote at the annual meeting on such matters.

In addition, our Amended and Restated By-Laws provide that newly created
directorships resulting from either an increase in the authorized number of
directors or vacancies may be filled only by:

/bullet/ a majority of the directors then in office, though less than a
quorum is then in office; or

/bullet/ by the sole remaining director.

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws provide that a director may be removed without cause only
by the holders of at least 75% of the shares entitled to vote at an election of
directors. A director may be removed with cause only by the holders of at least
a majority of the shares entitled to vote at an election of directors.

SHAREHOLDER MEETINGS

Under our Fourth Amended and Restated Articles of Incorporation and our
Amended and Restated By-Laws, only our chairman of the board, our president, or
the holders of at least a majority of our outstanding capital stock may call
special meetings of shareholders.

REQUIREMENTS FOR ADVANCE NOTIFICATION OF SHAREHOLDER NOMINATIONS AND PROPOSALS

Our Amended and Restated By-Laws provide for advanced notice procedures
with respect to shareholder proposals and the nomination of candidates for
election as directors, other than nominations made by or at the direction of
our Board of Directors or committee of the Board of Directors.

51
<PAGE>

ELIMINATION OF SHAREHOLDER ACTION BY WRITTEN CONSENT

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws eliminate the right of shareholders to act by written
consent.

NO CUMULATIVE VOTING

Our Fourth Amended and Restated Articles of Incorporation do not provide
for cumulative voting.

FLORIDA ANTI-TAKEOVER LAW

We are subject to anti-takeover provisions under the Florida Business
Corporation Act that apply to public corporations organized under Florida law
unless the corporation has elected to opt out of those provisions in its
articles of incorporation or bylaws. We have not chosen to opt-out of these
provisions.

These provisions prohibit the voting of shares in a publicly-held Florida
corporation that are acquired in a "control share acquisition" unless:

/bullet/ the board of directors gives its prior approval of the control
share acquisition;

/bullet/ the corporation amends its articles of incorporation or bylaws to
make the statute inapplicable before a control share acquisition; or

/bullet/ the holders of a majority of the corporation's voting shares,
excluding "interested" shares, approve the granting of voting rights to
the acquiring party.

A "control share acquisition" is defined as an acquisition that immediately
thereafter entitles the acquiring party, directly or indirectly, to vote or
direct the vote in the election of directors within any of the following ranges
of voting power:

/bullet/ 1/5 or more but less than 1/3;

/bullet/ 1/3 or more but less than a majority; or

/bullet/ a majority or more.

There are some exceptions to the "control share acquisition" provisions of the
Florida Business Corporation Act.

The Florida Business Corporation Act also contains an "affiliated
transaction" provision that prohibits a publicly-held Florida corporation from
engaging in a broad range of business combinations or other extraordinary
corporate transactions with an "interested shareholder" unless:

/bullet/ the transaction is approved by a majority of disinterested
directors before the person becomes an interested shareholder;

/bullet/ the corporation has not had more than 300 stockholders of record
during the past three years;

/bullet/ the interested shareholder has owned at least 80% of the
corporation's outstanding voting shares for at least five years;

/bullet/ the interested shareholder is the beneficial owner of at least 90%
of the voting shares, excluding shares acquired directly from the
corporation in a transaction not approved by a majority of the
disinterested directors;

52
<PAGE>

/bullet/ consideration is paid to the corporation's shareholders equal to
the highest amount per share calculated under a complex formula, and other
specified conditions are met; or

/bullet/ the transaction is approved by the holders of two-thirds of the
corporation's voting shares other than those owned by the interested
shareholder.

An "interested shareholder" is defined as a person who, together with
affiliates and associates, beneficially owns more than 10% of a corporation's
outstanding voting shares. The Florida Business Corporation Act defines
"beneficial ownership" in more detail.

The Florida Business Corporation Act also contains "general standards for
directors" provisions. These provisions state that in discharging his or her
duties and in determining what is in our best interest, a director may consider
factors that the director deems relevant, including:

/bullet/ the long term prospects and interests of Yupi and our
shareholders; and

/bullet/ the social, economic, legal or other effects of any proposed
actions on our employees, suppliers or customers, the community in which
we operate and the economy in general.

Therefore, directors who consider these other factors may make decisions which
are less beneficial to some, or a majority, of our shareholders than if the law
did not permit our directors to consider these factors.

INDEMNIFICATION AND LIMITATION OF LIABILITY

The Florida Business Corporation Act authorizes Florida corporations to
indemnify any person who was or is a party to any proceeding other than an
action by, or in the right of, the corporation, by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation. The
indemnity also applies to any person who is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation or other entity. The indemnification applies against liability
incurred in connection with such a proceeding, including any appeal thereof, if
the person acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the corporation. To be eligible for
indemnity with respect to any criminal action or proceeding, the person must
have had no reasonable cause to believe his conduct was unlawful.

In the case of an action by or on behalf of a corporation, indemnification
may not be made if the person seeking indemnification is found liable, unless
the court in which the action was brought determines such person is fairly and
reasonably entitled to indemnification.

Under the Florida Business Corporation Act, a director is not personally
liable for monetary damages to a corporation or other person for any statement,
vote, decision, or failure to act unless:

/bullet/ the director breached or failed to perform his duties as a
director; and

/bullet/ the director's breach of, or failure to perform, those duties
constitutes:

-- a violation of criminal law, unless the director had reasonable cause
to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful;

-- a transaction from which the director derived an improper personal
benefit, either directly or indirectly;

-- a circumstance under which an unlawful dividend, redemption or other
distribution is made;

-- in a derivative or shareholder proceeding, conscious disregard for the
best interest of the corporation or willful misconduct; or

53
<PAGE>

-- in a proceeding by another third party, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or
in a manner exhibiting wanton and willful disregard of human rights,
safety or property.

A corporation may purchase and maintain insurance for its directors or
officers against liabilities asserted against them and incurred by them in
their capacity, whether or not the corporation would have the power to
indemnify them against this liability under the Florida Business Corporation
Act.

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws require us, to the fullest extent permitted by law to
indemnify all our directors and officers, as well as other employees to whom we
have granted indemnification.

STOCK TRANSFER AGENT

The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company.

54
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales of substantial amounts of our common stock in the public market
could adversely affect prevailing market prices from time to time. Furthermore,
since only a limited number of shares will be available for sale shortly after
this offering, because of contractual and legal restrictions on resale
described below, sales of substantial amounts of our common stock in the public
market after the restrictions lapse could adversely affect the prevailing
market price and our ability to raise equity capital in the future.

Based on shares outstanding at December 31, 1999, upon completion of this
offering we will have outstanding an aggregate of 42,746,141 shares of common
stock, assuming no exercise of the underwriters' over-allotment option and no
exercise of outstanding options. If the underwriters exercise their
over-allotment option in full, we will have 43,796,141 shares of common stock
outstanding. The shares sold in this offering will be freely tradable without
restrictions or further registration under the Securities Act, unless such
shares are purchased by an existing affiliate of Yupi as that term is defined
in Rule 144 under the Securities Act.

The remaining 35,746,141 shares of common stock outstanding after this
offering are restricted shares or are subject to the contractual restrictions
described below. Restricted shares may be sold in the public market only if
registered or if they qualify for an exception from registration under Rules
144, 144(k) or 701 under the Securities Act, which are summarized below.
Subject to the lock-up agreements described below, these restricted shares will
be available for resale in the public market as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE OF FIRST AVAILABILITY FOR RESALE
- ------------------ -----------------------------------------------------------------------------------------
<S> <C>
11,223,500 Immediately after the date of this prospectus, substantially all of which shares are
subject to lock-up agreements
14,089,025 90 days after the date of this prospectus, substantially all of which shares are subject
to lock-up agreements
10,433,616 At various times 180 days after the date of the prospectus
</TABLE>

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned restricted
shares for at least one year would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:

/bullet/ one percent of the number of shares of common stock then
outstanding, which will equal 427,461 shares immediately after the
offering, or

/bullet/ the average weekly trading volume of the common stock on the
Nasdaq National Market during the four calendar weeks preceding the sale.

Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about Yupi. Rule 144 also provides that affiliates of Yupi who are
selling shares of common stock that are not restricted shares must nonetheless
comply with the same restrictions applicable to restricted shares with the
exception of the holding period requirement.

Under Rule 144(k), a person who is not deemed to have been an affiliate of
Yupi at any time during the 90 days preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, is entitled to
sell such shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.

RULE 701

Subject to certain limitations on the aggregate offering price of a
transaction and other conditions, Rule 701 may be relied upon with respect to
the resale of securities originally purchased

55
<PAGE>

from Yupi by its employees, directors, officers, consultants or advisors prior
to the date we become subject to the reporting requirements of the Exchange
Act. To be eligible for resale under Rule 701, shares must have been issued in
connection with written compensatory benefit plans or written contracts
relating to the compensation of such persons. In addition, the Securities and
Exchange Commission has indicated that Rule 701 will apply to typical stock
options granted by an issuer before it becomes subject to the reporting
requirements of the Exchange Act, along with the shares acquired upon exercise
of such options, including exercises after the date of this offering.
Securities issued in reliance on Rule 701 are restricted securities and,
subject to the contractual restrictions described below, beginning 90 days
after the date of this prospectus, may be sold by persons other than
affiliates, subject only to the manner of sale provisions of Rule 144, and by
affiliates, under Rule 144 without compliance with its one-year minimum holding
period requirements.

LOCK-UP AGREEMENTS

Yupi, its officers and directors and substantially all of its shareholders
and optionholders have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or in the case of Yupi,
file with the Securities and Exchange Commission a registration statement under
the Securities Act relating to, any shares of common stock or any securities
convertible into or exercisable or exchangeable for any shares of common stock,
or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation, for a period of 180 days after the date of this prospectus,
except under certain circumstances. Credit Suisse First Boston Corporation
currently has no plans to release any portion of the securities subject to
lock-up agreements. When determining whether or not to release shares from the
lock-up agreements, Credit Suisse First Boston Corporation will consider, among
other factors, the shareholder's reasons for requesting the release, the number
of shares for which the release is being requested and market conditions at the
time.

COMMON STOCK AND OPTIONS ISSUABLE UNDER OUR EMPLOYEE BENEFIT PLANS

Following this offering, we intend to file one or more registration
statements under the Securities Act covering approximately 14,200,000 shares of
common stock issuable upon the exercise of stock options, subject to
outstanding options or reserved for issuance under our Stock Incentive Plan,
our 2000 Stock Option and Incentive Plan and our 2000 Employee Stock Purchase
Plan. Accordingly, shares registered under such registration statements will,
subject to Rule 144 provisions applicable to affiliates, be available for sale
in the open market, except when such shares are subject to vesting restrictions
and the lock-up agreements described above. See "Management--Employee Benefit
Plans."

REGISTRATION RIGHTS

After this offering, the holders of approximately 19,558,460 shares of
common stock will be entitled to rights with respect to the registration of
these shares under the Securities Act. If we propose to register any of our
securities under the Securities Act, either for our own account or for the
account of other securityholders exercising registration rights, these holders
are entitled to notice of such registration and are entitled to include shares
of common stock. Additionally, these holders have demand registration rights to
require us on up to three occasions to file a registration statement under the
Securities Act at our expense. We are required to use our best efforts to
effect any such registration. Further, holders may require us to file two
additional registration statements on Form S-2 or Form S-3 at our expense.
Under these registration rights, the underwriters of an offering can limit the
number of shares included in the registration, and we have the right not to
effect a requested registration within 180 days following an offering of our
securities on a Form S-1, including this offering.

56
<PAGE>

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2000, the underwriters named below, for whom Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Banc of America Securities LLC and SG Cowen Securities Corporation
are acting as representatives, have agreed to purchase from Yupi the following
respective number of shares of common stock:

NUMBER OF
UNDERWRITERS SHARES
- ---------------------------------------------------------------- ----------
Credit Suisse First Boston Corporation ......................
Donaldson, Lufkin & Jenrette Securities Corporation .........
Banc of America Securities LLC ..............................
SG Cowen Securities Corporation .............................

---------
Total ...................................................... 7,000,000
=========

The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in this offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering of common stock may be terminated.

We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 1,050,000 additional shares of common stock at the initial
public offering price, less the underwriting discounts and commissions. This
option may be exercised only to cover over-allotments of common stock.

The underwriters propose to offer the common stock initially at the public
offering price on the cover page of this prospectus and to selling group
members at that price less a concession of $ per share. The underwriters
and the selling group members may allow a discount of $ per share on sales
to other broker/dealers. After the offering, the public offering price and
concession and discount to broker/dealers may be changed by the
representatives.

The following table summarizes the compensation to be paid to the
underwriters by us and the expenses payable by us.

<TABLE>
<CAPTION>
PER SHARE TOTAL
----------------------------------- ----------------------------------
WITHOUT WITH WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Underwriting discounts and commissions
paid by us ......................... $ $ $ $
Expenses payable by us ............... $ $ $ $
</TABLE>

The underwriters have informed us that they do not expect discretionary
sales by them to exceed 5% of the shares being offered.

57
<PAGE>

under certain circumstances, including in the case of Yupi, for grants of
employee stock and stock options pursuant to the terms of our stock plans in
effect on the date hereof or issuances of securities pursuant to the exercise
of any such stock options.

The underwriters have reserved for sale, at the initial public offering
price, up to 490,000 shares of the common stock for employees, directors and
other persons associated with Yupi who have expressed an interest in purchasing
common stock in the offering. The number of shares of common stock available
for sale to the general public in this offering will be reduced to the extent
the persons purchase the reserved shares. Any reserved shares not so purchased
will be offered by the underwriters to the general public on the same terms as
the other shares.

We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or to contribute to payments which the underwriters may be
required to make in that respect.

We have applied to list our common stock on the Nasdaq National Market
under the symbol "YUPI."

Prior to the offering, there has been no public market for our common
stock. The initial public offering price will be determined by negotiation
between Yupi and the representatives. The principal factors considered in
determining the public offering price will include:

/bullet/ the information set forth in this prospectus and otherwise
available to the representatives;

/bullet/ the history of, and the prospects for, Yupi and the industry in
which it competes;

/bullet/ an assessment of our management;

/bullet/ the prospects for, and the timing of, our future earnings;

/bullet/ our present state of development and our current financial
condition;

/bullet/ our past and present earnings and operations;

/bullet/ the general condition of the securities markets at the time of
the offering;

/bullet/ the recent market prices of, and the demand for, publicly-traded
common stock of companies in businesses similar to those of Yupi;

/bullet/ market conditions for initial public offerings; and

/bullet/ other relevant factors.

We can offer no assurances that an active trading market will develop for
our common stock or that our common stock will trade in the public market
subsequent to the offering at or above the initial public offering price.

A prospectus in electronic format will be made available on the Web sites
maintained by one or more of the underwriters participating in this offering.
The underwriters may agree to allocate a number of shares to underwriters for
sale to their online brokerage account holders. Internet distributions will be
allocated by the representatives of the underwriters to underwriters that may
make Internet distributions on the same basis as other allocations.

The representatives may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act.

/bullet/ Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position.

58
<PAGE>

/bullet/ Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.

/bullet/ Syndicate covering transactions involve purchases of common stock
in the open market after the distribution has been completed in order to
cover syndicate short positions.

/bullet/ Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the common stock originally sold
by such syndicate member is purchased in a stabilizing or a syndicate
covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty
bids may cause the price of the common stock to be higher than it would
otherwise be in the absence of these transactions. These transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

In November 1999, an affiliate of Credit Suisse First Boston Corporation
purchased 86,956 shares of our Class C Convertible Preferred Stock for
approximately $1.0 million and an affiliate of Banc of America Securities LLC
purchased 260,870 shares of our Class C Convertible Preferred Stock for
approximately $3.0 million.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of our common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of our common stock are effected. Accordingly, any resale of our common
stock in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of our common stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of our common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom such
purchase confirmation is received that:

/bullet/ such purchaser is entitled under applicable provincial securities
laws to purchase such common stock without the benefit of a prospectus
qualified under such securities laws;
/bullet/ where required by law, that such purchaser is purchasing as
principal and not as agent; and
/bullet/ such purchaser has reviewed the text above under "Resale
Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be readily available, including common law rights of action
for damages or recision or rights of action under the civil liability
provisions of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of

59
<PAGE>

process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of our common stock to whom the SECURITIES ACT (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any common stock acquired by such purchaser pursuant to this offering. Such
report must be in the form attached to British Columbia Securities Commission
Blanket Order BOR #95/17, a copy of which may be obtained from us. Only one
such report must be filed in respect of common stock acquired on the same date
and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of our common stock should consult their own legal and
tax advisors with respect to the tax consequences of an investment in our
common stock in their particular circumstances and with respect to the
eligibility of our common stock for investment by the purchaser under relevant
Canadian legislation.

LEGAL MATTERS

Certain legal matters will be passed upon for Yupi by Testa, Hurwitz &
Thibeault, LLP, Boston, Massachusetts. The validity of shares of common stock
offered hereby and certain other legal matters, including matters relating to
Florida law, will be passed upon for Yupi by Steel Hector & Davis LLP, Miami,
Florida. Certain legal matters will be passed upon for the underwriters by
Piper Marbury Rudnick & Wolfe LLP, Reston, Virginia.

EXPERTS

The financial statements of Yupi as of December 31, 1998 and 1999 and for
the period from October 20, 1997 (date of incorporation) to December 31, 1997
and the years ended December 31, 1998 and 1999, all of which are included in
this prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The combined financial statements of Planificacion y Estrategia en
Internet, S.L. and Illimited, S.L. as of December 31, 1997 and 1998 and for the
years ended December 31, 1997 and 1998, all of which are included in this
prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers Auditores, S.L., independent accountants, given on the
authority of said firm as experts in auditing and accounting.

The financial statements of Proveedora de Servicios para Red Bogota.com
Ltda., as of December 31, 1997, December 31, 1998 and June 30, 1999 and for the
period from November 27, 1997 (inception) through December 31, 1997, the year
ended December 31, 1998 and the six month period ended June 30, 1999, all of
which are included in this prospectus, have been so included in reliance on the
report of Price Waterhouse, independent accountants, given on the authority of
said firm as experts on auditing and accounting.

60
<PAGE>

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act. This prospectus does not
contain all of the information set forth in the registration statement. For
further information with respect to Yupi and our common stock, reference is
made to the registration statement. Statements contained in this prospectus as
to the contents of any contract or any other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
the contract or document filed as an exhibit to the registration statement, and
each such statement is qualified in all respects by reference to such exhibit.
Copies of all or any portion of the registration statement may be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, or by calling the Commission at
1-800-SEC- 0330, at prescribed rates. The Commission also maintains a Internet
site at http://www.sec.gov that contains registration statements, reports,
proxy and information statements and other information regarding registrants.

We intend to furnish to our shareholders annual reports containing
financial statements audited by an independent public accounting firm.

61
<PAGE>

INDEX TO FINANCIAL STATEMENTS

PAGE
-----
YUPI INTERNET INC.
Report of Independent Certified Public Accountants .................. F-2
Financial Statements:
Consolidated Balance Sheets ........................................ F-3
Consolidated Statements of Operations .............................. F-4
Consolidated Statements of Changes in Shareholders' Equity ......... F-5
Consolidated Statements of Cash Flows .............................. F-6
Notes to Consolidated Financial Statements ......................... F-7

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.
Report of Independent Accountants ................................... F-22
Financial Statements:
Balance Sheets ..................................................... F-23
Statements of Operations and Comprehensive Loss .................... F-24
Statements of Changes in Partners' Capital ......................... F-25
Statements of Cash Flows ........................................... F-26
Notes to the Financial Statements .................................. F-27

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.
Report of Independent Accountants ................................... F-30
Financial Statements:
Combined Balance Sheets ............................................ F-31
Combined Statements of Operations and Comprehensive Loss ........... F-32
Combined Statements of Changes in Stockholders' Equity ............. F-33
Combined Statements of Cash Flows .................................. F-34
Notes to Combined Financial Statements ............................. F-35

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Yupi Internet Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in shareholders'
equity and of cash flows present fairly, in all material respects, the
financial position of Yupi Internet Inc. and its subsidiaries at December 31,
1998 and 1999, and the results of their operations and their cash flows for the
period from October 20, 1997 (date of incorporation) through December 31, 1997
and for the years ended December 31, 1998 and 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP

Miami, Florida
March 2, 2000

F-2
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1998 1999
--------------- ----------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents ............................................. $ 106,425 $ 48,611,519
Accounts receivable ................................................... 14,642 2,585,297
Prepaid expenses ...................................................... 1,947 660,540
Notes receivable from employees ....................................... -- 460,000
Other current assets .................................................. 1,745 272,684
------------ -------------
Total current assets ............................................... 124,759 52,590,040
Property and equipment, net ............................................ 16,554 2,225,507
Intangible assets, net of accumulated amortization of $19 and $1,942,160
as of December 31, 1998 and 1999, respectively ........................ 40,274 12,076,951
Deferred marketing costs ............................................... -- 19,305,000
Other assets ........................................................... 29,587 438,162
------------ -------------
$ 211,174 $ 86,635,660
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ..................................... $ 5,154 $ --
Amounts due to sellers of acquired companies .......................... 60,000 4,247,850
Accounts payable and accrued expenses ................................. 29,756 3,785,726
Due to principal shareholders ......................................... 19,512 --
------------ -------------
Total current liabilities .......................................... 114,422 8,033,576
------------ -------------
Long-term debt ......................................................... 23,637 --
------------ -------------
Shareholders' equity:
Class A convertible preferred stock, $0.01 par value, 428,762 shares
authorized, 428,762 issued and outstanding at December 31, 1999,
stated at liquidation value, net of related costs ................... -- 13,160,468
Class B convertible preferred stock, $0.01 par value, 4,924,229 shares
authorized, 2,955,016 issued and outstanding at December 31, 1999,
stated at liquidation value, net of related costs ................... -- 33,898,805
Class C convertible preferred stock, $0.01 par value, 6,000,000 shares
authorized, 5,858,698 issued and outstanding at December 31, 1999,
stated at liquidation value, net of related costs ................... -- 63,613,129
Common stock, $0.0001 par value, 60,000,000 shares authorized,
16,143,650 shares and 16,187,681 shares issued and outstanding at
December 31, 1998 and 1999, respectively ............................ 16,144 1,619
Additional paid-in capital ............................................ 1,961,739 12,603,771
Deferred stock-based compensation ..................................... -- (3,775,665)
Accumulated other comprehensive income ................................ -- (12,718)
Accumulated deficit ................................................... (1,904,768) (40,887,325)
------------ -------------
Total shareholders' equity ......................................... 73,115 78,602,084
------------ -------------
Total liabilities and shareholders' equity ......................... $ 211,174 $ 86,635,660
============ =============
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-3
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ----------------------------------
1997 1998 1999
----------------- --------------- ----------------
<S> <C> <C> <C>
Revenues ............................................... $ 2,095 $ 77,147 $ 3,206,932
----------- ------------ -------------
Operating expenses:
Product and technology development .................... 6,053 36,164 4,812,909
Sales and marketing ................................... 300 14,221 25,807,111
General and administrative ............................ 16,477 1,832,944 4,560,499
Depreciation and amortization ......................... 742 2,197 2,204,116
Stock-based compensation .............................. -- 62,973 338,590
----------- ------------ -------------
Total operating expenses ........................... 23,572 1,948,499 37,723,225
----------- ------------ -------------
Loss from operations ................................... (21,477) (1,871,352) (34,516,293)
----------- ------------ -------------
Other income (expense):
Interest income ....................................... -- -- 379,021
Interest expense ...................................... -- (1,739) (859,444)
Other ................................................. -- -- (2,639)
----------- ------------ -------------
-- (1,739) (483,062)
----------- ------------ -------------
Loss before income taxes ............................... (21,477) (1,873,091) (34,999,355)
Income taxes ........................................... -- -- --
----------- ------------ -------------
Net loss ............................................... (21,477) (1,873,091) (34,999,355)
Deemed dividend on convertible preferred stock ......... -- -- (3,983,202)
----------- ------------ -------------
Net loss available to common shareholders .............. $ (21,477) $ (1,873,091) $ (38,982,557)
=========== ============ =============
Basic and diluted net loss per common share ............ $ (0.00) $ (0.16) $ (2.40)
=========== ============ =============
Weighted average number of shares used in computing
basic and diluted net loss per common share .......... 10,625,000 11,903,777 16,269,836
=========== ============ =============
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-4
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
PREFERRED STOCK
------------------------------------------------------------------------------
CLASS A CONVERTIBLE CLASS B CONVERTIBLE CLASS C CONVERTIBLE
------------------------ -------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 20, 1997
(date of incorporation) ............. -- $ -- -- $ -- -- $ --
Sale of common stock ................. -- -- -- -- -- --
Net loss ............................. -- -- -- -- -- --
------- ----------- --------- ----------- --------- -----------
Balance at December 31, 1997 ......... -- -- -- -- -- --
Issuance of common stock in
connection with settlement .......... -- -- -- -- -- --
Stock options issued
for services ........................ -- -- -- -- -- --
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- -- -- -- -- --
Sale of common stock ................. -- -- -- -- -- --
Net loss ............................. -- -- -- -- -- --
------- ----------- --------- ----------- --------- -----------
Balance at December 31, 1998 ......... -- -- -- -- -- --
Adjustment to reflect change
in par value ........................ -- -- -- -- -- --
Stock options issued
for services ........................ -- -- -- -- -- --
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- -- -- -- -- --
Sale of common stock ................. -- -- -- -- -- --
Repurchase of common stock ........... -- -- -- -- -- --
Issuance of shares in connection
with an acquisition ................. -- -- -- -- -- --
Issuance of Class A
Preferred stock ..................... 428,762 13,160,468 -- -- -- --
Issuance of Class B
Preferred stock ..................... -- -- 2,955,016 33,898,805 -- --
Issuance of Class C
Preferred stock ..................... -- -- -- -- 5,858,698 63,613,129
Deemed dividend on convertible
preferred stock ..................... -- -- -- -- -- --
Net loss ............................. -- -- -- -- -- --
Translation adjustment ............... -- -- -- -- -- --
------- ----------- --------- ----------- --------- -----------
Balance at December 31, 1999 ......... 428,762 $13,160,468 2,955,016 $33,898,805 5,858,698 $63,613,129
======= =========== ========= =========== ========= ===========

<CAPTION>
COMMON STOCK
---------------------------- ADDITIONAL
PAID-IN ACCUMULATED DEFERRED
SHARES AMOUNT CAPITAL DEFICIT COMPENSATION
--------------- ------------ --------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at October 20, 1997
(date of incorporation) ............. -- $ -- $ -- $ -- $ --
Sale of common stock ................. 10,625,000 10,625 -- (10,200) --
Net loss ............................. -- -- -- (21,477) --
---------- ------- ----------- ------------ -----------
Balance at December 31, 1997 ......... 10,625,000 10,625 -- (31,677) --
Issuance of common stock in
connection with settlement .......... 2,981,250 2,981 1,606,894 -- --
Stock options issued
for services ........................ -- -- 77,739 -- --
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- -- 65,954 -- --
Sale of common stock ................. 2,537,400 2,538 211,152 -- --
Net loss ............................. -- -- -- (1,873,091) --
---------- ------- ----------- ------------ -----------
Balance at December 31, 1998 ......... 16,143,650 16,144 1,961,739 (1,904,768) --
Adjustment to reflect change
in par value ........................ -- (14,530) 14,530 -- --
Stock options issued
for services ........................ -- -- 580,152
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- -- 4,291,414 -- (3,775,665)
Sale of common stock ................. 756,675 76 659,285 -- --
Repurchase of common stock ........... (1,013,750) (101) (174,899) -- --
Issuance of shares in connection
with an acquisition ................. 301,106 30 1,288,348 -- --
Issuance of Class A
Preferred stock ..................... -- -- -- -- --
Issuance of Class B
Preferred stock ..................... -- -- -- -- --
Issuance of Class C
Preferred stock ..................... -- -- -- -- --
Deemed dividend on convertible
preferred stock ..................... -- -- 3,983,202 (3,983,202) --
Net loss ............................. -- -- -- (34,999,355) --
Translation adjustment ............... -- -- -- -- --
---------- ------- ----------- ------------ -----------
Balance at December 31, 1999 ......... 16,187,681 $ 1,619 $12,603,771 $(40,887,325) $(3,775,665)
========== ======= =========== ============ ===========

<CAPTION>
OTHER
COMPREHENSIVE
INCOME TOTAL
-------------- ----------------
<S> <C> <C>
Balance at October 20, 1997
(date of incorporation) ............. $ -- $ --
Sale of common stock ................. -- 425
Net loss ............................. -- (21,477)
-------- -----------
Balance at December 31, 1997 ......... -- (21,052)
Issuance of common stock in
connection with settlement .......... -- 1,609,875
Stock options issued
for services ........................ -- 77,739
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- 65,954
Sale of common stock ................. -- 213,690
Net loss ............................. -- (1,873,091)
-------- -----------
Balance at December 31, 1998 ......... -- 73,115
Adjustment to reflect change
in par value ........................ -- --
Stock options issued
for services ........................ 580,152
Stock-based compensation, net
of amortization of deferred
compensation ........................ -- 515,749
Sale of common stock ................. -- 659,361
Repurchase of common stock ........... -- (175,000)
Issuance of shares in connection
with an acquisition ................. -- 1,288,378
Issuance of Class A
Preferred stock ..................... -- 13,160,468
Issuance of Class B
Preferred stock ..................... -- 33,898,805
Issuance of Class C
Preferred stock ..................... -- 63,613,129
Deemed dividend on convertible
preferred stock ..................... -- --
Net loss ............................. -- (34,999,355)
Translation adjustment ............... (12,718) (12,718)
-------- -----------
Balance at December 31, 1999 ......... $(12,718) $78,602,084
======== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
Operating activities:
Net loss .............................................. $ (21,477) $ (1,873,091) $ (34,999,355)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ........................ 742 2,197 2,204,116
Non-cash marketing expenses .......................... -- -- 9,995,000
Issuance of common stock in connection
with settlement .................................... -- 1,609,875 --
Stock options issued for services .................... -- 77,739 580,152
Stock-based compensation ............................. -- 62,973 338,590
Non-cash interest charges ............................ -- -- 668,828
Changes in operating assets and liabilities:
Accounts receivable ................................. -- (14,642) (2,570,655)
Prepaid expenses .................................... -- (1,947) (658,593)
Other assets ........................................ -- (11,332) (679,514)
Accounts payable and accrued expenses ............... 1,500 28,256 3,755,970
--------- ------------ -------------
Net cash used in operating activities .............. (19,235) (119,972) (21,365,461)
--------- ------------ -------------
Investing activities:
Purchases of property and equipment ................... (3,640) (15,780) (2,486,042)
Acquisition of businesses ............................. -- -- (8,550,317)
Other ................................................. (347) -- --
--------- ------------ -------------
Net cash used in investing activities .............. (3,987) (15,780) (11,036,359)
--------- ------------ -------------
Financing activities:
Issuance of common stock .............................. 425 216,671 659,361
Repurchase of common stock ............................ -- -- (175,000)
Issuance of convertible preferred stock, net of
related expenses .................................... -- -- 80,943,574
(Repayment of) proceeds from advances
from shareholders ................................... 19,212 300 (19,512)
Advances to employees ................................. -- -- (460,000)
Proceeds from issuance of debt ........................ 15,000 30,000 22,742
Repayment of long-term debt ........................... (202) (16,007) (51,533)
--------- ------------ -------------
Net cash provided by financing activities .......... 34,435 230,964 80,919,632
--------- ------------ -------------
Effect of exchange rate changes on cash and
cash equivalents ...................................... -- -- (12,718)
--------- ------------ -------------
Net increase in cash and cash equivalents .............. 11,213 95,212 48,505,094
Cash and cash equivalents, beginning of period ......... -- 11,213 106,425
--------- ------------ -------------
Cash and cash equivalents, end of period ............... $ 11,213 $ 106,425 $ 48,611,519
========= ============ =============
Supplemental disclosure of cash flow information:
Interest paid ......................................... $ -- $ 1,739 $ 45,630
========= ============ =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF OPERATIONS

Yupi Internet Inc. was incorporated under the laws of the State of Florida
in October 1997. Yupi develops and maintains www.yupi.com, a branded Internet
site located on the World Wide Web (the "Web"). Additionally, Yupi operates a
number of other sites that provide chat, e-mail services and country-specific
information. Yupi and its network of sites provide a gateway for Spanish users
to the Web.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Yupi Internet Inc. and its wholly-owned subsidiaries (collectively, "Yupi" or
the "Company"). All significant intercompany account balances and transactions
have been eliminated in consolidation.

