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, that we may be further impacted by slowdowns, postponements or cancellations in our client's businesses or deterioration in the financial condition of our clients, a history of losses, 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 and our disclosure controls, energy costs, the interest rate environment, failure to successfully implement expansion plans or integrate acquired businesses into our operations, 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 only to events as of the date on which the statements are made. 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

We are a global provider of managed IT solutions with data centers in the United States, Europe and Latin America. We provide carrier neutral colocation, managed services and exchange point services to approximately 1,100 customers worldwide across a broad range of sectors, including enterprises, government agencies, systems integrators, Internet content and portal companies and the world's largest network providers. We house and manage our customers' mission-critical IT infrastructure, enabling our customers to reduce capital and operational expenses while improving application performance, availability and security. As a result of our expertise and our full suite of product offerings, customers find it more cost effective and secure to contract us rather than hire dedicated IT staff. Furthermore, as a carrier neutral provider we have more than 160 competing carriers connected to our data centers enabling our customers to realize significant cost savings and easily scale their network requirements to meet their growth. We continue to see an increase in outsourcing as customers face escalating operating and capital expenditures and increased technical demands associated with their IT infrastructure.

We deliver our solutions primarily through three highly specialized data centers, or Network Access Points (NAPs) that were purpose-built and have been strategically located to enable us to become one of the industry leaders in terms of reliability, power availability and connectivity. Our owned NAP of the Americas facility, located in Miami, Florida, is one of the most interconnected data centers in the world and is a primary exchange point for high levels of traffic between the United States, Europe and Latin America; our owned NAP of the Capital Region, or NCR, located outside Washington, D.C., has been designed to address the specific security and connectivity needs of our federal customers; and our leased NAP of the Americas/West, located in Santa Clara, California, is strategically located in Silicon Valley to serve the technology and Internet content provider segments as well as provide access to connectivity to the U.S. west coast, Asia, Pacific Rim and other international locations. Each facility offers our customers access to carrier neutral connectivity as well as technologically advanced security, reliability and redundancy through 100% service level agreements, or SLAs, which means that we agree to provide 100% uptime for all of our customers' IT equipment contained

in our facilities. Our facilities and our IT platform can be expanded on a cost effective basis to meet growing customer demand.

Our primary products and services include colocation, managed services and exchange point services.

• 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.

Our business is characterized by long term contracts, which provide for monthly recurring revenue from a diversified customer base. Our customer contracts are generally 3 years in duration and our average quarterly revenue churn rate for the past four quarters has been less than 2% and we experienced no revenue churn in our federal customer base, which we believe is a reflection of the value of our integrated technology solutions and our ability to deliver the highest quality service. As an illustration of this principle, during the year ended March 31, 2009, approximately 90% of our overall revenue was recurring and over 70% of our new bookings were derived from existing customers.

Our principal executive office is located at 2 South Biscayne Boulevard, Suite 2800, Miami, Florida 33131. Our telephone number is (305) 856-3200.

Recent Events

On June 24, 2009, we completed our offering of $420.0 million aggregate principal amount of 12.0% Senior Secured Notes due 2017, which are guaranteed by substantially all of our domestic subsidiaries. Additionally, these notes are secured by a first priority security interest in substantially all of the assets of Terremark and the guarantors, including the pledge of 100% of all outstanding capital stock of each of our domestic subsidiaries and 65% of all outstanding capital stock of substantially all our foreign subsidiaries. The notes were offered and sold in a private placement to qualified institutional buyers in the United States in reliance on Rule 144A under the securities act, and outside the United States in reliance on Regulation S under the securities act. A portion of the proceeds from this offering were used to repay all of our outstanding secured indebtedness including our $250 million senior credit facilities, the outstanding $4.1 million of our 0.5% Series B Senior Subordinated Convertible Notes, approximately $8.4 million in termination fees incurred in connection with the termination of the interest rate swap agreements we entered into in connection with these senior credit facilities and an additional $2.2 million in prepayment fees with respect to the prepayment of the amounts outstanding under the senior credit facilities. We anticipate using the remaining proceeds for working capital and other general corporate purposes to support the growth of our business, which may include capital investments to build-out our existing facilities and acquisitions of complementary businesses.

