##### 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, 2009o

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 2900 Miami, Florida
    33131
 (Address of Principal Executive
    Offices, Including Zip Code)
  Registrants telephone number, including area code:
 (305) 856-3200
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, par value $0.001 per share

NASDAQ Stock Market LLC(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
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

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

Smaller Reporting
    company o   Rule 12b-2 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 $408,325,938
    (based on the closing market price of $6.87 per share for the
    registrants common stock as reported on the Nasdaq Global
    Market on September 30, 2008). For purposes of the
    foregoing computation, all executive officers, directors and
    five percent beneficial owners of the registrant are deemed to
    be affiliates. Such determination should not be deemed to be an
    admission that such executive officers, directors or five
    percent beneficial owners are, in fact, affiliates of the
    registrant.
  The number of shares outstanding of the registrants
    common stock, par value $0.001 per share, as of May 31,
    2009 was 64,144,870.
  DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 Part I


2Item 1.


Business


2Item 1A.


Risk Factors


16Item 1B.


Unresolved Staff Comments


26Item 2.


Properties


26Item 3.


Legal Proceedings


26Item 4.


Submission of Matters to a Vote of Security
    Holders


26Part II


26Item 5.


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


26Item 6.


Selected Financial Data


30Item 7.


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


32Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


46Item 8.


Financial Statements and Supplementary Data


46Item 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


49Part IV


50Item 15.


Exhibits and Financial Statements
    Schedules


50Signatures


54EX-21.1EX-23.2EX-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.
    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) 856-3200.
  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 10% of
    our employee base has federal security clearances, and we are
    the only 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 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, 2009.
    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, 2009 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 1,100 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.
    Strong management team We have a seasoned
    operational, sales and financial management team, comprising
    individuals who have an average of 8.5 years of communication
    and data center expertise. 3




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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, over 30% of
    the expected built-out space in Pod 2 is already under contract
    despite beginning construction in January 2009 and having an
    opening scheduled for early 2010. 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 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 line-of-business
  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
Cloudtm

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
  Exchange
    Point Services
   6




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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 CAGR of 60% from 2006 to 2008. 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. Robert Frances Group
    research highlights that while the average power requirement per
    rack was 1 to 3 kilowatts five years ago, a typical rack now
    requires 4 to 6 kilowatts with high density blade servers
    consuming 24  30 kilowatts per rack. Concurrently,
    increased cooling requirements for these dense servers coupled
    with increasing memory and storage requirements are also driving
    power demand. Industry estimates indicate that one equipment
    rack of 24 kilowatts of power requires six to seven tons of
    cooling capacity and approximately 3,800 cubic feet per minute
    of airflow. According to a recent study, aggregate electricity
    use for servers doubled over the period 2000 to 2005, both in
    the US and worldwide. Additionally, IDC expects the blade server
    market to continue to grow at by estimated 20.8% in unit
    shipments from 2008 to 2013, 7




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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.  
    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 current federal administration
    announced plans to increase the outsourcing of IT needs, which
    we expect will significantly boost federal demand for colocation
    and managed 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.  Customers
   8




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Sales and
    Marketing
  Sales
    
    Direct sales our direct salesforce is
    comprised of 29 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, Savvis and
    Verizon Business. 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,
    Internap Network Services Corporation and Switch and Data.
    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 Electronic Data
    Systems. 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 ServicesPod 1






50,000


Open / fully constructedPod 2






50,000


Expect opening early 2010Pods 3 through 5






150,000


For future expansionNAP of the Americas/West
    (Santa Clara, CA)


Leased



30,000


Colocation; Exchange; Managed ServicesCA Expansion


Owned



50,000


Colocation; Exchange; Managed ServicesDallas


Leased



7,100


Managed ServicesHerndon


Leased






Colocation; ExchangeInternationalColombia


Leased



18,000


Colocation; Exchange; Managed ServicesMadrid


Leased



6,500


Colocation; Exchange; Managed ServicesSao Paolo


Leased



3,400


Colocation; Exchange; Managed ServicesBenelux


Leased



1,000


Managed ServicesLondon


Leased



270


Managed Services  11




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(1)
    
    Represents total potential colocation space upon completion of
    five, 50,000 square foot pods. As of March 31, 2009,
    Pod 1 has been completed and Pod 2 is under construction. Pod 2
    is scheduled to open in early 2010. We intend to construct Pods
    3, 4 and 5 as needed to satisfy future demand for space in NAP
    of the Capital Region.  Financial
    Information About Geographic Areas
    March 31,2009


2008


2007Revenues:United States

$
218,935


$
163,278


$
85,167International


31,535



24,136



15,781$
250,470


$
187,414


$
100,948     March 31,2009


2008United States

$
390,790


$
327,048International


9,343



5,963$
400,133


$
333,011   Directors
    and Executive Officers
    Name

Age

Principal PositionManuel D. Medina


56


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


70


Vice Chairman of the BoardGuillermo Amore


70


DirectorTimothy Elwes


73


DirectorAntonio S. Fernandez


69


DirectorArthur L. Money


69


DirectorMarvin S. Rosen


67


DirectorMiguel J. Rosenfeld


59


DirectorRodolfo A. Ruiz


60


DirectorJamie Dos Santos


47


Chief Executive Officer Terremark Federal GroupJose A. Segrera


38


Chief Financial OfficerMarvin Wheeler


55


Chief Operations OfficerAdam T. Smith


37


Chief Legal Officer   Manuel D. Medina
 12




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Joseph R. Wright, Jr. book/video/software e-commerce
  Guillermo Amore
  Timothy Elwes
  Antonio S. Fernandez
  Arthur L. Money
 13




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Marvin S. Rosen
  Miguel J. Rosenfeld
  Rodolfo A. Ruiz
  Jamie Dos Santos
  Jose A. Segrera
  Marvin Wheeler
 14




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Adam T. Smith
  Where You
    Can Find Additional Information
  1-800-SEC-0330 http://www.sec.gov. http://www.terremark.com
 15




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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.
     16




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We
    anticipate that a significant portion of our revenues will be
    from contracts with agencies of the United States
    government, and uncertainties in government contracts could
    adversely affect our business.
    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.
   17




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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.
    
