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If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. þ

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

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

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(1)	Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and based on the average of the high and low prices as reported on the American Stock Exchange of the registrant’s common stock on March 6, 2003 for 12,473,303 additional shares as the filing fee was previously paid for 9,284,005 shares.



(2)	Issuable upon the conversion of debentures or the exercise of warrants together with such indeterminate number of shares as may be issuable pursuant to anti-dilution provisions contained therein. Under Rule 457(g) and based on a maximum exercise price of $4,940,331.70, the fee is $399.67. Fee for 1,300,000 shares issuable upon conversion of debentures and warrants previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

The selling stockholders named on page 12 may offer for sale up to 29,644,417 shares of our common stock, 21,757,308 of which are outstanding and 7,887,109 of which may be issued as a result of the conversion of debentures or the exercise of warrants held by some of the selling stockholders.

We will not receive any proceeds from the sale of the shares by the selling stockholders.

Our common stock is listed on the American Stock Exchange under the symbol “TWW.” On March 6, 2003, the closing price of the common stock was $0.28 per share.

These securities involve a high degree of risk. SEE “RISK FACTORS” BEGINNING ON PAGE 5 OF THIS PROSPECTUS.

This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

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

We design, build and operate facilities that integrate network access points and data centers. We are the owner and operator of the NAP of the Americas, one of the five Tier-1 Network Access Points in the world. The NAP of the Americas, the only carrier-neutral Tier-1 Network Access Point, or NAP, is located in Miami, Florida and provides peering, colocation and managed services to carriers, Internet service providers, and other Internet companies and enterprises.

Network access points are locations where two or more networks meet to interconnect and exchange Internet traffic (traffic of data, voice, images, video and all forms of digital telecommunications), much like air carriers meet at airports to exchange passengers and cargo. Participation in NAPs comes from telecommunications carriers, Internet Service Providers and large telecommunications and Internet users in general. Tier-1 NAPs are large centers that access and distribute Internet traffic and, following the airport analogy, operate much like large, international airport passenger and cargo transportation terminals or “hubs.” A carrier-neutral facility is one which enables customers’ telecommunications systems to directly interact with various carriers located at the NAP as opposed to carrier-operated NAPs where customers are often obligated to utilize the operator’s systems and connectivity.

The NAP of the Americas provides a connection point where telecommunications carriers can establish connections between and among their networks to exchange Internet traffic either without payment (a process knows as “peering”) or for a fee (known as “transit”), and can purchase capacity from each other. The NAP of the Americas generates revenue:



	•	by providing the location and equipment used by our carrier and non-carrier customers to peer or sell transit;



	•	by providing space where carriers, Internet Service Providers, Application Service Providers, content providers, Internet businesses, telecommunications providers and enterprises house their equipment and their network facilities in order to be close to the traffic exchange connections that take place at the NAP. This is known as colocation. (Application Service Providers (ASPs) are third-party entities that manage and distribute software-based services and solutions to customers across a wide area network from a central data center. In essence, ASPs are a way for companies to outsource some or almost all aspects of their information technology needs); and



	•	by providing a menu of related managed services, power management, and managed router services.

There are 13 undersea cable providers transmitting data from Latin America to North America which terminate in South Florida. All of those cables connect to the NAP of the Americas. We therefore believe that the NAP of the Americas could become a primary channel of data traffic from Central and South America and the Caribbean to North America and Europe.

In February 2002, we entered into an agreement with Fundacao de Amparo a Pesquisa do Estado de Sao Paulo, the research foundation for the State of Sao Paulo, to operate and manage the NAP created by FAPESP, which we have renamed the NAP do Brasil. Pursuant to the twenty year agreement, FAPESP turned over the management of the exchange point to Terremark, which we intend to enhance and move to new facilities modeled after the operational design of the NAP of the Americas within the next 12 months. FAPESP will receive 6% of the revenue generated by the enhanced NAP do Brazil for the first five years of operation, 5% during the following five years, and 1% during the last ten years. The term may be extended for an additional ten-year period, during which FAPESP would again receive 1% of the revenues.

In June 2002, we entered into an exclusive agreement with the Comunidad Autonoma de Madrid to develop and operate carrier-neutral network access points in Spain. As part of that agreement, the parties formed NAP de las Americas — Madrid S.A. to own and operate carrier-neutral NAPs in Spain, modeled after the NAP of the Americas. The shareholders in this new company are the Instituto Madrileno de

Desarrollo — IMADE, the Camara Oficial de Comercio e Industria de Madrid, Red Electrica Telecomunicaciones, S.A., Telvent Desarrollos S.A., a subsidiary of Abengoa S.A., and Centro de Transportes de Coslada, S.A. At the time the NAP de las Americas — Madrid S.A. was formed we owned 1% of its equity, which we subsequently increased to 10%. We have the option to purchase up to another 30% of the shares owned by the Comunidad and the Camara at cost, plus LIBOR. We provided the technical and operational know-how for the development of an interim NAP which became operational in July 2002. We will work with NAP de Las Americas — Madrid S.A. to select a permanent site, design the Madrid NAP and operate the business going forward. During the nine months ended December 31, 2002, we recognized approximately $380,000 in revenues from services billed to the NAP de Las Americas — Madrid S.A.

In an effort to limit the additional capital required, our business model for expansion is best compared to that of a management company model in the hospitality industry. The model contemplates that a local in-country partner would own and fund the development and build-out of the facility in which the TerreNAP Data Center will be located. The facility will ideally be a ground-up development built to the exacting specifications required for a top level NAP (as is the case in Miami), but it may be located in an existing building that is retrofitted to conform to those specifications. We intend to control the operations of the NAP and be the primary tenant in our partners’ building, sharing revenue via a long-term lease or management contract.

On November 8, 2002, CRG, LLC entered into an agreement with Cupertino Electric, Inc. to purchase our entire $18.5 million construction payable to Cupertino. On November 11, 2002, we entered into an agreement with CRG that provides us the option, upon the closing of the purchase of our debt by CRG from Cupertino, to repay the entire debt at a discount by either issuing shares of our common stock valued at $0.75 per share or making a cash payment. Our option must be exercised simultaneously with the closing of CRG’s purchase of our debt from Cupertino. CRG and Cupertino have extended the closing of their transaction to March 31, 2003. If the purchase by CRG of our debt from Cupertino closes on or before March 31, 2003, we may choose to pay $9.9 million in cash or issue 24,666,667 shares.

Our debt to Cupertino matured on October 31, 2002 and has not been repaid. As part of the agreement between CRG and Cupertino, Cupertino has agreed not to enforce any of its rights against us, but in order to preserve its rights, on November 8, 2002, Cupertino filed an action to enforce the rights it had acquired by virtue of a construction lien. Cupertino has agreed that it will not seek to enforce its rights pending the closing of the purchase of our debt by CRG. CRG has agreed that it will dismiss the action upon the closing. If the purchase of our debt by CRG does not occur before March 31, 2003, the standstill and the agreement between CRG and Cupertino will expire, and we will continue to owe the $18.5 million to Cupertino. As a procedural matter, Cupertino has served the complaint in this suit in order to avoid dismissal.

On December 5, 2002, CRG, LLC entered into an agreement with Kinetics Mechanical Services, Inc. and Kinetics Systems Inc. to purchase our entire $4.1 million construction payable to Kinetics Mechanical Services, Inc. and Kinetics Systems Inc. On December 5, 2002, we entered into an agreement with CRG that provides us the option, upon the closing of the purchase of the debt by CRG from Kinetics Mechanical Services, Inc. and Kinetics Systems Inc., to repay the entire debt at a discount by either issuing shares of our common stock valued at $0.75 per share or making a cash payment. Our option must be exercised simultaneously with the closing of CRG’s purchase of the debt from Kinetics Mechanical Services, Inc. and Kinetics Systems Inc. CRG and Kinetics subsequently extended the closing of their transaction to March 31, 2003. If the purchase by CRG of our debt from Kinetics closes on or before March 31, 2003, we may choose to pay $2.4 million in cash or issue 5,466,667 shares.

On November 1, 2002 and November 5, 2002, approximately $2.8 million and $1.0 million, respectively, of our debt owed to Kinetics came due. As part of the agreement between CRG and Kinetics, Kinetics has agreed not to enforce any of its rights against us but, in order to preserve its rights,

on December 2, 2002 Kinetics filed an action to enforce the rights it had acquired by virtue of a construction lien. Kinetics has agreed that it will not seek to enforce its rights pending the closing of the purchase of our debt by CRG. CRG has agreed that it will dismiss the action upon the closing. If the purchase of our debt by CRG does not occur before March 31, 2003 the standstill and the agreement between CRG and Kinetics will expire, and we will continue to owe the $4.1 million to Kinetics. As a procedural matter, Kinetics has served the complaint in this suit in order to avoid dismissal.

CRG was created by a group of our shareholders, for the purpose of buying our debt from Cupertino and Kinetics. None of these shareholders were or currently are officers or directors of our company. In addition, there is no affiliation between CRG and Cupertino or Kinetics. CRG is managed by Mr. Christian Altaba.

We have agreed to file a registration statement covering any shares issued to CRG and to use our commercially reasonable efforts to cause the registration statement to become effective before December 31, 2003.

In addition, in December 2002, approximately $15.8 million in principal amount and $520,000 in accrued interest on our convertible debentures were converted into shares of our common stock at a per share price of $0.75.

We were formed in 1982 and, from then until 2002, we, along with our subsidiaries, were engaged in the development, sale, leasing, management and financing of various real estate projects. We were also involved in a number of ancillary businesses which complemented our core development operations. Specifically, we engaged in brokering financial services, property management, construction management, condominium hotel management, residential sales and commercial leasing and brokerage, and advisory services.