INITIAL PUBLIC OFFERING

In January 2000, the Board of Directors of the Company (the "Board")
authorized the filing of a registration statement with the Securities and
Exchange Commission ("SEC") that would permit the Company to sell shares of the
Company's common stock in connection with a proposed initial public offering
("IPO"). Upon the closing of the IPO, all of the then outstanding shares of the
Company's convertible preferred stock (Class A, Class B and Class C--see Note
6) will be converted into shares of common stock.

FOREIGN CURRENCY TRANSLATION

For purposes of preparation of its financial statements, the Company uses
the local currency of its foreign subsidiaries as the functional currency.
Assets and liabilities of such subsidiaries are translated into United States
dollars at the exchange rate in effect at the end of the period, while revenues
and expenses of these subsidiaries are translated at the average exchange rate
during the period. Resulting translation adjustments are recorded in a separate
component of shareholders' equity, accumulated other comprehensive income.
Revenues of the Company's foreign subsidiaries and assets of the foreign
subsidiaries were not significant for all periods presented.

CASH AND CASH EQUIVALENTS

All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents. Such amounts are stated
at cost which approximates market value.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation and amortization is
provided using the straight line method over the estimated useful lives of the
assets, which range from three to five years. The cost of maintenance and
repairs is charged to expense as incurred. The cost of major repairs and
improvements which extend the lives of the related assets are capitalized and
depreciated.

INTANGIBLE ASSETS

Intangible assets consist mainly of property rights to the trade names and
Internet domain names of companies acquired. These property rights are
amortized using the straight line method over a

F-7
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

period of five years. The Company evaluates the realizability of its intangible
assets when an event occurs that indicates that impairment may have occurred.
The Company determines potential impairment by comparing the carrying amount to
the undiscounted future cash flows of the related assets. Cash flow forecasts
are based on trends of historical performance and management's estimate of
future performance.

OFFERING COSTS

As of December 31, 1999, other assets include approximately $214,000 of
transaction costs relating to the proposed IPO. Upon the closing of such IPO,
these costs will be deducted from the proceeds.

INCOME TAXES

The Company uses the liability method of accounting for income taxes,
whereby deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities as measured by the current enacted tax rates which will be in
effect when these temporary differences are expected to be recovered or
settled. Deferred tax expense is the result of changes in deferred tax assets
and liabilities. Valuation allowances are provided when the expected
realization of tax assets does not meet a "more likely than not" criteria.

REVENUE RECOGNITION

The Company derives revenue principally from the sale of advertisements.
Advertising revenues are recognized in the period in which the advertisement is
displayed. Company obligations under advertising contracts typically include
guarantees of minimum number of impressions, or times that an advertisement
appears in pages viewed by users on the Company's sites. Revenue for
impressions invoiced but not delivered is deferred until the commitment is met.
The Company is also involved in revenue sharing arrangements with certain
parties ("partners") under which the Company principally hosts co-branded
sites. Revenue is allocated to each partner based on the percentage of
impressions at each site. The allocated revenue is shared according to
distribution agreements. Revenue is recorded net of the payments under these
revenue sharing arrangements.

Revenues from barter transactions, which are transactions in which the
Company exchanges advertisements on its sites for promotions with its
advertisers, are recognized during the period in which the advertisements are
displayed on the Company's sites. Barter transactions are recorded at fair
value, only if the fair value of the advertising surrendered in the transaction
is determinable based on the Company's own history of receiving cash for
similar advertising from customers unrelated to the counterparty in the barter
transaction. Advertising surrendered for cash is considered similar to the
advertising being surrendered in the barter transaction if both are in the same
media and within the same advertising vehicle and both have reasonably similar
characteristics with respect to circulation, prominence, duration, demographics
and timing. For the period from inception through December 31, 1999, the
Company did not have sufficient revenues from similar cash-only advertising
sales to establish a basis of value for its barter transactions. Accordingly,
the Company did not record the revenue or the expense portion of these
transactions in the accompanying financial statements. Barter transactions
entered into during the year ended December 31, 1999 included 195.7 million
impressions displayed on the Company's sites with a contract value of
approximately $7.7 million.

F-8
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

PRODUCT DEVELOPMENT

Costs incurred in the classification and organization of listings within
the Company's sites and the development of new products and enhancements to
existing products are charged to expense as incurred.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising and marketing
expenditures reflected in the accompanying consolidated statements of
operations amounted to approximately $300, $8,400 and $24.3 million, for the
period from October 20, 1997 (date of incorporation) to December 31, 1997, and
the years ended December 31, 1998, and 1999, respectively.

USE OF ESTIMATES

In preparing financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.

STOCK-BASED COMPENSATION

The Company accounts for employee stock-based compensation using the
intrinsic value method. Stock-based compensation to non-employees is accounted
for using the fair value method. The Company also provides disclosure of
certain pro forma information as if the Company accounted for its employee
stock-based compensation using the minimum value method.

When options are granted to employees, a non-cash charge representing the
difference, if any, between the exercise price and the estimated fair value of
the common stock underlying the vested options on the date of grant is recorded
as stock-based compensation expense and the balance is deferred and amortized
over the remaining vesting period.

COMPUTATION OF HISTORICAL NET LOSS PER SHARE

Basic loss per common share is computed by dividing net losses available
to common shareholders for the period by the weighted average number of common
shares outstanding. Diluted loss per common share has not been presented as the
effect of the issuance of common equivalent shares is anti-dilutive. Common
equivalent shares consist of the incremental common shares issuable upon the
conversion of the preferred stock (using the if-converted method) and shares
issuable upon the exercise of stock options (using the treasury stock method).

STOCK SPLITS

On May 12, 1999, the Board approved a 25-for-1 stock split. On December
28, 1998, the Board approved a 1,000-for-1 stock split. All share information
has been restated to reflect all stock splits.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reflected in the consolidated balance sheets for cash
and cash equivalents, accounts receivables, current portion of long-term debt,
accounts payable and amounts due to sellers

F-9
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

of acquired companies approximate fair value due to the short maturities of
these instruments. The estimated fair value of long-term debt approximated the
carrying value for all periods presented.

CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially subject the Company to credit risk
consist primarily of cash and cash equivalents and accounts receivables. The
Company maintains its cash and cash equivalents with several financial
institutions. The Company's sales are primarily to companies located in the
United States. The Company performs ongoing credit evaluations of customers and
generally does not require collateral. Accounts receivable are due principally
from large U.S. companies under stated contract terms and the Company provides
for estimated credit losses at the time of sale. Such losses have not been
significant to date.

COMPREHENSIVE INCOME

As reflected in the consolidated statements of changes in shareholders'
equity, comprehensive income is a measure of net income and all other changes
in equity of the Company that result in transactions other than with
shareholders. Comprehensive income (loss) consists of net loss and foreign
currency translation adjustments.

SEGMENT INFORMATION

As of and for the periods presented, substantially all of the Company's
assets were located in the U.S., and the Company derived substantially all of
its revenue from businesses located in the U.S. The disclosure of segment
information was not required as the Company operates in only one business
segment.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Historically, the Company has not entered into
derivative contracts to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect the adoption of the new standard on
January 1, 2001 to affect its financial statements.

2. ACQUISITIONS:

In March 1999, the Company acquired certain assets and assumed certain
liabilities from Planificacion y Estrategia en Internet, S.L. and Illimited,
S.L. ("CiudadFutura.com"), entities which had ownership rights to the Internet
domain CiudadFutura.com. The purchase price for CiudadFutura.com of
approximately $10.1 million, including transaction costs incurred by the
Company, was substantially allocated to property rights of trade names and
Internet domain names. The purchase price was payable in cash of $6.0 million
and the remainder payable at the sellers'

F-10
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. ACQUISITIONS:--(CONTINUED)

option in (i) cash of $4.0 million or (ii) shares of the Company's common stock
at a 25% discount of the per share value assigned in the next investment round
completed by the Company. In August 1999, the sellers exercised their option to
be paid in the form of cash, and the Company issued to the sellers a $4.0
million note payable due March 15, 2000, bearing interest at 9% per year. The
acquisition has been accounted for under the purchase method and, accordingly,
the results of CiudadFutura.com have been included in the accompanying
consolidated statements of operations since the date of acquisition.

In August 1999, the Company completed the acquisition of Proveedora de
Servicios Para Red Bogota.com ("Bogota.com"). Bogota.com is a Web site
originally established in Colombia and targeting a Colombian audience. The
purchase price for Bogota.com was $2.0 million in cash and 261,765 shares of
the Company's common stock. The fair value assigned to the shares issued in
connection with the acquisition of Bogota.com was approximately $1.0 million,
based on a third party valuation. The acquisition of Bogota.com has been
accounted for under the purchase method and, accordingly, the results of
Bogota.com have been included in the consolidated operating results since the
date of acquisition. The purchase price of approximately $3.0 million,
including transaction costs incurred by the Company, was substantially
allocated to property rights of trade names and Internet domain names.

In October 1999, the Company acquired Claqueta.com, a Web site in Spain.
The acquisition of Claqueta.com was considered not to be significant.

In November 1999, the Company acquired La Cosa Interactive S.R.L. ("La
Cosa"), a Web site in Argentina, for $500,000 in cash and 37,397 shares of
common stock of the Company. The fair value assigned to the shares issued in
connection with the acquisition of La Cosa was approximately $324,000. The
acquisition of La Cosa has been accounted for under the purchase method and,
accordingly, the results of La Cosa have been included in the consolidated
operating results since the date of acquisition. The purchase price of
approximately $836,000, including transaction costs incurred by the Company,
was substantially allocated to property rights of trade names and Internet
domain names.

The following unaudited pro forma consolidated results of operations for
the years ended December 31, 1998 and 1999 assume the CiudadFutura.com and
Bogota.com acquisitions occurred as of January 1, 1998.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999
---------------- -----------------
<S> <C> <C>
Revenues .......................................... $ 255,553 $ 3,403,093
Net loss .......................................... $ (4,550,808) $ (35,721,139)
Net loss available to common shareholders ......... $ (4,550,808) $ (39,704,341)
Basic and diluted loss per common share ........... $ (0.37) $ (2.42)
</TABLE>

F-11
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. PROPERTY AND EQUIPMENT:

Property and equipment consist of the following:

DECEMBER 31,
--------------------------
1998 1999
---------- -------------
Computer equipment and software ......... $ 11,333 $2,288,215
Furniture and fixtures .................. 8,070 213,188
-------- ----------
19,403 2,501,403
Less: accumulated depreciation .......... (2,849) (275,896)
-------- ----------
$ 16,554 $2,225,507
======== ==========

4. DEBT:

In September 1998, the Company issued a $30,000 bank note, collateralized
by a certificate of deposit from a shareholder, bearing interest of 8.5% per
year, with monthly payments of principal and interest of $617 from October 1998
through September 2003. In July 1999, the Company repaid the debt outstanding.

On February 13, 1999, the Company executed a $3.0 million line of credit
agreement bearing no interest. Pursuant to this agreement, the Company granted
the lender the right to acquire up to $3.0 million of the Company's equity
securities. In the event a Private Investment, as defined, was completed by the
Company prior to March 15, 1999, the lender had the right to invest at an
equivalent value to that contemplated in the Private Investment provided that
$1.0 million of the total investment would be at a 30% discount. Absent a
Private Investment prior to March 15, 1999, the lender would have the right to
acquire a 15% equity interest in the Company for $3.0 million. Because the
Company expected to consummate a Private Investment prior to March 15, 1999, it
valued the acquisition rights granted to the lender at approximately $428,000,
the value of the discount to be granted to the lender upon its investment.

The Company borrowed $3.0 million under the line of credit and on March
15, 1999 offered to repay the outstanding balance to the lender. On March 30,
1999, the parties agreed to discharge the note in exchange for $3.0 million of
Class A convertible preferred stock, of which 45,620 shares were valued at
$21.92 per share and 63,857 shares were valued at $31.32 per share. This
transaction closed on April 23, 1999. Further, the Company's then principal
shareholders granted the lender options to purchase an aggregate of 647,525
shares of their common stock in the Company at a per share price of $0.93.
Management has estimated the fair value of these options at approximately
$240,000.

In connection with the agreement, the Company has recognized an aggregate
of $668,828 of interest charges representing the estimated value of the
acquisition rights on the date of the line of credit agreement and the
estimated fair value of the options provided by the Company's then principal
shareholders to the lender.

During August and September 1999, the Company borrowed an aggregate of
$3.0 million from a holder of its Class A convertible preferred stock. This
debt bears interest at 8% per year, and was payable upon demand. The principal
amount of this debt was discharged in exchange for shares of Class C
convertible preferred stock (Note 6).

F-12
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. INCOME TAXES:

The Company did not record an income tax provision during the period from
October 20, 1997 (date of incorporation) through December 31, 1997 and for the
year ended December 31, 1998 because it was operating as an S Corporation.
Effective January 1, 1999, the Company ceased to operate as an S Corporation
for U.S. income tax purposes. As of January 1, 1999, the differences between
the financial statement and the tax bases of the Company's assets and
liabilities were insignificant. For the year ended December 31, 1999, the
Company is subject to federal, state and foreign income taxes but has not
incurred a liability for such as a result of losses incurred.

The components of losses before income taxes consists of the following:

OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
Domestic ......... $ (21,477) $ (1,873,091) $ (33,737,377)
Foreign .......... -- -- (1,261,978)
--------- ------------ -------------
$ (21,477) $ (1,873,091) $ (34,999,355)
========= ============ =============

Significant components of the Company's deferred tax assets are as
follows:

DECEMBER 31,
1999
----------------
Net operating loss carryforwards ......... 12,642,861
Depreciation and amortization ............ 428,473
Stock-based compensation ................. 130,357
------------
13,201,691
Valuation allowance ...................... (13,201,691)
------------
$ --
============

The effective income tax rate differs from the statutory rate as follows:

YEAR ENDED
DECEMBER 31,
1999
----------------
Income taxes at the United States statutory rate ......... $ (12,249,774)
State income taxes ....................................... (1,172,735)
Effect of foreign taxes .................................. 21,635
Permanent differences .................................... 199,183
Valuation allowance ...................................... 13,201,691
-------------
Income taxes at effective tax rate ....................... $ --
=============

For federal income tax purposes at December 31, 1999, the Company had net
operating loss carryforwards of approximately $33.0 million which expire from
2004 through 2019. The net operating loss carryforwards may be subject to
limitations on their utilization. The deferred tax assets have been fully
offset by a valuation allowance resulting from the uncertainty surrounding the
future realization of these net operating loss carryforwards. Subsequently
recognized tax benefits relating to the valuation allowance for deferred tax
assets as of December 31, 1999 will be allocated to income from continuing
operations.

F-13
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:

CLASS A CONVERTIBLE PREFERRED STOCK

In April 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 428,762 shares of Class A convertible preferred
stock, par value $0.01 per share. From April 1999 to August 1999, the Company
issued 428,762 shares of the Class A convertible preferred stock, for aggregate
consideration of approximately $13.0 million at prices of $21.92 (see Note 4)
and $31.32 per share. The holders of Class A convertible preferred stock are
entitled to receive, if and when declared, cash dividends. Further, the Class A
convertible preferred stock had a liquidation value equal to the greater of
market value plus accrued and unpaid dividends, or $31.32 per share. The Class
A convertible preferred stock was redeemable upon the occurrence of certain
events, including a change in control or a fundamental change, as defined.

The previously described sale of Class A convertible preferred stock was
completed pursuant to the terms of a preferred stock purchase agreement dated
April 23, 1999. Of the total shares of Class A convertible preferred stock
sold, a portion of the shares were sold during May, July and August 1999 for
aggregate consideration of approximately $5.0 million. Because on the date of
issuance of such shares, the estimated fair market value of the Company's
common stock exceeded the conversion price, the Company has treated as a
preferred stock dividend an amount of approximately $4.0 million related to
these transactions.

In November 1999, the holders of Class A convertible preferred stock
elected to eliminate their redemption rights and amend their liquidation rights
to a liquidation value equal to $31.32 per share. As a result, since that date,
all of the Class A convertible preferred stock has been reflected within
shareholders' equity. The holders of Class A convertible preferred stock may
convert at any time all or any portion of the Class A convertible preferred
stock into common stock at a rate of 25 shares of common stock per share of
Class A convertible preferred stock, subject to certain anti-dilution
adjustments. The Class A convertible preferred stock is automatically converted
into common stock upon the completion of a qualified IPO, as defined. The
holders of the Class A convertible preferred stock are entitled to the number
of votes equal to the number of common shares that could be obtained upon
conversion on the date of the vote.

CLASS B CONVERTIBLE PREFERRED STOCK

In August 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 4,924,229 shares of Class B convertible preferred
stock, par value $0.01 per share. In October 1999, the Company issued 2,955,016
shares of Class B convertible preferred stock in exchange for $5.0 million in
cash and $29.3 million in services to be performed by Sony Corporation of
America ("Sony") over a three-year term pursuant to a contract entered into by
Sony and the Company.

The services to be provided by Sony have negotiated values agreed to
between Sony and the Company which the Company will use as a basis to expense
these services over the term of the agreement. Certain of the services to be
provided by Sony were deemed delivered on the date of the agreement and since
an amortization period for such services can not be estimated reliably, the
Company immediately recorded such services as sales and marketing expense. The
agreement provides for a significant cash penalty in the event of cancellation
or non-performance by Sony. As of December 31, 1999, the total amount of
services to be provided by Sony over the remaining life of the agreement
amounted to approximately $19.3 million.

F-14
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:--(CONTINUED)

The holders of Class B convertible preferred stock are entitled to
receive, if and when declared, cash dividends. The Class B convertible
preferred stock has a liquidation value equal to $11.60 per share. The holders
of Class B convertible preferred stock may convert at any time all or any
portion of the Class B convertible preferred stock into common stock at the
rate of 1.009 shares of common stock per share of Class B convertible preferred
stock, subject to certain anti-dilution provisions and conversion ratio
adjustments. The Class B convertible preferred stock will automatically convert
into common stock upon completion of a qualified IPO, as defined. The holders
of the Class B convertible preferred stock are entitled to the number of votes
equal to the number of common shares that could be obtained upon conversion on
the date of the vote.

CLASS C CONVERTIBLE PREFERRED STOCK

In November 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 6,000,000 shares of Class C convertible preferred
stock, par value $0.01 per share. The Company issued 5,858,698 shares of Class
C convertible preferred stock in exchange for approximately $67.4 million. The
holders of Class C convertible preferred stock are entitled to receive, if and
when declared, cash dividends. The Class C convertible preferred stock has a
liquidation value equal to $11.50 per share. The holders of the Class C
convertible preferred stock may at any time convert all or any portion of the
Class C convertible preferred stock into shares of common stock on a 1-for-1
basis, subject to certain anti-dilution provisions and conversion ratio
adjustments. The Class C convertible preferred stock will automatically convert
into common stock in the event of a qualified IPO, as defined. In the event the
IPO price per share is less than $15.295, the conversion ratio of the Class C
convertible preferred stock will be adjusted so that the initial public
offering price per share is equal to 133% of the price per share of the shares
of common stock issued upon conversion of the Class C convertible preferred
stock. A similar adjustment will also be made to the conversion ratio of the
Class B convertible preferred stock. Assuming a current estimated offering
price of $14.00 per share, and the corresponding adjustments to the Class B
convertible preferred stock and Class C convertible preferred stock conversion
ratios, the Class B convertible preferred and Class C convertible preferred
would convert into 3,021,250 shares and 6,400,628 shares of the Company's
common stock, respectively. The holders of the Class C convertible preferred
stock are entitled to the number of votes equal to the number of common shares
that could be obtained upon conversion on the date of the vote.

PREFERRED STOCK DIVIDENDS AND ISSUANCE COSTS

No preferred stock dividends have been declared or paid as of December 31,
1999.

The Company has recorded issuance costs incurred in connection with the
preferred shares as a reduction in the proceeds from the issuance of the
preferred shares.

COMMON STOCK

During 1997, the Company issued 10,625,000 shares of common stock in
exchange for $425. During 1998, the Company issued 2,537,400 shares of common
stock in exchange for $216,671. During 1999, the Company issued 756,675 shares
of common stock for $659,361.

In November 1998, the Company issued 2,981,250 shares of common stock in
connection with a settlement agreement to satisfy outstanding claims by an
individual against the Company. The

F-15
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:--(CONTINUED)

Company recognized approximately a $1.6 million charge within general and
administrative expenses, related to the aggregate estimated fair value of such
shares of common stock. As part of the agreement, the Company had an option to
repurchase 1,013,750 shares for an aggregate price of $175,000. In 1999, the
Company exercised its option to repurchase such shares.

The Company is required to reserve and keep available out of its
authorized but unissued shares, a sufficient number of shares for the
conversion of convertible preferred shares.

From October 1997 to November 1999, the Company increased its authorized
common shares from 1,000 shares to 60,000,000 shares. In November 1999, the
Company changed the par value of the Company's common share from $0.001 per
share to $0.0001 per share.

7. RELATED PARTY TRANSACTIONS:

In November 1999, the Company entered into an agreement with one of its
investors to purchase $12.5 million of advertising over a 30 month period
beginning on January 1, 2000. The Company purchased approximately $891,000 of
advertising from this investor during the year ended December 31, 1999.

A member of the Company's Board is an attorney at a law firm that provides
legal services to the Company. The Company paid this law firm, in part, by
granting it options to purchase 31,450 shares of the Company's common stock at
$0.0025 per share for services rendered through January 1999. Since February
1999, the Company has paid cash for all services rendered by this law firm.
Total legal fees paid by the Company to this law firm, including the estimated
fair value of options granted, amounted to approximately $154,000 for the year
ended December 31, 1999.

During the year ended December 31, 1999, the Company loaned an aggregate
of $460,000 to several key employees of the Company. The promissory notes bear
interest of 8% per year. All notes are for one year term and mature in various
dates during 2000.

The Company leases certain office space from an advertising company, the
owner of which is a shareholder and officer of the Company. The lease agreement
requires monthly base rent payments of $2,100 and other expenses. Total rent
expense paid by the Company to such advertising company amounted to
approximately $4,800 and $27,000 for the years ended December 31, 1998 and
1999, respectively.

Pursuant to the terms of two sales and maintenance agreements between the
Company and Netera, Inc., a company in which a holder of the Company's Class A
convertible preferred stock has a material interest, the Company paid Netera,
Inc. $649,187 for computer networking services during the year ended December
31, 1999.

F-16
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. LOSS PER SHARE:

The following table sets forth the computation of basic and diluted net
loss per common share:

Diluted loss per common share has not been presented separately from basic
loss per common share, as the outstanding stock options and preferred shares
are anti-dilutive for each period presented. Securities that could potentially
dilute basic earnings per common share in the future that were not included in
the computation of diluted loss per common share because their effect on
periods presented was anti-dilutive amount to 0, 3,955,450 and 9,288,439
options to purchase shares of common stock for the period from October 20, 1997
(date of incorporation) to December 31, 1997 and for the years ended December
31, 1998 and 1999, respectively, and 19,558,460 shares of common stock for the
year ended December 31, 1999 issuable upon the conversion of Preferred Stock on
an "as if converted" basis.

F-17
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. LOSS PER SHARE:--(CONTINUED)

The following table sets forth the computation of the unaudited pro forma
basic and diluted net loss per common share, assuming conversion of the
Preferred Stock upon issuance, and excluding the impact, if any, of dilution
that may result in the proposed IPO:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999
---------------- -----------------
<S> <C> <C>
Numerator:
Net loss ..................................................... $ (1,873,091) $ (34,999,355)
Deemed dividend on convertible preferred stock ............... -- (3,983,202)
------------ -------------
Numerator for pro forma net loss available
to common shareholders ....................................... $ (1,873,091) $ (38,982,557)
============ =============
Denominator:
Weighted average number of common shares ..................... 11,903,777 16,269,836
Assumed conversion of preferred stock to common shares (if
converted method) .......................................... -- 7,972,731
------------ -------------
Denominator for pro forma basic and diluted net loss
per common share ............................................. 11,903,777 24,242,567
============ =============
Pro forma basic and diluted net loss per common share ......... $ (0.16) $ (1.61)
============ =============
</TABLE>

9. STOCK OPTIONS:

In February 1999, the Company adopted a stock option plan (the "Plan") to
provide directors, officers, employees, consultants, distributors and others
with the opportunity to receive grants of incentive stock options,
non-qualified stock options and stock awards. The maximum number of shares
issuable under the Plan is 10,000,000. Certain of the grants made eligible to
participants are intended to qualify as incentive stock options or
non-qualified stock options to purchase common stock. Under the terms of the
Company's stock option agreements, options have a maximum term of ten years
from the date of grant. The option vesting periods vary from full vesting upon
issuance to vesting over a period of four years.

For the period from October 20, 1997 (date of incorporation) through
December 31, 1997, and the years ended December 31, 1998 and 1999, the Company
recognized approximately $0, $62,973 and $338,590, respectively, of employee
related stock-based compensation expense and expects to recognize and
additional expense of approximately $3.8 million over the remaining vesting
period of the options.

F-18
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. STOCK OPTIONS:--(CONTINUED)

The following transactions occurred with respect to the Plan:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
------------ -----------------
<S> <C> <C>
Balance at October 20, 1997 (date of incorporation) ......... -- $ --
Granted ..................................................... -- --
Canceled .................................................... -- --
-- -------
Outstanding, December 31, 1997 .............................. -- --
Granted ..................................................... 3,955,450 $0.0225
Canceled .................................................... -- --
Exercised ................................................... -- --
--------- -------
Outstanding, December 31, 1998 .............................. 3,955,450 $0.0225
--------- -------
Granted ..................................................... 5,372,778 $2.9255
Canceled .................................................... -- --
Forfeited ................................................... (39,789) 2.9022
Exercised ................................................... -- --
--------- -------
Outstanding, December 31, 1999 .............................. 9,288,439 $1.4872
========= =======
</TABLE>

The following table summarizes information concerning outstanding options
as of December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- -------------------------------------------- ----------------------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE REMAINING EXERCISE EXERCISE
PRICE NUMBER CONTRACTUAL PRICE NUMBER PRICE
($/SHARE) OUTSTANDING LIFE (YEARS) ($/SHARE) OUTSTANDING ($/SHARE)
- ----------- ------------- -------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
$0.0001 362,550 2.0 $0.0001 362,550 $0.0001
$0.0010 146,250 1.0 $0.0010 6,750 $0.0010
$0.0100 33,725 2.1 $0.0100 33,725 $0.0100
$0.0240 3,704,425 7.7 $0.0240 3,704,425 $0.0240
$2.6400 4,275,019 9.4 $2.6400 17,700 $2.6400
$5.0000 605,870 9.8 $5.0000 30,257 $5.0000
$8.0000 160,600 9.9 $8.0000 -- $8.0000
</TABLE>

Included in the preceding table are options to purchase an aggregate of
2,184,050 shares, of which options to purchase an aggregate of 433,282 shares
are exercisable at December 31, 1999, with a weighted average exercise price of
$3.03 per share and a weighted average remaining contractual life of 8.0 years.
The exercise price of such stock options was less than the grant date fair
value of the underlying common stock. In addition, the preceding table includes
options to purchase an aggregate of 7,104,389 shares, of which options to
purchase an aggregate of 3,722,125 shares are exercisable at December 31, 1999,
with a weighted exercise price of $1.2759 per share and a weighted average
remaining contractual life of 8.8 years. The exercise price of such stock
options was greater than the grant date fair value of the underlying common
stock.

F-19
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. STOCK OPTIONS:--(CONTINUED)

The Company accounts for its stock options using the intrinsic value
method. Had compensation expense for the Company stock-based compensation been
determined based on the fair value method, the Company's net loss would have
been increased to the pro forma amounts presented below:

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
Pro forma net loss available to
common shareholders ........... $ (21,477) $ (1,995,903) $ (53,489,756)
Pro forma basic and diluted loss
per common share .............. $ (0.00) $ (0.17) $ (3.29)
</TABLE>

The fair value for these options was estimated at the date of grant using
the minimum value method with the following assumptions:

YEAR ENDED DECEMBER 31,
-----------------------
ASSUMPTIONS 1998 1999
- -------------------------------------------- --------- --------
Average risk-free interest rate ......... 7.0% 7.0%
Dividend yield .......................... 0.0% 0.0%
Average life ............................ 8 years 8 years

Because the determination of fair value of all options granted after such
time as the Company becomes a public entity will include an expected volatility
factor in addition to the factors described in the preceding paragraph, the
above results may not be representative of future periods.

10. COMMITMENTS:

The Company leases equipment and office space under noncancelable
operating lease agreements. The minimum annual rental commitments under such
operating leases that have remaining terms in excess of one year are as
follows:

YEAR ENDED DECEMBER 31,
- -----------------------
2000 ........................ $ 727,700
2001 ........................ 636,500
2002 ........................ 628,600
2003 ........................ 583,200
2004 ........................ 570,600
2005 and thereafter ......... 1,070,100
----------
$4,216,700
==========

Rent expense amounted to approximately $8,700, $13,300 and $253,000 for
the period from October 20, 1997 (date of incorporation) through December 1997,
and the years ended December 31, 1998 and 1999, respectively.

See Note 7.