    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.  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
 18




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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.
       19




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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
  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.
   20




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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.
    We may
    become subject to burdensome government regulation and legal
    uncertainties that could substantially harm our business or
    expose us to unanticipated liabilities.
    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.   21




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##### Table of Contents



We
    have significant debt service obligations which will require the
    use of a substantial portion of our available
    cash.
    
    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.  and/or
  Our
    Credit Facilities, Senior Convertible Notes, and Series B
    Notes contain numerous restrictive covenants.
    
    incur more debt;
    pay dividends, redeem or repurchase our stock or make other
    distributions;
    make acquisitions or investments;
    enter into certain transactions with affiliates;
    merge or consolidate with others;
    dispose of assets or use asset sale proceeds;
    create liens on our assets;
    capital expenditures; and
    extend credit.   22




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##### Table of Contents



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;
    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.
    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; 23




---



##### Table of Contents




    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.    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.
        Risk
    Factors Related to Our Common Stock
  Our
    stock price may 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. 24




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##### Table of Contents



We
    expect that the price of our common stock will be significantly
    affected by the availability of shares for sale in the
    market.
    
    2,324,800 shares of our common stock reserved for issuance
    upon conversion of our 9% Senior Convertible Notes;
    4,575,200 shares of our common stock reserved for issuance
    upon conversion of our 6.625% Senior Convertible Notes;
    491,400 shares of our common stock reserved for issuance
    upon conversion of our Series B Notes;
    1,041,333 shares of our common stock reserved for issuance
    upon conversion of our Series I convertible preferred stock;
    2,209,887 shares of our common stock issuable upon exercise
    of options;
    1,489,630 shares of our nonvested stock; and
    2,030,328 shares of our common stock issuable upon exercise
    of warrants.    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.
   25




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.    ITEM 2.
    PROPERTIES.    ITEM 3.
    LEGAL
    PROCEEDINGS.    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.   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
      
    100,000,000 shares of common stock, par value $0.001 per
    share; and
    10,000,000 shares of preferred stock, par value $0.001 per
    share, which are issuable in series on terms to be determined by
    our board of directors, of which 600 shares are designated
    as series I convertible preferred stock.    
    59,740,750 shares of our common stock were outstanding;
    312 shares of our series I convertible preferred stock
    were outstanding. Each share of series I convertible
    preferred stock may be converted into 3,333 shares of our
    common stock.   26




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##### Table of Contents



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



1.85Through June 5, 2009


5.82



2.51   PricesFiscal Year 2008 Quarter Ended

High


LowJune 30, 2007(1)

$
8.79


$
6.34September 30, 2007


7.61



5.15December 31, 2007


8.14



5.14March 31, 2008


6.69



4.64     (1)
    
    May include prices reported by the American Stock Exchange, on
    which our common stock was traded until it began trading on the
    Nasdaq Global Market on May 14, 2007. 27




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##### Table of Contents



Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 Among Terremark Worldwide, Inc., The Russell 2000 Index,
 The RDG Internet Composite Index And The S&P North
    American Technology Internet Index
  
 *
    $100 Invested on 3/31/04 in stock or index, including
    reinvestment of dividends.
    Fiscal year ending March 31.    Dividend
    Policy
    Recent
    Sales of Unregistered Securities
    non-United
 28




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##### Table of Contents



Equity
    Compensation Plan Information
    Number of Securities


Weighted Averageto be Issued Upon


Exercise Price of


Number of SecuritiesExercise of Outstanding


Outstanding Options,


Available for FutureOptions, Nonvested Stock,


Nonvested Stock,


Issuance Under EquityPlan Category

Warrants and Rights


Warrants and Rights


Compensation PlansEquity compensation plans approved by security holders


5,729,845


$
7.02



2,791,367Equity compensation plans not approved by security holders





$




  29




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA.    Twelve Months Ended March 31,2009


2008


2007


2006


2005(Dollars in thousands except per share data)Results of Operations:Revenues

$
250,470


$
187,414


$
100,948


$
62,529


$
46,818Real estate services


















1,330Total revenues


250,470



187,414



100,948



62,529



48,148Cost of revenues


136,434



100,886



56,902



38,824



36,310Construction contract expenses


















809Other expenses


124,605



128,756



58,998



60,854



20,888Total expenses


261,039



229,642



115,900



99,678



58,007Net loss


(10,569
)


(42,228
)


(14,952
)


(37,149
)


(9,859
)Non-cash preferred dividend


(807
)


(794
)


(676
)


(727
)


(915
)Net loss attributable to common stockholders

$
(11,376
)

$
(43,022
)

$
(15,628
)

$
(37,876
)

$
(10,774
)Net loss per common share  basic

$
(0.19
)

$
(0.74
)

$
(0.35
)

$
(0.88
)

$
(0.31
)Net loss per common share  diluted

$
(0.19
)

$
(0.74
)

$
(0.36
)

$
(0.88
)

$
(0.40
)   As of March 31,2009


2008


2007


2006


2005(Dollars in thousands)Financial condition:(1)Property and equipment, net

$
301,002


$
231,674


$
137,937


$
129,893


$
123,406Total assets


516,341



503,860



309,646



204,716



208,906Long term obligations(2)(3)


336,793



352,391



184,510



163,967



149,734Stockholders equity


82,997



90,522



89,499



13,836



40,176     (1)
    
    See Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources.(2)
    
    Long term obligations include mortgage payable 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.(3)
    
    Long term obligations as of March 31, 2005, include
    approximately $600 in redeemable convertible preferred stock
    plus accrued dividends. 30




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##### Table of Contents



Three Months EndedMarch 31,


December 31,


September 30,


June 30,2009


2008


2008


2008(Dollars in thousands except per share data)Revenues

$
68,896


$
65,877


$
59,581


$
56,116Cost of revenues


34,975



34,242



35,130



32,087Other expenses


29,774



40,321



32,627



21,884Total expenses


64,749



74,563



67,757



53,971Net income (loss)


