##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended March 31,
    2010o

TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission file number
    001-12475
      Terremark Worldwide,
    Inc.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

84-0873124(State or Other Jurisdiction
    of

(IRS EmployerIncorporation or
    Organization)

Identification
    No.)   2 South Biscayne Blvd. Suite 2800 Miami, Florida
    33131
 (Address of Principal Executive
    Offices, Including Zip Code)
  Registrants telephone number, including area code:
 (305) 961-3200
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, par value $0.001 per share

NASDAQ Global Market(Title of Class)

(Name of Exchange on Which
    Registered)   Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
      o þ
  o þ
  þ o
  o o
  o
    Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller Reporting
    company o   o þ
  The aggregate market value of the registrants common
    stock held by non-affiliates of the registrant computed by
    reference to the price at which the common stock was last sold
    as of the last business day of the registrants most
    recently completed second quarter was approximately $402,331,065
    (based on the closing market price of $6.22 per share for the
    registrants common stock as reported on the Nasdaq Global
    Market on September 30, 2009).
  The number of shares outstanding of the registrants
    common stock, par value $0.001 per share, as of May 31, 2010 was
    65,337,470
  DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
  Part IItem 1.


Business


2Item 1A.


Risk Factors


17Item 1B.


Unresolved Staff Comments


28Item 2.


Properties


28Item 3.


Legal Proceedings


28Item 4.


(Removed and Reserved)


28Part II


29Item 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


29Item 6.


Selected Financial Data


32Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


33Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


46Item 8.


Financial Statements and Supplementary Data


47Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


47Item 9A.


Controls and Procedures


47Item 9B.


Other Information


47Part III


48Item 10.


Directors, Executive Officers and Corporate
    Governance


48Item 11.


Executive Compensation


48Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


48Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


48Item 14.


Principal Accountant Fees and Services


48Part IV


49Item 15.


Exhibits and Financial Statements Schedules


49Signatures


54EX-10.53EX-21EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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PART I  ITEM 1.
    BUSINESS.  The words Terremark, we,
    our, ours, and us refer to
    Terremark Worldwide, Inc. All statements in this discussion that
    are not historical are forward-looking statements within the
    meaning of Section 21E of the Securities Exchange Act of
    1934, as amended, including statements regarding
    Terremarks expectations, beliefs,
    hopes, intentions,
    strategies or the like. Such statements are based on
    managements current expectations and are subject to a
    number of factors and uncertainties that could cause actual
    results to differ materially from those described in the
    forward-looking statements. Terremark cautions investors that
    actual results or business condition may differ materially from
    those projected or suggested in such forward-looking statements
    as a result of various factors, including, but not limited to,
    the risk factors discussed in this Annual Report on
    Form 10-K.
    Except as required by applicable law, Terremark expressly
    disclaims any obligation or undertaking to release publicly any
    updates or revisions to any forward-looking statements contained
    herein to reflect any change in Terremarks expectations
    with regard thereto or any change in events, conditions, or
    circumstances on which any such statements are based.
  Our
    Business
        
    Colocation Services:  We provide customers with
    the space, power and a secure environment to deploy their own
    computing, network, storage and IT infrastructure.
    Managed Services:  We design, deploy, operate,
    monitor and manage our clients IT infrastructure at our
    facilities.
    Exchange Point Services:  We enable our
    customers to exchange Internet and other data traffic through
    direct connection with each other or through peering connections
    with multiple parties. 2




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(305) 961-3200.
  Competitive
    Strengths
    
    Strategically located carrier neutral data
    centers Our purpose-built, carrier neutral data
    centers have been established in regions with considerable
    demand for our services. Because we are not a carrier and are
    not affiliated with a particular carrier, we can provide direct
    access to more than 160 carriers, including all global
    Tier 1 carriers, enabling our customers to realize
    significant cost savings, flexibility and the option to scale
    their network needs as their businesses grow. Our facilities are
    in immediate proximity to major fiber routes, providing
    convenient access to the United States, Europe and Latin
    America. The NAP of the Americas located in Miami, Florida was
    the first purpose-built, carrier neutral Network Access Point of
    its kind and is specifically designed to link the United States
    with the rest of the world.
    Competitive advantage in serving the federal
    sector We believe the combination of our
    long-standing relationships with the federal government, high
    level security clearances and our dedicated federal sales force
    provides us with a competitive advantage. Approximately 17.2% of
    our U.S. employee base has federal security clearances, and
    we are the first company awarded a GSA Schedule contract
    offering colocation space that satisfies the federal
    governments requirements to be accredited as a Sensitive
    Compartmented Information Facility (SCIF). Since we were awarded
    our first federal contract in 2004, we have had success in
    expanding our business with the Departments of Defense and State
    and we continue to collaborate with key federal IT integrators
    such as Computer Sciences Corporation and General Dynamics. Our
    cloud computing offerings have been adopted by the federal
    government to power sites of national importance such as usa.gov
    and data.gov and recognized by government leaders for lowering
    operating costs for federal IT outsourcing. Our market presence
    with the federal sector and system integrators is increasing as
    a result of the success of the NAP of the Capital Region
    together with the federal governments current focus on
    civilian agency IT infrastructure. The federal sector accounted
    for approximately 24% of our revenue for the year ended
    March 31, 2010.
    Comprehensive portfolio of IT solutions We
    offer our customers a comprehensive suite of services, including
    colocation, managed hosting, managed network, disaster recovery,
    security and cloud computing services. We believe that the
    breadth of our service offerings enables us to better meet our
    existing customers changing demands and to cross-sell
    various products and services within our portfolio. We have had
    significant success in cross-selling our products, with
    approximately 70% of our new bookings for the year ended
    March 31, 2010 generated by existing customers.
    Scalable infrastructure Our infrastructure is
    focused around our three primary facilities in Florida, Virginia
    and California, where visibility of future revenues is high and
    where we believe the probability of success is significant. We
    are able to spread the operating expenses and capital
    expenditures of each facility across the facilitys growing
    customer base. Our current purpose-built infrastructure also
    allows us to build out in incremental data centers within our
    facilities with relatively low incremental capital expenditures
    as demand increases.
    Diversified customer base We have a diverse
    customer base of approximately 1,300 enterprises, government
    agencies, systems integrators, internet content and portal
    companies and network providers, which are attracted by our
    fully integrated suite of products and services. Given the
    breadth of our customer base, no commercial customer represents
    more than 5% of total recurring revenue. 3




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
    Strong management team We have a seasoned
    operational, sales and financial management team, comprising
    individuals who have an average of approximately 9 years of
    communication and data center expertise. Most of our operational
    and sales team has been assembled from several of the
    worlds leading communication service providers.  Strategy
    
    Increase revenue from our existing customer base We will continue to pursue opportunities to
    provide new services to existing customers and capture an
    increasing portion of each customers IT spending. We
    believe that our comprehensive set of services establishes a
    foundation for cross-selling opportunities across our broad
    customer base. We will focus on cross-selling managed services
    to our existing colocation customers, as well as providing
    colocation services to existing managed services customers. We
    expect our focus on cross-selling to existing customers to
    maintain or lower our existing churn rates, which will provide
    us with increased revenue visibility.
    Leverage our competitive advantage to serve the federal
    sector We will broaden our reach with customers
    in the federal sector, including increasing our penetration of
    civilian agencies. We will do so by leveraging our dedicated
    resources, existing relationships, preferred GSA provider status
    and the prime location and design of our NAP in the Washington
    D.C. area. We believe that our prior experience and existing
    relationships in the federal sector have resulted in our ability
    to offer federal sector customers tailored colocation and
    managed services. We plan to further capitalize on the current
    federal administrations plans to increase their use of
    cloud computing, building off our recently awarded federal cloud
    computing contracts to host the USA.gov and Data.gov websites.
    We believe we are well-positioned to win additional business in
    the federal sector, increase our penetration of the civilian
    agencies and further augment our relationships with the large
    federal IT integrators and other potential partners.
    Continue our disciplined approach to expansion Our current expansion plans are focused on
    growth within our existing footprint when the demand for our
    services is established, where there are significant
    opportunities to grow revenue and where the probability of
    success is significant. The development of our NAP of the
    Capital Region, or NCR, is an example of this. We opened Pod 1
    at NCR in July 2008 and were able to contract over 80% of its
    total built-out space by January 2009. Similarly, we opened
    Pod 2 in early 2010 and launched the construction of
    Pod 3 on April 2010 and now the NCR campus (including
    Pod 3) is 65% contracted. With more than 90% of the built
    out space in the NAP of the Americas/West currently contracted,
    we intend to apply the same disciplined approach to expansion in
    that and our other markets.
    Invest in our proprietary service delivery technology and
    products  We will continue to invest in
    proprietary technologies, including our industry leading cloud
    computing solutions that provide reliable, cost-effective and
    flexible solutions to our customers and a technological
    advantage over our competitors. Our investment in proprietary
    technology and products enables us to automate service delivery
    processes, which will allow us to drive efficiencies and lower
    our operating costs.  Products
    and Services
    Colocation
   4




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Space and Power
  Sensitive Compartmented Information Facility
    (SCIF) Services
  Remote Hands/Smart Hands on-site
  Managed
    Services
    Managed Hosting Services
 5




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Service

DescriptionManaged Hosting

Offers flexibility, scalability and operating efficiency through
    our full-service, utility-enabled hosting solutions. We also
    provide a more comprehensive suite of hosting services, built
    around an application-centric philosophy, with application-level
    deep monitoring, return-to-service and code troubleshooting
    services. Includes full support for leading database and
    application platforms.Enterprise
    Cloud(tm)

The Enterprise Cloud service allows our customers to control a
    pool of processing, storage and networking resources that allow
    them to deploy server capacity on demand instead of investing in
    their own infrastructure.   Managed Network Services
  Service

DescriptionManaged NOC Services

Provide 24x7 immediate response, customer network monitoring and
    management and vendor support management.Managed Routing Service

Provides managed access to the telecommunication backbones of
    the worlds leading carriers. The facilities are complete
    with redundant systems and infrastructure. Intelligent routing
    maximizes optimal network connectivity.Managed Satellite Services

Provide 24x7 monitoring and management, vendor support
    management, spectrum management and on-demand move/add/change.   Equipment/Other
    Infinistructure ®
  digitalOps
 6




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Exchange
    Point Services
    Interconnect Services
  Peering Services IP-based
  Industry
    Trends
    
    Global Bandwidth Utilization Trends.  Demand
    for global IP traffic, according to Cisco Systems, Inc,
    increased at a combined annual growth rate, or CAGR, of 60% from
    2006 to 2009. This growth in end-user traffic over IP networks
    is expected to continue to grow due to continued adoption of
    broadband access to the Internet by businesses and consumers and
    significant mass adoption of high bandwidth and data-intensive
    consumer and business applications that have large file content.
    The introduction of more powerful computers and software
    applications will further exacerbate this trend, and Cisco
    projects IP traffic will grow at a CAGR of 46% from 2007 through
    2012. Penetration rates are also expected to increase and, when
    combined with increasing connection speeds, indicate that global
    IP traffic will continue to increase exponentially. Regional
    internet traffic is growing fastest in Latin America. Cisco
    projects total regional IP traffic in Latin America to grow at a
    57% CAGR from 2007 to 2012. The growth is driven mainly by
    increasing internet penetration and the advent of high-speed
    connections in some of the fastest and largest developing
    economies in the world such as Brazil, Argentina and Colombia.
    As the increase in global internet traffic continues to drive
    demand for IT infrastructure, we believe we are well positioned
    to benefit from these trends. Our facilities handle a
    significant amount of internet traffic in the U.S., our flagship
    facility, the NAP of the Americas, handles approximately 90% of
    Latin American IP traffic, and our Brazilian facility is the
    largest Internet exchange in South America.
    Rising Power and Cooling Requirements.  Power
    availability for equipment and cooling is one of the most
    important challenges facing data centers today. The power
    requirement of a modern server environment has grown
    significantly, making many legacy data centers which were not
    adequately equipped obsolete. While the size of networking and
    computing equipment continues to shrink, the increasing speed at
    which this equipment can receive, process and transmit data
    continues to fuel power requirements. Additionally, IDC expects
    the blade server market to continue to grow at by estimated
    20.8% in unit shipments from 2009 to 2013, accounting for nearly
    29.8% of the server market by 2011. We expect the demand for the
    higher power density and advanced cooling systems provided by
    our data centers to continue. 7




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
    Increasing Enterprise Demand for
    Outsourcing.  In the U.S., the following factors
    have contributed to enterprise customers increasingly
    outsourcing their data center operations:  Increased Technical Demands and Technological
    Developments.
  Increased Reliance on the Internet. e-commerce,
  Adoption of Network-Centric Computing and IP
    Services.
  Business Continuity and Disaster Recovery.
  Regulatory Compliance.
  