On May 29, 2009, VMware Bermuda Limited, a wholly-owned subsidiary of VMware, Inc., a global leader in virtualization solutions from the desktop to the data center, acquired a $20 million equity stake in Terremark. VMware purchased 4 million shares, or a 5% fully-diluted equity interest in the Company, at a premium to our closing share price prior to announcement. In connection with the offer and sale of these shares to VMware, we relied on the exemption from registration provided by Section 4(2) of the securities act and Rule 506 under the securities act. Based upon the representations and warranties set forth in the governing subscription agreement, we believe that VMware is an "accredited investor" as such term is defined in Rule 501(a) under the securities act. In compliance with the terms of registration rights provisions set forth in the governing subscription agreement, on July 1, 2009, we filed with the Commission a registration statement covering the resale of the shares purchased by VMware. The Commission declared this registration statement effective on July 15, 2009. The governing subscription agreement grants to VMware a right of first refusal with respect to certain future equity sales by Terremark that occur within the 18-month period following the closing of the VMware purchase. If such equity sales are proposed to be made to a competitor of VMware or certain affiliates, VMware may elect to purchase such equity in lieu of the competitor. If such equity sales are

proposed to be made to a non-competitor of VMware, VMware will not have the ability to prevent such sale but will have the right to elect to purchase an additional amount of equity sufficient to maintain its initial equity percentage interest in Terremark.

Results of Operations

Results of Operations for the Three Months Ended June 30, 2009 as Compared to
the Three Months Ended June 30, 2008.

Revenues. The following charts provide certain information with respect to our
revenues:


                                            For the Three
                                             Months Ended
                                               June 30,
                                           2009        2008

                          United States        87 %       86 %
                          International        13 %       14 %

                                              100 %      100 %

                                                For the Three Months Ended June 30,
                                             2009                         2008

    Revenues consist of (in thousands):
    Colocation                            $    25,633            39 %   $ 18,459        33 %
    Managed and professional services          33,798            51 %     31,434        56 %
    Exchange point services                     4,451             7 %      3,697         7 %
    Equipment resales                           1,879             3 %      2,526         4 %

                                          $    65,761           100 %   $ 56,116       100 %

The $9.6 million, or 17% increase in revenues is mainly due to both an increase in our deployed customer base and an expansion of services to existing customers. Our deployed customer base increased to 1,094 customers as of June 30, 2009 from 1,016 customers as of June 30, 2008. Revenues consist of:

• colocation services, such as licensing of space and provision of power;

• managed and professional services, such as network management, managed web hosting, outsourced network operating center services, network monitoring, procurement of connectivity, managed router services, secure information services, technical support and consulting;

• exchange point services, such as peering and cross connects; and

• procurement and installation of equipment.

The $7.2 million, or 39% increase in colocation revenue is primarily the result of an increase in our utilization of total net colocation space to 28.3% as of June 30, 2009 from 21.0% as of June 30, 2008. Our utilization of total net colocation space represents space billed to customers as a percentage of total space built-out and available to customers. For comparative purposes, space added during the three months ended June 30, 2009 was assumed to be also available as of June 30, 2008.

The $2.4 million, or 8% increase in managed and professional services revenue is primarily the result of an increase in orders from both existing and new customers as reflected by the growth in our customer base and utilization of space, as discussed above.

The $0.8 million, or 20% increase in exchange point services revenue is mainly due to an increase in cross-connects billed to customers. Cross-connects billed to customers increased to 8,456 as of June 30, 2009 from 7,232 as of June 30, 2008.

Revenues from equipment resales may fluctuate quarter over quarter based on customer demand.

We anticipate an increase in revenue from colocation, exchange point and managed services as we add more customers to our network of NAPs, sell additional services to existing customers and introduce new products and services. We anticipate that the percentage of revenue derived from public sector customers will fluctuate depending on the timing of exercise of expansion options under existing contracts and the rate at which we sell services to the public sector. We anticipate that public sector revenues will continue to represent a significant portion of our revenues for the foreseeable future.

Cost of Revenues. Costs of revenues, excluding depreciation and amortization, increased $4.6 million, or 14% to $36.7 million for the three months ended June 30, 2009 from $32.1 million for the three months ended June 30, 2008. Cost of revenues, excluding depreciation and amortization, consist primarily of operations personnel, fees to third party service providers, procurement of connectivity and equipment, technical and colocation space rental costs, electricity, chilled water, insurance, property taxes, and security services. The increase is mainly due to increases of $2.7 million in connectivity procurement costs, $1.2 million in personnel costs and $0.6 million in colocation space costs.

The $2.7 million increase in connectivity procurement costs is in line with increase in revenues from managed services. The $1.2 million increase in personnel costs is mainly due to operations and engineering staffing levels increasing from an average of 493 employees during three months ended June 30, 2008 to an average of 522 employees during three months ended June 30, 2009, which is attributable to the expansion of operations in Culpeper, Virginia and Santa Clara, California. The $0.6 million increase in colocation space costs is primarily the result of the opening of our new facility in Colombia and additional new colocation space in Dallas, Texas, Belgium and Spain.