4,147



(8,686
)


(8,176
)


2,145Non-cash preferred dividend


(221
)


(195
)


(195
)


(195
)Earnings allocation to participating stockholders


(462
)










(231
)Net income (loss) attributable to common stockholders

$
3,464


$
(8,881
)

$
(8,371
)

$
1,719Net income (loss) per common share  basic

$
0.06


$
(0.15
)

$
(0.14
)

$
0.03Net income (loss) per common share  diluted

$
0.06


$
(0.15
)

$
(0.14
)

$
0.03   Three Months EndedMarch 31,


December 31,


September 30,


June 30,2008


2007


2007


2007(Dollars in thousands except per share data)Revenues

$
56,841


$
49,964


$
45,368


$
35,241Cost of revenues


30,276



26,358



25,304



18,948Other expenses


29,031



27,096



35,584



37,045Total expenses


59,307



53,454



60,888



55,993Net loss


(2,466
)


(3,490
)


(15,520
)


(20,752
)Non-cash preferred dividend


(195
)


(196
)


(201
)


(202
)Earnings allocation to participating stockholders














Net loss attributable to common stockholders

$
(2,661
)

$
(3,686
)

$
(15,721
)

$
(20,954
)Net loss per common share  basic

$
(0.04
)

$
(0.06
)

$
(0.27
)

$
(0.37
)Net loss per common share  diluted

$
(0.04
)

$
(0.06
)

$
(0.27
)

$
(0.37
)  31




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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. 32




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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) 856-3200.
  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
    No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
 33




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##### Table of Contents



EITF 00-21,
    No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent, Bulletin No. 90-1, Accounting for Separately Priced Extended Warranty and
    Product Maintenance Contracts.
      Derivatives
         34




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##### Table of Contents



Accounting
    for Income Taxes
    Accounting for Uncertainty in Income Taxes 
    an Interpretation of FASB Statement No. 109
    Goodwill
      Impairment
    of Long-Lived Assets
   35




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##### Table of Contents



Share-based
    compensation
  Share-Based Payment
    Recent
    Accounting Pronouncements
    Recent
    Events
    Results
    of Operations
  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
%     36




---



##### Table of Contents



For the Year Ended March 31,2009





2008Colocation

$
85,372,272



34
%

$
61,228,544



33
%Managed and professional services


139,538,733



56
%


110,933,378



59
%Exchange point services


15,948,845



6
%


12,691,169



7
%Equipment resales


9,610,117



4
%


2,560,708



1
%$
250,469,967



100
%

$
187,413,799



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.
   37




---



##### 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.
 38




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##### Table of Contents



Results
    of Operations for the Year Ended March 31, 2008 as Compared
    to the Year Ended March 31, 2007.
  Revenue.
  For the YearEndedMarch 31,2008


2007United States


87
%


84
%International


13
%


16
%100
%


100
%     For the Year Ended March 31,2008





2007Colocation

$
61,228,544



33
%

$
41,865,161



42
%Managed and professional services


110,933,378



59
%


43,793,652



43
%Exchange point services


12,691,169



7
%


9,031,100



9
%Equipment resales


2,560,708



1
%


6,258,268



6
%$
187,413,799



100
%

$
100,948,181



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.           39




---



##### Table of Contents



Costs of Revenues.
    General and Administrative Expenses.
  Sales and Marketing Expenses.
  Depreciation and Amortization
    Expenses.
  Interest Expense.
  Interest Income.
 40




---



##### Table of Contents



Change in Fair Value of Derivatives.
        Financing Charges and Other.
  Early Extinguishment of Debt and Net Loss.
  Liquidity
    and Capital Resources
   41




---



##### Table of Contents



Sources
    and Uses of Cash
        Debt
    Obligations
    Senior
    Secured Credit Facilities
   42




---



##### Table of Contents



43




---



##### Table of Contents



9% Senior
    Convertible Notes
        6.625% Senior Convertible
    Notes
  Series B
    Notes
          6.625% Senior
    Convertible Notes
   44




---



##### Table of Contents



Debt
    Covenants
      Guarantees
    and Commitments
      Capital Lease


Operating


Convertible


MortgageObligations


Leases


Debt


Payable


Total2010

$
4,399,881


$
11,277,290


$
38,224,806


$
18,259,509


$
72,161,4862011


3,655,826



10,427,835



3,788,970



18,732,205



36,604,8362012


2,021,028



10,396,392



3,788,970



18,676,396



34,882,7862013


450,382



8,496,621



3,788,970



264,784,224



277,520,1972014


10,503



8,785,944



59,086,486







67,882,933Thereafter






44,719,018











44,719,018$
10,537,620


$
94,103,100


$
108,678,202


$
320,452,334


$
533,771,256  45




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##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.              ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.  Form 10-K
 46




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##### Table of Contents



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
  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.  Review
    and Approval of Related Person Transactions
  and/or
     48




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##### Table of Contents



18-month
  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.   49




---



##### 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, 2009 and 2008.
    Consolidated Statements of Operations for the Years Ended
    March 31, 2009, 2008 and 2007.
    Consolidated Statement of Changes in Stockholders Equity
    for the Three Year Period Ended March 31, 2009.
    Consolidated Statements of Cash Flows for the Years Ended
    March 31, 2009, 2008 and 2007.
    Notes to Consolidated Financial Statements.        ExhibitNumber

Exhibit Description3
.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).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).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).3
.4

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).3
.5

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).3
.6

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).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).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).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).4
.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).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). 50




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.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).+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).+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).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).+10
.5

2000 Directors Stock Option Plan (filed as Exhibit
    4.2 to the Companys Registration Statement on
    Form S-8 filed on August 19, 2002).+10
.6

