EX-10.48 Form of Note, International



 





Exhibit 10.48




CUSIP NUMBER: 881448 AE 4




TERREMARK WORLDWIDE, INC.

0.50% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2009




     THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE
EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT (THE “SUBORDINATION
AGREEMENT”) DATED AS OF JANUARY 5, 2007 AMONG TERREMARK WORLDWIDE, INC. AS THE ISSUER, THE TRUSTEE,
FMP AGENCY SERVICES, LLC, AS THE AGENT TO THE SENIOR CREDITORS NAMED THEREIN, AND CREDIT SUISSE,
INTERNATIONAL, AS THE SUBORDINATED CREDITOR NAMED THEREIN, AND EACH HOLDER OF THIS NOTE, BY ITS
ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AND INTERCREDITOR
AGREEMENT.



     THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1272, 1273,
AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE COMPANY AGREES TO PROVIDE PROMPTLY
TO HOLDERS OF NOTES, UPON WRITTEN REQUEST, THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE AND THE YIELD TO MATURITY OF THE NOTES. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO
THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT THE FOLLOWING ADDRESS: 2601 S. BAYSHORE DRIVE,
9TH FLOOR, MIAMI, FLORIDA 33133.



     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR”
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “IAI”);
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATION AND AGREEMENTS RELATING TO THE TRANSFER OF THE NOTES (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY), (E) IN ACCORDANCE



 









 




WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.




     THIS SECURITY SHALL BE ENTITLED TO THE BENEFITS OF THAT CERTAIN REGISTRATION RIGHTS AGREEMENT,
DATED JANUARY 5, 2007, AMONG TERREMARK WORLDWIDE, INC., CREDIT SUISSE INTERNATIONAL AND THE OTHER
PARTIES NAMED THEREIN.



1. INTEREST.




     Terremark Worldwide, Inc., a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Security at 0.50% per annum for the first 24 months that
the Note is outstanding, and therafter at a rate of 1.50% per annum until maturity. The Company
will pay interest upon the maturity of the Securities. All interest payable hereunder shall be
payable in kind by adding such amount to the aggregate principal amount of the Securities.
Interest on the Securities will accrue on the principal amount from, and including, January 5,
2007, to, but excluding, the Maturity Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months, and accrued interest shall compound and be added to outstanding
principal on each July 1 and January 1 (of if such date is not a Business Day, the immediately
succeeding Business Day, such dates, the “Interest Payment Date”), as well as on June 30,
2009.



2. MATURITY.




     The Securities will mature on June 30, 2009.



3. METHOD OF PAYMENT.




     Except as provided in the Indenture (as defined below), the Company will pay interest on the
Securities to the persons who are Holders of record of Securities at the close of business on June
30, 2009. Holders must surrender Securities to a Paying Agent to collect the principal amount,
Redemption Price, Repurchase Price of the Securities, plus, if applicable, accrued and unpaid
interest, if any, payable as herein provided upon Redemption or Repurchase Upon Change in Control,
as the case may be. The Company will pay, in money of the United States that at the time of
payment is legal tender for payment of public and private debts, all amounts due in cash with
respect to the Securities, which amounts shall be paid (A) in the case this Security is in global
form, by wire transfer of immediately available funds to the account specified by the Holder hereof
and (B) in the case this Security is held in other than global form, by wire transfer of
immediately available funds to the account specified by the Holder hereof or,
if no such account is specified, by mailing a check to such Holder’s address shown in the Note
Register.



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4. PAYING AGENT, REGISTRAR, CONVERSION AGENT.




     Initially, The Bank of New York Trust Company, N.A., a national banking association (the
“Trustee”), will act as Paying Agent, Registrar and Conversion Agent. The Company may
change any Paying Agent, Registrar or Conversion Agent without notice.



5. INDENTURE.




     The Company issued the Securities under an Indenture dated as of January 5, 2007 (the
“Indenture”) between the Company and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 as amended and in effect from time to time (the “TIA”). The
Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for
a statement of such terms. The Securities are general unsecured senior subordinated obligations of
the Company limited to $4,000,000 aggregate principal amount, except as otherwise provided in the
Indenture (except for Securities issued in substitution for destroyed, mutilated, lost or stolen
Securities). Terms used herein without definition and which are defined in the Indenture have the
meanings assigned to them in the Indenture.