On April 28, 2000, Terremark Holdings, Inc. completed a reverse merger with AmTec, Inc., a public company. Contemporaneous with the reverse merger we changed our corporate name to Terremark Worldwide, Inc. and adopted “TWW” as our trading symbol on the American Stock Exchange. Historical information of the surviving company is that of Terremark Holdings, Inc.

After the April 28, 2000 merger, and as a result of changes in our business conditions, including market changes in the telecommunications industry and the lack of debt and equity financing vehicles to fund other business expansion, we began to redefine and focus our strategy and to implement a plan to exit all lines of business not directly related to our TerreNAP Data Center strategy. Lines of business discontinued include IP fax services, unified messaging services, and telephony. As of March 31, 2002, we had completed the exit of lines of business not related to our TerreNAP Data Center strategy.

From the time of our merger through December 31, 2002, we have incurred losses of approximately $193 million. Our cash flows from operating activities for the years ended December 31, 2001 and 2002 and for the nine months ended December 31, 2002 were negative. We have funded our operations through the sale of debt and equity securities and bank borrowings. As of December 31, 2002, our total liabilities were approximately $112.4 million, and our total shareholders’ deficit was $36.9 million. We must obtain additional debt or equity financing for working capital, capital expenditures and other general corporate purposes, however, future financing may not be available to us on acceptable terms or at all. Our independent auditors have issued a report dated July 12, 2002 stating that our recurring operating losses, negative cash flows, and liquidity deficit raise substantial doubt as to our ability to continue as a going concern. While we are actively seeking strategic solutions to our funding issues, we may not be able to continue as a going concern.

Our principal executive office is located at 2601 S. Bayshore Drive, Miami, Florida 33133. Our telephone number is (305) 856-3200.

This prospectus contains certain “forward-looking statements” 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. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described in “Risk Factors” and elsewhere in this prospectus. The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

We may not be able to obtain necessary financing to continue our operations. From the time of our merger through December 31, 2002, we have incurred losses of approximately $193 million. Our cash flows from operating activities for the years ended December 31, 2001 and 2002 and for the nine months ended December 31, 2002 were negative. We have funded our operations through the sale of debt and equity securities and bank borrowings. We must obtain additional debt or equity financing for working capital, capital expenditures and other general corporate purposes. Future financing may not be available to us on acceptable terms or at all. If future financing requirements are satisfied through the issuance of equity securities, investors may experience significant dilution. While we are actively seeking strategic solutions to our funding issues, we may not be able to continue as a going concern.

Our substantial leverage could adversely affect our ability to fulfill our obligations and operate our business. As of December 31, 2002, our total liabilities were approximately $112.4 million, obligations guaranteed by us were approximately $5.5 million and our total shareholders’ deficit was $36.9 million. Our substantial debt and guarantees could have important consequences to you, including the following:



	•	our substantial leverage increases our vulnerability to economic downturns and adverse competitive and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;



	•	our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and our industry and could limit our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement our business strategies;



	•	our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances, and other general corporate requirements;



	•	our level of debt may adversely impact our ability to convince potential customers to locate mission critical operations at our facilities; and



	•	covenants in our debt instruments limit our ability to pay dividends or make other restricted payments and investments.

If we do not increase sales and improve results of operations, we will need to obtain additional financing. Even if we are successful in extending the maturity of certain of our debt obligations and converting others into equity, we must obtain at least $20 million of additional customer contracts before December 31, 2003, or we will need additional debt or equity financing. Our ability to generate increased revenue is substantially dependent on the willingness of potential customers to locate their critical operations at our facilities. The typical sales cycle for our services is lengthy. Our ability to attract new customers depends on a variety of factors, including the willingness of carriers to exchange traffic at our facilities, the willingness of businesses to outsource their mission-critical data operations, the reliability and

cost-effectiveness of our services and our ability to effectively market our services. We expect to continue to make additional significant investments in sales and marketing. The increase in our sales and marketing efforts may not result in increased sales of our services. We intend to develop alternative distribution and lead generation relationships with potential channel partners. Any failure by us to develop these relationships could materially and adversely impact our ability to generate increased revenues.

If we do not find local financial or strategic partners, we may have to delay or abandon expansion plans. Expenditures commence well before a TerreNAP® Data Center opens, and it may take an extended period to approach break-even capacity utilization. It takes a significant period of time to select the appropriate location for a new TerreNAP Data Center, construct the necessary facilities, install equipment and telecommunications infrastructure and hire operations and sales personnel. As a result, we expect that individual TerreNAP Data Centers will experience losses for more than one year from the time they are opened. As a part of our TerreNAP Data Center strategy, we intend to rely on financial or strategic partners to fund the development costs. If we are unable to establish such third-party relationships, we may delay or abandon some or all of our development and expansion plans or otherwise forego market opportunities, making it difficult for us to generate additional revenue and to respond to competitive pressures.

Due to the short term nature of our NAP and data center operations, our prior results are not indicative of future performance. The nature of our operations changed subsequent to our April 28, 2000 merger with AmTec, Inc. We began offering data center and managed services in 2001. We believe that period-to-period comparisons of our results of operation may not be necessarily meaningful and should not be relied upon as indicators of future performance. Many of the factors that could cause our operating results to fluctuate significantly in the future are beyond our control.

Our operations in Brazil and Spain expose us to risks not faced by companies transacting business only in the United States. We have operations in foreign countries, including NAP facilities, sales personnel and customer support operations in Sao Paulo, Brazil and Madrid, Spain. We intend to expand to other international locations in the future. These operations are subject to economic risks inherent in doing business in foreign countries, including the following:



	•	Disruptions in Foreign Markets. Disruptions in financial markets and the deterioration of the underlying economic conditions in some countries could have an impact on our sales to customers located in, or whose end-user customers are located in, these countries.



	•	Fluctuations in Currency Exchange Rates. Currency instability in geographic markets other than the United States may make our services more expensive than services offered by others that are priced in the local currency. Moreover, many of the costs associated with our operations located outside the United States are denominated in local currencies. As a consequence, the increased strength of local currencies against the U.S. dollar in countries where we have foreign operations would result in higher effective operating costs and, potentially, reduced earnings. Currently, we do not hedge our foreign exchange risk. We cannot assure you that fluctuations in foreign exchange rates will not have a negative effect on our operations and profitability.



	•	Longer Payment Cycles. Our customers outside of the United States are often allowed longer time periods for payment than our U.S. customers. This increases the risk of nonpayment due to the possibility that the financial condition of particular customers may worsen during the course of the payment period.



	•	Tariffs, Duties, Limitations on Trade and Price Controls. Our international operations are affected by limitations on imports, currency exchange control regulations, transfer pricing regulations, price controls and other restraints on trade. In addition, the governments of some countries in which we have operations, have the ability to exercise significant influence over many aspects of their domestic economies and international trade.



	•	Potential Adverse Tax Consequences. Our international operations create a risk of potential adverse tax consequences, including imposition of withholding or other taxes on payments by our customers.



	•	Credit and Access to Capital Risks. Our local financial or strategic partners could have reduced access to working capital due to higher interest rates, reduced bank lending resulting from contractions in the money supply or the deterioration in their financial condition, or the inability to access other financing.



	•	Distributions and other payments from our subsidiaries and affiliates may be subject to foreign taxes. Distributions of earnings and other payments, including interest, we receive from our subsidiaries and affiliates may be subject to withholding taxes imposed by the jurisdictions in which these entities are formed or operating. These taxes would reduce the amount of after-tax cash we would receive from these entities.



	•	New Competitors and Competitive Environment. As we expand our operations in markets outside the United States, we will also encounter new competitors and competitive environments. Our foreign competitors may enjoy a government-sponsored monopoly on telecommunications services essential to our business, and will generally have a better understanding of their local industry and longer working relationships with local infrastructure providers.

We may not be able to compete effectively in the market for data center services. The market for data center services is extremely competitive and subject to rapid technological change. Our current and potential competitors include providers of data center services, global, regional and local telecommunications companies, and information technology outsourcing firms. Many of our existing competitors have greater market presence and financial and personnel resources than we do. Our competitors include Internet data centers operated by established communications carriers such as AT&T, Level 3, WorldCom, Regional Bell Operating Companies and Qwest. The principal competitive factors in our market include:



	•	ability to deliver services when requested by the customer;



	•	Internet system engineering and other professional services expertise;



	•	customer service;



	•	network capability, reliability, quality of service and scalability;



	•	variety of managed services offered;



	•	access to network resources, including circuits, equipment and interconnection capacity to other networks;



	•	broad geographic presence;



	•	price;



	•	ability to maintain and expand distribution channels



	•	brand name recognition;



	•	timing of introductions of new services;



	•	physical and network security;



	•	financial resources; and



	•	customer base.

Some of our competitors may be able to develop and expand their data center services faster, devote greater resources to the marketing and sale of their products and adopt more aggressive pricing policies than we can. In addition, these competitors have entered and will likely continue to enter into business relationships to provide additional services that compete with the services we provide.

We believe our market is likely to consolidate in the near future, which could result in increased competition. Some of our competitors which sell bandwith may be able to provide customers with additional benefits relating to the customer’s Internet system and network management solutions, including reduced local and long distance communications costs, which could reduce the overall costs of their services relative to ours. We may not be able to offset the effects of any price reductions.

We are dependent on key personnel and the loss of these key personnel could have a material adverse effect on our success. We are highly dependent on the services of Manuel D. Medina, our Chairman. In an attempt to reduce costs, we have eliminated some management positions. Our potential growth and expansion and the merger and integration of separate businesses, are expected to place increased demands on our management skills and resources. Therefore, our success also depends upon our ability to hire and retain additional skilled and experienced management personnel. Employment and retention of qualified personnel is important due to the competitive nature of our industry.