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).10
.7

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).10
.8

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).10
.9

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).+10
.10

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).+#10
.11

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).+#10
.12

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).10
.13

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).10
.14

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).10
.15

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).10
.16

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).10
.17

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).10
.18

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).10
.19

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).10
.20

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). 51




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.21

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).10
.22

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).10
.23

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).10
.24

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).10
.25

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).10
.26

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).10
.27

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).10
.28

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).10
.29

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).10
.30

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).10
.31

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).10
.32

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).10
.33

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).10
.34

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).10
.35

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).10
.36

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)+#10
.37

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).+#10
.38

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).+# 52




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.39

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).+#10
.40

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).+#10
.41

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).+#10
.42

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).10
.43

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).21
.1

Subsidiaries of the Company*23
.2

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 herewith+
    
    Compensation Plan or Arrangement#
    
    Management Contract 53




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##### Table of Contents



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

Title

Date/s/  MANUEL
    D. MEDINAManuel
    D. Medina

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

June 8, 2009/s/  GUILLERMO
    AMOREGuillermo
    Amore

Director

June 8, 2009/s/  TIMOTHY
    ELWESTimothy
    Elwes

Director

June 8, 2009/s/  ANTONIO
    S. FERNANDEZAntonio
    S. Fernandez

Director

June 8, 2009/s/  HON.
    ARTHUR L. MONEYHon.
    Arthur L. Money

Director

June 8, 2009/s/  MARVIN
    S. ROSENMarvin
    S. Rosen

Director

June 8, 2009/s/  MIGUEL
    J. ROSENFELDMiguel
    J. Rosenfeld

Director

June 8, 2009/s/  RODOLFO
    A. RUIZRodolfo
    A. Ruiz

Director

June 8, 2009/s/  JOSEPH
    R. WRIGHT, JR.Joseph
    R. Wright, Jr.

Director

June 8, 2009/s/  JOSE
    A. SEGRERAJose
    A. Segrera

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

June 8, 2009  54




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##### Table of Contents



EXHIBIT SCHEDULE
  ExhibitNumber

Description21
.1

Subsidiaries of the Company*23
.2

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




---



##### 



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,
    2008 and 2009


F-4Consolidated Statements of Operations for the
    years ended March 31, 2007, 2008 and 2009


F-5Consolidated Statement of Changes in
    Stockholders Equity for the years ended March 31,
    2007, 2008 and 2009


F-6Consolidated Statements of Cash Flows for the
    years ended March 31, 2007, 2008 and 2009


F-7Notes to Consolidated Financial Statements


F-8   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB No. 109
  Internal Control  Integrated
    Framework
  KPMG
    LLP
     F-2




---



##### Table of Contents



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




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  March 31,2009


2008ASSETSCurrent assets:Cash and cash equivalents

$
51,785,825


$
96,989,932Restricted cash


1,107,469



755,386Accounts receivable, net


35,815,539



44,048,075Current portion of capital lease receivable


630,849



1,860,745Prepaid expenses and other current assets


8,615,367



8,493,424Total current assets


97,955,049



152,147,562Restricted cash


1,484,107



1,585,234Property and equipment, net


301,001,980



231,674,274Debt issuance costs, net


7,408,834



9,869,503Other assets


8,906,174



6,901,083Capital lease receivable, net of current portion


454,300



345,074Intangibles, net


12,991,669



15,417,502Goodwill


86,139,201



85,919,431Total assets

$
516,341,314


$
503,859,663LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of mortgage payable and capital lease obligations

$
3,823,328


$
2,999,741Accounts payable and other current liabilities


60,351,751



57,947,054Current portion of convertible debt


32,376,006



Total current liabilities


96,551,085



60,946,795Mortgage payable, less current portion


252,727,616



249,222,856Convertible debt, less current portion


57,192,000



86,284,017Deferred rent and other liabilities


19,132,958



9,729,736Deferred revenue


7,740,320



7,154,424Total liabilities


433,343,979



413,337,828Commitments and contingencies






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


1



1Common stock: $.001 par value, 100,000,000 shares
    authorized; 59,740,750 and 59,172,022 shares issued


59,741



59,172Common stock warrants


8,959,888



11,216,638Additional paid-in capital


428,251,355



420,550,532Accumulated deficit


(352,994,575
)


(342,425,836
)Accumulated other comprehensive (loss) income


(1,279,075
)


1,169,241Note receivable






(47,913
)Total stockholders equity


82,997,335



90,521,835Total liabilities and stockholders equity

$
516,341,314


$
503,859,663   The accompanying notes are an
    integral part of these consolidated financial statements.
 F-4




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Year Ended March 31,2009


2008


2007Revenues

$
250,469,967


$
187,413,799


$
100,948,181Expenses:Cost of revenues, excluding depreciation and amortization


136,434,396



100,886,124



56,902,374General and administrative


36,794,535



32,266,578



17,613,604Sales and marketing


26,548,843



20,886,849



11,440,703Depreciation and amortization


28,224,409



18,685,257



11,010,862Total operating expenses


228,002,183



172,724,808



96,967,543Income from operations


22,467,784



14,688,991



3,980,638Other (expenses) income:Interest expense


(29,979,664
)


(32,105,034
)


(28,214,563
)Interest income


1,332,421



5,230,434



1,222,028Change in fair value of derivatives


(3,885,758
)


(1,106,625
)


8,276,712Financing charges and other


(582,115
)


(1,173,079
)


Loss on early extinguishment of debt






(26,949,577
)


Total other expenses


(33,115,116
)


(56,103,881
)


(18,715,823
)Loss before income taxes


(10,647,332
)


(41,414,890
)


(14,735,185
)Income taxes (benefit) expense


(78,593
)


813,385



216,981Net loss


(10,568,739
)


(42,228,275
)


(14,952,166
)Preferred dividend


(807,033
)


(794,063
)


(676,150
)Net loss attributable to common stockholders

$
(11,375,772
)

$
(43,022,338
)

$
(15,628,316
)Net loss per common share:Basic

$
(0.19
)

$
(0.74
)

$
(0.35
)Diluted

$
(0.19
)

$
(0.74
)

$
(0.36
)Weighted average common shares outstanding  basic


59,438,217



58,134,269



44,151,259Weighted average common shares outstanding  diluted


59,438,217



58,134,269



44,267,041   The accompanying notes are an
    integral part of these consolidated financial statements.
 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