Sales and Marketing Expenses. Sales and marketing expenses increased $0.6 million, or 10% to $6.3 million for the three months ended June 30, 2009 from $5.7 million for the three months ended June 30, 2008. The increase is primarily due to an increase in sales personnel from 88 employees during the three months ended June 30, 2008 to 96 employees during the three months ended June 30, 2009.

Depreciation and Amortization Expenses. Depreciation and amortization expense increased $3.3 million, or 57% to $8.9 million for the three months ended June 30, 2009 from $5.6 million for the three months ended June 30, 2008. The increase is the result of capital expenditures mostly related to the expansion of our data center footprint and upgrades to the infrastructure of our current footprint.

Interest Expense. Interest expense increased $2.0 million, or 29% to $9.1 million for the three months ended June 30, 2009 from $7.1 million for the three months ended June 30, 2008. This increase is due to an increase in the average outstanding debt balance during the period as well as a decrease in the amount of interest being capitalized. On June 24, 2009, we entered into a new secured loan agreement in the aggregate principal amount of $420.0 million. A portion of the loan proceeds were used to repay the first lien and second lien credit agreements, which had a face value of $150.0 million and $100.0 million, respectively. In addition, we repaid the 9% senior convertible debt and series B notes, which had a face value of $29.1 million and $4.0 million, respectively.

Loss on Early Extinguishment of Debt. For the three months ended June 30, 2009, we incurred a non-cash loss on the early extinguishment of our first lien and second lien credit agreements of $10.3 million.

Change in Fair Value of Derivatives. For the three months ended June 30, 2009, we recognized a loss of $1.5 million, as compared to a gain of $5.6 million due to the changes in the fair values of our derivatives which was mainly related to our two interest rate swap agreements that became effective February 2008 (first lien) and July 2008 (second lien). In connection with the repayment of the credit agreements on June 24, 2009, the interest rate swap agreements were settled for $8.4 million.

Interest Income. Interest income decreased $0.4 million, or 83% to $0.1 million for the three months ended June 30, 2009 from $0.5 million for the three months ended June 30, 2008. This decrease is the result of lower interest rates on our cash and cash equivalents account balances as well as a decrease in the average cash and cash equivalents balances for the period.

Other. For the three months ended June 30, 2009, we recorded $0.5 million of other income, which was primarily attributable to foreign currency gains during the period.

Liquidity and Capital Resources

As of June 30, 2009, our principal source of liquidity was our $147.2 million in unrestricted cash and cash equivalents and our $41.8 million in accounts receivable. We anticipate that we will generate sufficient cash flows from operations to fund our capital expenditures and debt service in connection with our currently identified business objectives.

In addition, under the indenture governing our 12% senior secured notes, we may incur additional indebtedness, including up to $50.0 million under credit facilities that may be used for any purpose and up to $75.0 million of additional junior indebtedness for the purpose of financing the purchase price or cost of construction or improvement of property, plant or equipment, including the acquisition of the capital stock of an entity that becomes a restricted subsidiary. Furthermore, we may incur further indebtedness to the extent that our fixed charge coverage ratio would have been at least 2.0 to 1 on a pro forma basis (including a pro forma application of the net proceeds from this additional indebtedness) as if this indebtedness had been incurred at and as of the beginning of our most recently completed four fiscal quarters for which internal financial statements are available.

We are anticipating capital expenditures for fiscal year 2010 of approximately $90.0 to $95.0 million, with $50.0 million related to the completion of the second phase of our NCR data center campus in Culpeper, Virginia, $20.0 million to upgrade our technology and service delivery platforms, and $20.0 million to expand our footprint in Santa Clara, California and Sao Paulo, Brazil and upgrade our infrastructure in Miami, Florida.

Our projected revenues and cash flows depend on several factors, some of which are beyond our control, including the rate at which we provide services, the timing of exercise of expansion options by customers under existing contracts, the rate at which new services are sold to the federal sector and the commercial sector, the ability to retain the customer base, the willingness and timing of potential customers in outsourcing the housing and management of their technology infrastructure to us, the reliability and cost-effectiveness of our services and our ability to market our services. Besides our cash on hand and any financing activities we may pursue, customer collections are our primary source of cash. While we believe we have a strong customer base and have experienced strong collections in the past, if the current market conditions continue to deteriorate we may experience increased churn in our customer base, including reductions in their commitments to us, which could also have a material adverse effect on our liquidity.

Sources and Uses of Cash

Cash used in operations for the three months ended June 30, 2009 was $9.9 million as compared to cash provided by operations of $17.6 million for the three months ended June 30, 2008. The decrease in cash used in operations is mainly due to timing of debt service payments, vendor payments and collections from customers, as well as the settlement of our interest rate swap agreements.