F-20
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. SIGNIFICANT CUSTOMERS AND GEOGRAPHIC CONCENTRATION:

For the year ended December 31, 1998, one customer accounted for
approximately 17% of the Company's total revenues. For the year ended December
31, 1999, the three largest customers accounted for approximately 20.5%, 15.6%,
and 14.5% of the Company's total revenues, respectively.

12. SUBSEQUENT EVENTS:

In February 2000, the Board of Directors approved the 2000 Stock Option
and Incentive Plan and the 2000 Employee Stock Purchase Plan. A total of
4,000,000 shares of common stock may be issued upon the exercise of options or
other awards granted under the 2000 Stock Option and Incentive Plan. The 2000
Employee Stock Purchase Plan provides for the issuance of up to 200,000 shares
of common stock. The Company intends to submit the plans to their shareholders
for approval during March 2000.

F-21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Proveedora de Servicios para Red Bogota.Com Ltda.

We have audited the balance sheets of Proveedora de Servicios para Red
Bogota.Com Ltda. as of December 31, 1997 and 1998 and June 30, 1999 and the
related statements of operations and comprehensive loss, of changes in
partners' capital, and of cash flows for the period from November 27
(inception) through December 31, 1997, the year ended December 31, 1998 and the
six month period ended June 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements audited by us present fairly, in
all material respects, the financial position of Proveedora de Servicios para
Red Bogota.Com Ltda. at December 31, 1997 and 1998 and June 30, 1999 and the
results of its operations and its cash flows for the period from November 27,
1997 (inception) through December 31, 1997, the year ended December 31, 1998
and the six month period ended June 30, 1999, in conformity with accounting
principles generally accepted in the United States of America.

Price Waterhouse

Bogota, Colombia
August 23, 1999

F-22
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- JUNE 30,
1997 1998 1999
---------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ......................... $12,430 $36,188 $12,757
Accounts receivable, net .......................... -- 20,114 23,244
Prepaid expenses and other assets ................. -- 1,003 759
------- ------- -------
Total current assets ............................ 12,430 57,305 36,760
Equipment, net ...................................... 5,283 29,316 27,359
------- ------- -------
$17,713 $86,621 $64,119
======= ======= =======
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Account payable and accrued expenses .............. $ 553 $25,134 $12,961
Due to partners ................................... 4,992 28,438 29,519
Deferred income ................................... -- 47 7,019
------- ------- -------
Total liabilities ............................... 5,545 53,619 49,499
Partners' capital ................................... 12,168 33,002 14,620
------- ------- -------
Total liabilities and partners' capital ......... $17,713 $86,621 $64,119
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-23
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 27 SIX MONTH
(INCEPTION) TO YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, JUNE 30,
1997 1998 1999
---------------- -------------- -------------
<S> <C> <C> <C>
Revenues ......................................... $ -- $ 104,869 $ 133,547
Operating expenses:
General and administrative ..................... 9,838 150,131 97,910
Sales and marketing ............................ -- 37,410 53,592
Depreciation and amortization .................. 74 1,834 2,914
--------- --------- ---------
Total operating expenses ..................... 9,912 189,375 154,416
--------- --------- ---------
Loss from operations ............................. (9,912) (84,506) (20,869)
Other income (expenses):
Interest income ................................ -- 172 1,477
Interest expense ............................... -- (848) (1,921)
Other .......................................... -- 375 1,241
--------- --------- ---------
Loss before provision for income tax ......... (9,912) (84,807) (20,072)
Provision for income tax ......................... -- -- (719)
--------- --------- ---------
Net loss during the period ................... $ (9,912) $ (84,807) $ (20,791)
Translation adjustment ........................... (3,119) (8,085) 2,409
--------- --------- ---------
Comprehensive loss during the period ......... $ (13,031) $ (92,892) $ (18,382)
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-24
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

CUMULATIVE
PARTNERS' TRANSLATION
CAPITAL ADJUSTMENT TOTAL
----------- ------------ -----------
Balance, November 27, 1997 ......... $ -- $ -- $ --
Partner contributions .............. 25,199 -- 25,199
Translation adjustment ............. -- (3,119) (3,119)
Net loss ........................... (9,912) -- (9,912)
--------- --------- ---------
Balance, December 31, 1997 ......... 15,287 (3,119) 12,168
Partner contributions .............. 113,726 -- 113,726
Translation adjustment ............. -- (8,085) (8,085)
Net loss ........................... (84,807) -- (84,807)
--------- --------- ---------
Balance, December 31, 1998 ......... 44,206 (11,204) 33,002
Translation adjustment ............. -- 2,409 2,409
Net loss ........................... (20,791) -- (20,791)
--------- --------- ---------
Balance, June 30, 1999 ............. $ 23,415 $ (8,795) $ 14,620
========= ========= =========

The accompanying notes are an integral part of these financial statements.

F-25
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTH
DECEMBER 31, PERIOD ENDED
---------------------------- JUNE 30,
1997 1998 1999
------------ ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss for the period ............................................. $ (9,912) $ (84,807) $ (20,791)
Adjustment to reconcile net loss for the period to net cash
used in operating activities:
Depreciation and amortization ..................................... 74 1,834 2,914
In-kind services contributed by a partner ......................... -- 113,726 --
Changes in operating assets and liabilities:
Accounts receivable ............................................. -- (20,114) (3,130)
Prepaid expenses ................................................ -- (1,003) 244
Account payable and accrued expenses ............................ 553 24,581 (12,173)
Due to partners ................................................. 4,992 23,446 1,081
Deferred income ................................................. -- 47 6,972
-------- --------- ---------
Net cash used in operating activities ................................. (4,293) 57,710 (24,883)
-------- --------- ---------
Cash flows from investing activities:
Purchase of equipment ............................................... (5,357) (25,867) (957)
-------- --------- ---------
Cash flows from financing activities:
Contribution by partners ............................................ 25,199 -- --
-------- --------- ---------
Effects of exchange rate changes on cash and cash equivalents ......... (3,119) (8,085) 2,409
-------- --------- ---------
Net (decrease) increase in cash and cash equivalents .................. 12,430 23,758 (23,431)
Cash and cash equivalents, beginning of period ........................ -- 12,430 36,188
-------- --------- ---------
Cash and cash equivalents, end of period .............................. $ 12,430 $ 36,188 $ 12,757
======== ========= =========
</TABLE>

SUPPLEMENTAL INFORMATION OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the year ending December 31, 1998, the Company issued 384 shares to a
partner in exchange for in kind services valued at $113,726. See note 3.

The accompanying notes are an integral part of these financial statements.

F-26
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

1. NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Proveedora de Servicios para Red Bogota.Com Ltda. (the Company) is a
limited liability partnership incorporated in Colombia on November 27, 1997,
for a 10-year life-term. Its principal office is in the city of Bogota.

The Company develops and maintains www.bogota.com, a branded Internet
online site located on the World Wide Web.

The Company owns the domain name Bogota.com, which was donated by one of
the partners.

A summary of the significant accounting policies followed in the
preparation of the accompanying financial statements is presented below:

ACCOUNTING ESTIMATES

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash equivalents include investments with original maturities of three
months or less and are stated at cost, which approximates market value.

PROVISION FOR BAD DEBTS ACCOUNTS

The provision for bad debt accounts is reviewed and updated at the end of
the period based on the aging analysis of balances and evaluation of the
account collections made by management.

EQUIPMENT

Equipment is recorded at cost. Depreciation and amortization are computed
using the straight-line method over the estimated useful lives of the
respective assets. Repairs and maintenance are charged to expense as incurred,
while expenditures, which extend the useful lives of the assets, are
capitalized.

REVENUE RECOGNITION

Revenues are derived principally from the sale of banner advertisements
and sponsorships. Advertising revenues on both banner and sponsorship
contracts, are recognized ratably in the period in which the advertisement is
displayed. A number of the agreements provide for the Company to receive a
percentage of revenues from electronic commerce transactions conducted by
advertisers who are selling goods or services to users of the Network. These
revenues are recognized by the Company upon notification from the advertiser of
its share of revenues earned by the Company.

F-27
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

1. NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES--(CONTINUED)

COMPREHENSIVE INCOME (LOSS)

Comprehensive income is a measure of net income and all other changes in
equity of the Company that result from transactions other than with partners.
Comprehensive income (loss) consists of net income (loss) and foreign currency
translation adjustments.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consists primarily of cash and cash equivalents,
and accounts receivable. The Company maintains the majority of its cash and
cash equivalents in various financial institutions. The Company's sales are
primarily to companies located in Colombia. The Company performs periodic
credit evaluations of its customers' financial condition and does not require
collateral.

FOREIGN CURRENCY

The functional currency of the Company is the Colombian peso. The
financial statements of the Company are translated to U.S. dollars using
period-end rates of exchange for assets and liabilities, and average rates for
the period for revenues, costs, and expenses. Translation gains and losses are
deferred and accumulated as a component of partners' capital. Operations are
generally translated at the weighted average exchange rate in effect during the
period. The resulting foreign exchange gains and losses are recorded as a
component of partners' capital.

INCOME TAXES

The Company uses the liability method of accounting for income taxes,
whereby deferred income taxes are provided on items recognized for financial
reporting purposes over different periods than for income tax purposes.
Valuation allowances are provided when the expected realization of the tax
assets does not meet a more likely than not criteria.

2. EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------ -----------
1997 1998 1999
---------- ----------- -----------
<S> <C> <C> <C>
Office equipment ............................. $ 771 $ 1,571 $ 2,104
Computer and communication equipment ......... 4,586 29,653 30,077
------ -------- --------
5,357 31,224 32,181
LESS--Accumulated depreciation ............... (74) (1,908) (4,822)
------ -------- --------
Equipment, net ............................ $5,283 $ 29,316 $ 27,359
====== ======== ========
</TABLE>

F-28
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

3. PARTNERS' CAPITAL

At June 30, 1999 the partners' capital consisted of 400 shares with a
value of Colombian pesos $5,000,000 each. By means of Public Deed No. 2992
dated November 23, 1999, 384 shares correspond to a partner's contribution in
kind of $113,726 whose valuation was agreed to by the partners in a general
meeting.

4. INCOME TAX

The Company is subject to taxes in Colombia at a rate of 35% of the
taxable income as long as such income is greater than the presumptive income,
which is defined as the greater of 5% of partners' equity or 1.5% of the
preceding year's assets. For the years ended December 31, 1997 and 1998 and the
six-month period ended June 30, 1999, the Company determined the income tax
based on the presumptive income described above. A valuation allowance had been
recognized to fully offset the deferred tax asset resulting from net operating
loss carry forwards due to the uncertainty surrounding its realization. As of
June 30, 1999 net operating loss carry forward amounting to approximately
Colombian pesos $29,393,000 (US$16,270) could be used to offset future taxable
income and expire in 2003.

5. SUBSEQUENT EVENTS

On August 26, 1999, the Company was sold to a third party.

F-29
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and the Boards of Directors of
Planificacion y Estrategia en Internet, S.L. and Illimited, S.L.

In our opinion, the accompanying combined balance sheets and the related
combined statements of operations and comprehensive loss, of changes in
stockholder's equity and of cash flows present fairly, in all material
respects, the financial position of Planificacion y Estrategia en Internet,
S.L. and Illimited, S.L. ("the Entities") at December 31, 1998 and 1997, and
the results of their operations and their cash flows for the years then ended
in conformity with accounting principles generally accepted in the United
States of America. These combined financial statements are the responsibility
of the Entities' management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

The Entities, as described in Note 3, have extensive transactions with
their stockholders. Because of these relationships, it is possible that the
terms of these transactions are not the same as those that would result from
transactions among wholly unrelated parties.

PricewaterhouseCoopers Auditores, S.L.

Madrid, Spain
July 27, 1999

F-30
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1997 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................ $ 36,741 $ 43,803
Accounts receivable, net ......................................... 6,570 9,754
Short-term investments ........................................... 102,105 --
Other ............................................................ 57 --
--------- ---------
Total current assets ............................................... 145,473 53,557
Property and equipment, net ........................................ 8,125 5,707
--------- ---------
$ 153,598 $ 59,264
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................. $ 3,668 $ 17,191
Due to stockholders .............................................. -- 26,660
--------- ---------
Total current liabilities .......................................... 3,668 43,851
--------- ---------
Contingencies (Note 5) ............................................. -- --
--------- ---------
Stockholders' equity:
Common stock, 100 shares authorized, issued and
outstanding and 575 shares authorized, issued and outstanding at
December 31, 1997 and December 31, 1998, respectively .......... 19,045 17,803
Additional paid-in capital ....................................... 31,200 62,400
Retained earnings (deficit) ...................................... 125,339 (64,954)
Cumulative translation adjustment ................................ (25,654) 164
--------- ---------
Total Stockholders' equity ......................................... 149,930 15,413
--------- ---------
$ 153,598 $ 59,264
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-31
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1997 1998
------------ ------------
<S> <C> <C>
Revenues ......................................................... $ 2,547 $ 73,537
Operating expenses:
Product and technology development .............................. -- 1,864
Sales and marketing ............................................. -- 2,364
General and administrative ...................................... 44,229 113,378
Depreciation and amortization ................................... 7,332 7,543
--------- ---------
Total operating expenses ......................................... 51,561 125,149
--------- ---------
Loss from operations ............................................. (49,014) (51,612)
Other income (expense):
Interest income and gain on sale of investments ................. 1,665 49,043
Interest expense ................................................ (5) (29)
Other ........................................................... -- 20
--------- ---------
Loss before provision for income tax ............................. (47,354) (2,578)
Provision for income tax ......................................... -- (4,434)
--------- ---------
Net loss for the year ............................................ (47,354) (7,012)
Change in cumulative translation adjustment for the year ......... (25,196) 164
--------- ---------
Comprehensive loss for the year .................................. $ (72,550) $ (6,848)
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-32
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
ADDITIONAL RETAINED CUMULATIVE
COMMON PAID-IN EARNINGS TRANSLATION
STOCK CAPITAL (DEFICIT) ADJUSTMENT TOTAL
---------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 ................... $ 19,045 $ -- $ 172,693 $ (458) $ 191,280
Net loss ..................................... -- -- (47,354) -- (47,354)
Services contributed by shareholders ......... -- 31,200 -- -- 31,200
Cumulative translation adjustment ............ -- -- -- (25,196) (25,196)
-------- ------- ---------- --------- ----------
Balance at December 31, 1997 ................. 19,045 31,200 125,339 (25,654) 149,930
Purchase and retirement of common stock
(Note 3) .................................... (1,242) -- (183,281) 25,654 (158,869)
Net loss ..................................... -- -- (7,012) -- (7,012)
Services contributed by shareholders ......... -- 31,200 -- -- 31,200
Cumulative translation adjustment ............ -- -- -- 164 164
-------- ------- ---------- --------- ----------
Balance at December 31, 1998 ................. $ 17,803 $62,400 $ (64,954) $ 164 $ 15,413
======== ======= ========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-33
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1997 1998
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ................................................................ $ (47,354) $ (7,012)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization ........................................... 7,332 7,543
Services contributed by shareholders .................................... 31,200 31,200
Gain on sale of investments ............................................. -- (46,789)
Changes in operating assets and liabilities:
Accounts receivable .................................................... 924 (2,603)
Other current assets ................................................... (59) 57
Accounts payable ....................................................... 1,249 37,973
--------- ----------
Net cash (used in) provided by operating activities ................... (6,708) 20,369
--------- ----------
Cash flows from investing activities:
Sale of short-term investments ......................................... -- 150,467
Purchase of property and equipment ..................................... -- (4,719)
--------- ----------
Net cash provided by investing activities ............................. -- 145,748
--------- ----------
Cash flows from financing activities:
Repurchase of shares from stockholders ................................. -- (158,869)
Repayment of advances from stockholders ................................ -- (2,902)
--------- ----------
Net cash used in financing activities ................................. -- (161,771)
--------- ----------
Effects of exchange rate changes on cash and cash equivalents ........... (6,491) 2,716
--------- ----------
Net (decrease) increase in cash and cash equivalents .................... (13,199) 7,062
Cash and cash equivalents, beginning of year ............................ 49,940 36,741
--------- ----------
Cash and cash equivalents, end of year .................................. $ 36,741 $ 43,803
========= ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest ................................. $ 5 $ 24
========= ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-34
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1998

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Planificacion y Estrategia en Internet, S.L. and Illimited, S.L. (the
"Entities") were incorporated in Spain on March 18, 1998 and August 12, 1987,
respectively. The Entities are 100% owned by a single individual and his wife
(the "Stockholders").

These combined financial statements were prepared to assist the Entities
to comply with certain requirements of a purchase agreement (see Note 6). The
combined financial statements were prepared under accounting principles
generally accepted in the United States of America and include the historical
basis of the accounts of Illimited, S.L. and Planificacion y Estrategia en
Internet, S.L. The equity accounts and share data in these combined financial
statements represent the sum of the corresponding equity accounts and share
data of the Entities. All significant intercompany transaction and accounts are
eliminated in combination.

The Entities principally develop and maintain www.ciudadfutura.com, a
branded Internet online network (the "Network") located on the World Wide Web
(the "Web"). The Network is organized around interest specific channels,
community features, search capabilities and online shopping in Spanish.

A summary of the significant accounting policies followed in the
preparation of the accompanying combined financial statements is presented
below:

ACCOUNTING ESTIMATES

REVENUE RECOGNITION

The Entities' revenues are derived principally from the sale of banner
advertisements and sponsorships. Advertising revenues on both banner and
sponsorship contracts are recognized ratably in the period in which the
advertisement is displayed. A number of the Entities' agreements provide for
the Entities to receive a percentage of revenues from electronic commerce
transactions conducted by advertisers who are selling goods or services to
users of the Network. These revenues are recognized by the entities upon
notification from the advertiser of its share of revenues earned by the
Entities and, to date, have not been significant.

COMPREHENSIVE INCOME (LOSS)

Comprehensive income is a measure of net income and all other changes in
equity of the Entities that result from transactions other than with
stockholders. Comprehensive income (loss) consists of net income (loss) and
foreign currency translation adjustments.

CASH AND CASH EQUIVALENTS

Cash equivalents include investments with original maturities of three
months or less and are stated at cost which approximates market value.

F-35
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

SHORT-TERM INVESTMENTS

Short-term investments are comprised of marketable debt which are
categorized as available for sale and, accordingly, are stated at their fair
values.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation and amortization
are computed using the straight line method over the estimated useful lives of
the respective assets. Repairs and maintenance are charged to expense as
incurred, while expenditures which extend the useful lives of the assets are
capitalized.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Entities to significant
concentrations of credit risk consist principally of cash and cash equivalents,
short-term investments and accounts receivable. The Entities maintain the
majority of their cash and cash equivalents with various financial
institutions. Short-term investments consist of government debt of Spain. The
Entities' sales are primarily to companies located in the United States and
Spain. The Entities perform periodic credit evaluations of their customers'
financial condition and do not require collateral.

FOREIGN CURRENCY

The functional currency of the Entities is the Spanish peseta. The
financial statements of these Entities are translated to U.S. dollars using
year-end rates of exchange for assets and liabilities, and average rates for
the year for revenues, costs, and expenses. Translation gains and losses are
deferred and accumulated as a component of stockholders' equity. Operations are
generally translated at the weighted average exchange rate in effect during the
period. The resulting foreign exchange gains and losses are recorded in the
combined statement of operations.

INCOME TAXES

The Entities use the liability method of accounting for income taxes,
whereby deferred income taxes are provided on items recognized for financial
reporting purposes over different periods than for income tax purposes.
Valuation allowances are provided when the expected realization of tax assets
does not meet a more likely than not criteria.

F-36
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

DECEMBER 31,
---------------------
1997 1998
--------- ---------
Computer equipment ............................... $ 9,188 $ 4,362
Furniture and fixtures ........................... 69,102 74,461
Other ............................................ -- 704
------- -------
78,290 79,527
Less: accumulated depreciation and amortization .. 70,165 73,820
------- -------
$ 8,125 $ 5,707
======= =======

3. RELATED PARTY TRANSACTIONS

The Entities, as described hereafter, have extensive transactions and
relationships with their two Stockholders. Because of these relationships, it
is possible that the terms of these transactions are not the same as those that
would result from transactions among wholly unrelated parties.

One of the Stockholders is the general manager of the Entities. The other
Stockholder provides certain maintenance services to the Network. The estimated
fair value of all of these services, amounting to $31,200 in each of the two
years ended December 31, 1998, has been recorded as additional paid-in capital.
In addition, the two Stockholders have provided financing and office space,
among other services.

On November 30, 1998, the Stockholders sold 25 shares of the Entities'
common stock to the Entities for an aggregate price of $158,869. On the same
date, the 25 shares were retired.

4. INCOME TAXES

The Entities are only subject to income tax in Spain. At December 31,
1997, the Entities had net operating losses carry forwards amounting to
approximately $15,000 which were used to partially offset taxable income for
the year ended December 31, 1998. A valuation allowance had been recognized to
fully offset the deferred tax asset resulting from the net operating loss carry
forwards due to the uncertainty surrounding its realization. Other than net
operating loss carry forwards and services contributed by shareholders, there
are no significant items recognized for financial reporting purposes over
different periods than for income tax purposes.

5. CONTINGENCIES

Under Spanish business law, a company is generally prohibited from buying
back its own shares when retained earnings are not sufficient to cover the
difference between the repurchase price of the shares and their nominal value.
As reflected in the statements of changes in stockholders' equity, the purchase
and retirement of the Entities' own shares resulted in a deficit of $2,554 at
December 31, 1998. Management believes that this matter will not have a
material impact on the Entities' financial condition and results of operations.

6. SUBSEQUENT EVENTS

On February 15, 1999, the Stockholders entered into a purchase agreement
with a third party to sell their Internet network business and related assets.

F-37
<PAGE>

INSIDE BACK COVER

Background has photographs of Yupi Web pages, photographs of
individuals in front of computers and a photograph of a billboard with the Yupi
logo.

Superimposed at the top of the page on the above-described background
appears the following text: "Yupi.com's Growth".

Below this text appears the following text: "February 2000: 3.8 million
registered users".

Below this text appears the following captions (from left to right):
"Visits*" and "Page Views*".

Below the "Visits*" caption appears a bar graph which has the following
information (from left to right): "4.9MM" above "April 1999" and "9.1MM" above
"January 2000".

Below the "Page Views*" caption appears a bar graph which has the
following information (from left to right): "62MM" above "April 1999" and
"132MM" above "January 2000".

Below the above-described captions and bar graphs is the following
text: "average length of stay*: 15 minutes".

At the lower left of the page appears the following text: "*Audited by
I/PRO Nielson".

At the lower right of the page is a picture of the Yupi logo.

<PAGE>

[YUPI LOGO]
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the common stock offered hereby are as
follows:

SEC registration fee ................................... $ 45,540
NASD filing fee ........................................ 17,750
Nasdaq National Market listing fee ..................... 95,000
Printing and engraving expenses ........................ 225,000
Legal fees and expenses ................................ 775,000
Accounting fees and expenses ........................... 325,000
Transfer agent and registrar fees and expenses ......... 10,000
Miscellaneous .......................................... 546,710
----------
Total ................................................ $2,040,000
==========

- ----------------
Yupi will bear all expenses shown above.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Florida Business Corporation Act and Yupi's Fourth Amended and
Restated Articles of Incorporation and Amended and Restated By-Laws provide for
indemnification of Yupi's directors and officers for liabilities and expenses
that they may incur in such capacities. In general, directors and officers are
indemnified with respect to actions taken in good faith in a manner reasonably
believed to be in, or not opposed to, the best interests of Yupi and, with
respect to any criminal action or proceeding, actions that the indemnitee had
no reasonable cause to believe were unlawful. Reference is made to Yupi's
Fourth Amended and Restated Articles of Incorporation and Amended and Restated
By-Laws filed as Exhibits 3.02 and 3.04 hereto, respectively.

The Underwriting Agreement provides that the underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of Yupi against certain liabilities, including liabilities under the
Securities Act of 1933. Reference is made to the form of Underwriting Agreement
filed as Exhibit 1.01 hereto.

In addition, Yupi has a directors' and officers' liability insurance
policy.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since its inception, the registrant has sold the following securities
(which have been adjusted to reflect the 1,000-for-1 stock split on December
28, 1998 and the 25-for-1 stock split effected in the form of a stock dividend
on May 12, 1999) that were not registered under the Securities Act:

1. On October 20, 1997, the registrant sold an aggregate of 10,625,000
shares of its common stock to Camilo Cruz and Carlos Cardona at a price
of $0.00004 per share for the aggregate purchase price of $425.

2. On May 27, 1998, July 23, 1998 and November 15, 1998, the registrant
sold an aggregate of 2,287,500 shares of its common stock to Ariel
Bentata at a price of $0.022 per share for the aggregate purchase price
of $50,000.

3. On November 15, 1998, in connection with the execution of a settlement
agreement between the registrant, Craig Doriot, Camilo Cruz, Carlos
Cardona and Ariel Bentata, the registrant sold 2,981,250 shares of its
common stock to Mr. Doriot.

II-1
<PAGE>

4. During the period from November 6, 1998 to February 19, 1999, the
registrant sold an aggregate of 742,375 shares of its common stock to 18
investors, including executive officers and directors of the registrant,
at a price of $0.6668 per share for the aggregate purchase price of
approximately $495,209.

5. In March 1999, the registrant sold an aggregate of 264,200 shares of
its common stock to 13 investors, including executive officers and
directors of the registrant, at a price of $1.2528 per share for the
aggregate purchase price of approximately $330,066.

6. On April 23, 1999, the registrant sold (i) 45,620 shares of its Class A
Convertible Preferred Stock to IFX Online, Inc. at a price of $21.92 per
share for the aggregate purchase price of approximately $999,990 and (ii)
an aggregate of 223,500 shares of its Class A Convertible Preferred Stock
to IFX Online, Inc. and Interprise Technology Partners, L.P. at a price
of $31.32 per share for the aggregate purchase price of approximately
$7,000,020.

7. On May 13, 1999, the registrant sold 95,785 shares of its Class A
Convertible Preferred Stock to Interprise Technology Partners, L.P. at a
price of $31.32 per share for the aggregate purchase price of
approximately $3,000,000.

8. On July 12, 1999 and July 28, 1999, the registrant sold an aggregate of
31,928 shares of its Class A Convertible Preferred Stock to Interprise
Technology Partners, L.P. at a price of $31.32 per share for the
aggregate purchase price of approximately $1,000,000.

9. On August 2, 1999, the registrant sold 31,929 shares of its Class A
Convertible Preferred Stock to Interprise Technology Partners, L.P. at a
price of $31.32 per share for the aggregate purchase price of
approximately $1,000,000.

10. On August 25, 1999, the registrant issued an aggregate of 261,765
shares of its common stock to the former shareholders of Proveedora de
Servicios para Red Bogota.com Ltda. as partial consideration for the
purchase of all of the outstanding share capital of such company.

11. On October 1, 1999, the registrant agreed to sell an aggregate of 1,944
shares of its common stock to the owners of certain assets relating to
the Internet domain www.claqueta.com as partial consideration for the
purchase of those assets. These shares were subsequently issued on
November 15, 1999.

12. On October 27, 1999, the registrant sold an aggregate of 2,955,016
shares of its Class B Convertible Preferred Stock to Sony Corporation of
America at a price of $11.60 per share for the aggregate purchase price
of $34,300,000, consisting of $5 million in cash and the obligation to
perform future services valued by the parties at $29,300,000.

13. On November 5, 1999, the registrant sold an aggregate of 5,858,698
shares of its Class C Convertible Preferred Stock to 20 investors at a
price of $11.50 per share for the aggregate purchase price of
approximately $67,375,044, consisting of $64,375,044 in cash and
$3,000,000 in retired debt.

14. On November 29, 1999, the registrant issued an aggregate of 37,397
shares of its common stock to the shareholders of La Cosa Interactive
S.R.L. as partial consideration for the registrant's purchase of all of
the outstanding share capital of such company.

15. During the period from June 1, 1998 to December 31, 1999, the
registrant granted, net of forfeited options, options to purchase an
aggregate of 9,288,439 shares of the registrant's common stock with
exercise prices ranging from $0.0001 to $8.00 per share.

No underwriters were involved in the foregoing sales of securities. Such
sales were made in reliance upon the exemption provided by Section 4(2) of the
Securities Act for transactions not involving a public offering and/or
Regulation D and/or Regulation S under the Securities Act and/or Rule 701 under
the Securities Act.

II-2
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------------- -----------------------------------------------------------------------------------------
<S> <C>
1.01x Form of Underwriting Agreement.
3.01 Third Amended and Restated Articles of Incorporation of Yupi, as amended.
3.02 Form of Fourth Amended and Restated Articles of Incorporation of Yupi, to be filed
after the closing of this offering.
3.03x By-laws, as amended, of Yupi.
3.04 Form of Amended and Restated By-laws of Yupi, to be effective after the closing of this
offering.
4.01/dagger/ Specimen Certificate for shares of Yupi's Common Stock.
5.01/dagger/ Legal Opinion of Steel Hector & Davis LLP.
10.01* Amended and Restated Stock Incentive Plan.
10.02 Reserved
10.03x Second Amended and Restated Registration Rights Agreement dated November 5, 1999.
10.04+x Letter Agreement dated October 27, 1999 by and between Yupi Internet Inc. and Sony
Corporation of America.
10.05x Lease dated October 11, 1999 by and between Yupi Internet Inc. and 1688 Partners Ltd.
10.06x Lease Agreement dated April 22, 1999 by and between Yupi Internet Inc. and South
Beach Tristar LLC.
10.07+x Value-Added Link Agreement dated July 20, 1999 by and between AltaVista Equipment
Corporation and Yupi Internet Inc.
10.08x Unsecured Promissory Note dated April 28, 1999 by Jacqueline O'Brien to Yupi Internet
Inc.
10.09x Unsecured Promissory Note dated April 28, 1999 by Carlos Cardona to Yupi Internet Inc.
10.10x Unsecured Promissory Note dated April 28, 1999 by Marlena Delgado to Yupi Internet
Inc.
10.11x Unsecured Promissory Note dated April 28, 1999 by Oscar Coen to Yupi Internet Inc.
10.12x Unsecured Promissory Note dated October 27, 1999 by Rudy Vila to Yupi Internet Inc.
10.13x Unsecured Promissory Note dated November 24, 1999 by Victor Gutierrez to Yupi
Internet Inc.
10.14x Unsecured Promissory Note dated November 24, 1999 by Gustavo Morles to Yupi
Internet Inc.
10.15x Unsecured Promissory Note dated November 30, 1999 by Jose Luque to Yupi Internet
Inc.
10.16x Unsecured Promissory Note dated November 30, 1999 by Rodolfo Vila to Yupi Internet
Inc.
10.17x Unsecured Promissory Note dated December 23, 1999 by Damaris Valero to Yupi
Internet Inc.
10.18x Promissory Note dated August 6, 1999 by Yupi Internet Inc. to Planificacion y Estrategia
de Internet, S.L.
10.19+x Letter Agreement dated November 4, 1999 by and between Yupi Internet Inc. and News
America Incorporated.
10.20* 2000 Stock Option and Incentive Plan.
10.21* 2000 Employee Stock Purchase Plan.
21.01x Subsidiaries.
23.01/dagger/ Consent of Testa, Hurwitz & Thibeault, LLP.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------------ ----------------------------------------------------------------
<S> <C>
23.02/dagger/ Consent of Steel Hector & Davis LLP (contained in Exhibit 5.01)
23.03 Consent of PricewaterhouseCoopers LLP.
23.04 Consent of PricewaterhouseCoopers Auditores, S.L.
23.05 Consent of Price Waterhouse.
24.01x Power of Attorney.
27.01x Financial Data Schedule for the Period Ended December 31, 1997.
27.02x Financial Data Schedule for the Year Ended December 31, 1998.
27.03 Financial Data Schedule for the Year Ended December 31, 1999.