Common

Additional



OtherStock

Value $.001

Stock

Stock

Paid-In

Accumulated

Comprehensive

Treasury

NotesSeries I

Issued Shares

Amount

Warrants

Options

Capital

Deficit

Income (loss)

Stock

Receivable

TotalBalance at March 31, 2006

$
1


44,490,352

$
44,490

$
13,251,660

$
582,004

$
291,607,528

$
(283,823,243
)
$
(317,756
)
$
(7,220,637
)
$
(287,730
)
$
13,836,317Components of comprehensive loss:Net loss




















(14,952,166
)










(14,952,166
)Foreign currency translation adjustment























407,747





(24,957
)

382,790Total comprehensive loss
































(14,569,376
)Conversion of preferred stock





53,637


54








2,225














2,279Issuance of warrants in exchange for services











92,988




















92,988Accrued dividends on preferred stock

















(676,029
)













(676,029
)Expiration of warrants











(748,010
)




748,010














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





269,140


269








1,606,600














1,606,869Share-based compensation

















491,507














491,507Sale of treasury stock




















(1,422,152
)




7,220,637





5,798,485Issuance of common stock in public offering





11,000,000


11,000








82,776,161














82,787,161Repayments of loans issued to employees





























128,320


128,320Adoption of SFAS No. 123R














(582,004
)

582,004














Balance at March 31, 2007


1


55,813,129


55,813


12,596,638





377,138,006


(300,197,561
)

89,991





(184,367
)

89,498,521Components of comprehensive loss:Net loss




















(42,228,275
)










(42,228,275
)Foreign currency translation adjustment























1,079,250





(17,633
)

1,061,617Total comprehensive loss
































(41,166,658
)Conversion of preferred stock





36,667


36








(36
)













Issuance of common stock in connection with acquisition





2,315,544


2,316








16,743,618














16,745,934Accrued dividends on preferred stock

















(794,063
)













(794,063
)Expiration of warrants











(1,380,000
)




1,380,000














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





398,182


398








1,073,194














1,073,592Share-based compensation

















2,569,871














2,569,871Issuance of common stock in public offering





608,500


609








4,404,118














4,404,727Repayments of loans issued to employees





























154,087


154,087Premium on issuance of convertible debt

















13,727,707














13,727,707Expiration of early conversion incentive feature within
    convertible debt

















4,308,117














4,308,117Balance at March 31, 2008


1


59,172,022


59,172


11,216,638





420,550,532


(342,425,836
)

1,169,241





(47,913
)

90,521,835Components of comprehensive loss:Net loss




















(10,568,739
)










(10,568,739
)Foreign currency translation adjustment























(2,448,316
)




4,097


(2,444,219
)Total comprehensive loss
































(13,012,958
)Accrued dividends on preferred stock

















(807,033
)













(807,033
)Expiration of warrants











(2,256,750
)




2,256,750














Share-based compensation

















4,941,561














4,941,561Issuance of common stock in settlement of share-based awards





568,728


569








1,309,545














1,310,114Repayments of loans issued to employees





























43,816


43,816Balance at March 31, 2009

$
1


59,740,750

$
59,741

$
8,959,888

$


$
428,251,355

$
(352,994,575
)
$
(1,279,075
)
$


$


$
82,997,335   The accompanying notes are an
    integral part of these consolidated financial statements.
  F-6




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Year Ended March 31,2009


2008


2007Cash flows from operating activities:Net loss

$
(10,568,739
)

$
(42,228,275
)

$
(14,952,166
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


28,224,409



18,685,257



11,010,862Loss on early extinguishment of debt






26,949,577



Increase (decrease) in fair value of derivatives


3,885,758



1,106,625



(8,276,712
)Accretion on debt, net


3,476,019



3,972,044



8,327,261Amortization of debt issue costs


2,267,426



1,518,927



2,042,999Provision for doubtful accounts


3,128,470



1,555,144



1,068,478Interest payment in kind on notes and mortgage payable


4,812,001



4,151,508



1,625,440Share-based compensation


7,728,977



3,962,657



766,957Warrants issued for services










92,988(Increase) decrease in:Accounts receivable


5,004,067



(17,298,342
)


(14,099,965
)Capital lease receivable, net of unearned interest


1,097,570



2,042,201



1,866,867Restricted cash


(250,957
)


94,522



(13,341
)Prepaid expenses and other assets


1,617,245



(3,147,002
)


(2,467,328
)Increase (decrease) in:Accounts payable and other current liabilities


(6,229,702
)


(7,810,510
)


6,160,368Deferred revenue


1,013,265



4,179,777



3,983,935Deferred rent and other liabilities


4,295,163



393,053



408,351Net cash provided by (used in) operating activities


49,500,972



(1,872,837
)


(2,455,006
)Cash flows from investing activities:Restricted cash










2,199,945Purchase of property and equipment


(90,382,394
)


(80,036,387
)


(18,463,769
)Acquisition of Data Return, LLC, net of cash acquired






(68,625,297
)


Acquisition of Accris Corporation, net of cash acquired






(681,808
)


Repayments of notes receivable


43,816



154,087



103,363Net cash used in investing activities


(90,338,578
)


(149,189,405
)


(16,160,461
)Cash flows from financing activities:Payment on loans and mortgage payable


(1,500,000
)


(100,545,487
)


(744,630
)Issuance of convertible debt










4,000,000Sale of treasury stock










5,798,485Payment of debt issuance costs






(8,835,232
)


(966,412
)Proceeds from issuance of common stock






4,404,727



82,787,161Proceeds from issuance of mortgage payable






249,500,000



Redemption of preferred stock










(646,693
)Payments of preferred stock dividends


(781,000
)


(598,813
)


(673,533
)Issuance of senior subordinated secured notes










10,000,000Proceeds from capital lease facility










4,403,573Payments under capital lease obligations


(2,085,501
)


(1,577,171
)


(946,429
)Proceeds from exercise of stock options and warrants






613,371



292,790Net cash (used in) provided by financing activities


(4,366,501
)


142,961,395



103,304,312Net (decrease) increase in cash and cash equivalents


(45,204,107
)


(8,100,847
)