    Increased government demand for
    outsourcing:The U.S. Federal government has
    announced plans to increase the outsourcing of IT needs, which
    we expect will significantly boost federal demand for colocation
    and managed services, including cloud services, reducing
    government costs and increasing efficiency. Cloud computing is
    likely to be one of the key managed hosting services utilized in
    this initiative. Outsourcing through cloud computing allows the
    government to use a pool of processing, storage and networking
    resources that can be provisioned on demand, and offers advanced
    capabilities in cyber security. The commercial sector has also
    seen similar increased demand for utilizing cloud services such
    as those provided by Terremark to reduce the costs and increase
    efficiencies in IT outsourcing.  Customers
   8




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Sales and
    Marketing
  Sales
    
    Direct sales our direct salesforce is
    composed of 21 quota-bearing sales people based primarily
    in the U.S.
    Sales engagement team team of 5 professionals
    responsible for managing inbound demand from marketing campaigns
    and website visitors as well as conducting targeted sales
    outreach.
    Our Channels & Strategic Alliances group responsible for the acquisition, education and
    retention of channel partners and reseller agents.  Marketing
    
    Brand management and positioning This
    includes brand identity unification, positioning at the
    corporate and product levels, the development of methodology,
    marketing assets and brand awareness programs for all of our
    business units.
    Lead generation Utilizing online marketing,
    targeted advertising, direct marketing, event marketing, and
    public relations programs and strategies to design and execute
    successful lead generation campaigns leveraging inside and
    direct sales and channel teams and contribute meaningfully and
    measurably to pipeline and revenue goals.  Competition
    
    Internet data centers operated by established communications
    carriers such as AT&T, Level 3, Qwest, and Savvis.
    Unlike the major network providers that constructed data centers
    primarily to help sell bandwidth, we have aggregated multiple
    networks in each of our carrier neutral data centers, providing
    superior diversity, pricing and performance. Telecommunications
    companies data centers generally provide only one choice
    of carrier and prefer customers with high managed services needs
    as part of their pricing structures. Locating in our data
    centers provides access to a wide choice of top tier networks
    and allows customers to negotiate the best prices with a number
    of carriers, which we believe results in better economics and
    redundancy.
    Infrastructure service providers such as Equinix, Global Switch
    and Internap Network Services Corporation. Infrastructure
    service providers often provide either colocation or managed
    services or a combination with limited managed services. In
    contrast, we offer a full suite of both colocation and managed
    services through high quality, technologically advanced, secure
    data centers with
    24-hour
    support.
    Large scale system integrators such as IBM and HP. Most system
    integrators are primarily engaged to deliver large scale
    information systems, including their design and development, the
    management of vendor contracts, the purchase of equipment and
    technical integration. While there may be some overlap with our
    services, we focus on providing an end-to-end service offering
    in colocation and managed services. 9




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
    Wholesale providers of data center space such as Digital Realty
    Trust, Dupont Fabros and 365 Main Inc. These companies have data
    centers focused on meeting the outsourced data center needs of
    wholesale customer deployments. These centers primarily provide
    space and power on a wholesale basis without additional
    services. While certain of our customers demand the use of only
    the basic elements of our data centers (e.g. power, space and
    cooling), our focus is on attracting those customers who demand
    services in addition to the physical facilities necessary to
    house their equipment. In addition, wholesale customers are not
    typically suited to our model as we focus on providing space and
    services to a large number of diverse customers in each data
    center, which allows our customers and maximizes our financial
    returns on a per site basis.
    Managed hosting and cloud computing providers including
    Rackspace, SAVVIS, AT&T, Pipex, The Planet and Verio.
    Microsoft, Google and Amazon are also emerging competition, as
    they are currently making investments in cloud computing
    capabilities. These services allow customers to use shared or
    dedicated physical or virtual computer servers to house, serve
    and maintain various computing environments including websites
    and databases.  Employees
    Primary
    Data Centers
  NAP of
    the Americas
      24-hour
  NAP of
    the Capital Region
  50-mile
  30-acre
 10




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®
    NAP of
    the Americas/West
    Data
    Center Summary
    PotentialColocationSpaceLocation

Type

(sq. ft.)


Services ProvidedUnited StatesNAP of the Americas
    (Miami, FL)

Owned


315,000


Colocation; Exchange; Managed ServicesNAP of the Capital Region
    (Culpeper, VA)

Owned


250,000
(1)

Colocation; Exchange; Managed ServicesNAP of the Americas/West
    (Santa Clara, CA)Datacenter 1

Leased


30,000


Colocation; Exchange; Managed ServicesDatacenter 2

Owned


50,000


Colocation; Exchange; Managed ServicesDallas

Leased


7,100


Managed ServicesHerndon

Leased





Colocation; ExchangeInternationalBogota

Leased


18,000


Colocation; Exchange; Managed ServicesSao Paulo

Leased


8,700


Colocation; Exchange; Managed ServicesMadrid

Leased


6,500


Colocation; Exchange; Managed ServicesBrussels

Leased


1,000


Managed ServicesLondon

Leased


270


Colocation; Exchange; Managed ServicesAmsterdam

Leased


19,000


For future expansion  11




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(1)
    
    Represents total potential colocation space upon completion of
    five, 50,000 square foot pods. As of March 31, 2010,
    Pod 1 and 2 have been completed and Pod 3 is under construction.
    We intend to construct Pods 4 and 5 as needed to satisfy future
    demand for space in NAP of the Capital Region.  Financial
    Information About Geographic Areas
    March 31,2010


2009


2008Revenues:United States





$
249,761


$
218,935


$
163,278International






42,586



31,535



24,136$
292,347


$
250,470


$
187,414     March 31,2010


2009United States

$
479,595


$
390,790International


32,932



9,343$
512,527


$
400,133   Our
    History
  Form 10-K.
 12




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Directors
    and Executive Officers
    Name

Age

PositionManuel D. Medina


57


Chairman of the Board of Directors, President and Chief
    Executive OfficerJoseph R. Wright, Jr.


71


Vice Chairman of the Board of DirectorsGuillermo Amore


71


DirectorTimothy Elwes


74


DirectorAntonio S. Fernandez


70


DirectorArthur L. Money


70


DirectorMarvin S. Rosen


68


DirectorRodolfo A. Ruiz


61


DirectorFrank Botman


43


DirectorMelissa Hathaway


41


DirectorJamie Dos Santos


48


Chief Executive Officer Terremark  Federal GroupJose A. Segrera


39


Chief Financial OfficerNelson Fonseca


36


Chief Operating OfficerMarvin Wheeler


56


Chief Strategy OfficerAdam T. Smith


38


Chief Legal Officer   Manuel D. Medina
  Joseph R. Wright, Jr. e-commerce
  Guillermo Amore
 13




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Timothy Elwes
  Antonio S. Fernandez
  Arthur L. Money
  Marvin S. Rosen
  Rodolfo A. Ruiz
 14




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Frank Botman
  Melissa Hathaway
  Jamie Dos Santos
  Jose A. Segrera
  Nelson Fonseca
 15




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Marvin Wheeler
  Adam T. Smith
  Where You
    Can Find Additional Information
  1-800-SEC-0330 http://www.sec.gov. http://www.terremark.com Form 10-K.
 16




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ITEM 1A.
    RISK
    FACTORS.  Form 10-K.
  We
    have incurred substantial losses in the past and expect to
    continue to incur additional losses in the future, which may
    reduce our ability to raise capital.
    We may
    not be able to compete successfully against current and future
    competitors.
     17




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A
    significant portion of our revenues is from contracts with
    agencies of the United States government and uncertainties and
    costs inherent in the government contracting arena could
    adversely affect our business.
    and/or
     18




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We
    derive a significant portion of our revenues from a few clients;
    accordingly, a reduction in our clients demand for our
    services or the loss of clients could impair our financial
    performance.
    A
    failure to meet customer specifications or expectations could
    result in lost revenues, increased expenses, negative publicity,
    claims for damages and harm to our reputation and cause demand
    for our services to decline.
    
    delayed or lost revenue;
    requirements to provide additional services to a customer at
    reduced charges or no charge;
    negative publicity about us, which could adversely affect our
    ability to attract or retain customers; and
    claims by customers for substantial damages against us,
    regardless of our responsibility for the failure, which may not
    be covered by insurance policies and which may not be limited by
    contractual terms of our engagement.  Our
    ability to successfully market our services could be
    substantially impaired if we are unable to deploy new
    infrastructure systems and applications or if new infrastructure
    systems and applications deployed by us prove to be unreliable,
    defective or incompatible.
    Any
    interruptions in, or degradation of, our private transit
    Internet connections could result in the loss of customers or
    hinder our ability to attract new customers.
      Our
    network infrastructure could fail, which would impair our
    ability to provide guaranteed levels of service and could result
    in significant operating losses.
   19




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
    require us to spend substantial amounts of money to replace
    equipment or facilities;
    entitle customers to claim service credits or seek damages for
    losses under our service level guarantees;
    cause customers to seek alternate providers; or
    impede our ability to attract new customers, retain current
    customers or enter into additional strategic relationships.  Difficulties
    presented by international economic, political, legal,
    accounting and business conditions could harm our business in
    international markets.
    
    unexpected changes in regulatory, tax and political environments;
    longer payment cycles and problems collecting accounts
    receivable;
    fluctuations in currency exchange rates;
    our ability to secure and maintain the necessary physical and
    telecommunications infrastructure;
    challenges in staffing and managing foreign operations; and
    laws and regulations on content distributed over the Internet
    that are more restrictive than those currently in place in the
    United States.    We may
    encounter difficulties implementing our expansion
    plan.
    
    identify and obtain the use of locations in which we believe
    there is sufficient demand for our services;
    generate sufficient cash flow from operations or through
    additional debt or equity financings to support these expansion
    plans;
    hire, train and retain sufficient additional financial reporting
    management, operational and technical employees; and
    install and implement new financial and other systems,
    procedures and controls to support this expansion plan with
    minimal delays.   20




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Our
    dependence on third parties increases the risk that we will not
    be able to meet our customers needs for software, systems
    and services on a timely or cost-effective basis, which could
    result in the loss of customers.
      We
    could be subject to increased operating costs, as well as
    claims, litigation or other potential liability, in connection
    with risks associated with Internet security and the security of
    our systems.
  e-commerce
    We may
    be subject to legal claims in connection with the information
    disseminated through our network, which could divert
    managements attention and require us to expend significant
    financial resources.
    e-mails
  If we
    are unable to protect our intellectual property and prevent its
    use by third parties, our ability to compete in the market will
    be harmed.
   21




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Our
    products or services could infringe on the intellectual property
    rights of others, which may lead to litigation that could itself
    be costly, could result in the payment of substantial damages or
    royalties and/or prevent us from using technology that is
    essential to our products or services.
    
    cease selling or using any of our products or services that
    incorporate or makes use of the asserted intellectual property,
    which would adversely affect our revenue;
    pay substantial damages for past use of the asserted
    intellectual property;
    obtain a license from the holder of the asserted intellectual
    property, which license may not be available on reasonable
    terms, if at all; or
    redesign or rename, in the case of trademark claims, our
    products or services to avoid infringing the intellectual
    property rights of third parties, which may not be possible and
    could be costly and time-consuming if it is possible to do.  and/or
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We
    license intellectual property rights from third-party owners. If
    such owners do not properly maintain or enforce the intellectual
    property underlying such licenses, our competitive position and
    business prospects could be harmed. Our licensor may also seek
    to terminate our license.
      We
    rely on trade secrets and other forms of non-patent intellectual
    property protection. If we are unable to protect our trade
    secrets, other companies may be able to compete more effectively
    against us.
        We may
    be subject to damages resulting from claims that we or our
    employees have wrongfully used or disclosed alleged trade
    secrets of their former employers.
    We may
    be exposed to liability under non-solicitation agreements to
    which one or more of our employees may be a party with certain
    of our competitors.
   23