<FN>
- ----------------
* Indicates a management contract or any compensatory plan, contract or
arrangement.
/dagger/ To be filed by amendment.
+ Confidential treatment has been requested as to omitted portions
pursuant to Rule 406 promulgated under the Securities Act of 1933, as
amended.
x Previously filed.
</FN>
</TABLE>

(b) Financial Statement Schedules.

All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes (1) to provide to the
underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser; (2) that for
purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective; and (3) that for the purpose of determining
any liability under the Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this Amendment to the Registration Statement
(File No. 333-94891) to be signed on its behalf by the undersigned, thereunto
duly authorized, in Miami Beach, Florida on March 7, 2000.

YUPI INTERNET INC.

By: /s/ LUIS E. SAN MIGUEL
-----------------------------------------
Luis E. San Miguel
Senior Vice President,
Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- ------------------------------------ ---------------------------------------- --------------
<S> <C> <C>
* President, Chief Executive Officer and March 7, 2000
- ------------------------------------ Director (Principal Executive Officer)
Oscar L. Coen

/s/ LUIS E. SAN MIGUEL Senior Vice President, Chief Financial March 7, 2000
- ------------------------------------ Officer and Treasurer (Principal
Luis E. San Miguel Financial and Accounting Officer)

* Director March 7, 2000
- ------------------------------------
Ariel Bentata

* Director March 7, 2000
- ------------------------------------
Carlos Cardona

* Director March 7, 2000
- ------------------------------------
Juan Carlos Campuzano

* Director March 7, 2000
- ------------------------------------
Camilo Cruz

* Director March 7, 2000
- ------------------------------------
Fred Ehrlich

* Director March 7, 2000
- ------------------------------------
David R. Parker

* By: /s/ LUIS E. SAN MIGUEL
------------------------------
Luis E. San Miguel
Attorney-in-Fact
</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------------- -----------------------------------------------------------------------------------------
<S> <C>
1.01x Form of Underwriting Agreement.
3.01 Third Amended and Restated Articles of Incorporation of Yupi, as amended.
3.02 Form of Fourth Amended and Restated Articles of Incorporation of Yupi, to be filed
after the closing of this offering
3.03x By-laws, as amended, of Yupi.
3.04 Form of Amended and Restated By-laws of Yupi, to be effective after the closing of this
offering
4.01/dagger/ Specimen Certificate for shares of Yupi's Common Stock.
5.01/dagger/ Legal Opinion of Steel Hector & Davis LLP.
10.01* Amended and Restated Stock Incentive Plan.
10.02 Reserved
10.03x Second Amended and Restated Registration Rights Agreement dated November 5, 1999.
10.04+x Letter Agreement dated October 27, 1999 by and between Yupi Internet Inc. and Sony
Corporation of America
10.05x Lease dated October 11, 1999 by and between Yupi Internet Inc. and 1688 Partners Ltd.
10.06x Lease Agreement dated April 22, 1999 by and between Yupi Internet Inc. and South
Beach Tristar LLC.
10.07+x Value-Added Link Agreement dated July 20, 1999 by and between AltaVista Equipment
Corporation and Yupi Internet Inc.
10.08x Unsecured Promissory Note dated April 28, 1999 by Jacqueline O'Brien to Yupi Internet
Inc.
10.09x Unsecured Promissory Note dated April 28, 1999 by Carlos Cardona to Yupi Internet Inc.
10.10x Unsecured Promissory Note dated April 28, 1999 by Marlena Delgado to Yupi Internet
Inc.
10.11x Unsecured Promissory Note dated April 28, 1999 by Oscar Coen to Yupi Internet Inc.
10.12x Unsecured Promissory Note dated October 27, 1999 by Rudy Vila to Yupi Internet Inc.
10.13x Unsecured Promissory Note dated November 24, 1999 by Victor Gutierrez to Yupi
Internet Inc.
10.14x Unsecured Promissory Note dated November 24, 1999 by Gustavo Morles to Yupi
Internet Inc.
10.15x Unsecured Promissory Note dated November 30, 1999 by Jose Luque to Yupi Internet
Inc.
10.16x Unsecured Promissory Note dated November 30, 1999 by Rodolfo Vila to Yupi Internet
Inc.
10.17x Unsecured Promissory Note dated December 23, 1999 by Damaris Valero to Yupi
Internet Inc.
10.18x Promissory Note dated August 6, 1999 by Yupi Internet Inc. to Planificacion y Estrategia
de Internet, S.L.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------------- -----------------------------------------------------------------------------------
<S> <C>
10.19+x Letter Agreement dated November 4, 1999 by and between Yupi Internet Inc. and News
America Incorporated.
10.20* 2000 Stock Option and Incentive Plan.
10.21* 2000 Employee Stock Purchase Plan.
21.01x Subsidiaries.
23.01/dagger/ Consent of Testa, Hurwitz & Thibeault, LLP.
23.02/dagger/ Consent of Steel Hector & Davis LLP (contained in Exhibit 5.01)
23.03 Consent of PricewaterhouseCoopers LLP.
23.04 Consent of PricewaterhouseCoopers Auditores, S.L.
23.05 Consent of Price Waterhouse.
24.01x Power of Attorney.
27.01x Financial Data Schedule for the Period Ended December 31, 1997.
27.02x Financial Data Schedule for the Year Ended December 31, 1998.
27.03 Financial Data Schedule for the Year Ended December 31, 1999.

EXHIBIT 3.01

THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
YUPI INTERNET INC.

In accordance with Section 607.1007 of the Florida Business
Corporation Act, the Florida Statutes, as hereafter amended and modified (the
"FBCA"), the Board of Directors of YUPI INTERNET INC., a Florida corporation
(the "CORPORATION"), hereby amends and restates in its entirety the Articles of
Incorporation of the Corporation as follows:

ARTICLE I.

NAME
----

The name of the Corporation is: YUPI INTERNET INC.

ARTICLE II.

PRINCIPAL ADDRESS
-----------------

The street address of the principal office and the mailing
address of the Corporation is: 605 Lincoln Road, Suite 401, Miami Beach, Florida
33131.

ARTICLE III

PURPOSES
--------

The Corporation may engage in the transaction of any or all
lawful business for which corporations may be incorporated under the laws of the
State of Florida.

ARTICLE IV

CAPITAL STOCK
-------------

4.1 AUTHORIZED SHARES. The total number of shares of all classes of capital
stock that the Corporation shall have the authority to issue shall be 72,000,000
shares, of which 60,000,000 shares shall be common stock, having a par

<PAGE>

value of $.0001 per share (referred to in these Third Amended and Restated
Articles of Incorporation as "COMMON STOCK") and 12,000,000 shares shall be
preferred stock, having a par value of $.01 per share (referred to in these
Third Amended and Restated Articles of Incorporation as "PREFERRED STOCK"). The
Board of Directors is expressly authorized, pursuant to Section 607.0602 of the
FBCA, to provide for the classification and reclassification of any unissued
shares of Common Stock or Preferred Stock and the issuance thereof in one or
more classes or series without the approval or the shareholders of the
Corporation, all within the limitations set forth in Section 607.0601 of the
FBCA.

4.2 COMMON STOCK.

(a) RELATIVE RIGHTS. The Common Stock shall be subject to all
of the rights, privileges, preferences and priorities of the Preferred Stock as
may be set by the Board of Directors and hereafter filed as Articles of
Amendment to these Third Amended and Restated Articles of Incorporation pursuant
to Section 607.0602 of the FBCA. Except as otherwise provided in these Third
Amended and Restated Articles of Incorporation, each share of Common Stock shall
have the same rights as and be identical in all respects to all the other shares
of Common Stock.

(b) VOTING RIGHTS. Each holder of Common Stock shall, except
as otherwise provided by the FBCA, be entitled to one vote for each share of
Common Stock held by such holder.

(c) DIVIDENDS. Whenever there shall have been paid, or
declared and set aside for payment, to the holders of the shares of any class of
stock having preference over the Common Stock as to the payment of dividends,
the full amount of dividends and of sinking fund or retirement payments, if any,
to which such holders are respectively entitled in preference to the Common
Stock, then the holders of record of the Common Stock and any class or series of
stock entitled to participate therewith as to dividends, shall be entitled to
receive dividends, when, as, and if declared by the Board of Directors, out of
any assets legally available for the payment of dividends thereon.

(d) DISSOLUTION, LIQUIDATION, WINDING UP. In the event of any
dissolution, liquidation, or winding up of the Corporation, whether voluntary or
involuntary, the holders of record of the Common Stock then outstanding, and all
holders of any class or series of stock entitled to participate therewith in
whole or in part, as to the distribution of assets, shall become entitled to
participate in the distribution of assets of the Corporation remaining after the
Corporation shall have paid, or set aside for payment, to the holders of any
class of stock having preference over the Common Stock in the event of
dissolution, liquidation, or winding up, the full preferential amounts (if any)
to which they are entitled, and shall have paid or provided for payment of all
debts and liabilities of the Corporation.

<PAGE>

4.3 PREFERRED STOCK.

(a) TERMS OF CLASS A CONVERTIBLE PREFERRED. The
Corporation is authorized to issue, from time to time, up to 428,762 shares of
Class A Convertible Preferred Stock, having the designations, preferences,
conversion and voting rights and other rights as set forth in EXHIBIT A hereto.

(b) TERMS OF CLASS B CONVERTIBLE PREFERRED. The
Corporation is authorized to issue, from time to time, up to 4,924,229 shares of
Class B Convertible Preferred Stock having the designations, preferences,
conversion and voting rights and other rights as set forth in EXHIBIT A hereto.

(c) TERMS OF CLASS C CONVERTIBLE PREFERRED. The
Corporation is authorized to issue, from time to time, up to 6,000,000 shares of
Class C Convertible Preferred Stock having the designations, preferences,
conversion and voting rights and other rights as set forth in EXHIBIT A hereto.

(d) ADDITIONAL ISSUANCES, DESIGNATIONS, POWERS,
ETC. Subject to the limitations prescribed by the FBCA and the provisions of
these Third Amended and Restated Articles of Incorporation, the Board of
Directors is expressly authorized, to provide, by resolution and by filing
Articles of Amendment to these Third Amended and Restated Articles of
Incorporation (which, pursuant to Section 607.0602(4) of the FBCA shall be
effective without shareholder action), for the issuance from time to time of
additional shares of the Preferred Stock in one or more additional classes or
series, to establish from time to time the number of shares to be included in
each such class or series, and to fix the designations, preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption relating to the shares of
each such class or series. The authority of the Board of Directors with respect
to each additional class or series of Preferred Stock shall include, but not be
limited to, setting or changing the following:

(i) the dividend rate, if any, on shares of such
class or series, the times of payment and the date from which
dividends shall be accumulated, if dividends are to be
cumulative;

(ii) whether the shares of such class or series shall
be redeemable and, if so, the redemption price and the terms
and conditions of such redemption;

(iii) the obligation, if any, of the Corporation to
redeem shares of such class or series pursuant to a sinking
fund;
<PAGE>

(iv) whether shares of such class or series shall be
convertible into, or exchangeable for, shares of stock of any
other class or classes and, if so, the terms and conditions
for such conversion or exchange, including the price or prices
or the rate or rates of conversion or exchange and the terms
of adjustment, if any;

(v) whether the shares of such class or series shall
have voting rights, in addition to the voting rights provided
by law, and, if so, the extent of such voting rights;

(vi) the rights of the shares of such class or series
in the event of voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation; and

(vii) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating
to such class or series.

(d) DISSOLUTION, LIQUIDATION, WINDING UP. In the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of Preferred Stock of each additional
class or series shall be entitled to receive only such amount or amounts as
shall have been fixed by the Articles of Amendment to these Third Amended and
Restated Articles of Incorporation or by the resolution or resolutions of the
Board of Directors providing for the issuance of such additional class or
series.

4.4 SHARES ACQUIRED BY THE CORPORATION. Shares of Common Stock
that have been acquired by the Corporation shall become treasury shares and may
be resold or otherwise disposed of by the Corporation for such consideration as
shall be determined by the Board of Directors, unless or until the Board of
Directors shall by resolution provide that any or all treasury shares so
acquired shall constitute authorized, but unissued shares.

4.5 NO PREEMPTIVE RIGHTS. Except as the Board of Directors may
otherwise determine, no shareholder of the Corporation shall have any
preferential or preemptive right to subscribe for or purchase from the
Corporation any new or additional shares of capital stock, or securities
convertible into shares of capital stock, of the Corporation, whether now or
hereafter authorized.

ARTICLE V.

REGISTERED OFFICE AND AGENT
---------------------------

The Corporation designates 605 Lincoln Road, Suite 401, Miami
Beach, Florida 33131 as the street address of the registered office of the
Corporation and names Ariel Bentata the Corporation's registered agent at that
address to accept service of process within its state.

<PAGE>

ARTICLE VI.

BOARD OF DIRECTORS
------------------

6.1 NUMBER, ELECTION. The number of directors constituting the
Board of Directors as of the date of adoption of these Third Amended and
Restated Articles of Incorporation is nine (9). The number of directors may be
increased or decreased from time to time as provided in these Third Amended and
Restated Articles of Incorporation or by the Bylaws, but in no event shall the
number of directors be less than three (3). Directors shall be elected annually,
at the annual meeting of the shareholders of the Corporation, by the votes cast
by the shares entitled to vote in the election at a meeting at which a quorum is
present.

6.2 DIRECTORS ELECTED BY HOLDERS OF PREFERRED STOCK.
Notwithstanding the foregoing, whenever the holders of any one or more classes
or series of Preferred Stock issued by the Corporation shall have the right,
voting separately by class or series, to elect one or more directors at an
annual or special meeting of shareholders, the election, term of office, filling
of vacancies and other features of such directorships shall be governed by the
terms of these Third Amended and Restated Articles of Incorporation, as amended
by Articles of Amendment applicable to such classes or series of Preferred
Stock.

6.3 QUORUM AND VOTING. A majority of the number of directors
fixed by or in accordance with these Third Amended and Restated Articles of
Incorporation and the Bylaws shall constitute a quorum for the transaction of
business at any meeting of directors. Unless greater majority is required
pursuant to the Bylaws, if a quorum is present when a vote is taken, the
affirmative vote of a majority of the directors present shall be the act of the
Board of Directors.

6.4 EXERCISE OF BUSINESS JUDGMENT. In discharging the duties
of their respective positions and in determining what is believed to be in the
best interests of the Corporation, the Board of Directors, and individual
directors, in addition to considering the effects of any action on the
Corporation or its shareholders, may consider the interests of the employees,
customers, suppliers and creditors of the Corporation and its subsidiaries, the
communities in which offices or other establishments of the Corporation and its
subsidiaries are located, and all other factors such directors consider
pertinent; provided, however, that this provision solely grants discretionary
authority to the directors and no constituency shall be deemed to have been
given any right to consideration thereby.

<PAGE>

ARTICLE VII.

INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------

7.1 RIGHT TO INDEMNIFICATION. Each person (including the
heirs, executors, administrators, or estate of such person) who is or was a
director or officer of the Corporation, or who is or was serving at the request
of the Corporation in the position of a director or officer, and as to whom the
Corporation has agreed to grant indemnification by separate resolution adopted
by the Board of Directors, shall be indemnified by the Corporation as of right
to the fullest extent permitted or authorized by current or future legislation
or by current or future judicial or administrative decision (but, in the case of
any future legislation or decision, only to the extent that it permits the
Corporation to provide broader indemnification rights than permitted prior to
the legislation or decision), against all fines, liabilities, settlements,
losses, damages, costs and expenses, including attorneys' fees, asserted against
him or her or incurred by him or her in his or her capacity as a director or
officer, or arising out of his or her status as a director or officer. The
foregoing right of indemnification shall not be exclusive of other rights to
which those seeking indemnification may be entitled. The Corporation may
maintain insurance, at its expense, to protect itself and any current or future
director or officer against any such fine, liability, cost or expense, including
attorneys' fees, whether or not the Corporation would have the legal power to
directly indemnify him or her against such liability.

7.2 ADVANCES. Costs, charges and expenses, including
attorneys' fees, incurred by any individual referred to in Section 7.1 in
defending civil or criminal suit, action or proceeding may be paid (and, in the
case of directors of the Corporation, shall be paid) by the Corporation in
advance of the final disposition thereof upon receipt of an undertaking to repay
all amounts advanced if it is ultimately determined that the person is not
entitled to be indemnified by the Corporation as authorized by this Article, and
upon satisfaction of other conditions established from time to time by the Board
of Directors or required by current or future legislation (but, with respect to
future legislation, only to the extent that it provides conditions less
burdensome than those previously provided).

7.3 PERSONAL LIABILITY OF DIRECTORS. No director of the
Corporation shall be personally liable to the Corporation or its shareholders
for monetary damages for breach of duty of care or other duty as a director,
except as provided by Section 607.0831 of the FBCA. If the FBCA is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the FBCA, as
amended.

7.4 SAVINGS CLAUSE. In the event that any of the provisions of
this Article (including any provision within a single sentence) are held by a
court of

<PAGE>

competent jurisdiction to be invalid, void or otherwise unenforceable, the
remaining provisions are severable and shall remain enforceable to the fullest
extent permitted by law.

ARTICLE VIII.

ACTION BY SHAREHOLDERS
----------------------

8.1 ANNUAL MEETINGS. At an annual meeting of the shareholders
of the Corporation, only such business shall be conducted, and only such
proposals shall be acted upon, as shall have been brought before the annual
meeting (a) by, or at the direction of, the Board of Directors, or (b) by any
shareholder of the Corporation who complies with the notice procedures set forth
in the Bylaws.

8.2 SPECIAL MEETINGS. Special meetings of the shareholders of
the Corporation may be called at any time by (a) the Board of Directors; (b) the
Chairman of the Board of Directors (if one is so appointed); (c) the President
of the Corporation; or (d) the holders of not less than fifty (50%) of all the
votes entitled to be cast on any issue proposed to be considered at the proposed
special meeting, if such shareholders sign, date and deliver to the
Corporation's Secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held. Special meetings of the
shareholders of the Corporation may not be called by any other person or
persons.

8.3 SHAREHOLDER ACTION WITHOUT A MEETING. Any action required
or permitted to be taken at an annual or special meeting of shareholders of the
Corporation may be taken without a meeting, without prior notice, and without a
vote if the action is taken in the manner set forth under Section 607.0704 of
the FBCA, as the same may be hereafter amended or superseded.

ARTICLE IX.

AMENDMENTS
----------

9.1 ARTICLES OF INCORPORATION. Except as provided in Section
4.3 hereof and in EXHIBIT A hereto, the affirmative vote of a majority of the
total number of votes of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required (unless separate voting by classes
is required by the FBCA, in which event the affirmative vote of a majority of
the number of shares of each class or series entitled to vote as a class shall
be required), to amend or repeal, or to adopt any provisions inconsistent with
the purpose or intent of these Third Amended and Restated Articles of
Incorporation. Notice of any such proposed amendment, repeal or adoption shall
be contained in the notice of the meeting at

<PAGE>

which it is to be considered. Subject to the provisions set forth herein, the
Board of Directors shall have the right to amend, alter, repeal or rescind any
provision contained in these Third Amended and Restated Articles of
Incorporation in the manner now or hereafter prescribed by law.

9.2 BYLAWS. The Board of Directors shall have the power to
amend or repeal the Bylaws in such manner as shall be prescribed by the Bylaws,
and nothing herein shall serve to limit such power. The shareholders of the
Corporation may adopt or amend a provision to the Bylaws which fixes a greater
quorum or voting requirement for shareholders (or voting groups of shareholders)
than is required by the FBCA. The adoption or amendment of a bylaw that adds,
changes or deletes a greater quorum or voting requirement for shareholders must
meet same quorum or voting requirement and be adopted by the same vote and
voting groups required to take action under the quorum or voting requirement
then in effect or proposed to be adopted, whichever is greater.

<PAGE>

IN WITNESS WHEREOF, YUPI INTERNET INC. has caused these Third
Amended and Restated Articles of Incorporation to be executed, its corporate
seal to be affixed, and its seal and execution hereof to be attested, all by its
duly authorized officers, this 5th day of November, 1999.

YUPI INTERNET INC.

Attest: /S/ LUIS SAN MIGUEL By: /S/ OSCAR COEN
------------------- ---------------
LUIS SAN MIGUEL OSCAR COEN
Assistant Secretary Chief Executive Officer

<PAGE>

===============================================================================

YUPI INTERNET INC.
------------------

TERMS OF CLASS A CONVERTIBLE PREFERRED STOCK,
CLASS B CONVERTIBLE PREFERRED STOCK
AND CLASS C CONVERTIBLE PREFERRED STOCK

===============================================================================

SECTION 1. DIVIDENDS.

1.1A. GENERAL OBLIGATION. When and as declared by the
Corporation's Board of Directors and to the extent permitted under the Florida
Business Corporation Act, the Corporation shall pay preferential dividends in
cash to the holders of the Class A Convertible Preferred Stock (the "CLASS A
PREFERRED"), the Class B Convertible Preferred Stock (the "CLASS B PREFERRED")
and the Class C Convertible Preferred Stock (the "CLASS C PREFERRED", together
with the Class A Preferred and the Class B Preferred, the "PREFERRED STOCK") as
provided in this SECTION 1. Each share of Preferred Stock shall be referred to
herein as a "SHARE". The date on which the Corporation initially issues any
Share of Class A Preferred, Class B Preferred or Class C Preferred shall be
deemed to be its "DATE OF ISSUANCE" regardless of the number of times transfer
of such Share is made on the stock records maintained by or for the Corporation
and regardless of the number of certificates which may be issued to evidence
such Share.

1.1B. DISTRIBUTION OF PARTIAL DIVIDEND PAYMENTS. Except as
otherwise provided herein, if at any time the Corporation pays less than the
total amount of dividends then accrued with respect to the Class A Preferred,
Class B Preferred or Class C Preferred, such payment shall be distributed pro
rata among the holders thereof based upon the number of Shares held by each such
holder.

1.1C. STOCK DIVIDENDS ON COMMON STOCK. If at any time the
Corporation pays a dividend or other distribution in securities of the
Corporation to the holders of the Common Stock, the holders of Preferred Stock
shall be entitled to such dividends or distributions (to the same extent as if
all Shares had been converted into Common Stock).

SECTION 2. LIQUIDATION. Upon any liquidation, dissolution or winding up
of the Corporation (whether voluntary or involuntary) distributions to the
stockholders of the Corporation shall be made in the following manner:

2.1A. LIQUIDATION PREFERENCE PAYMENTS. Each holder of Class A
Preferred shall be entitled to be paid, before any distribution or payment is
made

<PAGE>

upon any Junior Securities, an amount in cash equal to the aggregate Class
A Liquidation Value of all such shares held by such holder (plus all accrued and
unpaid dividends thereon) (with respect to one share of Class A Preferred, THE
"CLASS A LIQUIDATION PREFERENCE PAYMENT" and with respect to all shares of Class
A Preferred, the "CLASS A LIQUIDATION PREFERENCE PAYMENTS"). Each holder of
Class B Preferred shall be entitled to be paid, before any distribution or
payment is made upon any Junior Securities, an amount in cash equal to the
aggregate Class B Liquidation Value of all such shares held by such holder (plus
all accrued and unpaid dividends thereon) (with respect to one share of Class B
Preferred, the "CLASS B LIQUIDATION PREFERENCE PAYMENT" and with respect to all
shares of Class B Preferred, the "CLASS B LIQUIDATION PREFERENCE PAYMENTS").
Each holder of Class C Preferred shall be entitled to be paid, before any
distribution or payment is made upon any Junior Securities, an amount in cash
equal to the aggregate Class C Liquidation Value of all such shares held by such
holder (plus all accrued and unpaid dividends thereon) (with respect to one
share of Class C Preferred, the "CLASS C LIQUIDATION PREFERENCE PAYMENT" and
with respect to all shares of Class C Preferred, the "CLASS C LIQUIDATION
PREFERENCE PAYMENTS") (the Class A Liquidation Preference Payments, the Class B
Liquidation Preference Payments and the Class C Liquidation Preference Payments
being sometimes referred to collectively as the "PREFERRED STOCK LIQUIDATION
PREFERENCE PAYMENTS"). For purposes hereof, the Class A Preferred, Class B
Preferred and Class C Preferred shall all rank equally on liquidation. If upon
such liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed among the holders of
Preferred Stock shall be insufficient to permit payment in full to such
stockholders of the Preferred Stock Liquidation Preference Payments, then all of
the assets of the Corporation available for distribution to the holders of the
Preferred Stock shall be distributed to such holders of the Preferred Stock pro
rata, so that each holder receives that portion of the assets available for
distribution as the amount of the full liquidation preference to which such
holder would otherwise be entitled for all its Shares bears to the amount of the
full liquidation preference to which all holders of the Preferred Stock would
otherwise be entitled for all their shares pursuant to this SECTION 2.1A. For
purposes hereof, the Junior Securities shall rank on liquidation junior to the
Preferred Stock.

2.1B. LIQUIDATION NOTICE. Prior to the liquidation,
dissolution or winding up of the Corporation, the Corporation shall declare for
payment all accrued and unpaid dividends with respect to the Class A Preferred,
Class B Preferred and Class C Preferred, but only to the extent of funds of the
Corporation legally available for the payment of dividends. Not less than thirty
(30) days prior to the payment date stated therein, the Corporation shall mail
written notice of any such liquidation, dissolution or winding up to each record
holder of Preferred Stock setting forth in reasonable detail the amount of
proceeds to be paid with respect to each Share and each share of Common Stock in
connection with such liquidation, dissolution or winding up. The consolidation
or merger of the Corporation into or with any other entity or entities which
results in the exchange of outstanding shares of the Corporation for

<PAGE>

securities or other consideration issued or paid or caused to be issued or paid
by any such entity or affiliate thereof (other than a merger to re-incorporate
the Corporation in a different jurisdiction, a consolidation or merger into a
Subsidiary, or a merger in which the Corporation is the surviving Corporation
and the holders of the Corporation's voting stock outstanding immediately prior
to the transaction constitute a majority of the holder of voting stock
outstanding immediately following the transaction), and the sale or other
disposition by the Corporation of all or substantially all of its assets, shall
be deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of the provisions of this SECTION 2.

2.1C. PARTICIPATION FEATURE. In addition to, but
not before payment in full of the Preferred Stock Liquidation Preference
Payments under this SECTION 2, upon any liquidation, dissolution or winding up
of the Corporation (whether voluntary or involuntary), the holders of the
Preferred Stock shall be entitled to participate (on an as if converted basis)
with the holders of Common Stock as a single class in the distribution of the
assets of the Corporation which remain available for distribution.

SECTION 3. RESTRICTIONS.

3.1A. SPECIAL PREFERRED STOCK VOTING RIGHT. So long
as any Preferred Stock remains outstanding, without the prior written consent of
the holders of a majority of the outstanding shares of Preferred Stock (on an as
if converted basis) voting as a single class, the Corporation shall not, nor
shall it permit any Subsidiary to:

(I) redeem, purchase or otherwise acquire directly or
indirectly any of its equity securities (except for the repurchase pursuant to
contractual rights of the Corporation of capital stock issued to current or
former employees, consultants or other third parties who acquired such shares
directly from the Corporation);

(II) directly or indirectly pay or declare any dividend or
make any distribution upon any of its equity securities (except any subdivision
of the Corporation's outstanding shares of Common Stock by stock split, stock
dividend, recapitalization or otherwise); or

(III) consent to any liquidation, dissolution or winding up of
the Corporation, recapitalization or reorganization of the Corporation, or
consolidate or merge into or with any other entity or entities (other than a
merger to re-incorporate the Corporation in a different jurisdiction, a
consolidation or merger into a Subsidiary, or a merger in which the Corporation
is the surviving Corporation and the holders of the Corporation's voting stock
outstanding immediately prior to the transaction constitute a majority of the
holders of voting stock outstanding immediately following the transaction) or
sell or otherwise dispose of all or substantially all its assets.

<PAGE>

(IV) materially change the business in which the Corporation
and its Subsidiaries were engaged on the date on which shares of Class C
Preferred were originally issued.

3.1B. SPECIAL CLASS VOTING RIGHT. So long as any
shares of any class of Preferred Stock remain outstanding, without the prior
written consent of the holders of a majority of the outstanding shares of such
class of Preferred Stock (on an as if converted basis), the Corporation shall
not, nor shall it permit any Subsidiary to:

(I) amend, alter or repeal its Articles of Incorporation or
Bylaws if the effect would be materially adverse in any manner with respect to
the rights of the holders of such class of Preferred Stock; or

(II) create or authorize the creation of any additional class
or series of shares of stock unless the same ranks junior to such class of
Preferred Stock as to the distribution of assets on the liquidation, dissolution
or winding up of the Corporation and the payment of dividends, or increase the
authorized amounts of any such class of Preferred Stock or increase the
authorized amount of any additional class or series of shares of stock unless
the same ranks junior to such class of Preferred Stock as to the distribution of
assets on the liquidation, dissolution or winding up of the Corporation and the
payment of dividends, or create or authorize any obligation or security
convertible into shares of any such class of Preferred Stock or into shares of
any other class or series of stock unless the same ranks junior to such class of
Preferred Stock as to the distribution of assets on the liquidation, dissolution
or winding up of the Corporation and the payment of dividends, whether any such
creation, authorization or increase shall be by means of amendment to the
Articles of Incorporation or by merger, consolidation or otherwise.

SECTION 4. VOTING RIGHTS.

4.1A. ELECTION OF DIRECTORS.