84,688,845Cash and cash equivalents at beginning of period


96,989,932



105,090,779



20,401,934Cash and cash equivalents at end of period

$
51,785,825


$
96,989,932


$
105,090,779   The accompanying notes are an
    integral part of these consolidated financial statements.
 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
    No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
 F-8




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 00-21,
    No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent, Bulletin No. 90-1, Accounting for Separately Priced Extended Warranty and
    Product Maintenance Contracts.
      Significant
    concentrations
    Derivatives
     F-9




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Share-based
    compensation
  Share-Based
    Payment
    Stock
    warrants issued for services
    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
   F-11




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Capitalization
    of Interest Costs.
  Year Ended March 31,2009


2008


2007Interest expense

$
29,979,664


$
32,105,034


$
28,214,563Interest capitalized


4,689,614



1,598,439



208,829Interest charges incurred

$
34,669,278


$
33,703,473



28,423,392   98-1, Accounting for the Cost of Software Developed or
    Obtained for Internal Use, (SOP 98-1). SOP 98-1
  Goodwill
    and Impairment of long-lived assets and long-lived assets to be
    disposed of
       F-12




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Rent
    expense
      Fair
    value of financial instruments
    March 31, 2009


March 31, 2008Book Value


Fair Value


Book Value


Fair ValueMortgage payable, including current portion

$
254,227,616


$
241,750,612


$
250,722,856


$
249,053,329Convertible debt, including current portion


89,568,006



93,434,644



86,284,017



90,718,592     Fair
    value measurements
  Fair Value Measurements The Fair Value
    Option for Financial Assets and Financial Liabilities
   F-13




---



##### Table of Contents



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


Fair Value Measurement UsingMarch 31, 2009


Level 1


Level 2


Level 3Money market funds

$
21,064,509


$
21,064,509


$



$
Interest rate swaps


(6,072,737
)






(6,072,737
)


Embedded derivatives


(181,693
)










(181,693
)$
14,810,079


$
21,064,509


$
(6,072,737
)

$
(181,693
)     Money market fund instruments
  Interest rate swap instrument
  Embedded derivatives
    Income
    taxes
   F-14




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes 
    an Interpretation of FASB Statement No. 109
    Recent
    accounting pronouncements
  Noncontrolling Interests in Consolidated Financial
    Statements, an Amendment of ARB No. 51
  Disclosures about Derivative Instruments and Hedging
    Activities Accounting for
    Derivative Instruments and Hedging Activities
  No. FAS 142-3, Determination of the Useful Life of Intangible
    Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible
    Assets. FAS 142-3
  No. FAS 157-4, Determining Fair Value When the Volume and Level of
    Activity for the Asset or Liability Have Significantly Decreased
    and Identifying Transactions That Are Not Orderly
 F-15




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  FAS 157-4). FAS 157-4 FAS 157-4 FAS 157-4 FAS 115-2 FAS 124-2 FAS 107-1 28-1. FAS 157-4
  No. FAS 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments FAS 107-1 28-1). FAS 107-1 28-1 FAS 107-1 28-1 FAS 115-2 FAS 124-2 FAS 157-4. FAS 107-1 28-1 FAS 107-1 28-1
  3.
    Acquisitions  five-day
  Cash and cash equivalents

$
109,248Accounts receivable


2,122,035Inventory


763,970Goodwill


3,021,269Accounts payable and accrued expenses


(3,148,327
)Net assets acquired

$
2,868,195   five-day
 F-16




---



##### Table of Contents



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

$
41,095Accounts receivable


2,496,372Property and equipment


9,786,000Other assets


950,813Intangible assets, including goodwill


80,988,008Accounts payable and accrued expenses


(7,007,002
)Other liabilities


(3,849,216
)Net assets acquired

$
83,406,070     Gross Carrying


Amortization


AccumulatedAmount


Period


AmortizationIndefinite lived intangible assets:Goodwill

$
66,288,008






$
Trademarks


4,100,000







Amortizable intangibles:Customer base


6,500,000



8 years



1,503,125Technology


4,000,000



5 years



1,480,000Other


100,000



3 years



61,667     For the Years EndedMarch 31,2008


2007(unaudited)Revenues  pro forma

$
197,751,889


$
156,985,181Net loss  pro forma

$
(42,303,283
)

$
(17,934,166
)Net loss per common share:Basic and diluted  pro forma

$
(0.74
)

$
(0.40
)   4.
    Accounts
    Receivable  March 31,2009


2008Accounts receivable consists of:Accounts receivable

$
32,574,696


$
36,371,552Unbilled revenue


5,311,585



8,667,031Allowance for doubtful accounts


(2,070,742
)


(990,508
)$
35,815,539


$
44,048,075    F-17




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Prepaid
    Expenses and Other Assets  March 31,2009


2008Prepaid expenses and other assets consists of:Prepaid expenses

$
2,277,733


$
3,090,786Deferred installation costs


6,878,203



5,571,544Deposits


3,873,678



3,646,384Deferred rent


1,263,627



1,085,872Deferred tax asset


862,225



Interest and other receivables


357,780



424,355Other


2,008,295



1,575,56617,521,541



15,394,507Less: current portion


(8,615,367
)


(8,493,424
)$
8,906,174


$
6,901,083   6.
    Property
    and Equipment  March 31,2009


2008Property and equipment, net, consists of:Land

$
24,172,193


$
24,172,193Building


101,334,716



55,335,724Building and leasehold improvements


75,394,795



64,232,938Machinery and equipment


117,168,376



56,001,931Computer equipment, furniture and fixtures


54,169,375



30,486,055Construction in progress


7,159,667



54,677,025379,399,122



284,905,866Less: accumulated depreciation and amortization


(78,397,142
)


(53,231,592
)$
301,001,980


$
231,674,274    F-18




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Intangibles  Amortization


March 31,


March 31,Period (Years)


2009


2008Intangibles, net, consist of:Customer base


8-10


$
8,300,000


$
8,300,000Technology


4-5



6,400,000



6,400,000Trademarks






4,100,000



4,100,000Non-compete agreements


3



100,000



100,00018,900,000



18,900,000Less: accumulated amortization






(5,908,331
)