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##### Table of Contents



We may
    become subject to burdensome government regulation and legal
    uncertainties that could substantially harm our business or
    expose us to unanticipated liabilities.
    Our
    substantial leverage may impair our cash flow and financial
    condition and prevent us from fulfilling our obligations under
    the notes.
    
    making it more difficult for us to satisfy our obligations and
    comply with other restrictions under our notes and our other
    indebtedness;
    increasing our vulnerability to general adverse economic and
    industry conditions by making it more difficult for us to react
    quickly to changing conditions;
    limiting our ability to obtain additional or favorable financing
    to fund future working capital, capital expenditures, debt
    service requirements, acquisitions and other general corporate
    purposes;
    requiring that we use a substantial portion of our cash flow
    from operations for the payment of principal and interest on our
    indebtedness, therefore reducing our ability to use our cash
    flow to fund working capital, capital expenditures, acquisitions
    and general corporate purposes;
    limiting our flexibility in planning for, or reacting to,
    changes in our business, and the industry in which we
    operate; and
    placing us at a competitive disadvantage to those of our
    competitors that have less indebtedness.    
    general economic and capital markets conditions, and in
    particular the non-investment grade debt market;
    conditions in the Internet infrastructure market;
    credit availability from banks or other lenders;
    investor confidence in the telecommunications industry generally
    and our company specifically; and
    the success of our facilities.  Despite
    our current level of indebtedness, we may still be able to incur
    substantially more indebtedness, which could further exacerbate
    the risks associated with our substantial
    leverage.
   24




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##### Table of Contents



We
    will require a significant amount of cash to fund our debt
    service, working capital needs and our expansion plans, and our
    ability to generate sufficient cash depends upon many factors,
    some of which are beyond our control.
    Covenant
    restrictions under our indebtedness may limit our ability to
    operate our business.
    
    make restricted payments;
    incur additional debt and issue preferred or disqualified stock;
    create liens;
    create or permit to exist restrictions on our ability or the
    ability of our restricted subsidiaries to make
    certain payments or distributions;
    engage in sale-leaseback transactions;
    engage in mergers or consolidations or transfer all or
    substantially all of our assets;
    make certain dispositions and transfers of assets; and
    enter into transactions with affiliates.    If our
    financial condition deteriorates, we may be delisted by the
    NASDAQ, and our stockholders could find it difficult to sell our
    common stock.
    
    our financial condition and operating results appear to be
    unsatisfactory; 25




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##### Table of Contents




    we have sustained losses that are so substantial in relation to
    our overall operations or our existing financial condition has
    become so impaired that it appears questionable whether we will
    be able to continue operations
    and/or meet
    our obligations as they mature.      Our
    business could be harmed by prolonged electrical power outages
    or shortages, or increased costs of energy.
    We are
    dependent on key personnel and the loss of these key personnel
    could have a material adverse effect on our
    success.
    If the
    world-wide financial crisis and the ongoing economic recession
    continues or intensifies, our ability to meet long-term
    commitments and our ability to grow our business would be
    adversely affected; this could adversely affect our results of
    operations, cash flows and financial condition.
       26




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##### Table of Contents



Risk
    Factors Related to Our Common Stock
  Our
    stock price has been, and may continue to be, volatile, and you
    could lose all or part of your investment.
    
    actual or anticipated variations in our quarterly and annual
    results of operations;
    changes in market valuations of companies in our industry;
    changes in expectations of future financial performance or
    changes in estimates of securities analysts;
    fluctuations in stock market prices and volumes;
    future issuances of common stock or other securities;
    the addition or departure of key personnel; and
    announcements by us or our competitors of acquisitions,
    investments or strategic alliances.  We
    expect that the price of our common stock will be significantly
    affected by the availability of shares for sale in the
    market.
    
    4,575,200 shares of our common stock reserved for issuance
    upon conversion of our 6.625% Senior Convertible Notes;
    1,041,333 shares of our common stock reserved for issuance
    upon conversion of our Series I convertible preferred stock;
    2,340,037 shares of our common stock issuable upon exercise
    of options;
    2,429,994 shares of our nonvested stock; and
    2,018,128 shares of our common stock issuable upon exercise
    of warrants.   27




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##### Table of Contents



Our
    common shares are thinly traded and, therefore, relatively
    illiquid.
    Existing
    stockholders interest in us may be diluted by additional
    issuances of equity securities.
    We do
    not expect to pay dividends on our common stock, and investors
    will be able to receive cash in respect of the shares of common
    stock only upon the sale of the shares.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.    ITEM 2.
    PROPERTIES.    ITEM 3.
    LEGAL
    PROCEEDINGS.    ITEM 4.
    (REMOVED
    AND RESERVED). 28




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES.  Common
    Stock and Preferred Stock Information
      PricesFiscal Year 2010 Quarter Ended

High


LowJune 30, 2009

$
5.97


$
2.51September 30, 2009


6.50



4.34December 31, 2009


7.25



5.70March 31, 2010


8.98



6.17   PricesFiscal Year 2009 Quarter Ended

High


LowJune 30, 2008

$
7.32


$
5.27September 30, 2008


7.67



5.19December 31, 2008


6.92



2.56March 31, 2009


4.25



1.85    29




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##### Table of Contents



Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 Among Terremark Worldwide, Inc., The Russell 2000 Index
 And The RDG Internet Composite Index
  
 *
    $100 invested on March 31, 2005 in stock or index,
    including reinvestment of dividends.    Dividend
    Policy
  Form 10-K.
 30




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##### Table of Contents



Equity
    Compensation Plan Information
    Number of Securitiesto be Issued Upon


Weighted Average


Number of SecuritiesExercise of


Exercise Price of


Available for FutureOutstanding Options,


Outstanding Options,


Issuance Under EquityPlan Category

Warrants and Rights


Warrants and Rights


Compensation PlansEquity compensation plans approved by security holders


4,358,165


$
7.24



1,000,991Equity compensation plans not approved by security holders





$




  31




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA.    Twelve Months Ended March 31,2010


2009


2008


2007


2006(In thousands, except per share data)Results of Operations:Revenues

$
292,347


$
250,470


$
187,414


$
100,949


$
62,529Cost of revenues


159,596



136,434



100,886



56,902



38,824Other expenses


164,424



124,605



128,756



58,999



60,854Total expenses


324,020



261,039



229,642



115,901



99,678Net loss


(31,673
)


(10,569
)


(42,228
)


(14,952
)


(37,149
)Non-cash preferred dividend


(937
)


(807
)


(794
)


(676
)


(727
)Net loss attributable to common stockholders

$
(32,610
)

$
(11,376
)

$
(43,022
)

$
(15,628
)

$
(37,876
)Net loss per common share  basic

$
(0.51
)

$
(0.19
)

$
(0.74
)

$
(0.35
)

$
(0.88
)Net loss per common share  diluted

$
(0.51
)

$
(0.19
)

$
(0.74
)

$
(0.36
)

$
(0.88
)   As of March 31,2010


2009


2008


2007


2006(In thousands)Financial condition:(1)Property and equipment, net

$
404,656


$
301,002


$
231,674


$
137,937


$
129,893Total assets


650,246



516,342



503,860



309,646



204,716Long term obligations(2)


472,892



336,793



352,391



184,510



163,967Stockholders equity


80,487



82,998



90,522



89,499



13,836     (1)
    
    See Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources.(2)
    
    Long term obligations include secured loans less current
    portion, convertible debt less current portion, estimated fair
    value of derivatives embedded within convertible debt, deferred
    rent and other liabilities, deferred revenue less current
    portion, capital lease obligations less current portion and
    notes payable less current portion. 32




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.  This report contains forward-looking statements
    within the meaning of the Private Securities Litigation Reform
    Act of 1995 based on our current expectations, assumptions, and
    estimates about us and our industry. These forward-looking
    statements involve risks and uncertainties. Words such as
    believe, anticipate,
    estimate, expect, intend,
    plan, will, may, and other
    similar expressions identify forward-looking statements. In
    addition, any statements that refer to expectations, projections
    or other characterizations of future events or circumstances are
    forward-looking statements. All statements other than statements
    of historical facts, including, among others, statements
    regarding our future financial position, business strategy,
    projected levels of growth, projected costs and projected
    financing needs, are forward-looking statements. Our actual
    results could differ materially from those anticipated in such
    forward-looking statements as a result of several important
    factors including, without limitation, competitive factors,
    uncertainties inherent in government contracting, concentration
    of business with a small number of clients, the ability to
    service debt, substantial leverage, material weaknesses in our
    internal controls over financial reporting and our disclosure
    controls, energy costs, changes in interest rates, one-time
    events and other factors more fully described in Risk
    Factors and elsewhere in this report. The forward-looking
    statements made in this report relate to events only as of the
    date hereof. Because forward-looking statements are inherently
    subject to risks and uncertainties, some of which cannot be
    predicted or quantified, you should not rely upon
    forward-looking statements as predictions of future events.
    Except as required by applicable law, including the securities
    laws of the United States, and the rules and regulations of the
    Securities and Exchange Commission, we do not plan and assume no
    obligation to publicly update or revise any forward-looking
    statements contained herein after the date of this report,
    whether as a result of any new information, future events or
    otherwise.
  Our
    Business
        
    Colocation Services:  We provide customers with
    the space, power and a secure environment to deploy their own
    computing, network, storage and IT infrastructure. 33




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##### Table of Contents




    Managed Services:  We design, deploy, operate,
    monitor and manage our clients IT infrastructure at our
    facilities.
    Exchange Point Services:  We enable our
    customers to exchange Internet and other data traffic through
    direct connection with each other or through peering connections
    with multiple parties.    (305) 961-3200.
  Critical
    Accounting Policies and Estimates
      
    revenue recognition and allowance for bad debt;
    derivatives;
    accounting for income taxes;
    goodwill;
    impairment of long-lived assets; and
    share-based compensation.  Revenue
    Recognition and Allowance for Bad Debts
     34




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##### Table of Contents



Derivatives
          Accounting
    for Income Taxes
   35




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##### Table of Contents



Goodwill
      Impairment
    of Long-Lived Assets
      Share-based
    compensation
   36




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##### Table of Contents



Recent
    Accounting Pronouncements
    Recent
    Events
      Results
    of Operations
  Results
    of Operations for the Year Ended March 31, 2010 as Compared
    to the Year Ended March 31, 2009.
  Revenue.
    For The YearEndedMarch 31,2010


2009United States


85
%


87
%International


15
%


13
%100
%


100
%   For the Year Ended March 31,2010





2009Revenues consist of (in thousands):Colocation

$
111,173



38
%

$
82,714



33
%Managed and professional services


155,733



53
%


142,164



57
%Exchange point services


18,691



6
%


15,949



6
%Equipment resales


6,750



3
%


9,643



4
%$
292,347



100
%

$
250,470



100
%    37




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##### Table of Contents




    colocation services, such as licensing of space and provision of
    power;
    managed and professional services, such as network management,
    managed web hosting, outsourced network operating center
    services, network monitoring, procurement of connectivity,
    managed router services, secure information services, technical
    support and consulting;
    exchange point services, such as peering and cross
    connects; and
    procurement and installation of equipment.          Costs of Revenues.
    General and Administrative Expenses.
 38




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##### Table of Contents



Sales and Marketing Expenses.
  Depreciation and Amortization
    Expenses.
  Interest Expense.
  Interest Income.
  Change in Fair Value of Derivatives.
  Loss on Early Extinguishment of Debt.
  Results
    of Operations for the Year Ended March 31, 2009 as Compared
    to the Year Ended March 31, 2008.
  Revenue.
  For The YearEndedMarch 31,2009


2008United States


87
%


87
%International


13
%


13
%100
%


100
%  39




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##### Table of Contents



For The Year Ended March 31,2009





2008Revenues consist of (in thousands):Colocation

$
82,714



33
%

$
60,559



32
%Managed and professional services


142,164



57
%


111,702



60
%Exchange point services


15,949



6
%


12,592



7
%Equipment resales


9,643



4
%


2,561



1
%$
250,470



100
%

$
187,414



100
%     
    colocation services, such as licensing of space and provision of
    power;
    exchange point services, such as peering and cross connects;
    procurement and installation of equipment; and
    managed and professional services, such as network management,
    managed web hosting, outsourced network operating center
    services, network monitoring, procurement of connectivity,
    managed router services, secure information services, technical
    support and consulting.          Costs of Revenues.
   40