Our President, Chairman and Chief Executive Officer, can not be removed without cause which could delay, defer or prevent change in control of our company or impede a merger, consolidation, takeover or other business combination. Under the terms of our agreement with Manuel D. Medina, our President, Chairman and Chief Executive Officer, as long as Mr. Medina’s guarantees of our debt exist, we have agreed to nominate Mr. Medina to our Board of Directors and not remove Mr. Medina, unless for good cause, or remove any of our officers without Mr. Medina’s consent. This could delay, defer or prevent change in control of our company or impede a merger, consolidation, takeover or other business combination which you, as a stockholder, may otherwise view favorably.

If the price of our shares remains low or our financial condition continues to deteriorate, we may be delisted by the American Stock Exchange. Our common stock currently trades on the American Stock Exchange (Amex). The Amex requires companies to fulfill specific requirements in order for their shares to continue to be listed. The securities of a company may be considered for delisting if:



	• the financial condition and/or operating results of the company appear to be unsatisfactory;



	• it appears that the extent of public distribution or the aggregate market value of the securities has become so reduced as to make further dealings on the Amex inadvisable, or



	• the company has sustained losses which are so substantial in relation to its overall operations or its existing financial condition has become so impaired that it appears questionable whether the company will be able to continue operations and/or meet its obligations as they mature.

For example, the Amex may consider suspension or delisting of a stock if the stock has been selling for a substantial period of time at a low price per share. Our common stock has been trading at relatively low prices for the past eighteen months and we have sustained net losses for the past three fiscal years. Therefore, our common stock is at risk of being delisted by the Amex. If our shares are delisted from the Amex, our stockholders could find it difficult to sell our stock. To date we have had no communication from the Amex regarding delisting.

If our common stock is delisted from the Amex, we may apply to have our shares quoted on Nasdaq’s Bulletin Board or in the “pink sheets” maintained by the National Quotation Bureau, Inc. The Bulletin Board and the “pink sheets” are generally considered to be less efficient markets than the Amex. In addition, if our shares are no longer listed on the Amex or another national securities exchange in the United States, our shares may be subject to the “penny stock” regulations. If our common stock were to become subject to the penny stock rules it is likely that the price of our common stock would decline and that our stockholders would find it difficult to sell their shares.

Our business could be harmed by prolonged electrical power outages or shortages, or increased costs of energy. Our NAP facilities are susceptible to regional costs of power, electrical power shortages and planned or unplanned power outages caused by these shortages. A power shortage may result in an increase of the cost of energy, which we may not be able to pass on to our customers. We attempt to limit

exposure to system downtime by using backup generators and power supplies. Power outages, which last beyond our backup and alternative power arrangements, could harm our customers and our business.

We will not receive any proceeds from the sale by the selling stockholders of any of the shares offered hereby. We will pay all of the costs of this offering.

The following data has been derived from our financial statements, which have been audited by PricewaterhouseCoopers LLP, our independent certified public accountants. The information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and the Notes thereto incorporated by reference in this registration statement.

As of April 1, 2002, we adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. Under SFAS 142, goodwill and intangible assets that have indefinite lives are not amortized but rather are tested at least annually for impairment or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The goodwill impairment test however, involves a two-step approach. Initially the fair value of a reporting unit is compared with its carrying amount, including goodwill, to identify potential impairment. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for the excess, if any, of the carrying value of goodwill over the implied fair value of goodwill (similarly to the manner it is determined in a business combination). Intangible assets that have finite useful lives continue to be amortized over their useful lives. Generally, under previous accounting standards, these assets were being amortized over five years.

During the twelve months ended March 31, 2002 and 2001, intangible assets were generally amortized on the straight-line method over five years. In accordance with FAS 142, as of April 1, 2002, we ceased amortization of our intangible assets with indefinite lives and completed an initial impairment test of intangible assets. Management has determined that these assets were not impaired based on their fair values. Fair value was estimated using the expected present value of future cash flows and the market capitalization at the reporting unit level. If in subsequent periods anticipated construction contracts are not entered into, an additional impairment charge for post shell goodwill may be required. Intangible assets will be tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable.

A reconciliation of net loss and loss per share to exclude amortization expense in the prior years follows:

The following description of the terms of our common stock sets forth certain general terms and provisions of our common stock. This section also summarizes relevant provisions of the Delaware General Corporation Law, which we refer to as “Delaware law.” The terms of our certificate of incorporation and by-laws, as well as the terms of Delaware law, are more detailed than the general information provided below. Therefore, you should carefully consider the actual provisions of these documents.



	•	400,000,000 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 20 shares are designated as Series G Convertible Preferred Stock, and 294 shares are designated as Series H Convertible Preferred Stock.



	•	approximately 256,276,859 shares of our common stock were outstanding;



	•	20 shares of our Series G Convertible Preferred Stock were outstanding. Each share of Series G Convertible Preferred Stock may be converted into 1,995,429 shares of our common stock; and



	•	294 shares of our Series H Convertible Preferred Stock were outstanding. Each share of Series H Convertible Preferred Stock may be converted into 1,000 shares of our common stock.

Preemptive Rights. The holders of our common stock do not have preemptive rights to purchase or subscribe for any stock or other securities of ours.

Voting Rights. Each outstanding share of our common stock is entitled to one vote per share.

Dividends. Holders of our common stock are entitled to receive dividends or other distributions when and if declared by our board of directors. The right of our board of directors to declare dividends, however, is subject to any rights of the holders of other classes of our capital stock and the availability of sufficient funds under Delaware law to pay dividends. In accordance with a credit facility agreement with a financial institution, we may not pay cash or stock dividends without the written consent of the financial institution.

Liquidation Rights. In the event of the liquidation of our company, subject to the rights, if any, of the holders of other classes of our capital stock, the holders of our common stock are entitled to receive any of our assets available for distribution to our stockholders ratably in proportion to the number of shares held by them.

We list our common stock on the American Stock Exchange under the symbol “TWW.”

The following table sets forth information with respect to the selling stockholders as of March 7, 2003. Except as otherwise disclosed, the selling stockholders do not have and within the past three years have not had any position, office or other material relationship with us or any of our predecessors or affiliates. Because the selling stockholders may offer all or some portion of the shares pursuant to this prospectus, we cannot give an estimate as to the number of shares that the selling stockholders will hold upon termination of any of these sales.


(1)	Except as otherwise noted, we determine beneficial ownership in accordance with Rule 13d-3(d) promulgated by the Commission under the Securities and Exchange Act of 1934, as amended. We

We are registering the shares on behalf of the selling stockholders. The selling stockholders may sell their shares offered here to purchasers directly. Alternatively, the selling stockholders may offer the shares to or through underwriters, brokers/dealers or agents. The selling stockholders may pledge or grant a security interest in some or all of the common stock owned by them and, if any selling stockholders default in the performance of such secured obligations, the pledgees or secured parties may offer and sell the relevant common stock pursuant to this prospectus. To our knowledge, there are currently no plans, arrangements or understandings between any selling stockholders and any underwriter, broker-dealer or agent regarding the sale of the common stock by the selling stockholders. There can be no assurance that the selling stockholders will not transfer, devise or gift the shares by other means not described in this prospectus. The selling stockholders and any underwriters, brokers/dealers or agents that participate in the distribution of the shares may be deemed to be “underwriters” within the meaning of the Securities Act. Any profit realized by them on the sale of such shares and any discounts, commissions, concessions or other compensation received by any underwriter, broker/dealer or agent may be deemed to be underwriting discounts and commissions under the Securities Act. These discounts, commissions or concessions may be in excess of those customary in the types of transactions involved.


	•	at fixed prices;

	•	at market prices prevailing at the time of sale;

	•	at prices related to prevailing market prices; and/or

	•	at varying prices determined at the time of sale or at negotiated prices.

The sale of shares may be effected in transactions (which may involve crosses or block transactions):


	•	on any national securities exchange or quotation service on which the shares may be listed or quoted at the time of sale;

	•	in the over-the-counter market;


	•	in transactions otherwise than on such exchanges or in the over-the-counter market; or

	•	through the writing of options.

Because the selling stockholders may be deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act, the selling stockholders may be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling stockholders that the anti-manipulative provisions of Regulation M promulgated under the Securities Act may apply to their sales in the market.

Upon being notified by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, which supplement will disclose:


	•	the name of each such selling stockholder and of the participating broker-dealer(s);

	•	the number of shares involved;


	•	the price at which the shares were sold;



	•	the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable; and



	•	such other facts as may be material to the transaction.

Pursuant to our agreement with the selling stockholders, we will pay all expenses of the registration of the shares, including, without limitation, commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that the selling stockholders will pay all underwriting discounts and selling commissions, if any.

The validity of the securities being registered hereunder is being passed upon for us by Greenberg Traurig, P.A., Miami, Florida. Marvin S. Rosen, a member of Greenberg Traurig, is one of our directors. Mr. Rosen beneficially owns 1,352,984 shares of common stock, of which 235,834 shares are underlying stock options and 205,810 shares are underlying convertible debentures in the principal amount of $325,000.

Greenberg Traurig, P.A., Miami, Florida, have passed upon the validity of the issuance of the shares being offered by this prospectus.

The financial statements incorporated in this Registration Statement on Form S-3 by reference to the Annual Report on Form 10-K of Terremark Worldwide, Inc. for the year ended March 31, 2002 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 2 to the financial statements) of PricewaterhouseCoopers LLP, independent certified public accountants, given on the authority of said firm as experts in auditing and accounting.