(I) For so long as 10% of the Class A Preferred outstanding as
of the original issuance date of the Class A Preferred remain outstanding, in
the election of directors of the Corporation, the holders of the Class A
Preferred, voting separately as a single class to the exclusion of all other
classes of the Corporation's capital stock and with each share of Class A
Preferred entitled to one vote, shall be entitled to elect three (3) directors
to serve on the Corporation's Board of Directors until their successors are duly
elected by the holders of the Class A Preferred or they are removed from office
by the holders of the Class A Preferred. Any director in office elected solely
by the holders of the Class A Preferred voting separately as a class shall
remain as a member of the Board, until such time as his successor shall be duly
elected by the holders of Class A Preferred then entitled to vote for such
director. If the holders of the Class A Preferred for any reason fail to elect
anyone to fill any such directorship, such position shall

<PAGE>

remain vacant until such time as the holders of the Class A Preferred elect a
director to fill such position and shall not be filled by resolution or vote of
the Corporation's Board of Directors or the Corporation's other shareholders. In
order to protect the representation on the Board of Directors granted to the
holders of the Class A Preferred, any expansion of the number of directors
constituting the Board of Directors beyond nine (9) members, shall require, in
addition to any other voting requirement set forth in the Articles of
Incorporation, the vote of a majority of the Class A Preferred issued and
outstanding, voting separately as a single class to the exclusion of all other
classes of the Corporation's capital stock and with each share of Class A
Preferred entitled to one vote.

(II) For so long as 10% of the Class B Preferred outstanding
as of the original issuance date of the Class B Preferred remain outstanding, in
the election of directors of the Corporation, the holders of the Class B
Preferred, voting separately as a single class to the exclusion of all other
classes of the Corporation's capital stock and with each share of Class B
Preferred entitled to one vote, shall be entitled to elect one (1) director to
serve on the Corporation's Board of Directors until his successor is duly
elected by the holders of the Class B Preferred or he is removed from office by
the holders of the Class B Preferred. The director in office elected solely by
the holders of the Class B Preferred voting separately as a class shall remain
as a member of the Board, until such time as his successor shall be duly elected
by the holders of Class B Preferred then entitled to vote for such director. If
the holders of the Class B Preferred for any reason fail to elect anyone to fill
any such directorship, such position shall remain vacant until such time as the
holders of the Class B Preferred elect a director to fill such position and
shall not be filled by resolution or vote of the Corporation's Board of
Directors or the Corporation's other shareholders. In order to protect the
representation on the Board of Directors granted to the holders of the Class B
Preferred, any expansion of the number of directors constituting the Board of
Directors beyond nine (9) members, shall require, in addition to any other
voting requirement set forth in the Articles of Incorporation, the vote of a
majority of the Class B Preferred issued and outstanding, voting separately as a
single class to the exclusion of all other classes of the Corporation's capital
stock and with each share of Class B Preferred entitled to one vote.

(III) For so long as 10% of the Class C Preferred outstanding
as of the original issuance date of the Class C Preferred remain outstanding, in
the election of directors of the Corporation, the holders of the Class C
Preferred, voting separately as a single class to the exclusion of all other
classes of the Corporation's capital stock and with each share of Class C
Preferred entitled to one vote, shall be entitled to elect one (1) director to
serve on the Corporation's Board of Directors until his successor is duly
elected by the holders of the Class C Preferred or he is removed from office by
the holders of the Class C Preferred. The director in office elected solely by
the holders of the Class C Preferred voting separately as a class shall remain
as a member of the Board, until such time as his successor shall be duly elected
by the holders of Class C Preferred then entitled to vote for such director. If
the holders of the Class C Preferred for any reason fail to elect anyone to fill
any such directorship, such position shall remain vacant until such time as the
holders of the Class C Preferred elect a director to fill such position and
shall not be filled by resolution or vote of the Corporation's Board of
Directors or the Corporation's other shareholders. In order to protect the
representation on the Board of

<PAGE>

Directors granted to the holders of the Class C Preferred, any expansion of the
number of directors constituting the Board of Directors beyond nine (9) members,
shall require, in addition to any other voting requirement set forth in the
Articles of Incorporation, the vote of a majority of the Class C Preferred
issued and outstanding, voting separately as a single class to the exclusion of
all other classes of the Corporation's capital stock and with each share of
Class C Preferred entitled to one vote.

4.1B.OTHER VOTING RIGHTS. The holders of the Preferred Stock
shall be entitled to notice of all shareholders meetings in accordance with the
Corporation's bylaws, and except as set forth in SECTIONS 3, 4.1A AND 11 and as
otherwise required by applicable law, the holders of the Preferred Stock shall
be entitled to vote on all matters submitted to the shareholders for a vote
together with the holders of the Common Stock voting together as a single class
with each share of Common Stock entitled to one vote per share and each share of
Preferred Stock entitled to one vote for each share of Common Stock issuable
upon conversion of the Preferred Stock as of the record date for such vote or,
if no record date is specified, as of the date of such vote.

SECTION 5. CONVERSION.

5.1A. CONVERSION PROCEDURE.

(I) At any time and from time to time the holders of a
majority of the outstanding Preferred Stock (on an as if converted basis) may
convert all or any portion of the Preferred Stock (including any fraction of a
share) outstanding into a number of fully paid and non-assessable shares of
Conversion Stock computed by ADDING (a) the product of the number of shares of
Class A Preferred to be converted and $31.32 and dividing the result by the
Class A Conversion Price then in effect; AND (b) the product of the number of
shares of Class B Preferred to be converted and $11.60 and dividing the result
by the Class B Conversion Price then in effect; AND (c) the product of the
number of shares of Class C Preferred to be converted and $11.50 and dividing
the result by the Class C Conversion Price then in effect; PROVIDED THAT in the
event the holders of a majority of the outstanding Preferred Stock (on an as if
converted basis) elect to convert less than all of the outstanding Preferred
Stock, the number of shares to be converted from each of the Class A Preferred,
the Class B Preferred and the Class C Preferred shall be pro rata, based upon
the ratio of the number of shares of each such class outstanding to the total
number of shares of Preferred Stock outstanding.

(II) At any time and from time to time, any holder of Class A
Preferred may convert all or any portion of the Class A Preferred (including any
fraction of a share) held by such holder into a number of fully paid and
non-assessable shares of Conversion Stock computed by multiplying the number of
such shares to be converted by $31.32 and dividing the result by the Class A
Conversion Price then in effect. At any time and from time to time, the holders
of a majority of the Class A Preferred may convert all or any portion of the
Class A Preferred (including any fraction of a share) outstanding into a number
of shares of Conversion Stock computed by multiplying the number of such shares
to be converted by $31.32 and dividing the result by the Class A Conversion
Price then in effect.

<PAGE>

(III) At any time and from time to time, any holder of Class B
Preferred may convert all or a portion of the Class B Preferred (including any
fraction of a share) held by such holder into a number of fully paid and
non-assessable shares of Conversion Stock computed by multiplying the number of
such shares to be converted by $11.60 and dividing the result by the Class B
Conversion Price then in effect. At any time and from time to time the holders
of a majority of the Class B Preferred may convert all or any portion of the
Class B Preferred (including any fraction of a share) outstanding into a number
of shares of Conversion Stock computed by multiplying the number of such shares
to be converted by $11.60 and dividing the result by the Class B Conversion
Price then in effect.

(IV) At any time and from time to time, any holder of Class C
Preferred may convert all or a portion of the Class C Preferred (including any
fraction of a share) held by such holder into a number of fully paid and
non-assessable shares of Conversion Stock computed by multiplying the number of
such shares to be converted by $11.50 and dividing the result by the Class C
Conversion Price then in effect. At any time and from time to time the holders
of a majority of the Class C Preferred may convert all or any portion of the
Class C Preferred (including any fraction of a share) outstanding into a number
of shares of Conversion Stock computed by multiplying the number of such shares
to be converted by $11.50 and dividing the result by the Class C Conversion
Price then in effect.

(V) Except as otherwise provided herein, each conversion of
Preferred Stock shall be deemed to have been effected as of the close of
business on the date on which the written notice shall have been received by the
Corporation (unless a date is specified in such notice, in which case that date
shall be the effective date) of any matters described in SECTIONS 5.1A(I), (II),
(III) OR (IV) above. At the time any such conversion has been effected, the
rights of the holder of the Shares converted as a holder of Preferred Stock
shall cease and the Person or Persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Conversion Stock represented thereby.

(VI) Notwithstanding any other provision hereof, if a
conversion of Preferred Stock is to be made in connection with a Public Offering
or other transaction affecting the Corporation, the conversion of any Shares of
Preferred Stock may, at the election of the holder thereof, be conditioned upon
the consummation of such transaction, in which case such conversion shall not be
deemed to be effective until such transaction has been consummated.

(VII) As soon as possible after a conversion has been effected
(but in any event within five (5) business days in the case of SUBPARAGRAPH
(XII) below), the Corporation shall deliver to the converting holder:

(A) subject to receipt by the Corporation of the
certificates for the shares of Preferred Stock being converted, a
certificate or certificates representing the number of shares of
Conversion Stock issuable by reason of such conversion in such name or
names and such denomination or denominations as the converting holder
has specified;

<PAGE>

(B) payment in an amount equal to all accrued
dividends with respect to each Share converted which have not been paid
prior thereto, plus the amount payable under SUBPARAGRAPH (XII) below
with respect to such conversion; and

(C) a certificate representing any Shares of Class A
Preferred, Class B Preferred or Class C Preferred which were
represented by the certificate or certificates delivered to the
Corporation in connection with such conversion but which were not
converted.

(VIII) If for any reason the Corporation is unable to pay any
portion of the accrued and unpaid dividends on Preferred Stock being converted,
such dividends may, at the converting holder's option, be converted into an
additional number of shares of Conversion Stock determined by dividing the
amount of the unpaid dividends to be applied for such purpose, by the applicable
Class A Conversion Price, Class B Conversion Price or Class C Conversion Price
then in effect.

(IX) The issuance of certificates for shares of Conversion
Stock upon conversion of Preferred Stock shall be made without charge to the
holders of such Preferred Stock for any issuance tax in respect thereof or other
cost incurred by the Corporation in connection with such conversion and the
related issuance of shares of Conversion Stock. Upon conversion of each Share of
Preferred Stock, the Corporation shall take all such actions as are necessary in
order to insure that the Conversion Stock issuable with respect to such
conversion shall be validly issued, fully paid and nonassessable, free and clear
of all taxes, liens, charges and encumbrances with respect to the issuance
thereof.

(X) The Corporation shall not close its books against the
transfer of Preferred Stock or of Conversion Stock issued or issuable upon
conversion of Preferred Stock in any manner which interferes with the timely
conversion of Preferred Stock. The Corporation shall assist and cooperate with
any holder of Shares required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of Shares
hereunder (including, without limitation, making any filings required to be made
by the Corporation).

(XI) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Conversion Stock, solely
for the purpose of issuance upon the conversion of the Preferred Stock, such
number of shares of Conversion Stock issuable upon the conversion of all
outstanding Preferred Stock. All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Conversion Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Conversion Stock may be listed (except for official notice
of issuance which shall be immediately delivered by the Corporation upon each
such issuance). The Corporation shall not take any action which would cause the
number of authorized but unissued

<PAGE>

shares of Conversion Stock to be less than the number of such shares required to
be reserved hereunder for issuance upon conversion of the Preferred Stock .

(XII) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be delivered upon any
conversion of the Preferred Stock, the Corporation, in lieu of delivering the
fractional share therefor, shall pay an amount to the holder thereof equal to
the Market Price of such fractional interest as of the date of conversion.

(XIII) If the shares of Conversion Stock issuable by reason of
conversion of Preferred Stock are convertible into or exchangeable for any other
stock or securities of the Corporation, the Corporation shall, at the converting
holder's option, upon surrender of the Shares to be converted by such holder as
provided herein together with any notice, statement or payment required to
effect such conversion or exchange of Conversion Stock, deliver to such holder
or as otherwise specified by such holder a certificate or certificates
representing the stock or securities into which the shares of Conversion Stock
issuable by reason of such conversion are so convertible or exchangeable,
registered in such name or names and in such denomination or denominations as
such holder has specified.

5.1B. CONVERSION PRICE.

(I) The initial Class A Conversion Price (i.e. $31.32) as
subsequently adjusted to reflect the May 1999 25-for-1 stock split shall be
$1.2528. In order to prevent dilution of the conversion rights granted under
this SECTION 5, the Class A Conversion Price shall be subject to adjustment from
time to time pursuant to this SECTION 5.1B. The initial Class B Conversion Price
shall be adjusted as of the date of the original issuance of shares of Class C
Preferred to $11.50. In order to prevent dilution of the conversion rights
granted pursuant to this SECTION 5, the Class B Conversion Price shall be
subject to adjustment from time to time pursuant to this SECTION 5.1B. The
initial Class C Conversion Price shall be $11.50. In order to prevent dilution
of the conversion rights granted pursuant to this SECTION 5, the Class C
Conversion Price shall be subject to adjustment from time to time pursuant to
this SECTION 5.1B. Notwithstanding anything to the contrary contained in SECTION
5.1C, the Class A Conversion Price shall never be increased above $1.2528, as
adjusted pursuant to SECTION 5.1D, the Class B Conversion Price shall never be
increased above $11.50, as adjusted pursuant SECTION 5.1D, and the Class C
Conversion Price shall never be increased above $11.50, as adjusted pursuant to
SECTION 5.1D.

(II) If and whenever after the original date of issuance of
the Class C Preferred the Corporation issues or sells, or in accordance with
SECTION 5.1C is deemed to have issued or sold, any share of Common Stock for a
consideration per share less than the Class A Conversion Price, the Class B
Conversion Price and/or the Class C Conversion Price, as applicable (the
"APPLICABLE CONVERSION PRICE") in effect immediately prior to the time of such
issue or sale, then immediately upon such issue or sale, or deemed issue or
sale, such Applicable Conversion Price for any outstanding shares of such class
of Preferred Stock shall be reduced to the price determined by DIVIDING (a) the
sum of (1) the product derived by multiplying the then existing Applicable
Conversion Price in effect immediately prior to such issue or sale by the number
of shares of Common Stock Deemed Outstanding immediately prior to such issue or
sale, plus (2)

<PAGE>

the consideration, if any, received by the Corporation upon such issue or sale,
BY (b) the number of shares of Common Stock Deemed Outstanding immediately after
such sale.

(III) Notwithstanding the foregoing, there shall be no
adjustment to the Class A Conversion Price, to the Class B Conversion Price or
to the Class C Conversion Price hereunder: (a) with respect to the granting or
issuance and/or stock options or warrants (or the issuance of stock upon the
exercise of any), for an aggregate of up to 10,000,000 shares of Common Stock
(as such number of shares is equitably adjusted for subsequent stock splits,
stock combinations, stock dividends and recapitalizations, and such stock
options shall include all stock options currently outstanding), granted or
issued by the Corporation's Board of Directors prior to the date on which shares
of Class C Preferred were originally issued and granted or to be granted by the
Corporation's Board of Directors thereafter pursuant to a plan, in each case to
employees or directors of, or consultants to, the Corporation and its
Subsidiaries which stock, options or warrants: (X) granted after April 23, 1999,
are issued with an exercise price per share of (in the case of stock purchases
or awards, valued at an amount) in each case of not less than $1.2528 per share,
or (Y) prior to April 23, 1999, were granted or issued at any price to employees
or directors of, or consultants to, the Corporation and its Subsidiaries, or (Z)
to the extent in excess of an aggregate of 9,037,624 shares, shall be granted at
an exercise price per share of not less than $5.00 per share, as adjusted for
stock splits, stock dividends, recapitalizations or similar events, with respect
to 130,000 shares, and not less than $8.00 per share, as adjusted for stock
splits, stock dividends, recapitalizations or similar events, with respect to
the remaining shares; (b) with respect to the issuance of the Class A Preferred
or its conversion into Common Stock; (c) with respect to securities (or their
conversion) or rights to acquire securities issued in consideration for the
acquisition (whether by merger or otherwise) by the Corporation or any of its
Subsidiaries of all or substantially all the stock or assets of another entity;
(d) with respect to securities or rights to acquire securities issued pursuant
to a firm commitment underwritten public offering registered under the
Securities Act of 1933; (e) the issuance of the Class B Preferred or Class C
Preferred, or their respective conversion into Common Stock; and (f) with
respect to securities issued in connection with any equipment financing
transaction approved by the Board of Directors of the Corporation.
Notwithstanding the foregoing, there shall be no adjustment to the Class A
Conversion Price, Class B Conversion Price or Class C Conversion Price for any
event or circumstances occurring before the original date of issuance of the
Class C Preferred and there shall be no adjustment to the Class A Conversion
Price, Class B Conversion Price or Class C Conversion Price for stock dividends
not covered in SECTION 5.1D.

(IV) SPECIAL ADJUSTMENT OF CLASS C PREFERRED. In the event of
a Qualified Public Offering (as defined in Section 5.1H) in which the price paid
by the public for such shares is less than $15.295 per share (appropriately
adjusted to reflect the occurrence of any event described in Section 5.1D) then
the Class C Preferred shall convert into the number of fully paid and
non-assessable shares of Conversion Stock computed by multiplying (a) the
product of (1) the number of shares of Class C Preferred to be converted
multiplied by (2) $11.50, and dividing the result by the Class C Conversion
Price then in effect, by (b) a fraction, the numerator of which shall be $15.295
and the denominator of which shall be the per share price paid by the public for
such shares; provided however, that the number

<PAGE>

of Conversion Shares into which each share of Class C Preferred shall convert
pursuant to this sentence shall be limited to a maximum of 2.66 Conversion
Shares.

(V) SPECIAL ADJUSTMENT OF CLASS B PREFERRED. In the event of a
Qualified Public Offering (as defined in Section 5.1H) in which the price paid
by the public for such shares is less than $15.295 per share (appropriately
adjusted to reflect the occurrence of any event described in Section 5.1D) then
the Class B Preferred shall convert into the number of fully paid and
non-assessable shares of Conversion Stock computed by multiplying (a) the
product of (1) the number of shares of Class B Preferred to be converted
multiplied by (2) $11.60, and dividing the result by the Class B Conversion
Price then in effect, by (b) a fraction, determined by (W) taking a fraction,
the numerator of which shall be $15.295 and the denominator of which shall be
the price paid by the public for such shares, (X) subtracting 1 from such
fraction, (Y) multiplying the result by a fraction, the numerator of which shall
be 5 and the denominator of which shall be 34, and (Z) adding 1 to such
fraction; provided however, that the number of Conversion Shares into which each
share of Class B Preferred shall convert pursuant to this sentence shall be
limited to a maximum of 2.66 Conversion Shares.

5.1C. EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. No
adjustment to the Class A Conversion Price under SECTION 5.1B shall have the
effect of adjusting the Class B Conversion Price or the Class C Conversion
Price, no adjustment to the Class B Conversion Price under SECTION 5.1B shall
have the effect of adjusting the Class A Conversion Price or the Class C
Conversion Price, and no adjustment to the Class C Conversion Price under
SECTION 5.1B shall have the effect of adjusting the Class A Conversion Price or
the Class B Conversion Price. For purposes of determining the Applicable
Conversion Price for any outstanding shares of Preferred Stock under SECTION
5.1B, the following shall be applicable:

(I) ISSUANCE OF RIGHTS OR OPTIONS. If the Corporation in any
manner grants or sells any Option and the lowest price per share for which any
one share of Common Stock is issuable upon the exercise of any such Option, or
upon conversion or exchange of any Convertible Security issuable upon exercise
of any such Option, is less than an Applicable Conversion Price in effect
immediately prior to the time of the granting or sale of such Option, then such
share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Corporation at the time of the granting or sale of such Option
for such price per share. For purposes of this paragraph, the "lowest price per
share for which any one share of Common Stock is issuable" shall be equal to the
sum of the lowest amounts of consideration (if any) received or receivable by
the Corporation with respect to any one share of Common Stock upon the granting
or sale of the Option, upon exercise of the Option and upon conversion or
exchange of any Convertible Security issuable upon exercise of such Option. No
further adjustment of such Applicable Conversion Price shall be made upon the
actual issue of such Common Stock or such Convertible Security upon the exercise
of such Options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Security.

<PAGE>

(II) ISSUANCE OF CONVERTIBLE SECURITIES. If the Corporation in
any manner issues or sells any Convertible Security and the lowest price per
share for which any one share of Common Stock is issuable upon conversion or
exchange thereof is less than an Applicable Conversion Price in effect
immediately prior to the time of such issue or sale, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Corporation at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this paragraph, the "lowest price
per share for which any one share of Common Stock is issuable" shall be equal to
the sum of the lowest amounts of consideration (if any) received or receivable
by the Corporation with respect to any one share of Common Stock upon the
issuance or sale of the Convertible Security and upon the conversion or exchange
of such Convertible Security. No further adjustment of such Applicable
Conversion Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of any Convertible Security, and if any such issue or
sale of such Convertible Security is made upon exercise of any Options for which
adjustments of such Applicable Conversion Price had been or are to be made
pursuant to other provisions of this SECTION 5, no further adjustment of such
Applicable Conversion Price shall be made by reason of such issue or sale.

(III) CHANGE IN OPTION PRICE OR CONVERSION RATE. If the
exercise price provided for in any Option, the additional consideration (if any)
payable upon the issue, conversion or exchange of any Convertible Security or
the rate at which any Convertible Security is convertible into or exchangeable
for Common Stock changes at any time, the Applicable Conversion Price in effect
at the time of such change shall be adjusted immediately to the Applicable
Conversion Price which would have been in effect at such time had such Option or
Convertible Security originally provided for such changed exercise price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold; PROVIDED THAT if such adjustment of the
Applicable Conversion Price would result in an increase in the Applicable
Conversion Price then in effect, such adjustment shall not be effective until
written notice thereof has been given to all holders of the Preferred Stock. For
purposes of SECTION 5.1C, if the terms of any Option or Convertible Security
which was outstanding as of the date of issuance of the Class C Preferred are
changed in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such change; PROVIDED THAT no such change shall at any time cause
the Applicable Conversion Price hereunder to be increased.

(IV) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. Upon the expiration or termination of any Option or any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Applicable Conversion Price then in effect hereunder shall
be adjusted immediately to the Applicable Conversion Price which would have been
in effect at the time of such expiration or termination had such Option or
Convertible Security, to the extent outstanding immediately prior to such
expiration or termination, never been issued; PROVIDED THAT if such expiration
or termination or any amendment would result in an increase in the Applicable
Conversion Price then in effect, such increase shall not be effective until
written notice thereof has been given to all holders of the applicable class of
Preferred Stock. For purposes of SECTION 5.1C, the expiration, amendment or

<PAGE>

termination of any Option or Convertible Security which was outstanding as of
the date of issuance of the Class C Preferred shall not cause the Applicable
Conversion Price hereunder to be adjusted unless, and only to the extent that, a
change in the terms of such Option or Convertible Security caused it to be
deemed to have been issued after the date of issuance of the Class C Preferred.

(V) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Corporation therefor (net of discounts and
commissions). If any Common Stock, Option or Convertible Security is issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Corporation shall be the fair value of such
consideration as determined by the Board of Directors in good faith, except
where such consideration consists of securities, in which case the amount of
consideration received by the Corporation shall be the Market Price thereof as
of the date of receipt. If any Common Stock, Option or Convertible Security is
issued to the owners of the non-surviving entity in connection with any merger
in which the Corporation is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Option or Convertible Security, as the case may be. The fair
value of any consideration other than cash and securities shall be determined by
the Board of Directors of the Corporation in good faith.

(VI) INTEGRATED TRANSACTIONS. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.0001.

(VII) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.

(VIII) RECORD DATE. If the Corporation takes a record of the
holders of Common Stock for the purpose of entitling them: (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities; or (b) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or upon the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

5.1D. SUBDIVISION OR COMBINATION OF COMMON STOCK. If the
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Class A Conversion Price, the
Class B Conversion Price and the Class C Conversion Price in effect

<PAGE>

immediately prior to such subdivision shall be proportionately reduced, and if
the Corporation at any time combines (by reverse stock split or otherwise) one
or more classes of its outstanding shares of Common Stock into a smaller number
of shares, the Class A Conversion Price, the Class B Conversion Price and the
Class C Conversion Price in effect immediately prior to such combination shall
be proportionately increased. In case of any adjustment made pursuant to this
SECTION 5.1D, no further adjustment shall be made pursuant to SECTION 5.1B by
reason thereof.

5.1E. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "ORGANIC CHANGE". Prior to the
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Preferred Stock (on an as if converted basis) then outstanding)
to insure that each of the holders of Preferred Stock shall thereafter have the
right to acquire and receive, in lieu of or in addition to (as the case may be)
the shares of Conversion Stock immediately theretofore acquirable and receivable
upon the conversion of such holder's Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had converted its Preferred Stock immediately
prior to such Organic Change. In each such case, the Corporation shall also make
appropriate provisions (in form and substance reasonably satisfactory to the
holders of a majority of the Preferred Stock (on an as if converted basis) then
outstanding) to insure that the provisions of this SECTION 5, and SECTIONS 6 AND
7 hereof, shall thereafter be applicable to the Preferred Stock (including, in
the case of any such consolidation, merger or sale in which the successor entity
or purchasing entity is other than the Corporation, an immediate adjustment of
the Class A Conversion Price, the Class B Conversion Price and the Class C
Conversion Price to the value for the Common Stock reflected by the terms of
such consolidation, merger or sale, and a corresponding immediate adjustment in
the number of shares of Conversion Stock acquirable and receivable upon
conversion of Class A Preferred, Class B Preferred and Class C Preferred, if the
value so reflected is less than the Class A Conversion Price, the Class B
Conversion Price or the Class C Conversion Price, as the case may be, in effect
immediately prior to such consolidation, merger or sale). The Corporation shall
not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the Corporation)
resulting from consolidation or merger or the entity purchasing such assets
assumes by written instrument (in form and substance satisfactory to the holders
of a majority of the Preferred Stock (on an as if converted basis) then
outstanding), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.

5.1F. CERTAIN EVENTS. If any event occurs of the type
contemplated by the provisions of this SECTION 5 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Corporation's Board of Directors shall make an appropriate adjustment
in the Class A Conversion Price, the Class B Conversion Price and the Class C
Conversion Price

<PAGE>

so as to protect the rights of the holders of Class A Preferred, the Class B
Preferred and the Class C Preferred; PROVIDED THAT no such adjustment shall
increase the Class A Conversion Price, the Class B Conversion Price and the
Class C Conversion Price as otherwise determined pursuant to this SECTION 5 or
decrease the number of shares of Conversion Stock issuable upon conversion of
each Share of Class A Preferred, Class B Preferred or Class C Preferred.

5.1G. NOTICES.

(I) Immediately upon any adjustment of the Class A Conversion
Price, the Class B Conversion Price or the Class C Conversion Price, the
Corporation shall give written notice thereof to all holders of Preferred Stock,
setting forth in reasonable detail and certifying the calculation of such
adjustment.

(II) The Corporation shall give written notice to all holders
of Preferred Stock at least twenty (20) days prior to the date on which the
Corporation closes its books or takes a record: (a) with respect to any dividend
or distribution upon Common Stock; (b) with respect to any pro rata subscription
offer to holders of Common Stock; or (c) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.

(III) The Corporation shall also give written notice to the
holders of Preferred Stock at least twenty (20) days prior to the date on which
any Organic Change shall take place.

5.1H. MANDATORY CONVERSION. If at any time the Corporation
shall effect a firm commitment underwritten Public Offering of shares of its
Common Stock in which (i) the aggregate offering price paid for such shares by
the public shall be at least $22,500,000 and (ii) the price paid by the public
for such shares shall be at least $5.75 per share (appropriately adjusted to
reflect the occurrence of any event described in SECTION 5.1D) (a "QUALIFIED
PUBLIC OFFERING"), then effective upon the closing of the sale of such shares by
the Corporation pursuant to such Public Offering, all outstanding shares of
Preferred Stock shall automatically convert to shares of Common Stock on the
basis set forth in SECTION 5. Holders of shares of Preferred Stock so converted
may deliver to the Corporation at its principal office (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to such holders) during its usual business hours, the certificate or
certificates for the shares so converted. As promptly as practicable thereafter,
the Corporation shall issue and deliver to such holder a certificate or
certificates for the number of whole shares of Common Stock to which such holder
is entitled, together with payment in lieu of fractional shares to which such
holder may be entitled pursuant to SECTION 5. Until such time as a holder of
shares of Preferred Stock shall surrender his or its certificates therefor as
provided above, such certificates shall be deemed to represent the shares of
Common Stock to which such holder shall be entitled upon the surrender thereof.

SECTION 6. LIQUIDATING DIVIDENDS.

If the Corporation declares or pays a dividend upon the Common
Stock payable otherwise than in cash out of earnings or earned surplus
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares

<PAGE>

of Common Stock (a "LIQUIDATING DIVIDEND"), then the Corporation shall pay to
the holders of Preferred Stock at the time of payment thereof the Liquidating
Dividends which would have been paid on the shares of Conversion Stock had such
Preferred Stock been converted immediately prior to the date on which a record
is taken for such Liquidating Dividend, or, if no record is taken, the date as
of which the record holders of Common Stock entitled to such dividends are to be
determined.

SECTION 7. PURCHASE RIGHTS.

If at any time the Corporation grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "PURCHASE RIGHTS"), then each holder of Preferred Stock shall
be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such holder could have acquired if such holder
had held the number of shares of Conversion Stock acquirable upon conversion of
such holder's Preferred Stock immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

SECTION 8. REGISTRATION OF TRANSFER.

The Corporation shall keep at its principal office a register
for the registration of Preferred Stock. Upon the surrender of any certificate
representing Preferred Stock at such place, the Corporation shall, at the
request of the record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of Shares represented by the
surrendered certificate. Each such new certificate shall be registered in such
name and shall represent such number of Shares as is requested by the holder of
the surrendered certificate and shall be substantially identical in form to the
surrendered certificate, and dividends shall accrue on the Preferred Stock
represented by such new certificate from the date to which dividends have been
fully paid on such Preferred Stock represented by the surrendered certificate.

SECTION 9. REPLACEMENT.

Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Shares of Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
shall accrue on the Preferred Stock represented by such new

<PAGE>

certificate from the date to which dividends have been fully paid on such lost,
stolen, destroyed or mutilated certificate.

SECTION 10. DEFINITIONS.

"CLASS A LIQUIDATION VALUE" of any share of Class A Preferred
shall be equal to the principal value of the Class A Preferred (initially $31.32
per share).

"CLASS B LIQUIDATION VALUE" of any share of Class B Preferred
shall be equal to the principal value of the Class B Preferred (initially $11.60
per share).

"CLASS C LIQUIDATION VALUE" of any share of Class C Preferred
shall be equal to the principal value of the Class C Preferred (initially $11.50
per share).

"COMMON STOCK" means, collectively, the Corporation's Common
Stock par value $0.0001 per share.

"COMMON STOCK DEEMED OUTSTANDING" means, at any given time,
the number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to SECTIONS
5.1C(I) and 5.1C(II) hereof whether or not the Options or Convertible Securities
are actually exercisable at such time, plus, when computing the "Common Stock
Deemed Outstanding" where it appears in SECTION 5.1B(II), the shares of
outstanding Preferred Stock on an as converted basis.

"CONVERSION STOCK" means shares of the Corporation's Common
Stock, par value $0.0001 per share, issuable upon conversion of the Class A
Preferred, Class B Preferred or Class C Preferred; PROVIDED THAT if there is a
change such that the securities issuable upon conversion of the Class A
Preferred, Class B Preferred or Class C Preferred are issued by an entity other
than the Corporation or there is a change in the type or class of securities so
issuable, then the term "Conversion Stock" shall mean one share of the security
issuable upon conversion of the Class A Preferred, Class B Preferred or Class C
Preferred, as the case may be, if such security is issuable in shares, or shall
mean the smallest unit in which such security is issuable if such security is
not issuable in shares.