6. OPTIONAL REDEMPTION.




     The Company shall have the right, at the Company’s option, on any Interest Payment Date that
is six months following the date of this Indenture, upon no less than fifteen (15) days prior
written notice to the Trustee and the Initial Purchaser, to redeem (the “Redemption”) all
of the Securities at a redemption price equal to (i) the amount set forth below (expressed as
percentages of the principal amount outstanding on the date of redemption), plus (ii) the amount
(if any) by which the fair market value of on such date of the Common Stock into which the Security
is then convertible exceeds the principal amount of the Security on such date, plus (iii) accrued,
but unpaid Interest (the “Redemption Payment” or “Redemption Price”), if redeemed
during the following monthly periods following the closing date:



	 	 	 	 	 
	Monthly Period	 	Percentage
	After Month Six and Before Month Twelve
	 	 	113.00	%
	On or After Month Twelve and Before Month Eighteen
	 	 	112.40	%
	On or After Month Eighteen and Before Month Twenty Four
	 	 	111.30	%
	On or After Month Twenty Four
	 	 	108.80	%






7. NOTICE OF REDEMPTION.




     Notice of Redemption will be mailed at least twenty (20) days but not more than sixty (60)
days before the Redemption Date to each Holder of Securities to be redeemed at its address
appearing in the Note Register. Securities in denominations larger than $1,000 principal amount
may be redeemed in part but only in integral multiples of $1,000 principal amount.



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8. REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.




     Subject to the terms and conditions of the Indenture, in the event of a Change in Control,
each Holder of the Securities shall have the right, at the Holder’s option, to require the Company
to repurchase such Holder’s Securities including any portion thereof which is $1,000 in principal
amount or any integral multiple thereof on a date selected by the Company (the “Repurchase
Date”), which date is no later than forty five (45) days after the date of the Change in
Control, at a price payable in cash equal to one hundred percent (100%) of the principal amount of
such Security, plus accrued and unpaid interest to, and including, the Repurchase Date.



     Within twenty five (25) days after the occurrence of the Change in Control, the Company must
mail, or cause to be mailed, notice of the occurrence of such Change in Control to each Holder.
Such notice shall include, among other things, a description of the procedure which a Holder must
follow to exercise the Repurchase Right. To exercise the Repurchase Right, a Holder of Securities
must, in accordance with the provisions of the Indenture, (i) deliver, no later than the close of
business on the Business Day immediately preceding the Repurchase Date, a Purchase Notice to the
Company (if it is acting as its own Paying Agent) or to the Paying Agent; and (ii) deliver, at any
time after the delivery of such Purchase Notice, the Securities with respect to which the Holder is
exercising its Repurchase Right (together with all necessary endorsements).



     A “Change In Control” shall be deemed to have occurred at such time as:




     (i) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act), other than a Permitted Holder, is or becomes the “beneficial owner”
(as such term is used in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty
percent (50%) or more of the total voting power of all classes of the Company’s Capital Stock
entitled to vote generally in the election of directors calculated on a fully-diluted basis; or




     (ii) the Company consolidates with, or merges with or into, another Person or any Person
consolidates with, or merges with or into, the Company, in any such event other than pursuant to
a transaction where the Persons that “beneficially owned,” directly or indirectly, the shares of
the Company’s Voting Stock immediately prior to such transaction, “beneficially own,” directly
or indirectly, immediately after such transaction, shares of the continuing, surviving or
acquiring corporation’s Voting Stock representing at least a majority of the total voting power
of all outstanding classes of the Voting Stock of the continuing, surviving or acquiring
corporation; or




     (iii) the sale, transfer, lease, conveyance or other disposition of all or substantially
all of the assets of the Company to any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act;


provided,
however, that a Change in Control will not be deemed to have occurred if at least eighty
percent (80%) of the consideration (other than cash payments for fractional shares or pursuant to
statutory appraisal rights) in the merger or consolidation otherwise constituting the Change in
Control consists of common stock, depositary receipts or other certificates representing common
equity interests and any associated rights traded on a U.S. national




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securities exchange or quoted on The Nasdaq National Market (or which will be so traded or quoted
when issued or exchanged in connection with such Change in Control), and, as a result of such
transaction or transactions, the Securities become convertible solely into such common stock,
depositary receipts or other certificates representing common equity interests and associated
rights.




9. CONVERSION.




     The Securities shall be convertible into shares of Common Stock at any time on or after the
earlier of (x) the Registration Date or (y) 270 days following the Issue Date but prior to the
close of business on the Maturity Date, in accordance with the terms of the Indenture and as set
forth below.



     The initial Conversion Price is $8.14 per share, subject to adjustment in the event of certain
circumstances as specified in the Indenture. The Company will deliver a check in lieu of any
fractional share. On conversion, no payment or adjustment for any unpaid and accrued interest on,
or additional interest with respect to, the Securities will be made, except as specified in the
Indenture.