This prospectus is part of a registration statement on Form S-3 which was filed with the Securities and Exchange Commission. This prospectus and any subsequent prospectus supplements do not contain all of the information in the registration statement. We have omitted from this prospectus some parts of the

registration statement as permitted by the rules and regulations of the SEC. In addition, we file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any documents that we have filed with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. In addition, our Internet website (http://www.terremark.com) contains all of the annual, quarterly and special reports, proxy statements and other information we file with the SEC.

The Commission allows us to “incorporate by reference” in this prospectus other information we file with them, which means that we can disclose important information to you by referring you to those documents. This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus. The information that we file later with the SEC will automatically update and supersede the information included in and incorporated by reference in this prospectus. We incorporate by reference the documents listed below which have been filed with the Commission and any future filings made with the Commission under Sections 13(a), 13 (c), 14, or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), until we sell all the securities offered by this prospectus:

We have filed each of these documents with the Commission and they are available from the Commission’s Internet site and public reference rooms described under “Where you can obtain additional available information about us” above. You may also request a copy of these filings, at no cost, by writing or calling us at the following address:

No person has been authorized to give any information or to make any representations in connection with this offering other than those contained in this prospectus and, if given or made, any information and representations must not be relied upon as having been authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities to which it relates or an offer to sell or the solicitation of an offer to buy these securities in any circumstances in which this offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made under this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information contained in this prospectus is correct as of any time subsequent to its date.

We estimate that expenses in connection with the distribution described in this registration statement will be as follows. All expenses incurred with respect to the distribution will be paid by us, and such amounts, with the exception of the Securities and Exchange Commission registration fees, are estimates.

Pursuant to Section 102(b)(7) of the General Corporation Law of the State of Delaware, our certificate of incorporation eliminates the liability of our directors to us or our stockholders, except for liabilities related to breach of duty of loyalty, actions not in good faith, and certain other liabilities.

Our certificate of incorporation, and bylaws provide for the indemnification of directors and officers to the fullest extent permitted by the General Corporate Law.

Section 145 of the General Corporate Law authorizes indemnification when a person is made a party to any proceeding by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or was serving as a director, officer, employee or agent of another enterprise, at the request of the corporation, and if such person acted in good faith and in a manner reasonably believed by him or her to be in, or not opposed to, the best interests of the corporation. With respect to any criminal proceeding, such person must have had no reasonable cause to believe that his or her conduct was unlawful. If it is determined that the conduct of such person meets these standards, he or she may be indemnified for expenses incurred and amounts paid in such proceeding if actually and reasonably incurred by him or her in connection therewith.

If such a proceeding is brought by or on behalf of the corporation (i.e., a derivative suit), such person may be indemnified against expenses actually and reasonably incurred if he or she acted in good faith and in a manner reasonably believed by him or her to be in, or not opposed to, the best interests of the corporation. There can be no indemnification with respect to any matter as to which such person is adjudged to he liable to the corporation; however, a court may, even in such case, allow such indemnification to such person for such expenses as the court deems proper. Where such person is successful in any such proceeding, he or she is entitled to be indemnified against expenses actually and reasonably incurred by him or her. In all other cases, indemnification is made by the corporation upon determination by it that indemnification of such person is proper because such person has met the applicable standard of conduct.

Our board of directors has approved, and we are in the process of entering into, indemnification agreements with all of our directors and senior officers. These indemnification agreements provide, in pertinent part, that we shall indemnify an indemnitee who is or was a party or is threatened, pending or completed action or proceeding whether civil, criminal, administrative or investigative by reason of the fact that the indemnitee is or was our director or senior officer. We shall advance all expenses, judgments, fines, penalties and amounts paid in settlement (including taxes imposed on indemnitee on account of receipt of such payouts) incurred by the indemnitee in connection with the investigation, defense, settlement or appeal of any civil or criminal action or proceeding as described above. The indemnitee shall repay such amounts advanced only if it shall be ultimately determined that he or she is not entitled to be indemnified by us. The advances paid to the indemnitee by us

shall be delivered within 20 days following a written request by the indemnitee. Any award of indemnification to an indemnitee, if not covered by insurance, would come directly from our assets, thereby affecting a stockholder’s investment.

We have obtained directors’ and officers’ liability insurance with an aggregate liability for the policy year, inclusive of costs of defense, in the amount of $25,000,000.

The following exhibits, which are furnished with this registration statement or incorporated by reference, are filed as part of this registration statement:


(1)	Previously filed as an exhibit to Registrant’s Registration Statement on Form S-3 filed May 15, 2000.

(2)	Previously filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q filed November 14, 2002.


(3)	Previously filed as part of the Registrant’s Registration Statement on Form S-3 filed December 31, 2002.

(a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(b) The undersigned registrant hereby undertakes that for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


	(1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this Registration Statement.


	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement;


	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that the undertakings set forth in clauses (i) and (ii) do not apply if the Registration Statement is on Form S-3, and the information required to be included in a post-effective amendment is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.


	(2) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Miami, state of Florida, on March 10, 2003.


	By:	/s/ MANUEL D. MEDINA



	Manuel D. Medina
	Chairman of the Board
	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment to registration statement has been signed by the following persons in the capacities and on the dates indicated.


(1)	Previously filed as an exhibit to Registrant’s Registration Statement on Form S-3 filed May 15, 2000.

(2)	Previously filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q filed November 14, 2002.


(3)	Previously filed as part of the Registrant’s Registration Statement on Form S-3 filed December 31, 2002.