(3,482,498
)$
12,991,669


$
15,417,502     Non-CompeteCustomer Base


Technology


Agreements2010

$
992,500


$
1,295,714


$
33,3332011


992,500



800,000



5,0002012


992,500



800,000



2013


992,500



120,000



2014


936,786







Thereafter


930,836







$
5,837,622


$
3,015,714


$
38,333     8.
    Accounts
    Payable and Other Current Liabilities  March 31,2009


2008Accounts payable and other current liabilities consists of:Accounts payable

$
30,739,396


$
29,383,405Accrued expenses


15,917,499



17,246,649Current portion of deferred revenue


6,903,554



6,320,659Interest payable


4,835,265



2,884,780Customer prepayments


1,956,037



2,111,561$
60,351,751


$
57,947,054  F-19




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Mortgage
    Payable  March 31,2009


2008Mortgage Payable consists of:First Lien Credit Agreement, face value of $150.0 million,
    due August 15, 2012. Principal of $375,000 is payable
    quarterly. Interest is payable monthly at Eurodollar rate plus
    3.75% at the election of the Company. (Effective interest rate
    of 6.1% and 7.6%)

$
146,826,215


$
148,188,463Second Lien Credit Agreement, face value of $100.0 million,
    due February 2, 2013. Interest is payable at Eurodollar
    rate plus 7.75% at the election of the Company. (Effective
    interest rate of 10.1% and 12.1%)


107,401,401



102,534,393254,227,616



250,722,856Less: current portion


(1,500,000
)


(1,500,000
)$
252,727,616


$
249,222,856        F-20




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. 96-19, Debtors Accounting for a Modification or Exchange
    of Debt Instruments (EITF 96-19), EITF 96-19,
         F-21




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      10.
    Convertible
    Debt  March 31,2009


2008Convertible debt consists of:9% Senior Convertible Notes, face value of
    $29.1 million, due June 15, 2009, and convertible into
    shares of the Companys common stock at $12.50 per share.
    Interest at 9% is payable semi-annually, on December 15 and June
    15 (Effective interest rate of 26.5%)

$
28,268,174


$
24,834,6456.625% Senior Convertible Notes, face value of
    $57.2 million, 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%)


57,192,000



57,192,0000.5% Senior Subordinated Convertible Notes, face value of
    $4.0 million, due June 30, 2009, and convertible into
    shares of the Companys common stock at $8.14 per share.
    Interest at 0.5% is payable semi-annually, on December 1 and
    June 30 (Effective interest rate of 0.72%)


4,107,832



4,257,37289,568,006



86,284,017Less: current portion


(32,376,006
)


$
57,192,000


$
86,284,017     No. 96-19, Debtors Accounting for a Modification or Exchange
    of Debt Instruments (EITF 96-19). EITF 96-19,
 F-22




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##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Convertible Debt and Debt Issued with
    Stock Purchase Warrants.
         F-23




---



##### Table of Contents



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




---



##### Table of Contents



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


MortgageDebt


Payable


Total2010

$
33,121,153


$
1,500,000


$
34,621,1532011






1,500,000



1,500,0002012






1,500,000



1,500,0002013






250,749,019



250,749,0192014


57,192,000







57,192,00090,313,153



255,249,019



345,562,172Less: unamortized premiums and discounts


(745,147
)


(1,021,403
)


(1,766,550
)$
89,568,006


$
254,227,616


$
343,795,622   11.
    Derivatives  No. 06-7 Issuers Accounting for a Previously Bifurcated
    Conversion Option in a Convertible Debt Instrument When the
    Conversion Option No Longer Meets the Bifurcation Criteria in
    FASB Statement No. 133
       F-25




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    Deferred
    Rent and Other Liabilities  March 31,2009


2008Deferred rent and other liabilities consists of:Deferred rent

$
6,467,239


$
3,704,038Interest rate swap, at fair value


6,072,737



2,466,370Deferred tax liability


1,542,830



1,781,159Other liabilities


5,050,152



1,778,169$
19,132,958


$
9,729,736   13.
    Changes
    in Stockholders Equity  Series I
    convertible preferred stock
    Common
    stock
  Issuance
    of Common Stock
     F-26




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Conversion
    of preferred stock
      Stock
    warrants
    EstimatedNo. of Shares


Exercise




Fair Value atIssuance Date

Able to Purchase


Price


Expiration Date

IssuanceApril 2006


12,500


$
4.80


April 2011

$
92,988April 2005


7,200



6.90


April 2011


25,056December 2004


2,003,378



6.80-8.80


December 2011


8,782,933April 2004


5,000



7.00


April 2009


32,450June 2001


1,300



17.20


June 2011


22,490January 2003


950



4.80


June 2011


3,9712,030,328








$
8,959,888    F-27




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Sale
    of Treasury Shares
    14.
    Loss Per
    Share    March 31,2009


2008


2007Net loss attributable to common stockholders

$
(11,375,772
)

$
(43,022,338
)

$
(15,628,316
)Adjustments:Interest expense, including amortization of discount and debt
    issue costs










(28,701
)Change in fair value of derivatives










(112,827
)Numerator for diluted loss per share:

$
(11,375,772
)

$
(43,022,338
)

$
(15,769,844
)     March 31,2009


2008


2007Basic:Weighted average common shares outstanding  basic


59,438,217



58,134,269



44,151,259Diluted:Weighted average common shares outstanding


59,438,217



58,134,269



44,151,259Series B Notes










115,782Weighted average common shares outstanding  diluted


59,438,217



58,134,269



44,267,041     March 31,2009


2008


20079% Senior Convertible Notes


2,324,800



2,724,817



6,900,000Common stock warrants


2,260,722



2,364,187



2,545,766Common stock options


2,256,513



2,303,138



2,437,249Early conversion incentive






191,603



1,540,772Nonvested stock


1,554,000



798,222



532,800Series I convertible preferred stock


1,067,367



1,058,507



1,084,4776.625% Senior Convertible Notes


4,575,200



4,175,183



0.5% Senior Subordinated Convertible Notes


491,400



491,400



Series H redeemable preferred stock










12,324  F-28




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    Share-Based
    Compensation    Option
    Awards
    WeightedWeighted