Cash used in investing activities for the three months ended June 30, 2009 was $9.6 million compared to cash used in investing activities of $41.7 million for the three months ended June 30, 2008, a decrease of $32.1 million. This decrease is the result of higher capital expenditures mostly related to our expansion in Culpeper, Virginia and upgrades to our infrastructure in Miami, Florida and Santa Clara, California during the three months ended June 30, 2008.

Cash provided by financing activities for the three months ended June 30, 2009 was $114.6 million compared to cash used in financing activities of $0.6 million for the three months ended June 30, 2008, an increase of $115.2 million. The increase in cash provided by financing activities is primarily due to the proceeds received from our $420 million 12% Senior Secured Notes and the issuance of 4 million shares of our common stock. These proceeds were offset by the $290.9 million in repayments of the First Lien and Second Lien Credit Agreements, 9% Senior Convertible Debt and Series B Notes.

Debt Obligations

12% Senior Secured Notes

On June 24, 2009, we completed an offering of $420.0 million aggregate principal amount of 12.0% senior secured notes due in 2017, which are guaranteed by substantially all of our domestic subsidiaries. Additionally, the senior secured notes are secured by a first priority security interest in substantially all of the assets of Terremark Worldwide, Inc. and the guarantors, including the pledge of 100% of all outstanding capital stock of each of our domestic subsidiaries and 65% of all outstanding capital stock of substantially all our foreign subsidiaries. The senior secured notes were offered and sold in a private placement to qualified institutional buyers in the United States in reliance on Rule 144A under the securities act and outside the United States in reliance on Regulation S under the securities act.

The senior secured notes bear interest at 12.0% per annum, payable on December 15 and June 15 of each year, commencing December 15, 2009.

The senior secured notes are governed by an indenture, dated June 24, 2009, among Terremark Worldwide, Inc., the guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee. The senior secured notes are our general secured obligations, secured by first-priority liens on the collateral securing the senior secured notes and rank equal in right of payment with all of our existing and future senior secured indebtedness that is secured on an equal basis with the senior secured notes. To the extent that any liens on the collateral securing the senior secured notes were not perfected as of the closing date, we are obligated to use our reasonable best efforts to promptly perfect such security interests; provided we must in any event perfect such interests no later than 60 days following the closing date.

At any time prior to June 15, 2012, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a redemption price equal to 112.000% of the principal amount thereof, plus accrued and unpaid interest thereon, with the net cash proceeds of certain sales of our capital stock; provided that (i) at least 65% of the aggregate principal amount of senior secured notes remains outstanding immediately after such redemption, and
(ii) the redemption occurs within 120 days of the date of the closing of such sale of our capital stock.

At any time prior to June 15, 2013, we may redeem all or a part of the senior secured notes at a redemption price equal to 100% of the principal amount of the senior secured notes redeemed plus an applicable "make-whole" premium (as defined in the indenture), as of, and accrued and unpaid interest, if any, to the redemption date.

Additionally, on or after June 15, 2013, we may redeem all or a part of the senior secured notes on any one or more occasions, at the redemption prices (expressed as percentages of principal amount of the notes to be redeemed) set forth below plus accrued and unpaid interest on the senior secured notes redeemed, to the applicable redemption date, if redeemed during the 12-month period beginning on June 15 of each of the years indicated below:

                        Year                   Percentage

                        2013                       106.000 %
                        2014                       103.000 %
                        2015 and thereafter        100.000 %

The terms of the indenture generally limit our ability and the ability of our subsidiaries to, among other things: (i) make restricted payments; (ii) incur additional debt and issue preferred or disqualified stock; (iii) create liens;
(iv) create or permit to exist restrictions on our ability or the ability of our restricted subsidiaries to make certain payments or distributions; (v) engage in sale-leaseback transactions; (vi) engage in mergers or consolidations or transfer all or substantially all of our assets; (vii) make certain dispositions and transfers of assets; and (viii) enter into transactions with affiliates. Following the first day that the senior secured notes are assigned an investment grade rating by both Moody's and S&P, and provided that no default has occurred and is continuing, certain of the restrictions will be suspended, including, but not limited to,

restrictions on the incurrence of debt, restricted payments, transactions with affiliates and certain restrictions on mergers, consolidations and sales of assets.

Under the terms of the governing indenture, we may incur additional indebtedness, including up to $50.0 under credit facilities that may be used for any purpose, rank pari passu with the senior secured notes and which may be secured by parity liens on the collateral securing the senior secured notes. Also, we may incur up to $75.0 million of additional junior indebtedness for the purpose of financing the purchase price or cost of construction or improvement of property, plant or equipment, including the acquisition of the capital stock of an entity that becomes a restricted subsidiary. Any or all of this $75.0 million of additional indebtedness may be secured by parity liens on the collateral securing the senior secured notes, provided that our secured leverage . . .