"CONVERTIBLE SECURITIES" means any stock or securities
directly or indirectly convertible into or exchangeable for Common Stock.

"JUNIOR SECURITIES" means any capital stock or other equity
securities of the Corporation, except for the Class A Preferred, the Class B
Preferred and the Class C Preferred.

"MARKET PRICE" of any security means the average of the
closing prices of such security's sales on all securities exchanges on which
such security may at the time be listed, or, if there has been no sales on any
such exchange on any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ

<PAGE>

System as of 4:00 P.M., New York time, or, if on any day such security is not
quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of twenty-one (21) days consisting of
the day as of which "Market Price" is being determined and the twenty (20)
consecutive business days prior to such day. If at any time such security is not
listed on any securities exchange or quoted in the NASDAQ System or the
over-the-counter market, the "Market Price" shall be the fair value thereof
determined jointly by the Corporation and the holders of a majority of the
Preferred Stock (on an as if converted basis). If such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be
determined by an independent appraiser experienced in valuing securities jointly
selected by the Corporation and the holders of a majority of the Preferred Stock
(on an as if converted basis). The determination of such appraiser shall be
final and binding upon the parties, and the Corporation shall pay the fees and
expenses of such appraiser.

"OPTIONS" means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities; PROVIDED, HOWEVER, that
the term "Options" shall expressly exclude options or securities issued as
expressly contemplated by SECTION 5.1B(III).

"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

"PUBLIC OFFERING" means any offering by the Corporation of its
capital stock or equity securities to the public pursuant to an effective
registration statement under the Securities Act of 1933, as then in effect, or
any comparable statement under any similar federal statute then in force.

"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing general partner of such
limited liability company, partnership, association or other business entity.

<PAGE>

SECTION 11. AMENDMENT, WAIVER, ETC.

No amendment, modification or waiver shall be binding or
effective with respect to any provision of SECTIONS 1 to 13 hereof without the
prior written consent of the holders of a majority of the Preferred Stock (on an
as if converted basis) outstanding at the time such action is taken; PROVIDED
THAT no such action shall change (a) the rate at which or the manner in which
dividends on the Class A Preferred, Class B Preferred or Class C Preferred
accrue or the times at which such dividends become payable without the prior
written consent of the holders of at least two-thirds of the Preferred Stock (on
an as if converted basis) then outstanding, (b) the Class A Conversion Price,
Class B Conversion Price or Class C Conversion Price or the number of shares or
class of stock into which the Class A Preferred, Class B Preferred or Class C
Preferred is convertible, without the prior written consent of the holder of at
least two-thirds of the Preferred Stock (on an as if converted basis) then
outstanding, (c) the percentage required to approve any change described in
CLAUSES (A) and (B) above, without the prior written consent of the holders of
at least two-thirds of the Preferred Stock (on an as if converted basis) then
outstanding or (d) the definition of Qualified Public Offering in Section 5.1H
herein, if such change will result in a reduction of the price per share to be
paid by the public to below $5.75 contained in said definition, without the
prior written consent of the holders of at least two-thirds of the Preferred
Stock (on an as if converted basis) then outstanding; and provided further that
no change in the terms hereof may be accomplished by merger or consolidation of
the Corporation with another corporation or entity unless the Corporation has
obtained the prior written consent of the holders of the applicable percentage
of the Preferred Stock (on an as if converted basis) then outstanding.
Notwithstanding the foregoing, no amendment will be valid as to any class or
series of Preferred Stock which would materially and adversely affect the rights
of the holders of such class or series of Preferred Stock without the consent of
the holders of a majority of the outstanding shares of such class or series of
Preferred Stock so materially and adversely affected by such amendment. In the
event that any of the provisions of this EXHIBIT A (including any provision
within a single sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, the remaining provisions of this
EXHIBIT A are severable and shall remain enforceable to the fullest extent
permitted by law.

SECTION 12. ADJUSTMENTS.

All numbers set forth herein which refer to share prices or
numbers or amounts will be appropriately adjusted to reflect stock splits, stock
dividends, combinations of shares, and other recapitalizations affecting the
subject class of stock.

SECTION 13. NOTICES.

Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be delivered by registered or
certified mail, return receipt requested and postage prepaid, or by reputable
overnight courier service, charges prepaid, and shall be deemed to have been
given when so mailed or sent (i) to the Corporation, at its principal executive
offices and (ii) to any shareholder, at such holder's address as it appears in
the stock records of the Corporation (unless otherwise indicated by any such
holder).

* * * * * * *

<PAGE>

ARTICLES OF AMENDMENT
TO THE
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
YUPI INTERNET INC.

Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act, Yupi Internet Inc., a Florida corporation (the "Corporation"),
hereby adopts the following Articles of Amendment (the "Articles of Amendment")
to the Corporation's Third Amended and Restated Articles of Incorporation (the
"Articles of Incorporation"):

FIRST: Section 4.1 of Article IV of the Articles of Incorporation is
hereby amended and restated in its entirety as follows:

"4.1 AUTHORIZED SHARES. The total number of shares of all
classes of capital stock that the Corporation shall have the
authority to issue shall be 312,000,000 shares, of which
300,000,000 shares shall be common stock, having a par value
of $.0001 per share (referred to in these Third Amended and
Restated Articles of Incorporation as "COMMON STOCK") and
12,000,000 shares shall be preferred stock, having a par value
of $.01 per share (referred to in these Third Amended and
Restated Articles of Incorporation as "PREFERRED STOCK"). The
Board of Directors is expressly authorized, pursuant to
Section 607.0602 of the FBCA, to provide for the
classification and reclassification of any unissued shares of
Common Stock or Preferred Stock and the issuance thereof in
one or more classes or series without the approval of the
shareholders of the Corporation, all within the limitations
set forth in Section 607.0601 of the FBCA."

SECOND: The Articles of Amendment were duly approved and adopted by the
Board of Directors of the Corporation at a meeting held on February 7, 2000 and
pursuant to the written consent of the shareholders dated ____________, 2000.
The number of votes cast in favor of the Articles of Amendment by the
shareholders was sufficient for approval.

THIRD: The Articles of Amendment shall be effective as of the date of
filing with the Secretary of State of the State of Florida.

IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by its President and Secretary on _______________,
2000.

YUPI INTERNET INC.

By:
----------------------------------------------
Oscar L. Coen, President

By:
----------------------------------------------
Maria Elena Prio, Secretary

EXHIBIT 3.02

FOURTH AMENDED AND RESTATED

ARTICLES OF INCORPORATION

YUPI INTERNET INC.

ARTICLE I
NAME

The name of this corporation shall be YUPI INTERNET INC. (hereinafter
the "CORPORATION").

ARTICLE II
PURPOSES

The Corporation may engage in any activity or business permitted under
the laws of the United States and of the State of Florida.

ARTICLE III
AUTHORIZED SHARES

The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 305,000,000, consisting of (i)
300,000,000 shares of Common Stock, $.0001 par value per share ("COMMON Stock"),
and 5,000,000 shares of Preferred Stock, $.01 par value per share ("PREFERRED
STOCK").

Unless otherwise provided hereinafter or in any articles of amendment
providing for the determination of a class or series of stock, shares of capital
stock of the Corporation that have been issued and which are subsequently
acquired by the Corporation shall constitute issued but not outstanding shares
of the same class and series, until canceled or disposed of (whether by resale
or otherwise) by the Corporation, and upon cancellation, the canceled shares
shall constitute authorized and unissued shares of the same class and shall be
undesignated as to series.

For purposes of determining funds lawfully available for any dividends
or other distribution upon shares of stock, amounts needed to satisfy the rights
of shareholders upon dissolution who have preferential rights superior to those
of shareholders of the stock receiving such dividend or distribution shall not
be deducted from the Corporation's total assets.

1
<PAGE>

The following is a statement of the designations and the powers, privileges and
rights, and the qualifications, limitations or restrictions thereof in respect
of each class of capital stock of the Corporation.

A. COMMON STOCK.

1. GENERAL. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated by the Board of Directors
upon any issuance of the Preferred Stock of any series.

2. VOTING RIGHTS. Except as otherwise required by law or these Fourth
Amended and Restated Articles of Incorporation, each holder of Common Stock
shall have one vote in respect of each share of stock held of record by such
holder on the books of the Corporation for the election of directors and on all
matters submitted to a vote of shareholders of the Corporation. Except as
otherwise required by law or provided herein, holders of Common Stock shall vote
together with holders of the Preferred Stock as a single class, subject to any
special or preferential voting rights of any then outstanding Preferred Stock.
There shall be no cumulative voting.

3. DIVIDENDS. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.

4. DISSOLUTION, LIQUIDATION OR WINDING UP. In the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, each issued and outstanding share of Common
Stock shall entitle the holder thereof to receive an equal portion of the net
assets of the Corporation available for distribution to the holders of Common
Stock, subject to any preferential rights of any then outstanding Preferred
Stock.

B. PREFERRED STOCK.

Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purposes of voting by classes unless expressly provided.

Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix

2
<PAGE>

such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, special voting rights, conversion rights,
redemption privileges and liquidation preferences, as shall be stated and
expressed in such resolutions, all to the full extent now or hereafter permitted
by the corporate law of Florida. Without limiting the generality of the
foregoing, the resolutions providing for issuance of any series of Preferred
Stock may provide that such series shall be superior or rank equally or be
junior to the Preferred Stock of any other series to the extent permitted by
law. Except as otherwise specifically provided in a resolution establishing a
series of Preferred Stock, no vote of the holders of the Preferred Stock or
Common Stock shall be a prerequisite to the issuance of any shares of any series
of the Preferred Stock authorized by and complying with the conditions of these
Fourth Amended and Restated Articles of Incorporation, the right to have such
vote being expressly waived by all present and future holders of the capital
stock of the Corporation.

ARTICLE IV
REGISTERED AGENT AND OFFICE

The registered agent of this Corporation and her address is as follows:
Maria Elena Prio, 830 Lincoln Road, Second Floor, Miami Beach, Florida 33139.

ARTICLE V
PRINCIPAL OFFICE

The Corporation shall maintain its principal office at 830 Lincoln
Road, Second Floor, Miami Beach, Florida 33139, or at such other place as the
Board of Directors may designate from time to time.

ARTICLE VI
BOARD OF DIRECTORS

The Corporation shall have at least one director, but the Bylaws may
provide for the increase or decrease in the number of directors, provided that
the number of directors shall never be less than one.

ARTICLE VII
REMOVAL OF DIRECTORS

Any one or more or all of the directors may be removed without cause
only by the holders of at least seventy-five percent (75%) of the shares
entitled to vote at an election of directors. Any one or more or all of the
directors may be removed with cause only by the holders of at least a majority
of the shares then entitled to vote at an election of directors.

3
<PAGE>

ARTICLE VIII
SHAREHOLDER ACTION

Any action required or permitted to be taken by the shareholders of the
Corporation must be effected at a duly called annual or special meeting of
shareholders of the Corporation and may not be effected by any consent in
writing by such shareholders.

ARTICLE IX
SPECIAL MEETINGS OF SHAREHOLDERS

Special meetings of the shareholders of the Corporation, for any
purpose or purposes, may be called by the Board of Directors, the Chairman of
the Board or the President, and shall be called by the Chairman of the Board or
Secretary, upon the written request of the holders of not less than fifty
percent (50%) of the issued and outstanding shares of the capital stock of the
Corporation entitled to vote on each issue proposed to be considered at such
meeting. Only business within the purpose or purposes described in the notice of
special meeting may be conducted at a special meeting of shareholders.

ARTICLE X
AMENDMENT OF THE BYLAWS

In furtherance and not in limitation of the powers conferred by the
laws of the State of Florida, the Board of Directors of the Corporation is
expressly authorized to adopt, amend, alter and repeal the bylaws of the
Corporation. Shareholders may adopt, amend, repeal or alter the bylaws of the
Corporation, including bylaws adopted by the Board of Directors, without
approval of the Board of Directors only if such adoption, amendment, repeal or
alteration is approved by the affirmative vote of the holders of at least
seventy-five percent (75%) of the issued and outstanding shares of the capital
stock of the Corporation entitled to vote on such matters.

ARTICLE XI
INDEMNIFICATION

SECTION 1. INDEMNIFICATION.

(a) The Corporation (and any successor to the Corporation by merger or
otherwise) shall, and does hereby, indemnify, to the fullest extent permitted or
authorized by current or future legislation (specifically including the full
extent of indemnification permitted by ss.607.0850(7) Fla. Stat. (1994)), or
current or future judicial or administrative decisions (but, in the case of any
such future legislation or decisions, only to the extent that it permits the
Corporation to provide broader indemnification rights than permitted prior to
such legislation or decision), each person (including the heirs, personal
representatives, executors, administrators and estate of the person) who was or
is a party, or is threatened to be made a party, or was or is a witness, to any
threatened, pending or completed action, suit or proceeding, whether civil,

4
<PAGE>

criminal, administrative or investigative and any appeal therefrom
(collectively, a "PROCEEDING"), against all liability (which for purposes of
this Article includes all judgments, settlements, penalties, fines and taxes
under the Employee Retirement Income Security Act of 1974, as amended) and
costs, charges, and expenses (including attorneys' fees) asserted against him or
incurred by him by reason of the fact that the person is or was (i) a director,
or (ii) an officer, or (iii) an employee of the Corporation who is specifically
granted the indemnification rights provided hereby by the Board of Directors, or
(iv) serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (including serving as a fiduciary of an employee benefit plan) and as
to whom the Board has granted the right to indemnification provided hereby (each
an "INDEMNIFIED PERSON").

(b) Notwithstanding the foregoing, except with respect to the
indemnification specified in the third sentence of Section 3 of this Article,
the Corporation shall indemnify an Indemnified Person in connection with a
Proceeding (or part thereof) initiated by an Indemnified Person only if
authorization for the Proceeding (or part thereof) was not denied by the Board
of Directors of the Corporation, acting in its sole discretion, within 60 days
after receipt of notice thereof from the Indemnified Person.

SECTION 2. ADVANCE OF COSTS, CHARGES AND EXPENSES. Costs, charges and expenses
(including attorneys' fees) incurred by an Indemnified Person in defending a
Proceeding shall be paid by the Corporation to the fullest extent permitted or
authorized by current or future legislation or current or future judicial or
administrative decisions (but, in the case of any future legislation or
decisions, only to the extent that it permits the Corporation to provide broader
rights to advance costs, charges and expenses than permitted prior to the
legislation or decisions) in advance of the final disposition of the Proceeding,
upon receipt of an undertaking reasonably satisfactory to the Board of Directors
(the "UNDERTAKING") by or on behalf of the Indemnified Person to repay all
amounts so advanced if it is ultimately determined that such person is not
entitled to be indemnified by the Corporation as authorized in this Article;
provided that, in connection with a Proceeding (or part thereof) initiated by
such Indemnified Person (except a Proceeding authorized by the second sentence
of Section 3 of this Article), the Corporation shall pay the costs, charges and
expenses in advance of the final disposition of the Proceeding only if
authorization for the Proceeding (or part thereof) was not denied by the Board
of Directors of the Corporation, acting in its sole discretion, within 60 days
after receipt of a request for advancement accompanied by an Undertaking. A
person to whom costs, charges and expenses are advanced pursuant to this Article
shall not be obligated to repay pursuant to the Undertaking until the final
determination of (a) the pending Proceeding in a court of competent jurisdiction
concerning the right of that person to be indemnified or (b) the obligation of
the person to repay pursuant to the Undertaking.

The Board of Directors may, upon approval of the Indemnified Person,
authorize the Corporation's counsel to represent the Indemnified Person in any
action, suit or proceeding, whether or not the Corporation is a party to the
action, suit or proceeding. In the event that the

5
<PAGE>

Corporation's counsel is representing the Indemnified Person and subject to any
limitations imposed by law or any insurance policy referred to in Section 5 of
this Article XI, any Indemnified Person shall have the right to retain separate
counsel and to have the fees and expenses of such counsel paid as incurred as
provided herein in the event such person reasonably believes that there is an
actual or potential conflict in interest between the Corporation and such person
or in the event the Corporation or its insurer shall have failed to assume the
defense and employ counsel acceptable to such person within a reasonable period
of time after commencement of any action.

SECTION 3. PROCEDURE FOR INDEMNIFICATION. Any indemnification or advance under
this Article shall be made promptly, and in any event within 60 days after
delivery of the written request of the Indemnified Person. The right to
indemnification or advances as granted by this Article shall be enforceable by
an Indemnified Person in any court of competent jurisdiction if the Corporation
denies the request under this Article in whole or in part, or if no disposition
of the request is made within the 60-day period after delivery of the request.
The requesting person's costs and expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any action shall also be indemnified by the Corporation. It shall be a defense
available to the Corporation to assert in the action that indemnification is
prohibited by law or that the claimant has not met the standard of conduct, if
any, required by current or future legislation or by current or future judicial
or administrative decisions for indemnification (but, in the case of future
legislation or decision, only to the extent that the legislation does not impose
a more stringent standard of conduct than permitted prior to the legislation or
decisions). The burden of proving this defense shall be on the Corporation.
Neither (a) the failure of the Corporation (including its Board of Directors or
any committee thereof, its independent legal counsel, and its shareholders) to
have made a determination (prior to the commencement of the action) that
indemnification of the claimant is proper in the circumstances because he has
met the applicable standard of conduct, if any, nor (b) the fact that there has
been an actual determination by the Corporation (including its Board of
Directors or any committee thereof, its independent legal counsel, and its
shareholders) that the claimant has not met the applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.

SECTION 4. SURVIVAL OF INDEMNIFICATION. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which those
indemnified may now or hereafter be entitled under any by-law, statute,
agreement, vote of shareholders or disinterested directors or recommendation of
counsel or otherwise, both as to actions in the person's capacity as a director,
officer or employee and as to actions in another capacity while still a
director, officer or employee, and shall continue as to an Indemnified Person
who has ceased to be a director or officer or employee and shall inure to the
benefit of the estate, heirs, personal representatives, beneficiaries, executors
and administrators of such a person. All rights to indemnification and advances
under this Article shall be deemed to be a contract between the Corporation and
each Indemnified Person who is an Indemnified Person at any time while this
Article is in effect. Any repeal or modification of this Article or any repeal
or modification of relevant provisions of the

6
<PAGE>

Florida Business Corporation Act or any other applicable laws shall not in any
way diminish the rights to indemnification of such Indemnified Person or the
obligations of the Corporation arising hereunder for claims relating to matters
occurring prior to the repeal or modification. The Board of Directors of the
Corporation shall have the authority, by resolution, to provide for
indemnification of officers, employees or agents of the Corporation and for such
other indemnification of Indemnified Persons as it deems appropriate.

SECTION 5. INSURANCE. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise (including serving as a fiduciary of an employee benefit plan),
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article or the applicable provisions of the Florida Business
Corporation Act.

SECTION 6. SAVINGS CLAUSE. If this Article or any portion is invalidated or held
to be unenforceable on any ground by a court of competent jurisdiction, the
Corporation shall nevertheless indemnify each Indemnified Person described in
Section 1 of this Article to the fullest extent permitted by all applicable
portions of this Article that have not been invalidated or adjudicated
unenforceable, and as permitted by applicable law.

ARTICLE XII
AMENDMENT OF ARTICLES

The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Fourth Amended and Restated Articles of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred on shareholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the provisions of this Article XII and the
provisions of Articles VII, IX and X of these Fourth Amended and Restated
Articles of Incorporation may not be altered, amended or repealed in any respect
unless such alteration, amendment or repeal is approved by the affirmative vote
of the holders of at least seventy-five percent (75%) of the issued and
outstanding shares of capital stock of the Corporation entitled to vote on such
matter, voting together as a single class; provided, however, that such
seventy-five percent (75%) vote shall not be required for any alteration,
amendment or repeal unanimously recommended by the Board of Directors.

* * *

These Fourth Amended and Restated Articles of Incorporation were duly
adopted pursuant to Sections 607.1003 and 607.1007 of the Florida Business
Corporation Act by the Board of Directors of the Corporation on February 7, 2000
and by the written consent of the

7
<PAGE>

holders of the issued and outstanding shares of the Common Stock, Class A
Convertible Preferred Stock, Class B Convertible Preferred Stock and Class C
Convertible Preferred Stock dated as of _______________, 2000. The number of
votes cast in favor of these Fourth Amended and Restated Articles of
Incorporation was sufficient for the approval by such holders.

IN WITNESS WHEREOF, the Corporation has caused these Fourth Amended and
Restated Articles of Incorporation to be executed by its President and Secretary
on _______________, 2000.

YUPI INTERNET INC.

By: _______________________________
Oscar L. Coen, President

By: _______________________________
Maria Elena Prio, Secretary

EXHIBIT 3.04

AMENDED AND RESTATED BYLAWS

YUPI INTERNET INC.

ARTICLE I

SECTION 1. REGISTERED OFFICE. The registered office of Yupi Internet Inc., a
Florida corporation (the "CORPORATION"), shall be located in the State of
Florida.

SECTION 2. OTHER OFFICES. The Corporation may also have offices at such other
places, either within or without the State of Florida, as the Board of Directors
of the Corporation (the "BOARD OF DIRECTORS") may from time to time determine or
as the business of the Corporation may require.

ARTICLE II
MEETINGS OF SHAREHOLDERS

SECTION 1. ANNUAL MEETINGS. All annual meetings of the shareholders of the
Corporation for the election of directors and for such other business as may
properly come before the meeting shall be held on such date and at such time as
may be fixed, from time to time, by the Board of Directors, and at such place,
within or without the State of Florida, as may be designated by the Board of
Directors and stated in the notice of meeting or in a duly executed waiver of
notice thereof.

SECTION 2. BUSINESS AT ANNUAL MEETING. At an annual meeting of the shareholders,
only such business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting, business must be
(a) specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (c)
otherwise properly brought before an annual meeting by a shareholder. For
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than one hundred twenty (120) days nor more than one hundred eighty (180)
days prior to the first anniversary of the date of the Corporation's notice of
annual meeting provided with respect to the previous year's annual meeting;
provided, however, that if no annual meeting was held in the previous year or
the date of the annual meeting has been changed by more than thirty (30)
calendar days from the date contemplated by the previous year's notice of annual
meeting, such notice by the shareholder to be timely must be so delivered or
received not later than the close of business on the fifth (5th) day following
the date on which notice of the date of the annual meeting is given to
shareholders or made public, whichever first occurs. A shareholder's notice to
the Secretary shall set forth as to each matter the shareholder proposes to
bring before the annual meeting (a) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such

<PAGE>

business at the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (c) the class
and number of shares of the Corporation which are owned of record and
beneficially by the shareholder, and (d) any material interest of the
shareholder in such business. The Chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the requirements of this
Section 2, and if he should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section 2. Notwithstanding the foregoing provisions
of this Section, a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and the rules and regulations promulgated thereunder, with respect to the
matters set forth in this Section. Nothing in this Section shall be deemed to
affect any rights of shareholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to the applicable rules under the
Exchange Act.

SECTION 3. SPECIAL MEETINGS. (a) Special meetings of the shareholders may be
called by the Board of Directors, the Chairman of the Board or the President,
and shall be called by the Chairman of the Board or Secretary upon the request
of the holders of not less than fifty percent (50%) of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote on
each issue proposed to be considered at such meeting. Before a shareholder may
request or demand that a special meeting of the shareholders be held for any
purpose, the following procedure must be satisfied:

(A) Each shareholder seeking to request or demand, or to have the
shareholders request or demand, a special meeting shall first, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date, pursuant to Section 6 of Article II of these Bylaws, for the
purpose of determining the shareholders entitled to request the special meeting.
The Board of Directors shall promptly, but in all events within 30 days after
the date upon which such a request is received, fix such a record date. Every
request to fix a record date for determining the shareholders entitled to
request a special meeting shall be in writing and shall set forth (i) a brief
description of the business desired to be brought before a special meeting and
the reasons for conducting such business at a special meeting, (ii) the name and
address, as they appear on the Corporation's books, of the shareholder making
such request, (iii) the class and number of shares of the Corporation which are
owned of record and beneficially by the shareholder, (iv) any material interest
of the shareholder in the business and (v) shall bear the signature and date of
signature of the shareholder.

(B) No request or demand with respect to calling a special meeting of
shareholders shall constitute a valid and effective shareholder request or
demand for a special meeting unless (x) within 60 days of the record date
established in accordance with paragraph (A) of this Section 3(a), written
requests or demands signed by shareholders of record representing a sufficient
number of shares as of such record date to request or demand a special meeting
pursuant to this Section are delivered to

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<PAGE>

the Secretary of the Corporation and (y) each request or demand is made in
accordance with and contains the information required by paragraph (A) of this
Section 3(a).

(C) If the Corporation determines that a shareholder or shareholders
have satisfied the notice, information and other requirements specified in this
Section 3, then the Board of Directors shall adopt a resolution calling a
special meeting of the shareholders and fixing a record date, pursuant to
Section 6 of this Article II, for the purposes of determining the shareholders
entitled to notice of and to vote at such special meeting. Notice of such
special meeting shall be provided in accordance with Section 4 of this Article
II, provided that such notice shall be given within 60 days (or such longer
period as from time to time may be permitted by law) after the date the
request(s) or demand(s) for such special meeting is(are) delivered to the
Corporation by the requisite holders in accordance with this Section.

(b) Subject to the foregoing, special meetings of shareholders may be
held at such time and date, and at such place, within or without the State of
Florida, as shall be designated by the Board of Directors or the Chairman and
set forth in the notice of meeting required pursuant to Section 4 of this
Article. In fixing a meeting date for a special meeting of shareholders, the
Board of Directors may consider such factors as it deems relevant within the
good faith exercise of its business judgment, including, without limitation, the
nature of the action proposed to be taken, the facts and circumstances
surrounding the request, and any plan of the Board of Directors to call a
special or annual meeting of shareholders for the conduct of related business,
provided that such meeting date shall be within 120 days (or such longer period
as may from time to time be permitted by law) after the date the request(s) or
demand(s) for such special meeting is(are) delivered to the Corporation by the
requisite holders in accordance with this Section. Only business within the
purpose or purposes described in the notice required pursuant to Section 4 of
this Article may be conducted at a special meeting of shareholders.

(c) Notwithstanding the foregoing provisions of this Section, a
shareholder shall also comply with all applicable requirements of the Exchange
Act, and the rules and regulations promulgated thereunder, with respect to the
matters set forth in this Section. Nothing contained in this Section shall in
any way be construed to suggest or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any request or
demand or revocation thereof, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto).

SECTION 4. NOTICE. A written notice of each meeting of shareholders shall be
given to each shareholder entitled to vote at the meeting at the address as it
appears on the stock transfer records of the Corporation, not less than 10 nor
more than 60 days before the date of the meeting, by or at the direction of the
Chairman, the Board of Directors, the President or the Secretary. If the notice
is mailed at least 30 days before the date of the meeting, it may be done by a
class of United States mail other than first class. The notice so given shall
state the date, time and place of the meeting and, in the case of a special
shareholders' meeting, the purpose or purposes for which the meeting is called.
If mailed, notice shall be deemed to be delivered when deposited in the United
States mail

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<PAGE>

addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid. If a shareholders'
meeting is adjourned to a different date, time or place, notice need not be
given of the new date, time or place if the new date, time or place is announced
at the meeting before an adjournment is taken. At such an adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the adjournment, the Board of Directors fixes
a new record date for the adjourned meeting, a notice of the adjourned meeting
will be given on the new record date as provided in this Article to each
shareholder of record entitled to vote at such meeting.

SECTION 5. WAIVER OF NOTICE. Shareholders may waive notice of any meeting before
or after the date and time specified in the written notice of meeting. Any such
waiver of notice must be in writing, be signed by the shareholder entitled to
the notice and be delivered to the Corporation for inclusion in the appropriate
corporate records. Neither the business to be transacted at, nor the purpose of,
any shareholders' meeting need be specified in any written waiver of notice.
Attendance of a person at a shareholders' meeting shall constitute a waiver of
notice of such meeting, unless the shareholder at the beginning of the meeting
objects to holding the meeting or transacting business at the meeting.

SECTION 6. RECORD DATE. For the purpose of determining shareholders entitled to
notice of or to vote at a shareholders' meeting, to demand a special meeting, or
to take any other action, the Board of Directors may fix in advance a date as
the record date for any such determination of shareholders, such date in any
case to be not more than 70 days nor, in the case of a shareholders' meeting,
less than 10 days, prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
shareholders' meeting, then the record date for such meeting shall be the close
of business on the day before the first notice is delivered to shareholders. A
determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting, which it
must do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.

SECTION 7. QUORUM. A majority of the shares entitled to vote on a matter,
represented in person or by proxy, shall constitute a quorum for action on that
matter at a meeting of shareholders. If a quorum is not present or represented
at a meeting of shareholders, the holders of a majority of the shares
represented, and who would be entitled to vote at a meeting if a quorum were
present, may adjourn the meeting from time to time. Once a quorum has been
established at a shareholders' meeting, the subsequent withdrawal of
shareholders, so as to reduce the number of shares entitled to vote at the
meeting below the number required for a quorum, shall not affect the validity of
any action taken at the meeting or any adjournment thereof.

SECTION 8. VOTING. If a quorum is present, action on a matter, other than the
election of directors, shall be approved if the votes cast by the shareholders
represented at the meeting and entitled to vote on the subject matter favoring
the action exceeds the votes cast opposing the action, unless a

4
<PAGE>

different number of affirmative votes or voting by classes is required by
Florida law or by the Articles of Incorporation or these Bylaws. Directors shall
be elected in accordance with Article III, Section 3, of these Bylaws. Each
outstanding share shall be entitled to vote at a meeting of shareholders as
provided under the Articles of Incorporation or any amendment thereof or under
Florida law. An alphabetical list of shareholders entitled to notice of a
shareholder's meeting shall be available for inspection by any shareholder for a
period of 10 days prior to the meeting or such shorter time as exists between
the record date and the meeting and continuing through the meeting at a place as
permitted by Section 607.0720 of the Florida Business Corporation Act.

SECTION 9. SHAREHOLDER ACTIONS. Any action required or permitted to be taken by
the shareholders may be taken only at an annual or special meeting of
shareholders.

SECTION 10. PROXIES. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof may vote in person or by proxy. A
shareholder may appoint a proxy to vote or otherwise act for him by signing an
appointment form, either personally or by his attorney-in-fact. An appointment
of proxy is effective when received by the Secretary or other officer or agent
authorized to tabulate votes. If an appointment form designates two or more
persons to act as proxies, a majority of these persons present at the meeting,
or if only one is present, that one, has all of the powers conferred by the
instrument upon all the persons designated unless the instrument provides
otherwise. No appointment shall be valid for more than 11 months after the date
of its execution unless a longer period is expressly provided in the appointment
form.