     To convert a Security, a Holder must (1) complete and sign the Conversion Notice attached to
this Note, with appropriate signature guarantee, on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
required by the Registrar or Conversion Agent and (4) pay any tax or duty if required pursuant to
the Indenture. A Holder may convert a portion of a Security if the portion is $1,000 principal
amount or an integral multiple of $1,000 principal amount.



     Any shares of Common Stock issued upon conversion of a Security shall bear the Private
Placement Legend until such shares are sold pursuant to an effective registration statement or
after the second anniversary of the later of the Issue Date and the last date on which the Company
or any Affiliate was the owner of such shares or the Security (or any predecessor security) from
which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under
the Securities Act or any successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws, as set forth in an Opinion
of Counsel, unless otherwise agreed by the Company and the Holder thereof).



10. INTENTIONALLY OMITTED.




11. SUBORDINATION.




     All obligations under the Notes will be subordinate to the extent set forth in the
Subordination Agreement. A Holder by its acceptance of a Security agrees to be bound by the terms
and provisions of Article XI of the Indenture and the terms and provisions of the Subordination
Agreement and authorizes and expressly directs the Trustee, on its behalf, to take such action as
may be necessary or appropriate to effectuate the subordination between the Holders and the holders
of Senior Indebtedness (as defined in the Subordination Agreement) of the Company (including, but
not limited to, the execution of the Subordination Agreement) and appoints the Trustee as
attorney-in-fact for any and all such purposes.



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12. DENOMINATIONS, TRANSFER, EXCHANGE.




     The Securities are in registered form, without coupons, in denominations of $1,000 principal
amount and integral multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer documents. No
service charge shall be made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or similar governmental charge that may be
imposed in connection with certain transfers or exchanges. The Company, the Trustee and the
Registrar shall not be required to register the transfer of or exchange any Security (i) during a
period beginning at the opening of business fifteen (15) days before the mailing of a notice of
redemption of the Securities selected for Redemption under Section 3.4 of the Indenture and ending
at the close of business on the day of such mailing or (ii) that has been selected for Redemption
or for which a Purchase Notice has been delivered, and not withdrawn, in accordance with the
Indenture, except the unredeemed or unrepurchased portion of Securities being redeemed or
repurchased in part.



13. PERSONS DEEMED OWNERS.




     The registered Holder of a Security may be treated as the owner of such Security for all
purposes.



14. MERGER OR CONSOLIDATION.




     The Company shall not consolidate with, or merge with or into, or sell, transfer, lease,
convey or otherwise dispose of all or substantially all of the property or assets of the Company
to, another person, whether in a single transaction or series of related transactions, unless (i)
such other person is a corporation organized under the laws of the United States, any State thereof
or the District of Columbia; (ii) such person assumes by supplemental indenture all the obligations
of the Company under the Securities and the Indenture; and (iii) immediately after giving effect to
the transaction, no Default or Event of Default shall exist.



15. AMENDMENTS, SUPPLEMENTS AND WAIVERS.




     Subject to certain exceptions and to the provisions of the Indenture, the Indenture and the
Securities may be amended or supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Securities, and certain existing Defaults or Events
of Default may be waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. In accordance with the terms of the Indenture, the
Company, with the consent of the Trustee, may amend or supplement the Indenture or the Securities
without notice to or the consent of any Securityholder: (i) to evidence the assumption of the
Company’s obligations by a successor; (ii) to evidence the acceptance of appointment by a successor
trustee; (iii) to make any changes or modifications to the Indenture necessary to cure and
ambiguity or correct any error in the Indenture, so long as such action will not adversely affect
the interests of the Holders; (iv) to qualify or maintain the qualification of the Indenture under
the TIA; (v) to secure the obligations of the Company in respect of the



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Securities; (vi) to establish the forms or terms of the Securities; (vii) to add to the
covenants of the Company described in the Indenture for the benefit of Securityholders; or (viii)
to make other changes to the Indenture or forms or terms of the Securities, provided no such change
individually or in the aggregate with all other such changes has or will have a material adverse
effect on the interests of the Holders. In accordance with the terms of the Indenture, certain
amendments, supplements and waivers cannot be made without the consent of each Holder of each
outstanding Security affected.