EX-5.1 3 g80889a1exv5w1.txt OPINION OF GREENBERG TRAURIG EXHIBIT 5.1 OPINION OF GREENBERG TRAURIG, P.A. March 10, 2003 Terremark Worldwide, Inc. 2601 S. Bayshore Drive Miami, Florida 33133 Ladies and Gentlemen: We have acted as counsel for Terremark Worldwide, Inc., a Delaware corporation (the "Company") in connection with the Company's Registration Statement on Form S-3/A (the "Registration Statement") being filed by the Company under the Securities Act of 1933, as amended, with respect to 29,644,417 shares of the Company's common stock, par value $.001 per share (the "Common Stock"), issued to the selling stockholders (the "Selling Stockholders"), 21,757,308 of which are issued are outstanding (the "Shares") and 7,887,109 of which may be issued as a result of the conversion of debentures or the exercise of warrants (the "Additional Shares"). In connection with the preparation of the Registration Statement and this opinion letter, we have examined, considered and relied upon the following documents (collectively, the "Documents"): (1) the Company's restated certificate of incorporation, as filed with the Secretary of State of the State of Delaware, (2) the Company's restated bylaws, (3) resolutions of the board of directors of the Company, and (4) such other documents and matters of law as we have considered necessary or appropriate for the expression of the opinions contained herein. In rendering the opinions set forth below, we have assumed without investigation the genuineness of all signatures and the authenticity of all Documents submitted to us as originals, the conformity to authentic original documents of all Documents submitted to us as copies, and the veracity of the Documents. As to questions of fact material to the opinions hereinafter expressed, we have relied upon the representations and warranties of the Company made in the Documents. Based solely upon and subject to the Documents, and subject to the qualifications set forth below, we are of the opinion that (1) the Shares to be sold by the Selling Stockholders pursuant to the Registration Statement have been duly authorized, fully paid and nonassessable and (2) the Additional Shares have been duly authorized and, when issued in accordance with their terms, will be fully paid and nonassessable. Our opinion expressed above is limited to the General Corporation Law of the State of Delaware. Our opinion is rendered only with respect to laws, and the rules, regulations and orders thereunder, which are currently in effect. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the caption "Legal Matters" in the prospectus contained in the Registration Statement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, and the rules and regulations thereunder. Very truly yours, GREENBERG TRAURIG, P.A. Paul Berkowitz EX-10.1 4 g80889a1exv10w1.txt STOCK PURCHASE AGREEMENT EXHIBIT 10.1 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT dated as of June 13, 2002 (this "AGREEMENT"), is entered into by and between Terremark Worldwide, Inc., a Delaware corporation (the "COMPANY" or "TERREMARK") and NAP de Las Americas - Madrid, S.A., a Spanish limited liability company (the "INVESTOR"). RECITALS WHEREAS, the Company wishes to issue and sell to the Investor an aggregate of 5,000,000 shares (the "SHARES") of the authorized but unissued Common Stock, U.S. $0.001 par value, of the Company (the "COMMON STOCK") at a purchase price of U.S. $1.00 per share, for an aggregate purchase price of U.S. $5,000,000.00; and WHEREAS, the Investor wishes to purchase the Shares on the terms and subject to the conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties agree as follows: ARTICLE I PURCHASE AND SALE OF THE SECURITIES 1.01 ISSUANCE AND SALE OF THE SHARES. The Company has authorized the sale and issuance to the Investor of the Shares, and subject to the terms and conditions hereof and in reliance upon the representations, warranties, covenants and agreements of Investor contained herein, agrees to issue and sell to the Investor the Shares, and the Investor hereby agrees to purchase from the Company the Shares for U.S. $1.00 per share, for an aggregate purchase price of U.S. $5,000,000.00 (the "PURCHASE PRICE"). 1.02 CLOSINGS AND DELIVERY OF THE SHARES. (a) The sale and purchase of the Shares shall take place at a closing (the "CLOSING"), at 10:00 a.m. (Eastern Time) within five (5) business days after the date of this Agreement (the "CLOSING DATE") or at such other place and time as may be mutually agreed upon by the Company and the Investor. (b) At Closing: (i) The Investor shall deliver the Purchase Price to the Company by wire transfer of immediately available funds in consideration for the Shares; and Page 1 (ii) The Company shall issue and shall deliver to the Investor a stock certificate or certificates in definitive form, registered in the name of the Investor, or its designee, representing the number of Shares purchased by the Investor. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Investor as of the date hereof and as of the Closing Date as follows: 2.01 ISSUANCE OF SHARES. The Shares issued under this Agreement have been duly authorized by all necessary corporate action and, when paid for in accordance with the terms of this Agreement, the Shares shall be validly issued and outstanding, fully paid and nonassessable, free and clear of all liens, charges, and encumbrances of any nature whatsoever, including any preferential rights of other shareholders of any nature or third parties and the Investor shall be entitled to all rights accorded to a holder of capital stock of the same class in the Company. The Company has complied with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Shares hereunder. 2.02 BYLAWS AND CORPORATE AGREEMENTS. All the rights and obligations of the stockholders of the Company in their capacity as such are included in the Certificate of Incorporation and the Bylaws of the Company and there are no other rights, obligations or undertakings of any kind including any rights regarding the Shares. The Company is not and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or result, with or without the passage of time and the giving of notice, in a breach of the Certificate of Incorporation or Bylaws of the Company, or any material agreement, indenture or other instrument, judgment, order, writ or decree to which the Company is a party or by which it is bound. 2.03 COMMISSION REPORTS. The Company has duly and timely, or under applicable extensions, filed with the Securities and Exchange Commission (the "COMMISSION") all reports and other documents (individually a "REPORT" and collectively the "REPORTS") required to be filed by it by the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). 2.04 DISCLOSURE. None of this Agreement, the Exhibits hereto, the Reports or any other documents, certificates or instruments furnished to the Investor by or on behalf of the Company or any subsidiary in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made herein or therein, not misleading. 2.05 CORPORATE EXISTENCE AND QUALIFICATION. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with full power and authority (corporate and other) to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. The Company is duly incorporated and Page 2 qualified to do business as a foreign corporation and is in good standing in each jurisdiction of the United States, or any other country, state province, or political subdivision in which the character of the business conducted by it or the nature of the properties owned or leased by it makes such qualification necessary for the conduct of its business, except where the failure to be so qualified would not have a material adverse effect on the assets, condition or affairs of the Company (a "MATERIAL ADVERSE EFFECT"). 2.06 CAPITALIZATION. The authorized capital stock of the Company consists of (i) 300,000,000 shares of common stock, par value U.S. $0.001 per share, of which 199,482,250 shares are issued and outstanding and (ii) 10,000,000 shares of preferred stock, par value U.S. $0.001 per share, of which 20 shares are designated as Series G convertible preferred stock and 5,882 shares are designated as Series H convertible preferred stock. As of May 31, 2002, 20 shares of Series G convertible preferred stock were issued and outstanding and convertible into 1,675,555 shares of common stock, and 294 shares of Series H convertible preferred stock were issued and outstanding and convertible into 294,000 shares of common stock. As of the May 31, 2002, there were outstanding options, warrants and convertible debentures (of which U.S. $30,655,000.00were outstanding) currently exercisable for or convertible into a total of 42,936,151 shares of common stock. The Company has all requisite power and authority to issue, sell and deliver the Shares in accordance with and upon the terms and conditions set forth in this Agreement, and all corporate action required to be taken by the Company for the due and proper authorization, issuance, sale and delivery of the Shares has been validly and sufficiently taken. The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock. 2.07 AUTHORITY. All corporate action on the part of the Company, necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, sale and delivery of the Shares have been taken, and this Agreement constitutes the legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought). 2.08 COMPLIANCE WITH LAW. The Company is not, and will not be at Closing, in violation or default of any order, writ or decree to which it is a party or by which it is bound, or of any provision of any federal or state statute, rule, ordinance or regulation applicable to the Company, except for such violation which would not result, either individually or in the aggregate, in any Material Adverse Effect. 2.09 TAXES. The Company has accurately prepared and timely filed all federal, state, local, foreign and other tax returns for income, gross receipts, sales, use and other taxes and custom duties ("TAXES") required by law to be filed by it, has paid all taxes owed by the Company (whether or not shown on any tax return), except for assessments, the amount or validity of which currently Page 3 is being contested in good faith by appropriate proceedings and with respect to which adequate reserves in accordance with GAAP have been provided on the books of the Company. There is no dispute or claim concerning any tax liability of the Company either (a) claimed or raised by any authority in writing or (b) as to which the Company has knowledge based upon personal contact with any agency of such authority. 2.10 ACTIONS PENDING. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company which questions the validity of this Agreement or the transactions contemplated hereby, or any action taken or to be taken pursuant hereto. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company or any of its respective properties or assets and which, if adversely determined, will result in a Material Adverse Effect. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any subsidiary which will result in a Material Adverse Effect. 2.11 GOVERNMENTAL CONSENTS. Assuming the truth and accuracy of the Investor's representations set forth in Article III of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement, except for those required under applicable state securities laws. 2.12 OFFERING. Assuming the truth and accuracy of the Investor's representations set forth in Article III of this Agreement, the offer, sale and issuance of the Shares as contemplated by this Agreement is exempt from the registration requirements of the Securities Act (as defined in Article III, subsection (a) of this Agreement) and the state securities laws of any state of the United States, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 2.13 PERMITS. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which would not have a Material Adverse Effect. The Company is not in default under of such franchises, permits, licenses or other similar authority, except where such default would not have a Material Adverse Effect. 2.14 ABSENCE OF UNDISCLOSED LIABILITIES. The Company does not have material obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, either known to the Company or which, after diligent investigation and inquiry, should have been discovered by the Company, whether due or to become due and regardless of when asserted) arising out of transactions entered into at or prior to the Closing, or any action or inaction at or prior to the Closing, or state of facts existing at or prior to the Closing other than: (i) liabilities set forth on the Company's unaudited consolidated balance sheet as of December 31, 2001, and (ii) liabilities and obligations which have arisen after December 31, 2001 in the ordinary course of business. 2.15 BUSINESS CONDITIONS. Since December 31, 2001, there has not been any material adverse change in the business, financial condition, operations or results of operations of the Company. Page 4 2.16 BROKERS. No broker or finder has acted for the Company in connection with the transactions contemplated by this Agreement, and no broker or finder is entitled to any broker's or finder's fee or other commission in respect thereof based in any way on agreements, understandings or arrangements with the Company. 2.17 SUBSIDIARIES. All the representations and warranties made herein shall also be deemed to be made with regard to each of the Company's subsidiaries. 2.18 AUDITED FINANCIAL STATEMENTS. The audited financial statements of the Company for the fiscal year ended March 31, 2002 (the "2002 Audited Financial Statements") shall not differ in any material respect from the unaudited financial statements for such period provided to Investor by the Company. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR 3.01 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor represents and warrants to the Company that: (a) The Investor acknowledges that the offer, issuance and sale to it of the Shares is intended to be exempt from the registration requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"), pursuant to the provisions of Regulation D and/or Regulation S promulgated by the Commission under the Securities Act. The Investor represents and warrants to the Company that it is not a "U.S. Person" as that term is defined in Rule 902(k) of Regulation S. (b) Without limiting or conditioning the representations and warranties of the Company contained in Article II above, the Investor acknowledges that during the course of the transaction and prior to this Agreement that it has received information relating to the Company and has been given a reasonable opportunity to ask questions of and receive answers from the Company and its representatives concerning the Company. The Investor acknowledges that the Company's representatives have answered all inquiries made on behalf of the Investor to the satisfaction of the person or persons making such inquiry. (c) The Investor has had the opportunity to employ the services of an investment advisor, attorney or accountant in connection with making the investment contemplated by this Agreement, has read and understands all of the documents furnished or made available by the Company to the Investor, has evaluated the merits and risks of such an investment, and recognizes the highly speculative nature of this investment. Investor can bear the risk of the total loss of the investment made hereby. Page 5 (d) The Investor understands that the offering of Shares has not been reviewed by the Commission and no finding or determination as to the fairness of this investment has been made by the Commission. It is the Investor's present intention that the Shares being purchased by the Investor are being acquired for the Investor's own account and not with a present view to or for sale in connection with any distribution thereof. (e) No Person has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon the Investor for any commission, fee or other compensation as a finder or broker because of any act or omission of the Investor or any agent for the Investor. (f) The Investor understands that (i) the Shares currently have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act, (ii) the Shares must be held until such time as they are registered under the Securities Act pursuant to Article IV below or exempt from such registration, and (iii) the Company will make a notation on its transfer books to such effect. (g) The Investor has full corporate or other power and authority to enter into and to perform this Agreement in accordance with its terms. (h) The execution of, and performance of the transactions contemplated by, this Agreement is not in conflict with or will not result in any material breach of any terms, conditions or provisions of, or constitute a material default under, its corporate charter, limited partnership agreement, or other organizational document, as applicable, or any indenture, lease, agreement, order, judgment or other instrument to which the Investor is a party or by which it is bound. (i) The Investor acknowledges that the Company is a reporting company under the Exchange Act and is subject to the disclosure requirements of Regulation FD under the Exchange Act. The Investor acknowledges that certain of the information furnished by the Company to the Investor or its advisers in connection with this Agreement, is confidential and nonpublic and agrees that all such information shall be kept in confidence by the Investor and neither used by the Investor for the Investor's personal benefit (other than in connection with this Agreement), nor disclosed to any third party for any reason (other than to its agents, advisors, attorneys, consultants or other advisors in connection with the transactions contemplated by this Agreement); provided, however, that this obligation shall not apply to any such information that (i) is part of the public knowledge Page 6 or literature and readily accessible at the date hereof, (ii) becomes a part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision) or (iii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any Agreement entered into with the Company). (j) The investor acknowledges and agrees that, pursuant to the provisions of Regulation S, the Shares cannot be sold, assigned, transferred, conveyed, pledged or otherwise disposed of to any U.S. Person or within the United States of America or its territories without complying with the applicable distribution compliance period as set forth in Rule 903 of Regulation S. The Investor agrees not to engage in hedging transactions with regard to the Shares unless in compliance with the Securities Act. (k) The Investor acknowledges and agrees that the certificates representing the Shares shall bear the following legend (unless subsequently registered under the Act): "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TOT HESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE CORPORATION, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAWS." The Investor also acknowledges that the Company may place a stop transfer order against transfer of any of the Shares, if necessary in the Company's reasonable judgment, in order to assure compliance by the Investor with the terms of this Agreement. 3.02 COVENANTS OF THE INVESTOR. In order to enable the Company to conduct the registration in compliance with applicable securities laws, the Investor hereby agrees as follows: (a) The Investor shall provide all information or other materials and deliver such documents and undertakings and take all such other actions as may be reasonably required by the Company in order to permit the Company to comply with applicable requirements of the Page 7 Securities Act and the Commission and to comply with the requirements of applicable state securities laws and administrative agencies. (b) All information provided by the Investor to the Company in connection with the registration statement shall be true and correct in all material respects as of the date provided to the Company and will not omit any material fact necessary to make such information not misleading. The Investor shall notify the Company in writing immediately of any changes in any information provided to the Company in connection with the registration statement at all times during which the registration statement remains effective and the Investor has any shares included therein. 3.03 The Investor further covenants and agrees with the Company that it shall not sell or otherwise dispose of any of the Shares (which term, for purposes of this Section 3.03, shall include those shares issued to the Investor, if any, pursuant to Sections 4.06 and 4.07, below), regardless of when registered, for a period of 12 months from the Closing Date. ARTICLE IV COVENANTS OF THE COMPANY The Company covenants and agrees with the Investor as follows: 4.01. REGISTRATION AND LISTING. (a) The Company shall prepare and file with the Commission a registration statement with respect to all of the Shares and all of the shares issued to the Investor, if any, pursuant to Sections 4.06 or 4.07, below (collectively, the "Registrable Shares") and shall use commercially reasonable efforts to cause such registration statement to become effective no later than June 30, 2003. The Company shall keep such registration statement effective until the earlier to occur of (i) the expiration of the time period referred to in Rule 144(k) under the Securities Act with respect to all beneficial holders of the Registrable Shares other than affiliates of the Company and (ii) such time as all of the Registrable Shares have been sold or are otherwise freely tradable without registration under the Securities Act. (b) The Company shall prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all the Registrable Shares. (c) The Company shall furnish to the Investor such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the Page 8 requirements of the Securities Act, and such other documents as it may reasonably request in order to facilitate the disposition of the Registrable Shares. (d) The Company shall use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities laws of such jurisdictions in the United States as shall be reasonably requested by the Investor; PROVIDED THAT the Company shall not be required in connection therewith or as a condition thereto to qualify to do business, to subject itself to taxation in any such jurisdiction or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act. (e) In the event of any underwritten public offering, the Company shall enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. If the underwriter in such offering requests the delivery of a "comfort letter" from the Company's independent auditors or the delivery of an opinion of counsel to the Company, the costs of such comfort letter or opinion shall be borne by the Investor. The Investor shall also enter into and perform its obligations under such an agreement. (f) The Company shall notify the Investor when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. (g) The Company shall use commercially reasonable efforts to cause all Registrable Shares to be listed on the American Stock Exchange not later than June 30, 2003. (h) The Company shall perform all the necessary actions to register or qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the holder shall reasonably request, and perform all the necessary actions as may be required in such jurisdictions; provided, however, that the Company shall not be obligated to file any general consent to service of process or qualify as a foreign corporation in any jurisdiction. 4.02 EXPENSES. Except as set forth in Section 4.01(e), all expenses incurred in complying with the foregoing, including, without limitation, all registration, filing and qualification fees (including all expenses incident to filing with the American Stock Exchange), printing and accounting expenses, fees and disbursements of counsel for the Company, expenses of any special audits Page 9 incident to or required by any such registration and expenses of complying with the securities or blue sky laws or any jurisdictions, other than underwriting fees or commissions relating to the Registrable Shares, shall be paid by the Company. 4.03 INDEMNIFICATION WITH RESPECT TO THE REGISTRABLE SHARES. (a) To the extent permitted by law, the Company will indemnify and hold harmless the Investor, any underwriter (as defined in the Securities Act) for the Investor and each other person, if any, who controls the Investor or such underwriter, within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "VIOLATION"): (i) any untrue statement or alleged untrue statement of a material fact contained in the registration statement under which the Registrable Shares were registered under the Securities Act, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, or the Exchange Act or any state securities law; and the Company will pay to the Investor and each such underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 4.03(a) shall not apply to (x) amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed), or (y) any such loss, claim, damage, liability or action in respect of the Investor or an underwriter or controlling person to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Investor or such underwriter or controlling person. (b) To the extent permitted by law, the Investor will indemnify and hold harmless the Company, each of its directors, each of its officers who shall sign the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, any underwriter, any other person selling securities in such registration statement and any controlling person of any such underwriter or other person, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may Page 10 become subject, under the Securities Act, or the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with information furnished by the Investor for use in preparation of the registration statement, as approved by the Investor; and the Investor will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Subsection 4.03(b), in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 4.03(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Investor (which consent shall not be unreasonably withheld or delayed); provided, that, in no event shall any indemnity under this Subsection 4.03(b) exceed the net proceeds from the offering received by such Investor. (c) Promptly after receipt by an indemnified party under this Section 4.03 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 4.03, deliver to the indemnifying party a written notice of the commencement thereof. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate (in the written opinion of counsel for the indemnified party which counsel shall be reasonably acceptable to the Company) due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 4.03, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.03. (d) If the indemnification provided for in this Section 4.03 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such Page 11 loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 4.04 REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Commission Rule 144, at all times; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) furnish to the Investor, so long as the Investor owns any Registrable Shares, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Commission Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing the Investor of any rule or regulation of the Commission which permits the selling of any such securities without registration or pursuant to such form. 4.05 UNAUDITED AND AUDITED FINANCIAL STATEMENTS. The Company shall deliver to the Investor copies of the unaudited financial statements of the Company for the fiscal year ended March 31, 2002, but in no event later than three days prior to the Closing. The Company shall deliver to the Investor copies of the audited financial statements of the Company for such fiscal year as soon as they may lawfully be disclosed to the Investor. 