ARTICLE III
DIRECTORS

SECTION 1. POWERS. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed
under the direction of the Board of Directors. Directors must be natural persons
who are at least 18 years of age but need not be residents of Florida or
shareholders of the Corporation.

SECTION 2. COMPENSATION. Unless specifically authorized by a resolution of the
Board of Directors, the directors shall serve in such capacity without
compensation. The directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors. No such payments shall preclude any
director from serving in any other capacity and receiving compensation therefor.

SECTION 3. NUMBER, ELECTION AND TERM. The number of directors which shall
constitute the whole board shall be such number as is determined from time to
time by resolutions of the Board of Directors, but not less than one. Any
decrease in the number of directors shall not shorten the term of an incumbent
director. Directors shall be elected annually, at the annual meeting of
shareholders of the Corporation, by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present. The
terms of all directors expire at the next annual shareholders' meeting following
their election and when their successors are elected and shall

5
<PAGE>

qualify, or upon their earlier resignation, removal from office or death. The
Chairman of the Board of Directors shall preside at all meetings of directors
and of shareholders.

SECTION 4. DIRECTOR NOMINATION. Only persons who are nominated in accordance
with the procedures set forth in this Section 4 shall be eligible for election
as directors. Nominations of persons for election to the Board of Directors of
the Corporation may be made by or at the direction of the Board of Directors or
by any shareholder of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 4. Such nominations, other than those made by or at the direction
of the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than one hundred twenty (120) days nor more than one
hundred eighty (180) days prior to the first anniversary of the date of the
Corporation's notice of annual meeting with respect to the previous year's
annual meeting; provided, however, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed by more than
thirty (30) calendar days from the date contemplated by the previous year's
notice of annual meeting, such notice by the shareholder to be timely must be so
delivered or received not later than the close of business on the fifth (5th)
day following the date on which notice of the date of the annual meeting is
given to shareholders or made public, whichever first occurs. Such shareholder's
notice shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a director, (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
Corporation which are beneficially owned by such person, and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act (including without
limitation such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (b) as to the
shareholder giving the notice (i) the name and address, as they appear on the
Corporation's books, of such shareholder and (ii) the class and number of shares
of the Corporation which are beneficially owned by such shareholder. At the
request of the Board of Directors, any person nominated by the Board of
Directors for election as a director shall furnish to the Secretary of the
Corporation that information required to be set forth in a shareholder's notice
of nomination which pertains to the nominee. The Chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that a nomination was
not made in accordance with the requirements of this Section 4, and if he should
so determine, he shall so declare to the meeting and the defective nomination
shall be disregarded. No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth in
this Section 4.

SECTION 5. VACANCIES. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled by
the affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall
hold office only until the next shareholders' meeting at which directors are
elected.

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SECTION 6. REMOVAL OF DIRECTORS. Any one or more or all of the directors may be
removed without cause only by the holders of at least seventy-five percent (75%)
of the shares then entitled to vote at an election of directors. Any one or more
or all of the directors may be removed with cause only by the holders of at
least a majority of the shares then entitled to vote at an election of
directors. A director may be removed by the shareholders at a meeting of
shareholders, provided the notice of the meeting states that the purpose, or one
of the purposes, of the meeting is the removal of the director.

SECTION 7. QUORUM AND VOTING. A majority of the number of directors fixed by or
in accordance with these Bylaws shall constitute a quorum for the transaction of
business at any meeting of directors. If a quorum is present when a vote is
taken, the affirmative vote of a majority of the directors present shall be the
act of the Board of Directors.

SECTION 8. DEEMED ASSENT. A director who is present at a meeting of the Board of
Directors or a committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless (i) the director
objects at the beginning of the meeting (or promptly upon his arrival) to the
holding of the meeting or transacting specified business at the meeting, or (ii)
the director votes against or abstains from the action taken.

SECTION 9. COMMITTEES. The Board of Directors, by resolution adopted by a
majority of the full Board of Directors, may designate from among its members an
executive committee and one or more other committees each of which must have at
least two members and, to the extent provided in the designating resolution,
shall have and may exercise all the authority of the Board of Directors, except
such authority as may be reserved to the Board of Directors under Florida law.

SECTION 10. MEETINGS. Regular and special meetings of the Board of Directors
shall be held at the principal place of business of the Corporation or at any
other place, within or without the State of Florida, designated by the person or
persons entitled to give notice of or otherwise call the meeting. Meetings of
the Board of Directors may be called by the Chairman of the Board, by the
President or any two directors. A majority of the directors present, whether or
not a quorum exists, may adjourn any meeting of the Board of Directors to
another time and place. Notice of an adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and, unless the
time and place of the adjourned meeting are announced at the time of the
adjournment, to the directors who were present. Members of the Board of
Directors (and any committee of the Board) may participate in a meeting of the
Board (or any committee of the Board) by means of a telephone conference or
similar communications equipment through which all persons participating may
simultaneously hear each other during the meeting; participation by these means
constitutes presence in person at the meeting.

SECTION 11. NOTICE OF MEETINGS. Regular meetings of the Board of Directors may
be held without notice of the date, time, place or purpose of the meeting, so
long as the date, time and place of such meetings are fixed generally by the
Board of Directors. Special meetings of the Board of Directors

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<PAGE>

must be preceded by at least two days' written notice of the date, time and
place of the meeting. The notice need not describe either the business to be
transacted at or the purpose of the special meeting.

SECTION 12. WAIVER OF NOTICE. Notice of a meeting of the Board of Directors need
not be given to a director who signs a waiver of notice either before or after
the meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of that meeting and a waiver of any and all objections to the place of
the meeting, the time of the meeting and the manner in which it has been called
or convened, except when a director states, at the beginning of the meeting or
promptly upon arrival at the meeting, any objection to the transaction of
business because the meeting is not lawfully called or convened. The waiver of
notice need not describe either the business to be transacted at or the purpose
of the special meeting.

SECTION 13. DIRECTOR ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at a meeting of the Board of Directors (or a committee of the Board)
may be taken without a meeting if the action is taken by the written consent of
all members of the Board of Directors (or of the committee of the Board). The
action must be evidenced by one or more written consents describing the action
to be taken and signed by each director (or committee member), which consent(s)
shall be filed in the minutes of the proceedings of the Board. The action taken
shall be deemed effective when the last director signs the consent, unless the
consent specifies otherwise.

ARTICLE IV
OFFICERS

SECTION 1. OFFICERS. The Corporation shall have a President, one or more Vice
Presidents, a Secretary and a Treasurer, each of whom shall be appointed by the
Board of Directors. Such other officers and assistant officers and agents as may
be deemed necessary or desirable may be appointed by the Board of Directors from
time to time, including, without limitation, a Chairman of the Board and Chief
Executive Officer. Any two or more offices may be held by the same person.

SECTION 2. DUTIES. The officers of the Corporation shall have the following
duties:

The PRESIDENT shall, subject to the direction of the Board of
Directors, have general charge and supervision of the business of the
Corporation. Unless otherwise provided by the Board of Directors, and provided
that there is no Chairman of the Board or separate Chief Executive Officer or
that the Chairman of the Board and Chief Executive Officer, if any, are not
available, the President shall preside at all meetings of the shareholders, and,
if a director, at all meetings of the Board of Directors. The President shall
perform such other duties and shall have such other powers as the Board of
Directors may from time to time prescribe. If a Chief Executive Officer is
appointed by the Board of Directors he shall, subject to the direction of the
Board of Directors, have general charge and supervision of the business of the
Corporation in which case the President shall be in charge of the Corporation's
day-to-day operations under the direct control of the Chief Executive Officer
and the Board of Directors. Unless otherwise provided by the Board of Directors,
and provided that there is no Chairman of the Board or that the Chairman of the
Board, if any, is not

8
<PAGE>

available, the Chief Executive Officer shall preside at all meetings of
shareholders, and, if a director, at all meetings of the Board of Directors.
Each of the Chief Executive Officer, if any, and the President shall have the
power to enter into contracts and otherwise bind the Corporation in matters
arising in the ordinary course of the Corporation's business.

Each VICE PRESIDENT shall perform such duties as the Board of Directors
may from time to time prescribe.

The SECRETARY shall have custody of and shall maintain all of the
corporate records (except the financial records), shall record the minutes of
all meetings of the shareholders and the Board of Directors, shall authenticate
records of the Corporation, shall send all notices of meetings and shall perform
such other duties as are prescribed by the Board of Directors.

The TREASURER shall have custody of all corporate funds, securities and
financial records, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositaries as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render an
account of all his transactions as treasurer and of the financial condition of
the Corporation at regular meetings of the Board or when the Board of Directors
so requests. The Treasurer shall also perform such other duties as are
prescribed by the Board of Directors.

Each other officer and assistant officer, if any, shall be appointed by
the Board of Directors and shall have such powers and shall perform such duties
as shall be assigned by them by the Board of Directors.

SECTION 3. RESIGNATION OF OFFICER. An officer may resign at any time by
delivering notice to the Corporation. The resignation shall be effective upon
receipt, unless the notice specifies a later effective date. If the resignation
is effective at a later date and the Corporation accepts the future effective
date, the Board of Directors may fill the pending vacancy before the effective
date provided the Board of Directors provides that the successor officer does
not take office until the future effective date.

SECTION 4. REMOVAL OF OFFICER. The Board of Directors may remove any officer at
any time with or without cause. Any officer or assistant officer, if appointed
by another officer, may be removed by the appointing officer.

SECTION 5. COMPENSATION. The compensation of officers shall be fixed from time
to time at the discretion of the Board of Directors. The Corporation may enter
into employment agreements with any officer of the Corporation.

ARTICLE V

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STOCK CERTIFICATES

SECTION 1. ISSUANCE. Every holder of shares in this Corporation shall be
entitled to have a certificate representing all shares to which he is entitled.
No certificate shall be issued for any share until the consideration therefor
has been fully paid.

SECTION 2. FORM. Certificates representing shares in this Corporation shall be
signed by the President and the Secretary or any Assistant Secretary of the
Corporation, or by any other two officers designated by the Board of Directors.

SECTION 3. REGISTERED SHAREHOLDERS. The Corporation shall be entitled to treat
the holder of record of shares as the holder in fact and, except as otherwise
provided by the laws of Florida, shall not be bound to recognize any equitable
or other claim to or interest in the shares.

SECTION 4. TRANSFER OF SHARES. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation or the transfer agent of
the share certificates duly endorsed by the holder of record or
attorney-in-fact. If the surrendered certificates are canceled, new certificates
shall be issued to the person entitled to them, and the transaction recorded on
the books of the Corporation.

SECTION 5. LOST, STOLEN OR DESTROYED CERTIFICATES. If a shareholder claims that
one or more of his certificates for shares issued by the Corporation have been
lost, stolen or destroyed, a new certificate shall be issued upon delivery to
the Corporation of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed, and, at the discretion of
the Board of Directors, upon the deposit of a bond or other indemnity as the
Board reasonably requires.

ARTICLE VI
DISTRIBUTIONS

The Board of Directors may from time to time authorize and declare, and
the Corporation may pay, distributions (including but not limited to dividends
on, and redemptions and other acquisitions of shares of the Corporation's stock)
on its outstanding shares in cash, property, or its own shares, provided any
such distribution is in compliance with the applicable restrictions and other
provisions of Florida law.

ARTICLE VII

CORPORATE RECORDS

(a) The Corporation shall keep as permanent records minutes of all
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors in place of the
Board of Directors on behalf of the Corporation.

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<PAGE>

(b) The Corporation or its agent shall maintain accurate accounting
records and a record of its shareholders in a form that permits preparation of a
list of the names and addresses of all shareholders in alphabetical order by
class of shares showing the number and series of shares held by each.

(c) The Corporation shall keep a copy of: its articles or restated
articles of incorporation and all amendments to them currently in effect; its
Bylaws or restated Bylaws and all amendments currently in effect; resolutions
adopted by the Board of Directors creating one or more classes or series of
shares and fixing their relative rights, preferences, and limitations, if shares
issued pursuant to those resolutions are outstanding; the minutes of all
shareholders' meetings and records of all actions taken by shareholders without
a meeting for the past three years; written communications to all shareholders
generally or all shareholders of a class or series within the past three years,
including the financial statements furnished for the past three years; a list of
names and business street addresses of its current directors and officers; and
its most recent annual report delivered to the Department of State.

(d) The Corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.

ARTICLE VIII
INDEMNIFICATION

Indemnification of certain persons by the Corporation shall be as
specified in or determined pursuant to the Articles of Incorporation of the
Corporation as in effect from time to time.

ARTICLE IX
MISCELLANEOUS

SECTION 1. CORPORATE SEAL. The corporate seal of the Corporation shall be
circular in form and shall include the name and jurisdiction of incorporation of
the Corporation.

SECTION 2. FISCAL YEAR. The fiscal year of the Corporation shall end on December
31st of each calendar year, unless otherwise fixed by resolution of the Board of
Directors.

SECTION 3. CHECKS. All checks, drafts or other orders for the payment of money,
notes or other evidences of indebtedness issued in the name of the Corporation
shall be signed by the President, the Treasurer or such other officer(s) or
agent(s) of the Corporation as shall be determined from time to time by
resolution of the Board of Directors.

ARTICLE X
AMENDMENT

These Bylaws may be altered, amended and/or repealed and new Bylaws may
be adopted by the Board of Directors. Shareholders may adopt, amend repeal or
alter the Bylaws of the

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<PAGE>

Corporation, including Bylaws adopted by the Board of Directors, without
approval of the Board of Directors only if such adoption, amendment, repeal or
alteration is approved by the affirmative vote of the holders of at least
seventy-five percent (75%) of the issued and outstanding shares of the capital
stock of the Corporation entitled to vote on such matter, voting together as a
single class.

The undersigned, the Secretary of the Corporation, hereby certifies that the
foregoing Amended and Restated Bylaws were adopted by resolution of the Board of
Directors during a duly called meeting of the Board of Directors held on
February 7, 2000 and are effective as of ___________________, 2000.

-------------------------------
Maria Elena Prio, Secretary

EXHIBIT 10.01

YUPI INTERNET, INC.

AMENDED AND RESTATED STOCK INCENTIVE PLAN

SECTION 1.
PURPOSE

The purpose of this Plan is to promote the interests of the Company by
providing the opportunity to purchase Shares or to receive compensation which is
based upon appreciation in the value of Shares to Employees and Key Persons in
order to attract and retain Employees and Key Persons by providing an incentive
to work to increase the value of Shares and a stake in the future of the Company
which corresponds to the stake of each of the Company's shareholders. The Plan
provides for the grant of Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock Awards and Stock Appreciation Rights to aid the Company in
obtaining these goals.

SECTION 2.
DEFINITIONS

Each term set forth in this Section shall have the meanings set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular, and reference to one gender shall include the other gender.

2.1 BOARD means the Board of Directors of the Company.

2.2 CODE means the Internal Revenue Code of 1986, as amended.

2.3 COMMITTEE means the Compensation Committee of the Board.

2.4 COMMON STOCK means the $.001 par value per share common stock of
the Company.

2.5 COMPANY means Yupi Internet, Inc., a Florida corporation, and any
successor to such organization.

2.6 EMPLOYEE means an employee of the Company, a Subsidiary or a
Parent.

2.7 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.

2.8 EXERCISE PRICE means the price which shall be paid to purchase one
(1) Share upon the exercise of an Option granted under this Plan.

2.9 FAIR MARKET VALUE means the price at which the Committee, acting in
good faith, determines through any reasonable valuation method that a Share
might change hands between a

<PAGE>
- 2 -

willing buyer and a willing seller, neither being under any compulsion to buy or
to sell and both having reasonable knowledge of the relevant facts.

2.10 ISO means an option granted under this Plan to purchase Shares
which is intended by the Company to satisfy the requirements of Code Section 422
as an incentive stock option.

2.11 KEY PERSON means (i) a member of the Board who is not an Employee,
(ii) a consultant, distributor or other person who has rendered valuable
services to the Company, a Subsidiary or a Parent, (iii) a person who has
incurred, or is willing to incur, financial risk in the form of guaranteeing or
acting as co-obligor with respect to debts or other obligations of the Company,
or (iv) a person who has extended credit to the Company. Key Persons are not
limited to individuals and, subject to the preceding definition, may include
corporations. partnerships, associations and other entities.

2.12 NON-ISO means an option granted under this Plan to purchase Shares
which is not intended by the Company to satisfy the requirements of Code Section
422.

2.13 OPTION means an ISO or a Non-ISO.

2.14 PARENT means any corporation which is a parent of the Company
(within the meaning of Code Section 424).

2.15 PARTICIPANT means an individual who receives a Stock Incentive
hereunder.

2.16 PLAN means the Yupi Internet, Inc. Stock Incentive Plan, as
amended from time to time.

2.17 SHARE means a share of the Common Stock of the Company.

2.18 STOCK INCENTIVE means an ISO, a Non-ISO, a Restricted Stock Award
or a Stock Appreciation Right.

2.19 STOCK INCENTIVE AGREEMENT means an agreement between the Company
and a Participant evidencing an award of a Stock Incentive.

2.20 SUBSIDIARY means any corporation which is a subsidiary of the
Company (within the meaning of Code Section 424(o).

2.21 SURRENDERED SHARES means the Shares described in Section 8.2 which
(in lieu of being purchased) are surrendered for cash or Shares, or for a
combination of cash and Shares, in accordance with Section 8.

2.22 TEN PERCENT SHAREHOLDER means a person who owns (after taking into
account the attribution rules of Code Section 424(d)) more than ten percent
(10%) of the total combined voting power of all classes of shares of either the
Company, a Subsidiary or a Parent.

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SECTION 3.
SHARES SUBJECT TO STOCK INCENTIVES

The total number of Shares that may be issued pursuant to Stock
Incentives under this Plan shall not exceed Ten Million Shares (10,000,000) as
adjusted pursuant to Section 11. Such Shares shall be reserved, to the extent
that the Company deems appropriate, from authorized but unissued Shares, and
from Shares which have been reacquired by the Company. Furthermore, any Shares
subject to a Stock Incentive which remain after the cancellation, expiration or
exchange of such Stock Incentive thereafter shall again become available for use
under this Plan, but any Surrendered Shares which remain after the surrender of
an ISO or a Non-ISO under Section 8 shall not again become available for use
under this Plan.

SECTION 4.
EFFECTIVE DATE

The effective date of this Plan shall be the date it is adopted by the
Board, provided the shareholders of the Company approve this Plan within twelve
(12) months after such effective date. If such effective date comes before such
shareholder approval, any Stock Incentives GRANTED under this Plan before the
date of such approval automatically shall be granted subject to such approval.

SECTION 5.
ADMINISTRATION

This Plan shall be administered by the Board. The Board, actin in its
absolute discretion, shall exercise such powers and take such action as
expressly called for under this Plan. The Board shall have the power to
interpret this Plan and, subject to Section 13 to take such other action in the
administration and operation of the Plan as it deems equitable under the
circumstances. The Board's actions shall be binding on the Company, on each
affected Employee or Key Person, and on each other person directly or indirectly
affected by such actions.

The Board may delegate its authority under the Plan, in whole or in
part, to a Committee appointed by the Board consisting of not less than two (2)
directors, each of whom does not while a member of the Committee, or has not
during the one (1) year prior to serving as a member of the Committee. received
equity securities of the Company, Parent or Subsidiary, pursuant to this Plan or
any other plan of the Company, Parent or Subsidiary, except as may be permitted
under Section 16(b)(3) of the Exchange Act. The Committee (if appointed) shall
act according to the policies and procedures set forth in the Plan and to those
policies and procedures established by the Board, and the Committee shall have
such powers and responsibilities as are set forth by the Board. Reference to the
Board in this Plan shall specifically include reference to the Committee where
the Board has delegated it authority to the Committee, and any action by the
Committee pursuant to a delegation of authority by the Board shall be deemed an
action by the Board under the Plan. Notwithstanding the above, the Board may
assume the powers and responsibilities granted to the Committee at any time, in
whole or in part.

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SECTION 6.
ELIGIBILITY

Except as provided below, only Employees shall be eligible for the
grant of Stock Incentives under this Plan, but no Employee shall have the right
to be ranted a Stock Incentive under this Plan merely as a result of his or her
status as an Employee. Key Persons may be eligible, subject to written approval
by the Board, for the grant of Stock Incentives under this Plan, but only if the
Key Person has provided valuable services to the Company, a Subsidiary or a
Parent, and only if the Stock Incentive is not an ISO.

SECTION 7
TERMS OF STOCK INCENTIVES

7.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES.

(a) The Committee, in its absolute discretion. shall grant
Stock Incentives under this Plan from time to time and shall have the RIGHT to
grant new Stock Incentives in exchange for outstanding Stock Incentives. Stock
Incentives shall be granted to Employees or Key Persons selected by the
Committee, and the Committee shall be under no obligation whatsoever to grant
Stock Incentives to all Employees or Key Persons. or to grant all Stock
Incentives subject to the same terms and conditions. Each grant of a Stock
Incentive shall be evidenced by a Stock Incentive Agreement.

(b) The number of Shares as to which a Stock Incentive shall
be granted shall be determined by the Committee in its sole discretion, subject
to the provisions of Section 3 as to the total number of shares available for
grants under the Plan.

(c) Each Stock Incentive shall be evidenced by a Stock
Incentive Agreement executed by the Company and the Participant, which shall be
in such form and contain such terms and conditions as the Committee in its
discretion may, subject to the provisions of the Plan, from time to time
determine.

(d) The date a Stock Incentive is granted shall be the date on
which the Committee has approved the terms and conditions of the Stock Incentive
Agreement and has determined the recipient of the Stock Incentive and the number
of Shares covered by the Stock Incentive and has taken all such other action
necessary to complete the grant of the Stock Incentive.

7.2 TERMS AND CONDITIONS OF OPTIONS. Each grant of an Option shall be
evidenced by a Stock Incentive Agreement which shall:

(I) specify whether the Option is an ISO or Non-ISO; and

(II) incorporate such other terms and conditions as the
Committee, actin in its absolute discretion, deems consistent with the terms of
this Plan, including (without limitation) a restriction on the number of Shares
subject to the Option which first become exercisable or subject to surrender
during any calendar year.

<PAGE>
- 5 -

In determining Employee(s) or Key Person(s) to whom an Option
shall be granted and the number of Shares to be covered by such Option, the
Committee may take into account the recommendations of the President of the
Company and its other officers, the duties of the Employee or Key Person, the
present and potential contributions of the Employee or Key Person to the success
of the Company, the anticipated number of years of service remaining before the
attainment by the Employee of retirement age, and other factors deemed relevant
by the Committee, in its sole discretion, in connection with accomplishing the
purpose of this Plan. An Employee or Key Person who has been granted an Option
to purchase Shares, whether under this Plan or otherwise, may be granted one or
more additional Options.

If the Committee grants an ISO and a Non-ISO to an Employee on
the same date, the right of the Employee to exercise or surrender one such
Option shall not be conditioned on his or her failure to exercise or surrender
the other such Option.

(a) EXERCISE PRICE. Subject to adjustment in accordance with
Section 11 and the other provisions of this Section, the Exercise Price shall be
as set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an ISO to a Participant who is not a Ten Percent Shareholder, the
Exercise Price shall not be less than the Fair Market Value on the date the ISO
is granted. With respect to each grant of an ISO to a Participant who is a Ten
Percent Shareholder, a Ten Percent Shareholder shall not be less than one
hundred ten percent (I 109/o) of the Fair Market Value on the date the ISO is
granted. If a Stock Incentive .s a Non-ISO. the Exercise Price for each Share
shall be no less than the minimum price required by applicable state law, or by
the Company's governing instrument, or $0.01, whichever price is greater.

(b) OPTION TERM. Each Option granted under this Plan shall be
exercisable in whole or in part at such time or times as set forth in the
related Stock Incentive Agreement, but no Stock Incentive Agreement shall:

(i) make an Option exercisable before the date such
Option is granted; or

(ii) make an option exercisable after the earlier of
the:

(A) the date such Option is exercised in
full, or

(B) the date which is the tenth (10th)
anniversary of the date such Option is granted. if such Option is a Non-ISO or
an ISO granted to a non-Ten Percent Shareholder. or the date which is the fifth
(5th) anniversary of the date such Option is granted, if such Option is an ISO
granted to a Ten Percent Shareholder.

A Stock Incentive Agreement may provide for the exercise of an
Option after the employment of an Employee has terminated for any reason
whatsoever, including death or disability.

(c) PAYMENT. Payment for all shares of Stock purchased
pursuant to exercise of an Option shall be made in cash or, if the Stock
Incentive Agreement provides, by delivery to the Company of a number of Shares
which have been owned by the holder for at least six (6)

<PAGE>
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months prior to the date of exercise having an aggregate Fair Market Value of
not less than the product of the Exercise Price multiplied by the number of
Shares the Participant intends to purchase upon exercise of the Option on the
date of delivery. In addition, the Stock Incentive Agreement may provide for
cashless exercise through a brokerage transaction following registration of the
Company's equity securities under Section 12 of the Securities Exchange Act of
1934. Except as provided in subparagraph (f) below, payment shall be made at the
time that the Option or any part thereof is exercised, and no Shares shall be
issued or delivered upon exercise of an Option until full payment has been made
by the Participant. The holder of an Option, as such, shall have none of the
rights of a stockholder.

Notwithstanding the above, and in the sole discretion of the
Committee, an Option may be exercised as to a portion or all (as determined by
the Committee) of the number of Shares specified in the Stock Incentive
Agreement by delivery to the Company of a promissory note, such promissory note
to be executed by the Participant and which shall include, with such other terms
and conditions as the Committee shall determine, provisions in a form approved
by the Committee under which: (i) the balance of the aggregate purchase price
shall be payable in equal installments over such period and shall bear interest
at such rate (which shall not be less than the prime bank loan rate as
determined by the Committee) as the Committee shall approve, and (11) the
Participant shall be personally liable for payment of the unpaid principal
balance and all accrued but unpaid interest.

(d) CONDITIONS TO EXERCISE OF AN OPTION. Each Option granted
under the Plan shall be exercisable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement: provided, however, that subsequent to
the grant of an Option. the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part.

(e) TRANSFERABILITY OF OPTIONS. Except as set forth below and
in subparagraph (f) below, (i) no Option shall be transferable by any
Participant other than by will or the laws of descent and distribution and (ii)
Options may be exercised during the Participant's lifetime only by the
Participant (or, if the Participant is disabled and so long as the Option
remains exercisable, by the Participant's duly appointed guardian or other legal
representative). However, the Committee may, in its discretion, permit a
Participant holding a Non-ISO to transfer the Non-ISO to family members or other
persons (including trusts, partnerships and other legal entities) for estate
planning purposes. In connection with permitting transfers, the Board or
Committee may require that (i) no consideration be given or payment made for any
such transfer, (ii) the Stock Incentive Agreement pursuant to which such Non-ISO
is granted must expressly provide for transferability in a manner consistent
with the Plan, and (iii) subsequent transfers of the transferred Non-ISO shall
be prohibited except those in accordance with this Section. Following any such
transfer, the Non-ISO shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, and the transferee
of such Non-ISO shall be subject to the applicable terms of the Plan. The events
of termination of employment set forth in a Participant's Stock Incentive
Agreement shall continue to be applied with respect to the original holder of
such Non-ISO, following which such Non-ISO shall be exercisable by the
transferee only to the extent and for the periods specified in such Stock
Incentive Agreement.

(f) SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS.
Notwithstanding anything to the contrary in this Section, any Option in
substitution for a stock option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination to in termination provisions) as those
contained in the previously issued stock option being replaced thereby.

7.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. A Stock
Appreciation Right may be granted in connection with all or any portion of a
previously or contemporaneously granted Option or not in connection with an
Option. A Stock Appreciation Right shall entitle the Participant to receive upon
exercise or payment the excess of: (1) the Fair Market Value of a

<PAGE>
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specified number of Shares at the time of exercise, over (II) a specified price
which shall be not less than the Exercise Price for that number of Shares in the
case of a Stock Appreciation Right granted in connection with a previously or
contemporaneously granted Option., or in the case of any other Stock
Appreciation Right not less than one hundred percent (1009/o) of the Fair Market
Value of that number of Shares at the time the Stock Appreciation Right was
granted. A Stock Appreciation Right granted in connection with an Option may
only be exercised to the extent that the related Option has not been exercised.
The exercise of a Stock Appreciation Right shall result in a pro rata surrender
of the related Option to the extent the Stock Appreciation Right has been
exercised.

(a) PAYMENT. Upon exercise or payment of a Stock Appreciation
Right, the Company shall pay to the Participant the appreciation in cash or
Shares (at the aggregate Fair Market Value on the date of payment or exercise)
as provided in the Stock Incentive Agreement or, in the absence of such
provision. as the Committee may determine.

(b) CONDITIONS TO EXERCISE. Each Stock Appreciation Right
granted under the Plan shall be exercisable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of a Stock Appreciation Right, the Committee, at any time before
complete termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised in whole or in
part.

(c) NONTRANSFERABILITY OF STOCK APPRECIATION RIGHT. A Stock
Appreciation Right shall not be transferable or assignable except by will or by
the laws of descent and distribution and shall be exercisable, during the
Participant's lifetime, only by the Participant, or in the event of the
disability of the Participant, by the legal representative of the Participant.

7.4 TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Shares awarded
pursuant to Restricted Stock Awards shall be subject to restrictions for periods
determined by the Committee. The Committee shall have the power to permit. in
its discretion,, an acceleration of the expiration of the applicable restriction
period with respect to any part or all of the Shares awarded to a Participant.
The Committee may require a cash payment from the Participant in an amount no
greater than the aggregate Fair Market Value of the Shares awarded determined at
the date of grant in exchange for the grant of a Restricted Stock Award or may
grant a Restricted Stock Award without the requirement of a cash payment.

SECTION 8.
SURRENDER OF OPTIONS

8.1 GENERAL RULE. The Committee, acting in its absolute discretion, may
incorporate a provision in a Stock Incentive Agreement to allow an Employee or
Key Person to surrender his or Option in whole or in part in lieu of the
exercise in whole or in part of that Option on any date that:

(a) the Fair Market Value of the Shares subject to such Option
exceeds Exercise Price for such Shares, and

<PAGE>
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(b) the Option to purchase such Shares is otherwise
exercisable.

8.2 PROCEDURE. The surrender of an Option in whole or in part shall be
effected by the delivery of the Stock Incentive Agreement to the Committee,
together with a statement signed by the Participant which specifies the number
of Shares ("Surrendered Shares") as to which the Participant surrenders his or
her Option and how he or she desires payment be made for such Surrendered
Shares.