AverageAverage


Remaining


AggregateShares


Exercise Price


Contractual Term


Intrinsic ValueOutstanding at April 1, 2008


2,303,138


$
10.05Granted






Exercised


(900
)


3.46Forfeited


(92,351
)


9.63Outstanding at March 31, 2009


2,209,887



10.06



4.59


$
(16,286,525
)Exercisable at March 31, 2009


2,059,886


$
10.36



4.36


$
(15,793,854
)    F-29




---



##### 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


271,350



5.25


$
4.01



271,350


$
4.01$5.01-10.00


1,524,359



5.34



6.16



1,374,358



6.18$10.01-20.00


95,121



1.75



15.54



95,121



15.54$20.01-30.00


13,230



1.91



24.71



13,230



24.71$30.01-50.00


305,827



1.29



32.53



305,827



32.532,209,887



4.59


$
10.06



2,059,886


$
10.36   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      2008

2007Risk Free Rate

4.11%

4.54%Volatility

102%

118%Expected Term

6 years

6 yearsExpected Dividends

0%

0%Expected Dividends

0%

0%  F-30




---



##### Table of Contents



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


Fair ValueOutstanding at April 1, 2008


799,745


$
6.52Granted


1,173,400



5.90Vested


(335,462
)


6.53Forfeited


(148,053
)


6.10Outstanding at March 31, 2009


1,489,630


$
6.07   16.
    Commitments
    and Contingencies  Leasing
    activities
      As Lessee


As LessorCapital


Operating


Sales-Type


OperatingLeases


Leases


Leases


Leases2010

$
4,399,881


$
11,277,290


$
823,385


$
3,241,1622011


3,655,826



10,427,835



491,312



2,740,7712012


2,021,028



10,396,392



56,932



2,622,6332013


450,382



8,496,621







2,105,9152014


10,503



8,785,944







2,168,690Thereafter






44,719,018







7,530,861Total minimum lease payments

$
10,537,620


$
94,103,100


$
1,371,629


$
20,410,032Amount representing interest and maintenance


(2,704,529
)






(471,549
)Net minimum lease payments

$
7,833,091






$
900,080    F-31




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Litigation
    17.
    Related
    Party Transactions      For the Year Ended March 31,2009


2008


2007Services purchased from related party

$



$



$
497,948Services provided to Fusion


75,673



71,335



87,321Interest income from shareholder


11,022



18,685



25,800Services from directors


521,010



536,476



712,503   March 31,


March 31,2009


2008Other assets

$
348,113


$
387,658Note receivable  related party






52,981      F-32




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    Revenues  For the Year Ended March 31,2009


2008


2007Revenues consist of:Colocation

$
85,372,272


$
61,228,544


$
41,865,161Managed and professional services


139,538,733



110,933,378



43,793,652Exchange point services


15,948,845



12,691,169



9,031,100Equipment resales


9,610,117



2,560,708



6,258,268Total revenues

$
250,469,967


$
187,413,799


$
100,948,181     19.
    Income
    Taxes      For the Year Ended March 31,2009


2008


2007United States

$
(10,505,302
)

$
(42,674,575
)

$
(14,219,056
)International


(142,030
)


1,259,685



(516,129
)$
(10,647,332
)

$
(41,414,890
)

$
(14,735,185
)  F-33




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    March 31,2009


2008Deferred tax assets:Net operating loss carryforwards

$
93,835,234


$
93,421,764Interest rate swap and embedded derivatives


2,353,542



900,095Allowances and other


7,031,020



4,005,538Total deferred tax assets


103,219,796



98,327,397Valuation allowance


(92,387,653
)


(91,825,838
)Deferred tax liabilities:Intangibles with indefinite lives


(1,542,830
)


(1,558,000
)Convertible debt






(1,604,874
)Depreciation and amortization


(9,969,918
)


(5,119,844
)Total deferred tax liability


(11,512,748
)


(8,282,718
)Net deferred tax liability

$
(680,605
)

$
(1,781,159
)            F-34




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended March 31,2009


2008


2007Statutory tax rate


(34.0
)%


(34.0
)%


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


(1.3
)


(2.9
)


(4.0
)Foreign income tax


(1.1
)


0.1



(0.9
)Permanent differences


8.3



(0.9
)


0.5Valuation allowance


27.1



39.9



39.9Effective tax rate


(1.0
)%


2.2
%


1.5
%       20.
    Information
    About the Geographic Segments    March 31,2009


2008


2007Revenues:United States

$
218,935


$
163,278


$
85,167International


31,535



24,136



15,781$
250,470


$
187,414


$
100,948Cost of revenues:United States

$
117,236


$
86,416


$
47,175International


19,198



14,470



9,727$
136,434


$
100,886


$
56,902Income from operations:United States

$
21,117


$
13,676


$
4,831International


1,351



1,013



(850
)$
22,468


$
14,689


$
3,981     March 31,2009


2008United States

$
390,790


$
327,048International


9,343



5,963$
400,133


$
333,011  F-35




---



##### Table of Contents



TERREMARK
    WORLDWIDE, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  21.
    Supplemental
    Cash Flow Information  For the Year Ended March 31,2009


2008


2007Supplemental disclosures of cash flow information:Cash paid for interest, net of amount capitalized

$
18,042,220


$
21,385,504


$
16,407,077Cash paid for income taxes


255,745



216,981



Non-cash operating, investing and financing activities:Warrants issued










92,988Assets acquired under capital leases


4,521,154



1,528,340



1,897,465Stock tendered in payment of services










1,038,579Establishment of Series B derivative asset










342,534Net assets acquired in exchange for common stock






16,745,934



Expiration of warrants


2,256,750



1,380,000



748,010Conversion of preferred stock to equity










2,279Changes in accrued property and equipment


1,977,901



18,258,644



2,445,152   22.
    Subsequent
    Events   F-36