4.06 COMPENSATION TO INVESTOR UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS. If on October 31, 2002 (the "CALCULATION DATE"): (i) the Company has "materially" failed to meet the cash flow projections attached hereto as Exhibit D; or (ii) As a result of acts or omissions attributable to the Company, the Investor has failed to begin operating an interim network access point in Madrid, then Page 12 at the request of either the Investor or the Company, the Company shall issue to the Investor such number of additional shares of Common Stock (the "Additional Shares") as determined in this Section 4.06. The number of Additional Shares to be issued shall be calculated as follows: (1) the quotient of (A) the aggregate number of shares theretofore issued or required to be issued to the Investor pursuant to this Agreement, divided by (B) the Section 4.06 Adjustment Price (defined below), less (2) the aggregate number of shares theretofore issued or required to be issued to the Investor pursuant to this Agreement. . The "SECTION 4.06 ADJUSTMENT PRICE" shall be the greater of U.S. $0.50 or the 10/31 Closing Price. The Company covenants and agrees that (i) all shares issuable pursuant to this Section shall be, when issued, free of preemptive rights, validly authorized and issued, fully paid and non-assessable and free from all taxes; and (ii) during the time period within which the Additional Shares may be issued, the Company will, at all times, have authorized and reserved for the purpose of issue a sufficient number of shares of Common Stock. 4.07 NO DILUTION. Except for shares of Common Stock issuable upon the exercise of options, puts, convertible debentures and warrants outstanding on the date of this Agreement (but excluding the option heretofore granted by the Company to any financial institution), the Company covenants and agrees that if, from date hereof and continuing until the first anniversary of the Closing, it issues any shares of its Common Stock for a purchase price less than the "Anti-Dilution Price", the Company shall issue to the Investor such number of additional shares of Common Stock as shall be determined by dividing 5,000,000 by the Anti-Dilution Price, and subtracting from the quotient thereof the number of shares previously issued to the Investor in respect of this Agreement. For purposes hereof, the "Anti-Dilution Price" shall equal (a) U.S. $1.00 per share; (b) the Section 4.06 Adjustment Price (if and only if there shall have been an adjustment pursuant to Section 4.06); or (c) any higher Anti-Dilution Price previously established under this Section 4.07. The Company covenants and agrees that (i) all shares issuable pursuant to this Section shall be, when issued, free of preemptive rights, validly authorized and issued, fully paid and non-assessable and free from all taxes; and (ii) during the time period within which such shares may be issued, the Company will, at all times, have authorized and reserved for the purpose of issue a sufficient number of shares of Common Stock. 4.08 COMPANY INVESTMENT IN INVESTOR. Concurrently with the Closing, the Company shall have consummated the purchase of at least ten percent (10%) of the outstanding equity capital of the Investor. 4.09 THE COMPANY'S GLOBAL STRATEGY. The Company covenants and agrees to use its best commercially reasonable efforts to incorporate the Investor's Madrid network access point into its global network access point strategy. 4.10 SURVIVAL. The obligations of the Company and the Investor under this Article IV shall survive the Closing and the completion of any offering of the Shares in a registration statement under this Article IV, and otherwise. Page 13 ARTICLE V CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING The obligations of the Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against the Investor if it does not consent in writing thereto: 5.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company contained in Article II shall be true on and as of the Closing with the same effect as those such representations and warranties have been made on and as of the date of Closing. 5.02 PERFORMANCE. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied by it on or before the Closing. 5.03 QUALIFICATIONS. Such authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing. 5.04 CORPORATE PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings taken or required to be taken in connection with the transactions contemplated at the Closing and all documents instant thereto shall be reasonably satisfactory in form and substance to the Investor, and the Investor shall have received all such counterpart original and certified or other copies of such documents as it reasonably may request. 5.05 NO PROCEEDINGS. There shall not have been commenced or threatened against the Investor, or against any person affiliated with the Investor, any proceeding involving any challenge to, or seeking damages or other relief in connection with, any of the transactions contemplated in this Agreement. 5.06 OPINION AND LETTER OF COUNSEL. The Investor shall have received the opinion of (i) Greenberg Traurig, P.A., counsel to the Company, dated the date of the Closing, substantially in the form set forth in Exhibit A hereto and (ii) Jose E. Gonzalez, General Counsel to the Company, dated the date of the Closing, substantially in the form set forth in Exhibit B hereto. 5.07 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company's Certificate of Incorporation and Bylaws are in the form attached hereto as Exhibit C and shall not have been amended or modified. 5.08 SECURITIES LAW COMPLIANCE. The Company shall have made all filings, subject to applicable extensions, required to be made on or prior to the Closing under all applicable U.S. federal and state securities laws necessary to consummate the issuance of the Shares pursuant to this Agreement in compliance with such laws. Nothing contained herein shall be deemed to require the Company to make any such filings prior to the due date therefore. Page 14 5.09 CLOSING DOCUMENTS. The Company shall have delivered to the Investor all of the following documents: (a) an Officer's Certificate dated the date of the Closing, stating that the conditions specified in this Article V have been fully satisfied; (b) a copy of the resolutions duly adopted by the Company's Board of Directors and certified by the Secretary of the Company authorizing the execution, delivery and performance of this Agreement, the issuance and sale of the Shares, and the consummation of all other transactions contemplated by this Agreement; and a Certificate of Good Standing in effect at the Closing and certified by the Secretary of State of the State of Delaware. 5.10 COMPANY INVESTMENT IN INVESTOR. The Company shall, concurrently to the Closing , have consummated the purchase of at least ten percent (10%) of the outstanding equity capital of the Investor pursuant to Section 4.08, above, and shall have made full payment of the purchase price paid by Centro de Transportes Coslada to it. 5.11 LICENSE. The Company and the Investor shall have entered into a license agreement in form and substance satisfactory to the Investor and the Company. Pursuant to such license, the Company shall have granted to the Investor, INTER ALIA: (i) an exclusive and non-transferable, royalty-free, fully paid right and license to use in Spain the Company's trademark "Nap de las Americas" for a period of twenty (20) years, commencing on the Closing Date; and (ii) an exclusive and non-transferable, royalty-free, fully paid right and license to use in Spain the Company's technical and other know-how with respect to the formation and operation of network access points for a period of fifteen (15) years, commencing on the Closing Date. Page 15 ARTICLE VI MUTUAL COVENANTS The Company will furnish to the Investor and the Investor will furnish to the Company, such information and assistance as the other may reasonably request in connection with the preparation of any regulatory filings or submissions. The Company will provide the Investor and the Investor will provide the Company, with copies of all correspondence, filings or communications (or memoranda setting forth the substance thereof) between such party or any of its representatives, on the one hand, and any governmental agency or authority or member of their respective staffs, on the other hand, with respect to this Agreement and the transactions contemplated hereby. ARTICLE VII INDEMNIFICATION The Company agrees to indemnify and hold harmless the Investor and its directors, officers, affiliates, agents, successors and assigns from and against any and all actual losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorney's fees, charges and disbursements but excluding consequential damages) incurred as a result of any misrepresentation or breach of the warranties and covenants made by the Company herein, except where such misrepresentation or breach is caused by the Investor. The Investor agrees to indemnify and hold harmless the Company and its directors, officers, affiliates, agents, successors and assigns from and against any and all actual losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys fees, charges and disbursements but excluding consequential damages) incurred by the Company as result of any breach of the representations and covenants made by the Investor herein, except where such misrepresentation or breach is caused by the Company. ARTICLE VIII MISCELLANEOUS 8.01 FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, including, without limitation, using all reasonable efforts to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings. 8.02 EXPENSES. Except as otherwise provided herein, each party hereto will pay its own expenses in connection with the transactions contemplated hereby, whether or not such transactions shall be consummated. Page 16 8.03 SURVIVAL OF AGREEMENTS. All representations and warranties made herein or in any agreement, certificate or instrument delivered to the Investor pursuant to or in connection with this Agreement shall survive the execution and delivery of this Agreement, the issuance, sale and delivery of the Shares. 8.04 BROKERAGE. Each party hereto will indemnify and hold harmless the others against and in respect of any claim for brokerage or other commissions relative to this Agreement or to the transactions contemplated hereby, based in any way on agreements, arrangements or understandings made or claimed to have been made by such party with any third party. 8.05 PARTIES IN INTEREST. All representations, covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. Without limiting the generality of the foregoing, all representations, covenants and agreements benefiting the Investor, unless otherwise herein or therein provided, shall inure to the benefit of any and all subsequent holders from time to time of Shares and all such holders shall be bound by all of the obligations of the Investor hereunder. 8.06 NOTICES. All notices, requests, consents, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given, (ii) on the date of transmittal of services via telecopy to the party to whom notice is to be given (with a confirming copy delivered within 24 hours thereafter), (iii) on the third day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, or (iv) on the date of delivery if sent via a nationally recognized courier providing a receipt for delivery and properly addressed as set forth on signature page hereto. Any notice or other communication between the parties hereto shall be sent to the Company, addressed to it at 2601 S. Bayshore Drive, Miami, Florida 33133, Attention: General Counsel. Any party may change its address for purposes of this paragraph by giving notice of the new address to each of the other parties in the manner set forth above. 8.07 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida, United States of America, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Florida to be applied. 8.08 EXCLUSIVE JURISDICTION AND CONSENT TO SERVICE OF PROCESS. The parties agree that any legal action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted in a federal court sitting in Miami-Dade County, Florida which shall be the exclusive jurisdiction and venue of said legal proceedings and each party hereto waives any objection which such party may now or hereafter have to the lay of venue of any such action, suit or proceeding, and irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Any Page 17 and all service of process and any other notice in any such action, suit or proceeding shall be effective against such party (or the subsidiary of such party) when transmitted in accordance with Section 8.06. Nothing contained herein shall be deemed to affect the right of any party hereto to serve process in any manner permitted by law. 8.09 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. The parties accordingly agree that they shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, this being in addition to any other remedy to that they are entitled at law or in equity. 8.10 ENTIRE AGREEMENT. This Agreement, including the exhibits, constitutes the sole and entire agreement of the parties with respect to the subject matter hereof. All exhibits and schedules hereto are hereby incorporated herein by reference. 8.11 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.12 AMENDMENTS AND WAIVERS. This Agreement may be amended or modified, and provisions hereof may be waived, with the written consent of the Company and the holders of at least a majority of the outstanding Shares. Any such amendment, modification or waiver shall be binding on all parties, including those not signing such amendment, modification or waiver, and such consent may be given or withheld for any reason or for no reason. 