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##### Table of Contents



General and Administrative Expenses.
  Sales and Marketing Expenses.
  Depreciation and Amortization
    Expenses.
  Interest Expense.
  Interest Income.
  Change in Fair Value of Derivatives.
  Financing Charges and Other.
  Loss on Early Extinguishment of Debt.
  Liquidity
    and Capital Resources
   41




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##### Table of Contents



Sources
    and Uses of Cash
        Debt
    Obligations
   42




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##### Table of Contents



12%
    Senior Secured Notes
              12-month
  Year

Percentage2013


106
%2014


103
%2015 and thereafter


100
%      43




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##### Table of Contents



44




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##### Table of Contents



6.625% Senior
    Convertible Notes
        Debt
    Covenants
      Guarantees
    and Commitments
    Form 10-K)
  Capital Lease


Operating


Convertible


SecuredObligations


Leases


Debt


Loans


Total2011

$
6,820


$
17,002


$
3,789


$
56,400


$
84,0112012


4,924



16,094



3,789



56,400



81,2072013


2,488



12,431



3,789



56,400



75,1082014


89



12,343



59,086



56,400



127,9182015 and thereafter


75



54,952







667,400



722,427$
14,396


$
112,822


$
70,453


$
893,000


$
1,090,671  45




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##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.               46




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##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.  Form 10-K
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE.    ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Evaluation
    of Disclosure Controls and Procedures
  Disclosure
    Controls and Procedures
  Rule 13a-15(e)
      Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
    page F-3,
  Changes
    in Internal Control Over Financial Reporting
  Rule 13a-15(f)
  ITEM 9B.
    OTHER
    INFORMATION.   47




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.  Form 10-K.
      ITEM 11.
    EXECUTIVE
    COMPENSATION.    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.  Form 10-K.
    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.   48




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENTS SCHEDULES.      
    Managements Report on Internal Control over Financial
    Reporting.
    Report of Independent Registered Certified Public Accounting
    Firm on the Financial Statements  KPMG LLP.
    Report of Independent Registered Certified Public Accounting
    Firm on Internal Control Over Financial Reporting 
    KPMG LLP.
    Consolidated Balance Sheets as of March 31, 2010 and 2009.
    Consolidated Statements of Operations for the Years Ended
    March 31, 2010, 2009 and 2008.
    Consolidated Statement of Changes in Stockholders Equity
    for the Three Year Period Ended March 31, 2010.
    Consolidated Statements of Cash Flows for the Years Ended
    March 31, 2010, 2009 and 2008.
    Notes to Consolidated Financial Statements.        ExhibitNumber

Description of Exhibit3
.1

Certificate of Merger of Terremark Holdings, Inc. with and into
    AmTec, Inc. (filed as Exhibit 3.1 to the Companys
    Registration Statement on Form S-3 filed on May 15, 2000 and
    incorporated by reference herein).3
.2

Restated Certificate of Incorporation of the Company (filed as
    Exhibit 3.1 to the Companys Registration Statement on Form
    S-3 filed on May 15, 2000 and incorporated by reference herein).3
.3

Certificate of Amendment to Certificate of Incorporation of the
    Company (filed as Exhibit 3.3 to the Companys Registration
    Statement on Form S-1/A filed on December 21, 2004 and
    incorporated by reference herein).3
.4

Certificate of Designations of Preferences of Series I
    Convertible Preferred Stock of the Company (filed as Exhibit 3.6
    to the Companys Registration Statement on Form S-3/A filed
    on March 17, 2004 and incorporated by reference herein).3
.5

Certificate of Amendment to Certificate of Incorporation of the
    Company (filed as Exhibit 3.7 to the Companys Current
    Report on Form 8-K filed on May 18, 2005 and incorporated by
    reference herein).3
.6

Second Amended and Restated Bylaws of the Company (filed as
    Exhibit 3.1 to the Companys Current Report on Form 8-K
    filed on February 7, 2008 and incorporated by reference herein).4
.1

Specimen Stock Certificate (filed as Exhibit 4.6 to the
    Companys Current Report on Form 8-K filed on May 18, 2005
    and incorporated by reference herein).4
.2

Form of Warrant for the Purchase of Common Stock (filed as
    Exhibit 4.1 to the Companys Current Report on Form 8-K
    filed on April 15, 2003 and incorporated by reference herein).4
.3

Indenture dated as of June 14, 2004, including form of
    9% Senior Convertible Note due 2009, (filed as Exhibit 4.5
    to the Companys Quarterly Report on Form 10-Q filed on
    August 9, 2004 and incorporated by reference herein). 49




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##### Table of Contents



ExhibitNumber

Description of Exhibit4
.4

Indenture dated as of January 5, 2007 by and between Terremark
    Worldwide, Inc. and Bank of New York Trust Company, N.A.,
    as trustee (filed as Exhibit 10.42 to the Companys Current
    Report on Form 8-K filed on January 11, 2007 and incorporated by
    reference herein).4
.5

Indenture dated as of May 2, 2007 by and between Terremark
    Worldwide, Inc. and Bank of New York Trust Company, N.A., as
    trustee (filed as Exhibit 4.1 to the Companys Current
    Report on Form 8-K filed on May 4, 2007 and incorporated by
    reference herein).4
.6

Indenture, dated June 24, 2009, by and among the Company,
    certain of the Companys subsidiaries and The Bank of New
    York Mellon Trust Company, N.A., as trustee (filed as Exhibit
    4.1 to the Companys Current Report on Form 8-K filed on
    June 29, 2009 and incorporated by reference herein).4
.7

Form of Note (filed as Exhibit 4.2 to the Companys Current
    Report on Form 8-K filed on June 29, 2009 and incorporated by
    reference herein).4
.8

Supplemental Indenture, dated April 28, 2010, by and among
    the Company, certain of the Companys subsidiaries and The
    Bank of New York Mellon Trust Company, N.A., as trustee (filed
    as Exhibit 4.1 to the Companys Current Report on
    Form 8-K filed on April 29, 2010 and incorporated by
    reference herein).4
.9

Form of New Note (filed as Exhibit 4.2 to the
    Companys Current Report on Form 8-K filed on
    April 29, 2010 and incorporated by reference herein).5
.1

Legal opinion of Greenberg Traurig, P.A.**10
.1

1995 Stock Option Plan (previously filed as part of the
    Companys Transition Report on
    Form 10-KSB
    for the transition period from October 1, 1994 to March 31, 1995
    and incorporated by reference herein).+10
.2

1996 Stock Option Plan (previously filed as part of the
    Companys Transition Report on
    Form 10-KSB
    for the transition period from October 1, 1994 to March 31, 1995
    and incorporated by reference herein).+10
.3

Net Premises Lease by and between Rainbow Property Management,
    LLC and Coloconnection, Inc. (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K filed on April 15,
    2003 and incorporated by reference herein).10
.4

Amended and Restated 2000 Stock Option Plan (filed as Exhibit
    4.1 to the Companys Registration Statement on Form S-8
    filed on August 19, 2004 and incorporated by reference herein).+10
.5

Agreement between Fundacão De Amparo A Pesquisa Do Estado
    De Sao Paulo  FAPESP and Terremark Latin America
    (Brazil) Ltda. (previously filed as an exhibit to the
    Companys Registration Statement on Form S-3/A filed on
    December 22, 2003 and incorporated by reference herein).10
.6

Form of Warrant Certificate of Terremark Worldwide, Inc. issued
    to Citigroup Global Markets Realty Corp. (filed as Exhibit 10.27
    to the Companys Current Report on Form 8-K filed on
    January 6, 2005 and incorporated by reference herein).10
.7

Form of Warrant Certificate of Terremark Worldwide, Inc. issued
    to the Purchasers (filed as Exhibit 10.31 to the
    Companys Current Report on Form 8-K filed on January 6,
    2005 and incorporated by reference herein).10
.8

2005 Executive Incentive Compensation Plan (filed as Exhibit A
    to the Companys Definitive Proxy Statement relating to the
    Companys 2005 Annual Meeting of Stockholders and
    incorporated by reference herein).+10
.9

Amended and Restated Employment Letter Agreement between
    Terremark Worldwide, Inc. and Arthur L. Money (filed as Exhibit
    10.38 to the Companys Annual Report on Form 10-K filed on
    June 16, 2006 and incorporated by reference herein).+#10
.10

Consulting Agreement, dated as of November 8, 2006, by and
    between Terremark Management Services, Inc. and Guillermo Amore
    (filed as Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q filed on November 9, 2006 and incorporated by
    reference herein).+#10
.11

Purchase Agreement, dated as of January 5, 2007, by and among
    Terremark Worldwide, Inc., as issuer, the guarantors named
    therein, the agent named therein, and each of the purchasers
    named therein (filed as Exhibit 10.39 to the Companys
    Current Report on Form 8-K filed on January 11, 2007 and
    incorporated by reference herein).10
.12

Registration Rights Agreement, dated as of January 5, 2007 by
    and among Terremark Worldwide, Inc. and Credit Suisse
    International (previously filed as Exhibit 10.41 to the
    Companys Current Report on Form 8-K filed on January 11,
    2007 and incorporated by reference herein). 50




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.13

Capital Lease Facility Commitment Letter by and between
    Terremark Worldwide, Inc. and Credit Suisse Securities (USA) LLC
    and Credit Suisse, Cayman Islands Branch dated January 5, 2007
    (filed as an Exhibit 10.46 to the Companys Current Report
    on Form 8-K filed on January 11, 2007 and incorporated by
    reference herein).10
.14

Form of Note of Terremark Worldwide, Inc. issued to Credit
    Suisse, International (filed as Exhibit 10.48 to the
    Companys Current Report on Form 8-K filed on January 11,
    2007 and incorporated by reference herein).10
.15

Participation Agreement, dated as of February 15, 2007, by and
    among Culpeper Lessor 2007-1 LLC, as Lessor, NAP of the Capital
    Region, LLC, as Lessee and Terremark Worldwide, Inc., as
    Guarantor (filed as Exhibit 10.49 to the Companys Current
    Report on Form 8-K filed on February 20, 2007 and incorporated
    by reference herein).10
.16

Lease Agreement, dated as of February 15, 2007, by and between
    Culpeper Lessor 2007-1 LLC and NAP of the Capital Region, LLC
    (filed as Exhibit 10.50 to the Companys Current Report on
    Form 8-K
    filed on February 20, 2007 and incorporated by reference herein).10
.17

Guaranty, dated as of February 15, 2007 by Terremark Worldwide,
    Inc. in favor of Culpeper Lessor 2007-1 LLC (filed as Exhibit
    10.51 to the Companys Current Report on Form 8-K filed on
    February 20, 2007 and incorporated by reference herein).10
.18

Lease Supplement, Memorandum of Lease Agreement and Remedies,
    dated as of February 15, 2007, by and among Culpeper Lessor
    2007-I LLC, as Lessor, NAP of the Capital Region, LLC, as Lessee
    and James W. DeBoer, as Trustee (filed as Exhibit 10.52 to the
    Companys Current Report on
    Form 8-K
    filed on February 20, 2007 and incorporated by reference herein).10
.19

Appendix I to Participation Agreement, Lease Agreement and Other
    Operative Documents  Definitions and
    Interpretation (filed as Exhibit 10.53 to the Companys
    Current Report on Form 8-K filed on February 20, 2007 and
    incorporated by reference herein).10
.20

Interest Purchase Agreement, dated May 11, 2007, by and among
    the Company and the Sellers of Data Return LLC (filed as Exhibit
    10.1 to the Companys Current Report on Form 8-K filed on
    May 16, 2007 and incorporated by reference herein).10
.21

Registration Rights Agreement, dated May 11, 2007, by and among
    the Company and the Sellers (filed as Exhibit 10.2 to the
    Companys Current Report on Form 8-K filed on May 16, 2007
    and incorporated by reference herein).10
.22

First Lien Senior Secured Credit Agreement, dated as of July 31,
    2007, by and among the Company, each lender from time to time
    party thereto, Credit Suisse, as administrative agent and
    collateral agent and Societe Generale, as syndication agent
    (filed as Exhibit 10.60 to the Companys Current Report on
    Form 8-K filed on August 6, 2007 and incorporated by reference
    herein).10
.23

Form of First Lien Term Note (filed as Exhibit 10.61 to the
    Companys Current Report on Form 8-K filed on August 6,
    2007 and incorporated by reference herein).10
.24