8.3 PAYMENT. A Participant in exchange for his or her Surrendered
Shares shall receive a payment in cash or in Shares, or in a combination of cash
and Shares. equal in amount on the date such surrender is effected to the excess
of the Fair Market Value of the Surrendered Shares on such date over the
Exercise Price for the Surrendered Shares. The Committee, acting in its absolute
discretion, can approve or disapprove. a Participant's request for payment in
whole or in part in cash and can make that payment in cash or in such
combination of cash and Shares as the Committee deems appropriate. A request for
payment only in Shares shall be approved and made in Shares to the extent
payment can be made in whole shares of Shares and (at the Committee's
discretion) in cash in lieu of any fractional Shares.

8.4 RESTRICTIONS. Any Stock Incentive Agreement which incorporates a
provision to allow a Participant to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee deems necessary to satisfy the
conditions to the exemption under Rule 16b3 (or any successor exemption) to
Section 16(b) of the Exchange Act.

SECTION 9.
SECURITIES REGULATION

Each Stock Incentive Agreement may provide that. upon the receipt of
Shares as a result of he surrender or exercise of a Stock Incentive, the
Participant shall, if so requested by the Company. hold such Shares for
investment and not with a view of resale or distribution to the public and, if
so requested by the Company. shall deliver to the Company a written statement
satisfactory to the Company to that effect. Each Stock Incentive Agreement may
also provide that. if so requested by the Company, the Participant shall make a
written representation to the Company that he or she will not sell or offer to
sell any of such Shares unless a registration statement shall be in effect with
respect to such Shares under the Securities Act of 1933, as amended (" 1933
Act"), and any applicable state securities law or, unless he or she shall have
furnished to the Company an opinion, in form and substance sat. factory to the
Company, of legal counsel acceptable to the Company, that such registration is
not required. Certificates representing the Shares transferred upon the exercise
or surrender of a Stock Incentive granted under this Plan may at the discretion
of the Company bear a legend to the effect that such Shares have not been
registered under the 1933 Act or any applicable state securities law and that
such Shares may not be sold or offered for sale in the absence of an effective
registration statement as to such Shares under the 19')') Act and any applicable
state securities law or an opinion. in to and substance satisfactory to the
Company. of legal counsel acceptable to he Company. that such registration is
not required.

<PAGE>
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SECTION 10.
LIFE OF PLAN

No Stock Incentive shall be GRANTED under this Plan on or after the
earlier of.

(a) the tenth (10th) anniversary of the effective date of this
Plan (as determined under Section 4 of this Plan), in which event this Plan
otherwise thereafter shall continue in effect until all outstanding Stock
Incentives have been surrendered or exercised in full or no longer are
exercisable,

(b) or the date on which all of the Shares reserved under
Section 3 of this Plan have (as a result of the surrender or exercise of Stock
Incentives granted under this Plan) been issued or no longer are available for
use under this Plan, in which event this Plan also shall terminate on such date.

SECTION 11.
ADJUSTMENT

The number of Shares reserved under Section 3 of this Plan, and the
number of Shares subject to Stock Incentives granted under this Plan, and the
Exercise Price of any Options, shall be adjusted by the Committee in an
equitable manner to reflect any change in the capitalization of the Company,
including, but not limited to, such changes as stock dividends or stock splits.
Furthermore, the Committee shall have the right to adjust (in a manner which
satisfies the requirements of Code Section 424(a)) the number of Shares reserved
under Section 3, and the number of Shares subject to Stock Incentives granted
under this Plan, and the Exercise Price of any Options in the event of any
corporate transaction described in Code Section 424(a) which provides for the
substitution or assumption of such Stock Incentives. If any adjustment under
this Section creates a fractional Share or a right to acquire a fractional
Share, such fractional Share shall be disregarded, and the number of Shares
reserved under this Plan and the number subject to any Stock Incentives granted
under this Plan shall be the next lower number of Shares, rounding all fractions
downward. An adjustment made under this Section by the Committee shall be
conclusive and binding on all affected persons and, further, shall not
constitute an increase in the number of Shares reserved under Section 3.

SECTION 12.
SALE OR MERGER OF THE COMPANY

If the Company agrees to sell substantially all of its assets for cash
or property, or for a combination of cash and property, or agrees to any merger,
consolidation, reorganization, division or other transaction in which Shares are
converted into another security or into the right to receive securities or
property and such agreement does not provide for the assumption or substitution
of the Stock Incentives granted under this Plan, each Stock Incentive at the
direction and discretion of the Committee, or as is otherwise provided in the
Stock Incentive Agreements, may be canceled unilaterally by the Company in
exchange for the whole Shares (or, subject to satisfying the conditions to the
exemption under Rule 16b3 or any successor exemption to Section 16(b) of the
Exchange Act, for the whole Shares and the cash in lieu of a fractional Share)
which

<PAGE>
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each Participant otherwise would receive if he or she had the right to surrender
or exercise his or her outstanding Stock Incentive in full and he or she
exercised that right exclusively for Shares on a date fixed by the Committee
which comes before such sale or other corporate transaction.

SECTION 13.
AMENDMENT OR TERMINATION

This Plan may be amended by the Board from time to time to the extent
that the Board deems necessary or appropriate; provided, however. no such
amendment shall be made absent the approval of the shareholders of the Company:
(a) to increase the number of Shares reserved under Section 3, except as set
forth in Section 11, (b) to extend the maximum life of the Plan under Section 10
or the maximum exercise period under Section 7, (c) to decrease the minimum
Exercise Price under Section 7, or (d) to change the designation of Employees or
Key Persons eligible for Stock Incentives under Section 6. The Board also may
suspend the granting of Stock Incentives under this Plan at any time and may
terminate this Plan at any time, provided, however, the Company shall not have
the right to modify, amend or cancel any Stock Incentive granted before such
suspension or termination unless: (1) the Participant consents in writing to
such modification, amendment or cancellation, or (11) there is a dissolution or
liquidation of the Company or a transaction described in Section 11 or Section
12.

SECTION 14.
MISCELLANEOUS

14.1 SHAREHOLDER RIGHTS. No Participant shall have any rights as a
shareholder of the Company as a result of the grant of a Stock Incentive to him
or to her under this Plan or his or her exercise or surrender of such Stock
Incentive pending the actual delivery of Shares subject to such Stock Incentive
to such Participant.

14.2 NO GUARANTEE OF CONTINUED RELATIONSHIP. The grant of a Stock
Incentive to a Participant under this Plan shall not constitute a contract of
employment and shall not confer on a Participant any rights upon his or her
termination of employment or relationship with the Company in addition to those
rights, if any, expressly set forth in the Stock Incentive Agreement which
evidences his or her Stock Incentive.

14.3 WITHHOLDING. The exercise or surrender of any Stock Incentive
granted under this Plan shall constitute a Participant's full and complete
consent to whatever action the Committee directs to satisfy the federal and
state tax withholding requirements, if any, which the Committee in its
discretion deems applicable to such exercise or surrender.

14.4 TRANSFER. The transfer of an Employee between or among the
Company, a Subsidiary or a Parent shall not be treated as a termination of his
or her employment under this Plan.

14.5 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Georgia.

EXHIBIT 10.20

YUPI INTERNET INC.

2000 STOCK OPTION AND INCENTIVE PLAN

1. PURPOSE AND ELIGIBILITY

The purpose of this 2000 Stock Option and Incentive Plan (the "PLAN")
of Yupi Internet Inc. (the "COMPANY") is to provide stock options and other
equity interests in the Company (each an "AWARD") to employees, officers,
directors, consultants and advisors of the Company and its Subsidiaries, all of
whom are eligible to receive Awards under the Plan. Any person to whom an Award
has been granted under the Plan is called a "PARTICIPANT". Additional
definitions are contained in Section 8.

2. ADMINISTRATION

A. ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered
by the Board of Directors of the Company (the "BOARD"). The Board, in its sole
discretion, shall have the authority to grant and amend Awards, to adopt, amend
and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award. All decisions by the Board shall be final
and binding on all interested persons. Neither the Company nor any member of the
Board shall be liable for any action or determination relating to the Plan.

B. APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "COMMITTEE"). All references in
the Plan to the "BOARD" shall mean such Committee or the Board.

C. DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, PROVIDED THAT the Board shall fix the maximum number
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.

3. STOCK AVAILABLE FOR AWARDS

A. NUMBER OF SHARES. Subject to adjustment under Section 3(c), the
aggregate number of shares of Common Stock of the Company (the "COMMON STOCK")
that may be issued pursuant to the Plan is 4,000,000 shares. If any Award
expires, or is terminated, surrendered or forfeited, in whole or in part, the
unissued Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan. If shares of Common Stock issued pursuant to the
Plan are repurchased by, or are surrendered or forfeited to, the Company at no
more than cost, such shares of Common Stock shall again be available for the
grant of Awards under the Plan; PROVIDED, HOWEVER, that the cumulative number of
such shares that may be so reissued under the Plan will not exceed 4,000,000
shares. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

B. PER-PARTICIPANT LIMIT. Subject to adjustment under Section 3(c), no
Participant may be granted Awards during any one fiscal year to purchase more
than 600,000 shares of Common Stock.

C. ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination,

<PAGE>

exchange of shares, liquidation, spin-off, split-up, or other similar change in
capitalization or event, (i) the number and class of securities available for
Awards under the Plan and the per-Participant share limit, (ii) the number and
class of securities, vesting schedule and exercise price per share subject to
each outstanding Option, (iii) the repurchase price per security subject to
repurchase, and (iv) the terms of each other outstanding stock-based Award shall
be adjusted by the Company (or substituted Awards may be made) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is appropriate. If Section 7(e)(i) applies for any event, this Section 3(c)
shall not be applicable.

4. STOCK OPTIONS

A. GENERAL. The Board may grant options to purchase Common Stock (each,
an "OPTION") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.

B. INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "INCENTIVE
STOCK OPTION") shall be granted only to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Board and the Company shall have no liability if an Option
or any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "NONSTATUTORY STOCK OPTION."

C. EXERCISE PRICE. The Board shall establish the exercise price (or
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.

D. DURATION OF OPTIONS. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

E. EXERCISE OF OPTION. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares for
which the Option is exercised.

F. PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
an Option shall be paid for by one or any combination of the following forms of
payment:

(i) by check payable to the order of the Company;

(ii) except as otherwise explicitly provided in the applicable
option agreement, and only if the Common Stock is then publicly traded, delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price; or

(iii) to the extent explicitly provided in the applicable option
agreement, by (x) delivery of shares of Common Stock owned by the Participant
valued at fair market value (as determined

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<PAGE>

by the Board or as determined pursuant to the applicable option agreement), (y)
delivery of a promissory note of the Participant to the Company (and delivery to
the Company by the Participant of a check in an amount equal to the par value of
the shares purchased), or (z) payment of such other lawful consideration as the
Board may determine.

(g) Except as set forth below and in Section 7(a) below, (i) no Option
shall be transferable by any Participant other than by will or the laws of
descent and distribution and (ii) Options may be exercised during the
Participant's lifetime only by the Participant (or, if the Participant is
disabled and so long as the Option remains exercisable, by the Participant's
duly appointed guardian or other legal representative). However, the Board may,
in its discretion, permit a Participant holding a Nonstatutory Stock Option to
transfer the Nonstatutory Stock Option to family members or other persons
(including trusts, partnerships and other legal entities) for estate planning
purposes. In connection with permitting transfers, the Board may require that
(i) no consideration be given or payment made for any such transfer, (ii) the
stock option agreement pursuant to which such Nonstatutory Stock Option is
granted must expressly provide for transferability in a manner consistent with
the Plan, and (iii) subsequent transfers of the transferred Nonstatutory Stock
Option shall be prohibited except those in accordance with this Section.
Following any such transfer, the Nonstatutory Stock Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, and the transferee of such Nonstatutory Stock Option shall be subject
to the applicable terms of the Plan. The events of termination of employment set
forth in a Participant's stock option agreement shall continue to be applied
with respect to the original holder of such Nonstatutory Stock Option, following
which such Nonstatutory Stock Option shall be exercisable by the transferee only
to the extent and for the periods specified in such stock option agreement.

5. RESTRICTED STOCK

A. GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"RESTRICTED STOCK AWARD").

B. TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of any such Restricted Stock Award. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "DESIGNATED BENEFICIARY"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

6. OTHER STOCK-BASED AWARDS

The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including, without limitation, the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights, phantom stock awards or stock units.

7. GENERAL PROVISIONS APPLICABLE TO AWARDS

A. TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award and except as provided in Section 4(g) above,
Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered
by the person to whom they are granted, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
life of the Participant, shall be exercisable only by the Participant.
References to a Participant, to the extent relevant in the context, shall
include references to authorized transferees.

B. DOCUMENTATION. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board. Each
Award may contain terms and conditions in addition to those set forth in the
Plan PROVIDED THAT such terms and conditions do not contravene the provisions of
the Plan.

C. BOARD DISCRETION. The terms of each type of Award need not be
identical, and the Board need not treat Participants uniformly.

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<PAGE>

D. TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.

E. ACQUISITION OF THE COMPANY

(I) CONSEQUENCES OF AN ACQUISITION. Unless otherwise expressly
provided in the applicable Option or Award, upon the occurrence of an
Acquisition, the Board or the board of directors of the surviving or acquiring
entity (as used in this Section 7(e)(i), also the "BOARD") shall, as to
outstanding Awards (on the same basis or on different bases, as the Board shall
specify), make appropriate provision for the continuation of such Awards by the
Company or the assumption of such Awards by the surviving or acquiring entity
and by substituting on an equitable basis for the shares then subject to such
Awards either (a) the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition, (b) shares of stock
of the surviving or acquiring corporation or (c) such other securities as the
Board deems appropriate, the fair market value of which (as determined by the
Board in its sole discretion) shall not materially differ from the fair market
value of the shares of Common Stock subject to such Awards immediately preceding
the Acquisition. In addition to or in lieu of the foregoing, with respect to
outstanding Options, the Board may, upon written notice to the affected
optionees, provide that one or more Options must be exercised, to the extent
then exercisable or to be exercisable as a result of the Acquisition, within a
specified number of days of the date of such notice, at the end of which period
such Options shall terminate; or terminate one or more Options in exchange for a
cash payment equal to the excess of the fair market value (as determined by the
Board in its sole discretion) of the shares subject to such Options (to the
extent then exercisable or to be exercisable as a result of the Acquisition)
over the exercise price thereof.

(II) ACQUISITION DEFINED. An "ACQUISITION" shall mean: (x) the
consummation of any merger or consolidation after which the voting securities of
the Company outstanding immediately prior thereto represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
acquiring entity) less than 50% of the combined voting power of the voting
securities of the Company or such surviving or acquiring entity outstanding
immediately after such event; or (y) the consummation of any sale of all or
substantially all of the assets or capital stock of the Company (other than in a
spin-off or similar transaction) or (z) the consummation of any other
acquisition of the business of the Company, as determined by the Board.

(III) ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. In connection with
a merger or consolidation of an entity with the Company or the acquisition by
the Company of property or stock of an entity, the Board may grant Awards under
the Plan in substitution for stock and stock-based awards issued by such entity
or an affiliate thereof. The substitute Awards shall be granted on such terms
and conditions as the Board considers appropriate in the circumstances.

(IV) POOLING-OF-INTERESTS-ACCOUNTING. If the Company proposes to
engage in an Acquisition intended to be accounted for as a pooling-of-interests,
and in the event that the provisions of this Plan or of any Award hereunder, or
any actions of the Board taken in connection with such Acquisition, are
determined by the Company's or the acquiring company's independent public
accountants to cause such Acquisition to fail to be accounted for as a
pooling-of-interests, then such

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<PAGE>

provisions or actions shall be amended or rescinded by the Board, without the
consent of any Participant, to be consistent with pooling-of-interests
accounting treatment for such Acquisition.

(V) PARACHUTE AWARDS. If, in connection with an Acquisition, a tax
under Section 4999 of the Code would be imposed on the Participant (after taking
into account the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of
the Code), then the number of Awards which shall become exercisable, realizable
or vested as provided in such section shall be reduced (or delayed), to the
minimum extent necessary, so that no such tax would be imposed on the
Participant (the Awards not becoming so accelerated, realizable or vested, the
"PARACHUTE AWARDS"); PROVIDED, HOWEVER, that if the "aggregate present value" of
the Parachute Awards would exceed the tax that, but for this sentence, would be
imposed on the Participant under Section 4999 of the Code in connection with the
Acquisition, then the Awards shall become immediately exercisable, realizable
and vested without regard to the provisions of this sentence. For purposes of
the preceding sentence, the "AGGREGATE PRESENT VALUE" of an Award shall be
calculated on an after-tax basis (other than taxes imposed by Section 4999 of
the Code) and shall be based on economic principles rather than the principles
set forth under Section 280G of the Code and the regulations promulgated
thereunder. All determinations required to be made under this Section 7(e)(iv)
shall be made by the Company.

F. WITHHOLDING. Each Participant shall pay to the Company, or make
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part by transferring shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement). The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

G. AMENDMENT OF AWARDS. The Board may amend, modify or terminate any
outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, PROVIDED THAT, except as otherwise provided in Section 7(e)(iii), the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

H. CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

I. ACCELERATION. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of some or all restrictions, or that any other
stock-based Awards may become exercisable in full or in part or free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections 280G and 4999 of the Code if

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<PAGE>

a change in control of the Company occurs, or (ii) disqualify all or part of the
Option as an Incentive Stock Option.

8. MISCELLANEOUS

A. DEFINITIONS.

(I) "COMPANY," for purposes of eligibility under the Plan,
shall include any present or future subsidiary corporations of Yupi Internet
Inc., as defined in Section 424(f) of the Code (a "SUBSIDIARY"), and any present
or future parent corporation of Yupi Internet Inc., as defined in Section 424(e)
of the Code. For purposes of Awards other than Incentive Stock Options, the term
"COMPANY" shall include any other business venture in which the Company has a
direct or indirect significant interest, as determined by the Board in its sole
discretion.

(II) "CODE" means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.

(III) "EMPLOYEE" for purposes of eligibility under the Plan
(but not for purposes of Section 4(b)) shall include a person to whom an offer
of employment has been extended by the Company.

B. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan.

C. NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder thereof.

D. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the date on which the Plan was
adopted by the Board, but Awards previously granted may extend beyond that date.

E. AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time.

F. GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
State of Florida, without regard to any applicable conflicts of law.

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EXHIBIT 10.21

YUPI INTERNET INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE 1 - PURPOSE.

This 2000 Employee Stock Purchase Plan (the "PLAN") is intended to
encourage stock ownership by all eligible employees of Yupi Internet Inc., a
Florida corporation (the "COMPANY"), and its participating subsidiaries (as
defined in Article 17) so that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the Company. The Plan is
designed to encourage eligible employees to remain in the employ of the Company
and its participating subsidiaries. The Plan is intended to constitute an
"employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "CODE").

ARTICLE 2 - ADMINISTRATION OF THE PLAN.

The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "COMMITTEE"). The Committee shall consist of not
less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee may select one of its members as Chairman, and
shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.

In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "COMMITTEE" wherever
used herein shall be deemed to mean the Board of Directors.

ARTICLE 3 - ELIGIBLE EMPLOYEES.

All employees of the Company or any of its participating subsidiaries
whose customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed 90 days of employment with
the Company shall be eligible to receive options under the Plan to purchase
common stock of the Company, and all eligible employees shall have the same
rights and privileges hereunder. Persons who are eligible employees on the first
business day of any Payment Period (as defined in Article 5) shall receive their
options as of such day. Persons who become eligible employees after any date on
which options are granted under the Plan shall be granted options on the first
day of the next succeeding Payment Period on which options are granted to
eligible employees under the

<PAGE>

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Plan. In no event, however, may an employee be granted an option if such
employee, immediately after the option was granted, would be treated as owning
stock possessing five percent or more of the total combined voting power or
value of all classes of stock of the Company or of any parent corporation or
subsidiary corporation, as the terms "parent corporation" and "subsidiary
corporation" are defined in Section 424(e) and (f) of the Code. For purposes of
determining stock ownership under this paragraph, the rules of Section 424(d) of
the Code shall apply, and stock which the employee may purchase under
outstanding options shall be treated as stock owned by the employee.

ARTICLE 4 - STOCK SUBJECT TO THE PLAN.

The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued common stock, par value $.0001 per share (the
"COMMON STOCK"), or shares of Common Stock reacquired by the Company, including
shares purchased in the open market. The aggregate number of shares which may be
issued pursuant to the Plan is Two Hundred Thousand (200,000), subject to
adjustment as provided in Article 12. If any option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available under the Plan.

ARTICLE 5 - PAYMENT PERIOD AND STOCK OPTIONS.

The first Payment Period during which payroll deductions will be
accumulated under the Plan shall commence on a date determined by the Board of
Directors and shall end on December 31, 2000. For the remainder of the duration
of the Plan, Payment Periods shall consist of the six-month periods commencing
on January 1 and July 1 and ending on June 30th and on December 31st of each
calendar year.

Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the Option
Price hereinafter provided for, a maximum of 1,000 shares, on condition that
such employee remains eligible to participate in the Plan throughout the
remainder of such Payment Period. The participant shall be entitled to exercise
the option so granted only to the extent of the participant's accumulated
payroll deductions on the last day of such Payment Period. If the participant's
accumulated payroll deductions on the last day of the Payment Period would
enable the participant to purchase more than 1,000 shares except for the
1,000-share limitation, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the 1,000 shares shall be
promptly refunded to the participant by the Company, without interest. The
"OPTION PRICE" per share for each Payment Period shall be the lesser of (i) 85%
of the average market price of the Common Stock on the first business day of the
Payment Period and (ii) 85% of the average market price of the Common Stock on
the last business day of the Payment Period, in either event rounded up to the
nearest cent. The foregoing limitation on the number of shares subject to option
and the Option Price shall be subject to adjustment as provided in Article 12.

For purposes of the Plan, the term "AVERAGE MARKET PRICE" on any date
means (i) the average (on that date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on the
Nasdaq National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the Nasdaq
National Market; or (iv) if the

<PAGE>

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Common Stock is not publicly traded, the fair market value of the Common Stock
as determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm's length.

For purposes of the Plan, the term "BUSINESS DAY" means a day on which
there is trading on the Nasdaq National Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or
legal holiday in the State of Florida.

No employee shall be granted an option which permits the employee's right
to purchase stock under the Plan, and under all other Section 423(b) employee
stock purchase plans of the Company and any parent or subsidiary corporations,
to accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with Section 423(b)(8)
of the Code. If the participant's accumulated payroll deductions on the last day
of the Payment Period would otherwise enable the participant to purchase Common
Stock in excess of the Section 423(b)(8) limitation described in this paragraph,
the excess of the amount of the accumulated payroll deductions over the
aggregate purchase price of the shares actually purchased shall be promptly
refunded to the participant by the Company, without interest.

ARTICLE 6 - EXERCISE OF OPTION.

Each eligible employee who continues to be a participant in the Plan on
the last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
the participant's accumulated payroll deductions on such date will pay for at
the Option Price, subject to the 1,000-share limit of the option and the Section
423(b)(8) limitation described in Article 5. If the individual is not a
participant on the last day of a Payment Period, the he or she shall not be
entitled to exercise his or her option. Only full shares of Common Stock may be
purchased under the Plan. Unused payroll deductions remaining in a participant's
account at the end of a Payment Period by reason of the inability to purchase a
fractional share shall be carried forward to the next Payment Period.

ARTICLE 7 - AUTHORIZATION FOR ENTERING THE PLAN.

An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:

A. Stating the percentage to be deducted regularly from the
employee's pay;

B. Authorizing the purchase of stock for the employee in each
Payment Period in accordance with the terms of the Plan; and

C. Specifying the exact name or names in which stock purchased
for the employee is to be issued as provided under Article 11 hereof.

Such authorization must be received by the Company at least ten days
before the first day of the next succeeding Payment Period and shall take effect
only if the employee is an eligible employee on the first business day of such
Payment Period.

<PAGE>

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Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.

The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.

ARTICLE 8 - MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.

An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) of the employee's total compensation, including base pay or salary and any
overtime, bonuses or commissions.

ARTICLE 9 - CHANGE IN PAYROLL DEDUCTIONS.

Deductions may not be increased or decreased during a Payment Period.
However, a participant may withdraw in full from the Plan.

ARTICLE 10 - WITHDRAWAL FROM THE PLAN.

A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal notice
to the Company.

To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least ten days before the first day of the next Payment
Period in which he or she wishes to participate. The employee's re-entry into
the Plan becomes effective at the beginning of such Payment Period, provided
that he or she is an eligible employee on the first business day of the Payment
Period.

ARTICLE 11 - ISSUANCE OF STOCK.

Certificates for stock issued to participants shall be delivered as soon
as practicable after each Payment Period by the Company's transfer agent.

Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.

ARTICLE 12 - ADJUSTMENTS.

Upon the happening of any of the following described events, a
participant's rights under options granted under the Plan shall be adjusted as
hereinafter provided:

A. In the event that the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if,
upon a reorganization, split-up, liquidation, recapitalization or the like
of the Company, the shares of Common Stock shall be exchanged for other
securities of the Company, each participant shall be entitled, subject to
the conditions herein stated, to purchase such number of shares of Common
Stock or amount of other securities of the Company as were exchangeable
for the number of shares of Common Stock that such participant would have
been entitled to purchase except for such action, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or exchange; and

<PAGE>

-5-

B. In the event the Company shall issue any of its shares as a
stock dividend upon or with respect to the shares of stock of the class
which shall at the time be subject to option hereunder, each participant
upon exercising such an option shall be entitled to receive (for the
purchase price paid upon such exercise) the shares as to which the
participant is exercising his or her option and, in addition thereto (at
no additional cost), such number of shares of the class or classes in
which such stock dividend or dividends were declared or paid, and such
amount of cash in lieu of fractional shares, as is equal to the number of
shares thereof and the amount of cash in lieu of fractional shares,
respectively, which the participant would have received if the participant
had been the holder of the shares as to which the participant is
exercising his or her option at all times between the date of the granting
of such option and the date of its exercise.

Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above. Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only
after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a "modification" (as that term is
defined in Section 424 of the Code). If the Committee determines that such
adjustments would constitute a modification, it may refrain from making such
adjustments.

If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "ACQUISITION"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "SUCCESSOR BOARD")
shall, with respect to options then outstanding under the Plan, either (i) make
appropriate provision for the continuation of such options by arranging for the
substitution on an equitable basis for the shares then subject to such options
either (a) the consideration payable with respect to the outstanding shares of
the Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c)
such other securities as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market value of the shares
of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant's options in exchange for a cash payment
equal to the excess of (a) the fair market value on the date of the Acquisition,
of the number of shares of Common Stock that the participant's accumulated
payroll deductions as of the date of the Acquisition could purchase, at an
option price determined with reference only to the first business day of the
applicable Payment Period and subject to the 1,000-share, Code Section 423(b)(8)
and fractional-share limitations on the amount of stock a participant would be
entitled to purchase, over (b) the result of multiplying such number of shares
by such option price.

The Committee or Successor Board shall determine the adjustments to be
made under this Article 12, and its determination shall be conclusive.

ARTICLE 13 - NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.

An option granted under the Plan may not be transferred or assigned and
may be exercised only by the participant.

<PAGE>

-6-

ARTICLE 14 - TERMINATION OF EMPLOYEE'S RIGHTS.

Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate, and the Company shall promptly refund, without interest,
the entire balance of his or her payroll deduction account under the Plan.
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or for so long as the
participant's right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.

If a participant's payroll deductions are interrupted by any legal
process, a withdrawal notice will be considered as having been received from the
participant on the day the interruption occurs.

ARTICLE 15 - TERMINATION AND AMENDMENTS TO PLAN.

Unless terminated sooner as provided below, the Plan shall terminate on
________, 2010. The Plan may be terminated at any time by the Company's Board of
Directors but such termination shall not affect options then outstanding under
the Plan. It will terminate in any case when all or substantially all of the
unissued shares of stock reserved for the purposes of the Plan have been
purchased. If at any time shares of stock reserved for the purpose of the Plan
remain available for purchase but not in sufficient number to satisfy all then
unfilled purchase requirements, the available shares shall be apportioned among
participants in proportion to the amount of payroll deductions accumulated on
behalf of each participant that would otherwise be used to purchase stock, and
the Plan shall terminate. Upon such termination or any other termination of the
Plan, all payroll deductions not used to purchase stock will be refunded,
without interest.

The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
options under the Plan, if such action would be treated as the adoption of a new
plan for purposes of Section 423(b) of the Code; or (iii) cause Rule 16b-3 under
the Securities Exchange Act of 1934 to become inapplicable to the Plan.

ARTICLE 16 - LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.

The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time the employee chooses,
subject to compliance with any applicable federal or state securities laws and
subject to any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY
MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

ARTICLE 17 - PARTICIPATING SUBSIDIARIES.

The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of

<PAGE>

-7-

Directors to participate in the Plan. The Board of Directors shall have the
power to make such designation before or after the Plan is approved by the
stockholders.

ARTICLE 18 - OPTIONEES NOT STOCKHOLDERS.

Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a stockholder of the shares
covered by an option until such shares have been actually purchased by the
employee.

ARTICLE 19 - APPLICATION OF FUNDS.

The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.

ARTICLE 20 - NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

By electing to participate in the Plan, each participant agrees to notify
the Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such dispositions generally
are treated as "disqualifying dispositions" under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.

ARTICLE 21 - WITHHOLDING OF ADDITIONAL INCOME TAXES.

By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other provision
of the Plan, the Company may withhold such taxes from the participant's
accumulated payroll deductions and apply the net amount to the purchase of
Common Stock, unless the participant pays to the Company, prior to the exercise
date, an amount sufficient to satisfy such withholding obligations. Each
participant further acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection with the
disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition

<PAGE>

-8-

of Common Stock by the participant upon the payment to the Company or such
subsidiary of an amount sufficient to satisfy such withholding requirements.

ARTICLE 22 - GOVERNMENTAL REGULATIONS.

The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.

Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.

ARTICLE 23 - GOVERNING LAW.

The validity and construction of the Plan shall be governed by the laws of
the State of Florida, without giving effect to the principles of conflicts of
law thereof.

ARTICLE 24 - APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY.

The Plan was adopted by the Board of Directors on February 7, 2000 and was
approved by the stockholders of the Company on _________, 2000.

EXHIBIT 23.03

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated March 2, 2000, relating to the financial statements of Yupi
Internet Inc., which appear in such Registration Statement. We also consent to
the reference to us under the heading "Experts" in such Registration Statement.

PricewaterhouseCoopers LLP
Miami, FL
March 7, 2000

EXHIBIT 23.04

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated July 27, 1999, relating to the financial statements of
Planificacion y Estrategia en Internet, S.L. and Illimited, S.L., which appear
in such Registration Statement. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.

PricewaterhouseCoopers Auditores, S.L.
Madrid, Spain
March 7, 2000

EXHIBIT 23.05

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated August 23, 1999, relating to the financial statements of Proveedora
de Servicios para Red Bogota.com Ltda., which appear in such Registration
Statement. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.

Price Waterhouse
Bogota, Colombia
March 7, 2000

<ARTICLE> 5

<S> <C>
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
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0
110,672,402
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