16. DEFAULTS AND REMEDIES.




     Subject to the provisions of the Indenture, an “Event of Default” occurs if: (i) the
Company fails to pay the principal of any Security when the same becomes due and payable, whether
at maturity, upon Redemption, on a Repurchase Date with respect to a Repurchase Upon Change in
Control or otherwise; (ii) the Company fails to pay Interest on any Security when due, if such
failure continues for thirty (30) days after the date when due; (iii) the Company fails to timely
provide a Change in Control Notice, as required by the provisions of this Indenture; (iv) the
Company defaults in its obligation to convert the Securities into shares of Common Stock, cash or a
combination of cash and Common Stock upon exercise of a Holder’s conversion right and such default
continues for ten (10) days; (v) the Company defaults in its obligation to repurchase any Security
on a Repurchase Date with respect to a Repurchase Upon Change in Control or otherwise; (vi) the
Company defaults in its obligation to redeem any Security after exercise of its option to redeem;
(vii) the Company fails to perform or observe any of the covenants in Article IV of the
Indenture for sixty (60) days after written notice to the Company by the Trustee or to the Company
and the Trustee by Holders of at least fifty percent (50%) in the aggregate principal amount of the
Securities then outstanding; (viii) there occurs an event of default with respect to the Company’s
or any of its Subsidiaries’ Indebtedness having a principal amount then outstanding, individually
or in the aggregate, of at least fifteen million ($15,000,000), whether such Indebtedness now
exists or is hereafter incurred, which default or defaults: (a) shall have resulted in such
Indebtedness becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable; or (b) shall constitute the failure to pay such Indebtedness
at the final stated maturity thereof (after expiration of any applicable grace period); (ix) any
final judgment or judgments for the payment of money in excess of fifteen million ($15,000,000)
shall be rendered against the Company and shall not be discharged for any period of sixty (60)
consecutive days during which time a stay of enforcement shall not be in effect or during which
time an appeal has not been filed; or (x) certain events of bankruptcy, insolvency or
reorganization involving the Company.



     If an Event of Default (excluding an Event of Default specified in Section 6.1(x) of the
Indenture (but including an Event of Default specified in Section 6.1(ix) of the Indenture)) occurs
and is continuing, the Trustee by notice to the Company or the Holders of at least fifty percent
(50%) in aggregate principal amount of the Securities then outstanding by notice to the Company and
the Trustee, may declare the Securities to be immediately due and payable in full. Upon such
declaration, the principal of, premium, if any, and any accrued and unpaid interest on, all
Securities shall be due and payable immediately. If an Event of Default specified in Section
6.1(x) of the Indenture occurs, the principal of, and accrued and unpaid interest on, all the
Securities shall ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder. The Holders of a majority in aggregate



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principal amount of the Securities then outstanding by written notice to the Trustee may
rescind or annul an acceleration and its consequences if (A) the rescission would not conflict with
any order or decree, (B) all existing Events of Default, except the nonpayment of principal or
interest that has become due solely because of the acceleration, have been cured or waived and (C)
all amounts due to the Trustee under Section 7.7 if the Indenture have been paid.




     Holders may not enforce the Indenture or the Securities except as provided in the Indenture.
The Holders of a majority in aggregate principal amount of the Securities then outstanding may
direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to
follow any direction that conflicts with law or the Indenture, is unduly prejudicial to the rights
of other Holders or would involve the Trustee in personal liability unless the Trustee is offered
indemnity reasonably satisfactory to it; provided, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.



     If a Default or Event of Default occurs and is continuing, the Trustee shall mail to Holders
of Securities a notice of the Default or Event of Default within ninety (90) days after such Event
of Default becomes known to the Trustee. Except in the case of a Default in payment on any
Security (including the failure to make a mandatory repurchase pursuant hereto), the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the Securities.



17. REGISTRATION RIGHTS.




     The Holders are entitled to registration rights as set forth in the Registration Rights
Agreement. The Holders shall be entitled to receive additional interest in certain circumstances,
all as set forth in the Registration Rights Agreement.



18. TRUSTEE DEALINGS WITH THE COMPANY.




     The Trustee under the Indenture, or any banking institution serving as successor Trustee
thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and
perform services for, the Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee.



19. NO RECOURSE AGAINST OTHERS.




     No past, present or future director, officer, employee or shareholder, as such, of the Company
shall have any liability for any obligations of the Company under the Securities or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder, by accepting a Security, waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.



20. AUTHENTICATION.




     This Security shall not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent in accordance with the Indenture.



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21. ABBREVIATIONS.




     Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).



     The company will furnish to any holder upon written request and without charge a copy of the
indenture. Requests may be made to:




Terremark Worldwide, Inc.

2601 South Bayshore Drive

Miami, Florida 33133

Attn: Chief Financial Officer




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