Second Lien Senior Secured Credit Agreement, dated as of July
    31, 2007, by and among the Company, each lender from time to
    time party thereto and Credit Suisse, as administrative agent
    and collateral agent (filed as Exhibit 10.62 to the
    Companys Current Report on Form 8-K filed on
    August 6, 2007 and incorporated by reference herein).10
.25

Form of Second Lien Term Note (filed as Exhibit 10.63 to the
    Companys Current Report on
    Form 8-K
    filed on August 6, 2007 and incorporated by reference herein).10
.26

First Lien Security Agreement, dated as of July 31, 2007, by and
    among the Company, the other Persons listed on the signature
    pages thereto, the Additional Grantors and Credit Suisse, as
    collateral agent for the Secured Parties (filed as Exhibit 10.64
    to the Companys Current Report on Form 8-K filed on August
    6, 2007 and incorporated by reference herein).10
.27

Second Lien Security Agreement, dated as of July 31, 2007, by
    and among the Company, the other Persons listed on the signature
    pages thereto, the Additional Grantors and Credit Suisse, as
    collateral agent for the Secured Parties (filed as Exhibit 10.65
    to the Companys Current Report on Form 8-K filed on August
    6, 2007 and incorporated by reference herein). 51




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.28

First Lien Subsidiary Guaranty, dated as of July 31, 2007, by
    and among the Subsidiary Guarantors and the Additional
    Guarantors in favor of the Secured Parties (filed as Exhibit
    10.66 to the Companys Current Report on Form 8-K filed on
    August 6, 2007 and incorporated by reference herein).10
.29

Second Lien Subsidiary Guaranty, dated as of July 31, 2007, by
    and among the Subsidiary Guarantors and the Additional
    Guarantors in favor of the Secured Parties (filed as Exhibit
    10.67 to the Companys Current Report on Form 8-K filed on
    August 6, 2007 and incorporated by reference herein).10
.30

Intercreditor Agreement, dated as of July 31, 2007, by and among
    the Company, Credit Suisse, Cayman Islands Branch, in its
    capacity as collateral agent for the First Lien Lenders,
    including its successors and assigns from time to time, and
    Credit Suisse, in its capacity as collateral agent for the
    Second Lien Lenders, including its successors and assigns from
    time to time (filed as Exhibit 10.68 to the Companys
    Current Report on Form 8-K filed on August 6, 2007 and
    incorporated by reference herein).10
.31

Amendment to Terremark Worldwide, Inc. 2005 Executive Incentive
    Compensation Plan (filed as Exhibit A to the Companys
    Definitive Proxy Statement in Connection with the Companys
    2007 Annual Meeting of Stockholders and incorporated by
    reference herein).+10
.32

Real Property Purchase Agreement, dated March 9, 2007, by and
    between DPJV II, LLC, BDP Partners, L.P., EJLJ Mathews Family
    Partners, L.P. and EGP Partners, L.P. and NAP of the
    Americas/West, Inc. (filed as Exhibit 10.69 to the
    Companys Current Report on Form 8-K filed on September 10,
    2007 and incorporated by reference herein).10
.33

Lease Termination Agreement, dated July 2, 2007, by and between
    NAP of the Americas/West, Inc. and Equant, Inc. (filed as
    Exhibit 10.70 to the Companys Current Report on Form 8-K
    filed on September 10, 2007 and incorporated by reference
    herein).10
.34

Employment Agreement with Manuel D. Medina dated February 7,
    2008 (filed as Exhibit 10.1 to the Companys Quarterly
    Report on Form 10-Q filed on February 8, 2008 and incorporated
    by reference herein).+#10
.35

Form of Indemnification Agreement for directors and officers of
    the Company (filed as exhibit 10.39 to the Companys Annual
    Report on Form 10-K filed on June 16, 2008 and incorporated by
    reference herein)+#10
.36

Form of Restricted Stock Agreement (filed as exhibit 10.40 to
    the Companys Annual Report on Form 10-K filed on June 16,
    2008 and incorporated by reference herein).+#10
.37

Employment Agreement with Adam T. Smith dated June 13, 2008
    (filed as exhibit 10.41 to the Companys Annual Report on
    Form 10-K filed on June 16, 2008 and incorporated by reference
    herein).+#10
.38

Employment Agreement with Jose A. Segrera dated June 13, 2008
    (filed as exhibit 10.42 to the Companys Annual Report on
    Form 10-K filed on June 16, 2008 and incorporated by reference
    herein).+#10
.39

Employment Agreement with Marvin Wheeler dated June 13, 2008
    (filed as exhibit 10.43 to the Companys Annual Report on
    Form 10-K filed on June 16, 2008 and incorporated by reference
    herein).+#10
.40

Employment Agreement with Jamie Dos Santos dated July 18, 2008
    (filed as Exhibit 10.1 to the Companys Current Report on
    Form 8-K filed on July 21, 2008 and incorporated by reference
    herein).+#10
.41

Amendment to Terremark Worldwide, Inc. 2005 Executive Incentive
    Compensation Plan (filed as Exhibit A to the Companys
    Definitive Proxy Statement in Connection with the Companys
    2008 Annual Meeting of Stockholders and incorporated by
    reference herein).+#10
.42

Subscription Agreement, dated as of May 25, 2009, between the
    Company and VMware Bermuda Limited (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K filed on May 27, 2009
    and incorporated by reference herein).10
.43

Purchase Agreement, dated June 17, 2009, by and among the
    Company, certain of the Companys subsidiaries and the
    Initial Purchasers (filed as Exhibit 10.1 to the Companys
    Current Report on Form 8-K filed on June 18, 2009 and
    incorporated by reference herein).10
.44

Registration Rights Agreement, dated June 24, 2009, by and among
    the Company, certain of the Companys subsidiaries and
    Credit Suisse Securities (USA) LLC on behalf of the Initial
    Purchasers named therein (filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K filed on June 29, 2009
    and incorporated by reference herein). 52




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.45

Security Agreement, dated June 24, 2009, by and among the
    Company, certain of the Companys subsidiaries and U.S.
    Bank National Association, as collateral trustee (filed as
    Exhibit 10.2 to the Companys Current Report on Form 8-K
    filed on June 29, 2009 and incorporated by reference herein).10
.46

Intellectual Property Security Agreement, dated June 24, 2009,
    by and among the Company, certain of the Companys
    subsidiaries and U.S. Bank National Association, as collateral
    trustee (filed as Exhibit 10.3 to the Companys
    Current Report on Form 8-K filed on June 29, 2009 and
    incorporated by reference herein).10
.47

Collateral Trust Agreement, dated June 24, 2009, by and among
    the Company, certain of the Companys subsidiaries, U.S.
    Bank National Association, as collateral trustee, the other
    Secured Debt Representatives from time to time party thereto and
    The Bank of New York Mellon Trust Company, N.A., as trustee
    under the Indenture (filed as Exhibit 10.4 to the Companys
    Current Report on Form 8-K filed on June 29, 2009 and
    incorporated by reference herein).10
.48

Consulting Agreement, dated February 8, 2010, by and
    between the Company and Hathaway Global Strategies, LLC (filed
    as Exhibit 10.6 to the Companys Quarterly Report on
    Form 10-Q filed on February 10, 2010 and incorporated by
    reference herein).10
.49

Purchase Agreement, dated April 23, 2010, by and among the
    Company, the Guarantors and the Initial Purchaser (filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K filed on April 29, 2010 and incorporated by
    reference herein).10
.50

Registration Rights Agreement, dated April 28, 2010, by and
    among the Company, the Guarantors and the Initial Purchaser
    (filed as Exhibit 10.2 to the Companys Current Report
    on Form 8-K filed on April 29, 2010 and incorporated
    by reference herein).10
.51

Amendment to Collateral Trust Agreement, dated April 28,
    2010, by and among the Company, the Guarantors and the
    Collateral Trustee (filed as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    filed on April 29, 2010 and incorporated by reference
    herein).10
.52

Additional Secured Debt Designation, dated April 28, 2010,
    by and between the Company and the Collateral Trustee (filed as
    Exhibit 10.4 to the Companys Current Report on
    Form 8-K filed on April 29, 2010 and incorporated by
    reference herein).10
.53

Amended and Restated Employment Agreement with Nelson Fonseca,
    dated June 10, 2010.+#*21


Subsidiaries of the Company*23
.1

Consent of KPMG LLP*31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a)*31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a)*32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002*32
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002*     *
    
    Filed with this Annual Report on Form 10-K.+
    
    Compensation plan or arrangement.#
    
    Management contract 53




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##### Table of Contents



SIGNATURES    TERREMARK WORLDWIDE, INC.
  MANUEL
    D. MEDINA
   Chairman of the Board, President and
 Chief Executive Officer
 (Principal Executive Officer)
 Date:
    June 11, 2010
  JOSE
    A. SEGRERA
   Executive Vice President and Chief Financial Officer
 (Principal Financial and Accounting Officer)
 Date:
    June 11, 2010
    Signature

Title

Date/s/  MANUEL
    D. MEDINAManuel
    D. Medina

Chairman of the Board, President
    and Chief Executive Officer
    (Principal Executive Officer)

June 11, 2010/s/  GUILLERMO
    AMOREGuillermo
    Amore

Director

June 11, 2010/s/  TIMOTHY
    ELWESTimothy
    Elwes

Director

June 11, 2010/s/  ANTONIO
    S. FERNANDEZAntonio
    S. Fernandez

Director

June 11, 2010/s/  HON.
    ARTHUR L. MONEYHon.
    Arthur L. Money

Director

June 11, 2010/s/  MARVIN
    S. ROSENMarvin
    S. Rosen

Director

June 11, 2010/s/  MELISSA
    HATHAWAYMelissa
    Hathaway

Director

June 11, 2010/s/  RODOLFO
    A. RUIZRodolfo
    A. Ruiz

Director

June 11, 2010/s/  JOSEPH
    R. WRIGHT, JR.Joseph
    R. Wright, Jr.

Director

June 11, 2010/s/  FRANK
    BOTMANFrank
    Botman

Director

June 11, 2010/s/  JOSE
    A. SEGRERAJose
    A. Segrera

Executive Vice President
    and Chief Financial Officer
    (Principal Financial and Accounting Officer)

June 11, 2010  54




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##### Table of Contents



EXHIBIT SCHEDULE
  ExhibitNumber

Description10
.53

Amended and Restated Employment Agreement with Nelson Fonseca,
    dated June 10, 2010.#*21


Subsidiaries of the Company*23
.1

Consent of KPMG LLP*31
.1

Certification of Chief Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002*31
.2

Certification of Chief Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002*32
.1

Certification of Chief Executive Officer, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002*32
.2

Certification of Chief Financial Officer, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002*  55




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##### Table of Contents



Table of
    Contents
  PageAudited Consolidated Financial StatementsReport of Independent Registered Public
    Accounting Firm


F-2Report of Independent Registered Public
    Accounting Firm


F-3Consolidated Balance Sheets as of March 31,
    2009 and 2010


F-4Consolidated Statements of Operations for the
    years ended March 31, 2008, 2009 and 2010


F-5Consolidated Statement of Changes in
    Stockholders Equity for the years ended March 31,
    2008, 2009 and 2010


F-6Consolidated Statements of Cash Flows for the
    years ended March 31, 2008, 2009 and 2010


F-7Notes to Consolidated Financial Statements


F-8  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Internal Control  Integrated
    Framework
  
    F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control 
    Integrated Framework
        Internal Control  Integrated
    Framework
    
    F-3




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
 CONSOLIDATED
    BALANCE SHEETS

(In thousands, except per share data)  March 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
53,468


$
51,786Restricted cash






1,107Accounts receivable, net


50,266



35,816Current portion of capital lease receivable


418



631Prepaid expenses and other current assets


12,605



8,615Total current assets


116,757



97,955Restricted cash


1,959



1,484Property and equipment, net


404,656



301,002Debt issuance costs, net


3,384



7,409Other assets


15,384



8,907Capital lease receivable, net of current portion


235



454Intangibles, net


11,759



12,992Goodwill


96,112



86,139Total assets

$
650,246


$
516,342LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of capital lease obligations and secured loans

$
4,919


$
3,823Accounts payable and other current liabilities


91,948



60,352Current portion of convertible debt






32,376Total current liabilities


96,867



96,551Secured loans, less current portion


388,835



252,728Convertible debt, less current portion


57,192



57,192Deferred rent and other liabilities


18,351



19,133Deferred revenue


8,514



7,740Total liabilities


569,759



433,344Commitments and contingencies






Stockholders equity:Series I convertible preferred stock: $.001 par value,
    312 shares issued and outstanding (liquidation value of
    approximately $8.0 million)






Common stock: $.001 par value, 100,000,000 shares
    authorized; 65,058,331 and 59,740,750 shares issued and
    outstanding


65



60Common stock warrants


8,901



8,960Additional paid-in capital


456,860



428,251Accumulated deficit


(384,667
)


(352,994
)Accumulated other comprehensive loss


(672
)


(1,279
)Total stockholders equity


80,487



82,998Total liabilities and stockholders equity

$
650,246


$
516,342    F-4




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF OPERATIONS(In
    thousands, except per share data)  For The Year Ended March 31,2010


2009


2008Revenues

$
292,347


$
250,470


$
187,414Expenses:Cost of revenues, excluding depreciation and amortization


159,596



136,434



100,886General and administrative


34,782



36,795



32,267Sales and marketing


28,774



26,549



20,887Depreciation and amortization


37,882



28,224



18,685Total operating expenses


261,034



228,002



172,725Income from operations


31,313



22,468



14,689Other (expenses) income:Interest expense


(49,643
)


(29,980
)


(32,105
)Interest income


356



1,332



5,231Change in fair value of derivatives


(1,464
)


(3,886
)


(1,107
)Financing charges and other


60



(582
)


(1,173
)Loss on early extinguishment of debt


(10,275
)






(26,950
)Total other expenses


(60,966
)


(33,116
)


(56,104
)Loss before income taxes


(29,653
)


(10,648
)


(41,415
)Income tax expense (benefit)


2,020



(79
)


813Net loss


(31,673
)


(10,569
)


(42,228
)Preferred dividend


(937
)


(807
)


(794
)Net loss attributable to common stockholders

$
(32,610
)

$
(11,376
)

$
(43,022
)Net loss per common share:Basic and diluted

$
(0.51
)

$
(0.19
)

$
(0.74
)Weighted average common shares outstanding  basic and
    diluted


63,977



59,438



58,134    F-5




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##### Table of Contents






TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
   AccumulatedPreferred

Common Stock Par

Common

Additional



OtherStock

Value $.001

Stock

Paid-In

Accumulated

Comprehensive

NotesSeries I

Issued Shares

Amount

Warrants

Capital

Deficit

(Loss) Income

Receivable

TotalBalance at March 31, 2007

$



55,813

$
56

$
12,597

$
377,138

$
(300,197
)
$
90

$
(184
)
$
89,500Components of comprehensive (loss) income:Net loss

















(42,228
)







(42,228
)Foreign currency translation adjustment




















1,079


(18
)

1,061Total comprehensive loss


























(41,167
)Conversion of preferred stock





36




















Issuance of common stock in connection with acquisition





2,316


2





16,744











16,746Accrued dividends on preferred stock














(794
)










(794
)Expiration of warrants











(1,380
)

1,380











Issuance of common stock in settlement of share-based awards





398








1,073











1,073Share-based compensation














2,570











2,570Issuance of common stock in public offering





609


1





4,404











4,405Repayments of loans issued to employees























154


154Premium on issuance of convertible debt














13,728











13,728Expiration of early conversion incentive feature within
    convertible debt














4,308











4,308Balance at March 31, 2008





59,172


59


11,217


420,551


(342,425
)

1,169


(48
)

90,523Components of comprehensive (loss) income:


























Net loss

















(10,569
)







(10,569
)Foreign currency translation adjustment




















(2,448
)

4


(2,444
)Total comprehensive loss


























(13,013
)Accrued dividends on preferred stock














(807
)










(807
)Expiration of warrants











(2,257
)

2,257











Share-based compensation














4,941











4,941Issuance of common stock in settlement of share-based awards





569


1





1,309











1,310Repayments of loans issued to employees























44


44Balance at March 31, 2009





59,741


60


8,960


428,251


(352,994
)

(1,279
)




82,998Components of comprehensive (loss) income:Net loss

















(31,673
)







(31,673
)Foreign currency translation adjustment




















607





607Total comprehensive loss


























(31,066
)Expiration of warrants











(59
)

59











Accrued dividends on preferred stock














(937
)










(937
)Issuance of common stock in connection with a private placement





4,000


4





19,932











19,936Issuance of common stock in settlement of share-based awards





1,317


1





3,143











3,144Share-based compensation














6,412











6,412Balance at March 31, 2010

$



65,058

$
65

$
8,901

$
456,860

$
(384,667
)
$
(672
)
$


$
80,487     F-6




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS(In
    thousands)  For The Year Ended March 31,2010


2009


2008Cash flows from operating activities:Net loss

$
(31,673
)

$
(10,569
)

$
(42,228
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


37,882



28,224



18,685Loss on early extinguishment of debt


10,275







26,950Change in fair value of derivatives


1,464



3,886



1,107(Gain) loss on currency translation effect


(856
)


700



Accretion on debt, net


2,673



3,476



3,972Amortization of debt issue costs


764



2,267



1,519Provision for doubtful accounts


2,181



3,128



1,555Interest payment in kind on secured loans and convertible debt


395



4,812



4,152Share-based compensation


9,548



7,729



3,963Settlement of interest rate swaps


(8,360
)






(Increase) decrease in:Accounts receivable


(15,330
)


4,261



(17,299
)Capital lease receivable, net of unearned interest


382



1,098



2,042Restricted cash


632



(251
)


95Prepaid expenses and other assets


(7,336
)


936



(3,147
)Increase (decrease) in:Accounts payable and other current liabilities


13,318



(4,730
)


(7,812
)Deferred revenue


3,138



1,631



4,180Deferred rent and other liabilities


3,361



4,295



393Net cash provided by (used in) operating activities


22,458



50,893



(1,873
)Cash flows from investing activities:Purchase of property and equipment


(118,581
)


(90,383
)


(80,037
)Acquisition of DS3 DataVaulting, LLC, net of cash acquired


(12,037
)






Acquisition of Data Return, LLC, net of cash acquired










(68,625
)Acquisition of Accris Corporation, net of cash acquired










(682
)Repayments of notes receivable






44



154Net cash used in investing activities


(130,618
)


(90,339
)


(149,190
)Cash flows from financing activities:Payment on secured loans and convertible debt


(290,930
)


(1,500
)


(100,545
)Payments of debt issuance costs


(3,545
)


(60
)


(8,835
)Proceeds from issuance of common stock


20,883



3



4,405Proceeds from issuance of secured loans


386,963







249,500Payments of preferred stock dividends


(924
)


(781
)


(599
)Payments under capital lease obligations


(3,520
)


(2,028
)


(1,577
)Proceeds from exercise of stock options and warrants










613Net cash provided by (used in) financing activities


108,927



(4,366
)


142,962Effect of foreign currency exchange rates on cash and cash
    equivalents


915



(1,392
)


Net increase (decrease) in cash and cash equivalents


1,682



(45,204
)


(8,101
)Cash and cash equivalents at beginning of period


51,786



96,990



105,091Cash and cash equivalents at end of period

$
53,468


$
51,786


$
96,990    F-7




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Business
    and Organization    2.
    Summary
    of Significant Accounting Policies    Reclassifications
    Use of
    estimates
    Revenue
    recognition and allowance for bad debts
     F-8




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Significant
    concentrations
    Derivatives
     F-9




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Share-based
    compensation
      Stock
    warrants
    Earnings
    (loss) per share
     F-10




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    comprehensive income (loss)
      Cash
    and cash equivalents
    Restricted
    cash
    Property
    and equipment
      For The Year Ended March 31,2010


2009


2008Interest expense

$
49,643


$
29,980


$
32,105Interest capitalized


4,569



4,690



1,598Interest charges incurred

$
54,212


$
34,670


$
33,703    F-11




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
    and Impairment of long-lived assets and long-lived assets to be
    disposed of
          Rent
    expense
      Fair
    value of financial instruments
   F-12




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31, 2010


March 31, 2009Book Value


Fair Value


Book Value


Fair ValueSecured loans:12% Senior secured notes

$
388,835


$
481,491


$



$
First lien credit agreement, including current portion










146,826



140,251Second lien credit agreement










107,402



101,499Convertible debt:6.625% Senior convertible debt


57,192



59,062



57,192



59,1719% Senior convertible debt, current portion










28,268



30,2670.5% Senior subordinated convertible debt, current portion










4,108



3,997     Fair
    value measurements
    Level 1:

Quoted prices (unadjusted) in active markets that are accessible
    at the measurement date for identical assets and liabilities.
    The fair value hierarchy gives the highest priority to
    Level 1 inputs.Level 2:

Observable prices that are based on inputs not quoted on active
    markets but corroborated by market data.Level 3:

Unobservable inputs when there is little or no market data
    available, thereby requiring an entity to develop its own
    assumptions. The fair value hierarchy gives the lowest priority
    to Level 3 inputs.  F-13




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value at


Fair Value Measurement UsingMarch 31, 2010


Level 1


Level 2


Level 3Money market fund

$
28,177


$
28,177


$



$
Embedded derivatives


(295
)










(295
)$
27,882


$
28,177


$



$
(295
)     Money market fund instruments
  Embedded derivatives
    Income
    taxes
     F-14




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recent
    accounting pronouncements
          3.
    Acquisitions   F-15




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash and cash equivalents

$
44Accounts receivable, net


827Prepaid and other current assets


258Property and equipment, net


1,690Intangibles


825Goodwill


9,923Accounts payable and accrued expenses


(398
)Deferred revenue


(162
)Capital lease obligations


(926
)Net assets acquired

$
12,081   4.
    Accounts
    Receivable  March 31,2010


2009Accounts receivable, net, consists of (in thousands):Accounts receivable

$
35,452


$
32,575Unbilled revenue


16,089



5,312Allowance for doubtful accounts


(1,275
)


(2,071
)$
50,266


$
35,816     5.
    Prepaid
    Expenses and Other Assets  March 31,2010


2009Prepaid expenses and other assets consists of (in thousands):Prepaid expenses

$
4,741


$
2,278Deferred installation costs


8,758



7,487Deposits


4,476



3,874Prepaid ground lease


3,602



Deferred rent


1,364



1,264Other


2,376



1,399Tenant allowance


1,418



Deferred tax asset


949



862Interest and other receivables


305



35827,989



17,522Less: current portion


(12,605
)


(8,615
)$
15,384


$
8,907  F-16




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Property
    and Equipment  March 31,2010


2009Property and equipment, net, consists of (in thousands):Land

$
18,336


$
18,336Building


169,723



107,171Building and leasehold improvements


81,433



75,395Machinery


136,063



117,168Equipment, furniture and fixtures


82,646



54,169Construction in progress


30,521



7,160518,722



379,399Less: accumulated depreciation and amortization


(114,066
)


(78,397
)$
404,656


$
301,002     7.
    Intangibles  Amortization


March 31,Period (Years)


2010


2009Intangibles, net, consists of (in thousands):Customer base


8-10


$
9,125


$
8,300Technology


4-5



6,400



6,400Trademarks






4,100



4,100Non-compete agreements


3



100



10019,725



18,900Less: accumulated amortization






(7,966
)


(5,908
)$
11,759


$
12,992     CustomerBase


Technology2011

$
1,075


$
8002012


1,075



8002013


1,075



1202014


1,075



2015 and thereafter


1,639



$
5,939


$
1,720    F-17




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Accounts
    Payable and Other Current Liabilities  March 31,2010


2009Accounts payable and other current liabilities consists of (in
    thousands):Accounts payable

$
45,934


$
30,739Accrued expenses


17,121



15,918Current portion of deferred revenue


7,138



6,904Interest payable


17,308



4,835Customer prepayments


4,447



1,956$
91,948


$
60,352   9.
    Secured
    Loans  March 31,2010


2009Secured loans consists of (in thousands):12% Senior Secured Notes, due June 15, 2017. Interest
    is payable semi-annually, on December 15 and June 15 (Effective
    interest rate of 13.8%)

$
388,835


$
First Lien Credit Agreement, due August 15, 2012. Principal
    of $375,000 was payable quarterly. Interest was payable monthly
    at Eurodollar plus 3.75% at the election of the Company
    (Effective interest rate of 6.1%)






146,826Second Lien Credit Agreement, due February 2, 2013.
    Interest was payable at Eurodollar plus 7.75% at the election of
    the Company. (Effective interest rate of 10.1%)






107,402388,835



254,228Less: current portion






(1,500
)$
388,835


$
252,728      F-18




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           F-19




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12-month
  Year

Percentage2013


106
%2014


103
%2015 and thereafter


100
%          F-20




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        10.
    Convertible
    Debt  March 31,2010


2009Convertible debt consists of (in thousands):6.625% Senior Convertible Notes, due June 15, 2013,
    and convertible into shares of the Companys common stock
    at $12.50 per share. Interest at 6.625% is payable
    semi-annually, on December 15 and June 15 (Effective interest
    rate of 6.6%)

$
57,192


$
57,1929% Senior Convertible Notes, due June 15, 2009, and
    convertible into shares of the Companys common stock at
    $12.50 per share. Interest at 9% was payable semi-annually, on
    December 15 and June 15 (Effective interest rate of 26.5%)






28,2680.5% Senior Subordinated Convertible Notes, due
    June 30, 2009, and convertible into shares of the
    Companys common stock at $8.14 per share. Interest at 0.5%
    was payable semi-annually, on December 1 and June 30 (Effective
    interest rate of 0.72%)






4,10857,192



89,568Less: current portion






(32,376
)$
57,192


$
57,192      F-21




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Convertible


SecuredDebt


Loans


Total2011

$



$



$
2012










2013










2014


57,192







57,1922015 and thereafter






420,000



420,00057,192



420,000



477,192Less: unamortized premiums and discounts






(31,165
)


(31,165
)$
57,192


$
388,835


$
446,027   11.
    Derivatives     F-22




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            12.
    Deferred
    Rent and Other Liabilities  March 31,2010


2009Deferred rent and other liabilities consists of (in thousands):Deferred rent

$
10,449


$
6,467Interest rate swap, at fair value






6,073Long-term portion of capital lease obligations


5,751



2,990Deferred tax liability


1,543



1,543Other liabilities


608



2,060$
18,351


$
19,133  F-23




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Changes
    in Stockholders Equity  Series I
    convertible preferred stock
    Common
    stock
  Issuance
    of Common Stock
        18-month
       F-24




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Conversion
    of preferred stock
    Stock
    warrants
    No. of Shares








Estimated FairIssuance Date

Able to Purchase


Exercise Price


Expiration Date


Value at IssuanceApril 2006


12,500


$
4.80



April 2011


$
93December 2004


2,003,378



6.80-8.80



December 2011



8,783June 2001


1,300



17.20



June 2011



21January 2003


950



4.80



June 2011



42,018,128










$
8,901     Sale of
    Treasury Shares
    14.
    Loss Per
    Share    March 31,2010


2009


20089% Senior Convertible Notes


484



2,325



2,725Common stock warrants


2,023



2,261



2,364Common stock options


2,330



2,257



2,303Early conversion incentive










192Nonvested stock


1,713



1,554



798Series I convertible preferred stock


1,073



1,067



1,0596.625% Senior Convertible Notes


4,575



4,575



4,1750.5% Senior Subordinated Convertible Notes


123



491



491   15.
    Share-Based
    Compensation   F-25




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Option
    Awards
    WeightedWeighted


AverageAverage


Remaining


AggregateShares


Exercise Price


Contractual Term


Intrinsic ValueOutstanding at April 1, 2009


2,209,887


$
10.06Granted


220,000



4.98Exercised


(56,126
)


5.91Forfeited


(33,724
)


8.76Outstanding at March 31, 2010


2,340,037


$
9.69



3.38


$
(6,266,190
)Exercisable at March 31, 2010


2,103,370


$
10.20



3.59


$
(6,705,456
)   Share-based
    Compensation Recognized in the Consolidated Statement of
    Operations
    For The Year EndedMarch 31,2010


2009Cost of revenues

$
4,340


$
2,882General and administrative


4,297



4,003Sales and marketing


910



844$
9,547


$
7,729    F-26




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverage


Weighted





WeightedRemaining


Average





AverageOutstanding


Contractual Life


Exercise Price


Options


Exercise PriceRange of Exercise Prices

Options


(Years)


(Outstanding)


Exercisable


(Exercisable)$2.50-5.00


437,050



2.94


$
4.18



257,050


$
3.97$5.01-10.00


1,498,059



4.30



6.18



1,441,392



6.13$10.01-20.00


87,121



0.89



15.65



87,121



15.65$20.01-30.00


13,230



0.91



24.71



13,230



24.71$30.01-50.00


304,577



0.29



32.50



304,577



32.502,340,037



3.38


$
9.69



2,103,370


$
10.20   Fair
    Value Assumptions
    
    the expected price volatility of the Companys common stock
    over the term of the awards;
    actual and projected employee stock option exercise behaviors,
    which is referred to as expected term;
    risk-free interest rate; and
    expected dividends.      2010

2009

2008Risk Free Rate

2.2%



4.1%Volatility

129%



102%Expected Term

6 years



6 yearsExpected Dividends

0%



0%  F-27




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Nonvested
    Awards
    Weighted AverageGrant DateShares


Fair ValueOutstanding at April 1, 2009


1,489,630


$
6.07Granted


1,719,500



6.78Vested


(628,178
)


5.27Forfeited


(150,958
)


6.04Outstanding at March 31, 2010


2,429,994


$
6.54   16.
    Commitments
    and Contingencies  Leasing
    activities
  and/or
    As Lessee


As LessorCapital


Operating


Sales-Type


OperatingLeases


Leases


Leases


Leases2011

$
6,820


$
17,002


$
548


$
3,7472012


4,924



16,094



208



3,6112013


2,488



12,431



83



2,9302014


89



12,343







2,1682015 and thereafter


75



54,952







7,531Total minimum lease payments


14,396


$
112,822



839


$
19,987Amount representing interest and maintenance


(3,192
)






(276
)Net minimum lease payments

$
11,204






$
563    F-28




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Litigation
        17.
    Related
    Party Transactions      For The Year Ended March 31,2010


2009


2008Services purchased from related party

$
111


$



$
Services provided to Fusion


34



76



71Services from directors


417



521



536   March 31,

March 31,2010

2009Other assets

$
304


$
348    F-29




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    Revenues  For The Year Ended March 31,2010


2009


2008Revenues consist of (in thousands):Colocation

$
111,173


$
82,714


$
60,559Managed and professional services


155,733



142,164



111,702Exchange point services


18,691



15,949



12,592Equipment resales


6,750



9,643



2,561$
292,347


$
250,470


$
187,414     19.
    Information
    About the Companys Operating Segment    20.
    Income
    Taxes      For The Year Ended March 31,2010


2009


2008United States

$
(35,001
)

$
(10,505
)

$
(42,675
)International


5,348



(143
)


1,260$
(29,653
)

$
(10,648
)

$
(41,415
)     For the Year Ended March 31,2010


2009


2008Current

$
2,107


$
1,021


$
(745
)Deferred


(87
)


(1,100
)


1,558Provision (benefit) for income taxes

$
2,020


$
(79
)

$
813  F-30




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31,2010


2009Deferred tax assets:Net operating loss carryforwards

$
122,747


$
93,835Interest rate swap and embedded derivatives


187



2,354Allowances and other


8,898



7,031Total deferred tax assets


131,832



103,220Valuation allowance


(108,922
)


(92,388
)Deferred tax liabilities:Intangibles with indefinite lives


(1,647
)


(1,543
)Depreciation and amortization


(21,729
)


(9,970
)Other


(128
)


Total deferred tax liability


(23,504
)


(11,513
)Net deferred tax liability

$
(594
)

$
(681
)            F-31




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For The Year Ended March 31,2010


2009


2008Statutory tax rate


(34.0
)%


(34.0
)%


(34.0
)%State income taxes, net of federal income tax benefit


3.5



(1.3
)


(2.9
)Foreign income tax


(0.5
)


(1.1
)


0.1Permanent differences


(2.0
)


8.3



(0.9
)Valuation allowance


39.8



27.1



39.9Effective tax rate


6.8
%


(1.0
)%


2.2
%       21.
    Information
    About the Geographic Segments    March 31,2010


2009


2008Revenues:United States

$
249,761


$
218,935


$
163,278International


42,586



31,535



24,136$
292,347


$
250,470


$
187,414Cost of revenues:United States

$
135,026


$
117,236


$
86,416International


24,570



19,198



14,470$
159,596


$
136,434


$
100,886Income from operations:United States

$
27,424


$
21,117


$
13,676International


3,889



1,351



1,013$
31,313


$
22,468


$
14,689     March 31,2010


2009United States

$
479,595


$
390,790International


32,932



9,343$
512,527


$
400,133  F-32




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  22.
    Supplemental
    Cash Flow Information  For The Year Ended March 31,2010


2009


2008Supplemental disclosures of cash flow information (in thousands):Cash paid for interest, net of amount capitalized

$
34,406


$
18,042


$
21,386Cash paid for income taxes


2,460



256



217Non-cash operating, investing and financing activities:Assets acquired under capital leases


8,207



4,521



1,528Net assets acquired in exchange for common stock










16,746Cancellation and expiration of warrants


59



2,257



1,380Changes in accounts payable and other current liabilities
    related to purchase of property, plant and equipment


10,086



1,978



18,259   23.
    Supplemental
    Guarantor and Non-Guarantor Financial Information    Rule 3-10 Regulation S-X
   F-33




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Balance Sheet as of March 31, 2010 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalCurrent assets:Cash and cash equivalents

$
43,497


$
517


$
9,454


$



$
53,468Restricted cash


















Accounts receivable, net


9



45,937



4,320







50,266Current portion of capital lease receivable






418











418Prepaid expenses and other current assets


674



8,606



3,328



(3
)


12,605Total current assets


44,180



55,478



17,102



(3
)


116,757Investment in subsidiaries


224,726











(224,726
)


Intercompany accounts receivable


288,644



45,798



4,282



(338,724
)


Restricted cash


638



1,011



310







1,959Property and equipment, net


6,514



373,112



25,030







404,656Debt issuance costs, net


3,384















3,384Other assets


904



9,895



4,621



(36
)


15,384Capital lease receivable, net of current portion






235











235Intangibles, net






10,799



960







11,759Goodwill






89,169



6,943







96,112Total assets

$
568,990


$
585,497


$
59,248


$
(563,489
)

$
650,246Current liabilities:Current portion of capital lease obligations and secured loans

$
1,183


$
3,589


$
147


$



$
4,919Accounts payable and other current liabilities


24,412



58,455



9,081







91,948Current portion of convertible debt


















Total current liabilities


25,595



62,044



9,228







96,867Intercompany accounts payable


43,783



276,341



18,600



(338,724
)


Secured loans, less current portion


388,835















388,835Convertible debt, less current portion


57,192















57,192Deferred rent and other liabilities


5,074



12,115



1,162







18,351Deferred revenue






6,540



2,013



(39
)


8,514Total liabilities

$
520,479


$
357,040


$
31,003


$
(338,763
)

$
569,759Commitments and contingencies


















Stockholders equity:Series I convertible preferred stock


















Common stock


65







1,063



(1,063
)


65Common stock warrants


8,901















8,901Additional paid-in capital


456,859



189,034



34,630



(223,663
)


456,860Accumulated (deficit) earnings


(417,314
)


39,425



(6,778
)






(384,667
)Accumulated other comprehensive loss






(2
)


(670
)






(672
)Total stockholders equity


48,511



228,457



28,245



(224,726
)


80,487Total liabilities and stockholders equity

$
568,990


$
585,497


$
59,248


$
(563,489
)

$
650,246  F-34




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Balance Sheet as of March 31, 2009 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalCurrent assets:Cash and cash equivalents

$
41,895


$
1,363


$
8,528


$



$
51,786Restricted cash






1,107











1,107Accounts receivable, net


2



32,814



3,000







35,816Current portion of capital lease receivable






631











631Prepaid expenses and other current assets


865



6,317



1,433







8,615Total current assets


42,762



42,232



12,961







97,955Investment in subsidiaries


200,512











(200,512
)


Intercompany accounts receivable


242,013



65,673



1,907



(309,593
)


Restricted cash


626



858











1,484Property and equipment, net


5,808



285,549



9,645







301,002Debt issuance costs, net


7,382



27











7,409Other assets


937



7,386



584







8,907Capital lease receivable, net of current portion






454











454Intangibles, net






11,652



1,340







12,992Goodwill






79,196



6,943







86,139Total assets

$
500,040


$
493,027


$
33,380


$
(510,105
)

$
516,342Current liabilities:Current portion of capital lease obligations and secured loans

$
2,257


$
1,406


$
160


$



$
3,823Accounts payable and other current liabilities


12,409



41,675



6,268







60,352Current portion of convertible debt


32,376















32,376Total current liabilities


47,042



43,081



6,428







96,551Intercompany accounts payable


64,794



233,073



11,726



(309,593
)


Secured loans, less current portion


252,728















252,728Convertible debt, less current portion


57,192















57,192Deferred rent and other liabilities


10,258



7,975



900







19,133Deferred revenue






5,921



1,819







7,740Total liabilities

$
432,014


$
290,050


$
20,873


$
(309,593
)

$
433,344Commitments and contingencies


















Stockholders equity:Series I convertible preferred stock


















Common stock


60







1,000



(1,000
)


60Common stock warrants


8,960















8,960Additional paid-in capital


428,251



176,833



22,679



(199,512
)


428,251Accumulated (deficit) earnings


(369,245
)


26,144



(9,893
)






(352,994
)Accumulated other comprehensive loss










(1,279
)






(1,279
)Total stockholders equity


68,026



202,977



12,507



(200,512
)


82,998Total liabilities and stockholders equity

$
500,040


$
493,027


$
33,380


$
(510,105
)

$
516,342  F-35




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations for the Year Ended March 31,
    2010 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalRevenues

$
22,911


$
251,196


$
42,840


$
(24,600
)

$
292,347Expenses:Costs of revenues, excluding depreciation and amortization


264



136,198



24,823



(1,689
)


159,596General and administrative


27,454



25,005



5,234



(22,911
)


34,782Sales and marketing


2,425



21,614



4,735







28,774Depreciation and amortization


2,025



31,698



4,159







37,882Total operating expenses


32,168



214,515



38,951



(24,600
)


261,034(Loss) income from operations


(9,257
)


36,681



3,889







31,313Other (expenses) income:Interest expense


(49,130
)


(22,922
)


(177
)


22,586



(49,643
)Interest income


22,692



123



127



(22,586
)


356Change in fair value of derivatives


(1,464
)














(1,464
)Financing charges and other


(548
)


(298
)


906







60Loss on early extinguishment of debt


(10,275
)














(10,275
)Total other (expenses) income


(38,725
)


(23,097
)


856







(60,966
)(Loss) income before income taxes


(47,982
)


13,584



4,745







(29,653
)Income taxes expense


87



303



1,630







2,020Net (loss) income

$
(48,069
)

$
13,281


$
3,115


$



$
(31,673
)  F-36




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations for the Year Ended March 31,
    2009 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalRevenues

$



$
219,615


$
31,535


$
(680
)

$
250,470Expenses:Costs of revenues, excluding depreciation and amortization


7



117,910



19,197



(680
)


136,434General and administrative


26,424



6,147



4,224







36,795Sales and marketing


452



21,860



4,237







26,549Depreciation and amortization


1,027



23,977



3,220







28,224Total operating expenses


27,910



169,894



30,878



(680
)


228,002(Loss) income from operations


(27,910
)


49,721



657







22,468Other (expenses) income:Interest expense


(29,479
)


(468
)


(386
)


353



(29,980
)Interest income


1,330



184



171



(353
)


1,332Change in fair value of derivatives


(3,886
)














(3,886
)Financing charges and other


6



(15
)


(573
)






(582
)Total other expenses


(32,029
)


(299
)


(788
)






(33,116
)(Loss) income before income taxes


(59,939
)


49,422



(131
)






(10,648
)Income taxes (benefit) expense


(898
)






819







(79
)Net (loss) income

$
(59,041
)

$
49,422


$
(950
)

$



$
(10,569
)  F-37




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations for the Year Ended March 31,
    2008 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalRevenues

$



$
163,443


$
24,136


$
(165
)

$
187,414Expenses:Costs of revenues, excluding depreciation and amortization


7



86,574



14,470



(165
)


100,886General and administrative


22,284



6,689



3,294







32,267Sales and marketing


623



16,786



3,478







20,887Depreciation and amortization


523



15,570



2,592







18,685Total operating expenses


23,437



125,619



23,834



(165
)


172,725(Loss) income from operations


(23,437
)


37,824



302







14,689Other (expenses) income:Interest expense


(29,352
)


(2,712
)


(41
)






(32,105
)Interest income


4,564



379



288







5,231Change in fair value of derivatives


(1,107
)














(1,107
)Financing charges and other


(1,173
)














(1,173
)Loss on early extinguishment of debt


(24,226
)


(2,724
)










(26,950
)Total other (expenses) income


(51,294
)


(5,057
)


247







(56,104
)(Loss) income before income taxes


(74,731
)


32,767



549







(41,415
)Income taxes expense


325



9



479







813Net (loss) income

$
(75,056
)

$
32,758


$
70


$



$
(42,228
)  F-38




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows for the Year Ended March 31,
    2010 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalCash flows from operating activities:Net (loss) income

$
(48,069
)

$
13,281


$
3,115


$



$
(31,673
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


2,025



31,698



4,159







37,882Loss on early extinguishment of debt


10,275















10,275Change in fair value of derivatives


1,464















1,464Gain on currency translation effect










(856
)






(856
)Accretion on debt, net


2,673















2,673Amortization of debt issue costs


657



107











764Provision for doubtful accounts






2,181











2,181Interest payment in kind on secured loans and convertible debt


395















395Share-based compensation


3,641



5,596



311







9,548Settlement of interest rate swaps


(8,360
)














(8,360
)(Increase) decrease in:Accounts receivable


(7
)


(14,478
)


(845
)






(15,330
)Capital lease receivable, net of unearned interest






382











382Restricted cash


(12
)


954



(310
)






632Prepaid expenses and other assets


64



(1,224
)


(6,176
)






(7,336
)(Decrease) increase in:Accounts payable and other current liabilities


16,858



(4,482
)


942







13,318Deferred revenue






2,708



430







3,138Deferred rent and other liabilities


1,469



1,806



86







3,361Net cash (used in) provided by operating activities


(16,927
)


38,529



856







22,458Cash flows from investing activities:Purchase of property and equipment


(882
)


(100,563
)


(17,136
)






(118,581
)Acquisition of DS3 DataVaulting, LLC, net of cash acquired






(12,037
)










(12,037
)Net cash used in investing activities


(882
)


(112,600
)


(17,136
)






(130,618
)Cash flows from financing activities:Payment on secured loans and convertible debt


(290,930
)














(290,930
)Intercompany activity, net


(91,933
)


75,734



16,199







Payments of debt issuance costs


(3,544
)


(1
)










(3,545
)Proceeds from issuance of common stock


20,883















20,883Proceeds from issuance of secured loans


386,963















386,963Payments of preferred stock dividends


(924
)














(924
)Payments under capital lease obligations


(1,104
)


(2,229
)


(187
)






(3,520
)Net cash provided by financing activities


19,411



73,504



16,012







108,927Effect of foreign currency exchange rate on cash and cash
    equivalents






(279
)


1,194







915Net increase (decrease) in cash and cash equivalents


1,602



(846
)


926







1,682Cash and cash equivalents at beginning of period


41,895



1,363



8,528







51,786Cash and cash equivalents at end of period

$
43,497


$
517


$
9,454


$



$
53,468  F-39




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows for the Twelve Months Ended
    March 31, 2009 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalCash flows from operating activities:Net (loss) income

$
(59,041
)

$
49,422


$
(950
)

$



$
(10,569
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


1,027



23,977



3,220







28,224Change in fair value of derivatives


3,886















3,886Loss on currency translation effect










700







700Accretion on debt, net


3,476















3,476Amortization of debt issue costs


2,188



79











2,267Provision for doubtful accounts






3,128











3,128Interest payment in kind on secured loans and convertible debt


4,812















4,812Share-based compensation


3,689



4,040











7,729(Increase) decrease in:Accounts receivable


1



4,717



(457
)






4,261Capital lease receivables, net of unearned interest






1,098











1,098Restricted cash


123



(374
)










(251
)Prepaid expenses and other assets


52



1,790



(906
)






936(Decrease) Increase in:Accounts payable and other current liabilities


1,869



(7,910
)


1,311







(4,730
)Deferred revenue






823



808







1,631Deferred rent and other liabilities


2,620



1,508



167







4,295Net cash (used in) provided by operating activities


(35,298
)


82,298



3,893







50,893Cash flows from investing activities:Purchase of property and equipment


(1,959
)


(81,443
)


(6,981
)






(90,383
)Repayment of notes receivable


48



(4
)










44Net cash used in investing activities


(1,911
)


(81,447
)


(6,981
)






(90,339
)Cash flows from financing activities:Payments on secured loans and convertible debt


(1,500
)














(1,500
)Payments of debt issuance costs


(60
)














(60
)Proceeds from issuance of common stock


3















3Intercompany activity, net


(6,473
)


(1,005
)


7,478







Payments of preferred stock dividends


(781
)














(781
)Payments under capital lease obligations


(645
)


(1,140
)


(243
)






(2,028
)Net cash (used in) provided by financing activities


(9,456
)


(2,145
)


7,235







(4,366
)Effect of foreign currency exchange rates on cash and cash
    equivalents


(4
)


470



(1,858
)






(1,392
)Net (decrease) increase in cash and cash equivalents


(46,669
)


(824
)


2,289







(45,204
)Cash and cash equivalents at beginning of period


88,564



2,187



6,239







96,990Cash and cash equivalents at end of period

$
41,895


$
1,363


$
8,528


$



$
51,786  F-40




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows for the Year Ended March 31,
    2008 (In
    thousands)
  Guarantor


Non-GuarantorIssuer


Subsidiaries


Subsidiaries


Eliminations


TotalCash flows from operating activities:Net (loss) income

$
(75,056
)

$
32,758


$
70


$



$
(42,228
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


523



15,570



2,592







18,685Loss on early extinguishment of debt


24,226



2,724











26,950Change in fair value of derivatives


1,107















1,107Accretion on debt, net


3,546



426











3,972Amortization of debt issue costs


1,292



227











1,519Provision for doubtful accounts






1,555











1,555Interest payment in kind on secured loans and convertible debt


3,984



168











4,152Share-based compensation


2,157



1,806











3,963(Increase) decrease in:










Accounts receivable


(3
)


(15,734
)


(1,562
)






(17,299
)Capital lease receivable, net of unearned interest






2,042











2,042Restricted cash


(117
)


212











95Prepaid expenses and other assets


147



(3,380
)


86







(3,147
)(Decrease) increase in:Accounts payable and other current liabilities


(762
)


(8,169
)


1,119







(7,812
)Deferred revenue






3,510



670







4,180Deferred rent and other liabilities


93



124



176







393Net cash (used in) provided by operating activities


(38,863
)


33,839



3,151







(1,873
)Cash flows from investing activities:Purchase of property and equipment


(535
)


(77,148
)


(2,354
)






(80,037
)Acquisition of Data Return LLC, net of cash acquired


(68,681
)


303



(247
)






(68,625
)Acquisition of Accris Corporation, net of cash acquired


(791
)


109











(682
)Repayments of notes receivable


154















154Net cash used in investing activities


(69,853
)


(76,736
)


(2,601
)






(149,190
)Cash flows from financing activities:Payments on secured loans and convertible debt


(48,124
)


(52,421
)










(100,545
)Intercompany activity, net


(98,564
)


95,968



2,596







Payments of debt issuance costs


(8,835
)














(8,835
)Proceeds from issuance of common stock


4,405















4,405Proceeds from issuance of secured loans


249,500















249,500Payments of preferred stock dividends


(599
)














(599
)Payments under capital lease obligations


(188
)


(983
)


(406
)






(1,577
)Proceeds from exercise of stock options and warrants


613















613Net cash provided by (used in) financing activities


98,208



42,564



2,190







142,962Net (decrease) increase in cash and cash equivalents


(10,508
)


(333
)


2,740







(8,101
)Cash and cash equivalents at beginning of period


99,072



2,520



3,499







105,091Cash and cash equivalents at end of period

$
88,564


$
2,187


$
6,239


$



$
96,990  F-41




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24.
    Subsequent
    Events   F-42