8.13 SEVERABILITY. If any provision of this Agreement shall be declared void or unenforceable by any judicial or administrative authority, the validity of any other provision and of the entire Agreement shall not be affected thereby. 8.14 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting any term or provision of this Agreement. 8.15 DEFINITION OF "PERSON." As used in this Agreement, the term "Person" shall mean an individual, corporation, trust, partnership, limited liability company or partnership, joint venture, unincorporated organization, governmental authority or any agency or political subdivision thereof, or other entity. Page 18 IN WITNESS WHEREOF, the Company and the Investor have executed this Stock Purchase Agreement as of the date first above written. THE COMPANY: THE INVESTOR: TERREMARK WORLDWIDE, INC. NAP DE LAS AMERICAS - MADRID, S.A. By: /s/ Manuel D. Medina By: --------------------------- --------------------------------- Name: Manuel D. Medina Name: Title: President and CEO Title: Address: 2601 S. Bayshore Drive Address: Camara Oficial de Comercio Miami, Florida 33133 e Industria de Madrid, Plaza de la Independencia, n(0)1 Madrid, Spain Page 19 EX-10.2 5 g80889a1exv10w2.txt LICENSE AGREEMENT EXHIBIT 10.2 TERREMARK SYSTEM LICENSE AGREEMENT This License Agreement (the "Agreement") is made and entered into as of this 13 day of June 2002 by and between TERREMARK WORLDWIDE, INC., a Delaware corporation ("Licensor"), having offices at 2601 So. Bayshore Drive, Miami, FL 33133 and NAP DE LAS AMERICAS - MADRID, S.A., a Spanish limited liability company having offices at Camara Oficial de Comercio e Industria de Madrid, Plaza de la Independencia, n(0)1 Madrid, Spain (the "Licensee"). Licensor and Licensee are each individually referred to herein as a "Party" and are collectively referred to as the "Parties". WHEREAS, Licensor and its Affiliates (defined below) have developed and continue to develop methods of operating carrier-neutral Tier-1 Network Access Points ("Tier-1 NAPs") that feature a distinctive facility format and utilize distinctive uniform business formats, signs, equipment, layouts, systems, Know-how (defined below), methods, procedures, inventory specifications, training, maintenance, refurbishment, remodeling and refit procedures, designs and marketing and advertising standards and formats, all of which Licensor may modify from time to time (the "Terremark System"); and WHEREAS, Licensor and its Affiliates operate and grant to certain qualified persons or entities, the right to develop and use the Terremark System; and WHEREAS, Licensee was formed for the purpose of developing, owning and operating carrier-neutral Tier-1 NAPs in the Territory using the Terremark System (the "Business"); and WHEREAS, Licensor wishes to license to Licensee the exclusive use of the Terremark System in the Territory; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows: 1. LICENSE OF INTELLECTUAL PROPERTY 1.1 GRANT OF RIGHTS. In exchange for the consideration set forth in paragraph 1.2 and the Stockholder's Agreement among Licensor, Licensee, and Licensee's Stockholders on 31 May, 2002 (the "Stockholders Agreement"), Licensor grants to Licensee, and Licensee accepts, a nontransferable, royalty-free, fully-paid and exclusive right and license to use, copy and exploit all the intellectual property, Know-how, Licensor's Confidential Information (as defined below), Copyrighted Works and Marks comprising the Terremark System, including without limitation, all trade secrets, know-how, show-how, methodologies and processes set forth on Schedule A hereto (collectively, the "Intellectual Property") in connection with operating the Business in the Territory during the Term (the "License"). (i) The term "Know-how" means a package of non-patented practical information resulting from experience and testing by Licensor that is secret, substantial and identified and forms part of the Terremark System. For these purposes "secret" means that the know-how as a body or in its precise configuration is not easily accessible and "substantial" means that the know-how includes information that is important and useful to Licensee in developing and operating Tier-1 NAPs in Spain. (ii) The term "Marks" mean the trademarks, service marks and other commercial symbols which Licensor authorizes its licensees to use from time to time to identify the products and services offered used in connection with the Terremark System, whether by TerreNAP Data Center or otherwise, including the marks "NAP of the Americas," "NAP de Las Americas" and "TerreNAP" and the Know-how. (iii) The term "Copyrighted Works" means certain copyrighted or copyrightable works that are created by or for Licensor (including, without limitation, the Methods and Procedures Manuals, Basis of Design Drawings and Specifications) and which Licensor licenses to Licensee from time to time for use in the operation of the Business in the Territory. TERREMARK SYSTEM LICENSE - SPAIN Page 1 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL (iv) The term "Affiliate" shall mean any person or entity that (a) directly or indirectly owns or controls, (b) is directly or indirectly owned or controlled by, or (c) is under common control with Licensor or Licensee, as applicable. For purposes of this definition, "control" means holding a majority of the equity or otherwise having the power to direct or cause the direction of the management and policies of an entity. (v) The term "Territory" shall mean the country of Spain as its borders and possessions are constituted on the date hereof. (vi) No change in the ownership or control of Licensee contemplated by the Stockholders Agreement shall be deemed to violate the provisions of this Agreement prohibiting Licensee from transferring the License. Licensee acknowledges that Licensor is engaged, or may in the future engage, in the Business in territories other than the Territory, and agrees that Licensor has the right use and exploit the Intellectual Property in connection therewith outside the Territory. 1.2 CONSIDERATION. Licensee shall grant to Licensor (or its designated Affiliate) an initial ten percent (10%) equity interest in Licensee, with the right to acquire up to an additional thirty -percent (30%), in accordance with the provisions of the Stockholders Agreement (for an aggregate of 40%). In addition, as a condition precedent to this License becoming effective, Licensee shall have purchased and fully paid for 5,000,000 shares of Licensor common stock pursuant that certain Stock Purchase Agreement between Licensor and Licensee dated 11 June, 2002. 1.3 REPRESENTATIONS AND WARRANTIES. Licensor represents and warrants that (i) it owns or has full right and authority to use, exploit and license to Licensee all the Intellectual Property; (ii) the Intellectual Property is free and clear of any outstanding injunction, judgment, order or decree; (iii) this License Agreement and the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Licensor; (iv) the Intellectual Property licensed to Licensee hereunder comprises all of Licensor's intellectual property necessary for Licensee to operate the Business; (v) no action, suit, claim or demand is pending or, to the knowledge of Licensor, is threatened which challenges the ownership, validity, enforceability, license or use of any item of Intellectual Property; (vi) the use or exploitation of the Intellectual Property by Licensee in accordance with this Agreement will not interfere with, infringe upon, misappropriate or otherwise come into conflict with any intellectual property or other proprietary right of any third party; and (vii) to the extent that any interest in the Intellectual Property has been pledged or encumbered by Licensor, Licensor has received no notice of default under any such pledge or security agreement and has committed no act that, with the passage of time or the giving of notice, would constitute an event of default thereunder. 2. TERM. Subject to the provisions of this Agreement, the term of the License granted hereby to Licensee (the "Term") for the use of (a) the Marks shall be for twenty (20) years and (b) all other Intellectual Property licensed hereunder shall be for 15 years. 3. THE MARKS AND COPYRIGHTED WORKS. 3.1 OWNERSHIP AND GOODWILL. Licensee acknowledges that the Marks, Know-how and Copyrighted Works are the sole and exclusive property of Licensor and its Affiliates. Licensee acknowledges that its License to use the Marks, Know-how and Copyrighted Works are derived solely from this Agreement and are limited to the operation of the Business by Licensee pursuant to and in compliance with this Agreement and the applicable standards, specifications, and operating procedures prescribed by Licensor from time to time during the Term that are designed to reasonably ensure that the quality of the products and services provided by Licensee are commercially comparable to those provided by Licensor or its Affiliates under the Terremark System. Any unauthorized use of the Marks, Know-how and Copyrighted Works or any attempt by Licensee to appropriate or claim ownership of any other name, mark, symbol or designation used by Licensor or its Affiliates anywhere in the world, shall constitute a breach of this TERREMARK SYSTEM LICENSE - SPAIN Page 2 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL Agreement and an infringement of the rights of Licensor and its Affiliates. Licensee acknowledges and agrees that all usage of the Marks, Know-how, Intellectual Property and Copyrighted Works by Licensee and any goodwill established thereby shall inure to the benefit of Licensor and that this Agreement does not confer any goodwill or other interest in the Marks, Know-how or Copyrighted Works upon Licensee, other than as expressly set forth in this Agreement. All provisions of this Agreement applicable to the Marks, Know-how and Copyrighted Works shall apply to any other trademarks, service marks, commercial symbols and copyrighted materials hereafter authorized for use by or licensed to Licensee by the Licensor whether or not registered or subject to legal protection in the Territory. In the event Licensee acquires rights in any Marks, Know-how Copyrighted Works or other trademarks, service marks, commercial symbols and copyrighted materials from Licensor and in connection with the operation of the Business the Territory, Licensee undertakes that it will execute all documents in form and substance reasonably acceptable to Licensee and reasonably necessary or desirable to vest ownership of such rights in the Licensor or its Affiliates. 3.2 LIMITATIONS ON USE OF MARKS AND COPYRIGHTED WORKS. Except for the Mark "NAP de Las Americas," Licensee shall not use any Mark as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms, designs, or symbols, or in any modified form, nor may Licensee use any Mark or Copyrighted Work in connection with anything other than the Business or in any other manner not expressly authorized herein or in any other writing by Licensor. Licensee agrees to display the Marks in the manner reasonably prescribed by Licensor and in connection with only those advertising and marketing materials approved by Licensor, which approval shall not be unreasonably withheld. Licensee agrees to give such notices of trademark and service mark registrations and appropriate copyright notices as Licensor reasonably specifies. If Licensor authorizes Licensee to prepare any adaptation, translation or derivative work of the Copyrighted Works, Licensee hereby agrees that such adaptation, translation or derivative work shall be the property of Licensor and be deemed included in the Intellectual Property Licensed to Licensee under this Agreement, and Licensee hereby assigns all its right, title and interest therein to Licensor. Licensee agrees to execute any documents in form and substance reasonably acceptable to Licensee, in recordable form, which Licensor determines are reasonably necessary to reflect ownership by Licensor of such work. Licensee shall submit all such adaptations, translations or derivative works to Licensor for approval prior to use, which approval shall not be unreasonably withheld. 3.3 NOTIFICATION OF INFRINGEMENTS AND CLAIMS. Licensee shall notify Licensor promptly after it acquires knowledge of any apparent infringement of or challenge to Licensee's use of any Mark, Know-how, Copyrighted Work, Licensor's Confidential Information or other intellectual property rights licensed under this Agreement, or claim by any person of any rights in any Mark, Know-how, Copyrighted Work, Licensor's Confidential Information or other intellectual property rights licensed under this Agreement, and Licensee shall not communicate with any person other than Licensee's counsel, Licensor and its counsel in connection with any such infringement, challenge or claim. Licensor shall have sole discretion to take such action as it deems appropriate in connection with the foregoing, and the right to control exclusively any settlement, litigation or other proceeding arising out of any such alleged infringement, challenge or claim or otherwise relating to any Mark, Know-how, Copyrighted Work, Licensor's Confidential Information or other intellectual property rights licensed under this Agreement, and to retain all proceeds of any litigation or settlement. Licensee agrees to execute any and all instruments and documents, render such assistance, and do such acts and things as may, in the opinion of Licensor's counsel, be reasonably necessary or advisable to protect and maintain the interests of Licensor and its Affiliates in any litigation or other proceeding or to otherwise protect and maintain the interests of Licensor and its Affiliates in the Marks, Know-how, Copyrighted Works, Licensor's Confidential Information and other intellectual property rights licensed under this Agreement. 3.4 RECORDAL OF LICENSES AND REGISTERED USER AGREEMENTS. Licensee shall, at the request and expense of Licensor, do all acts and execute all documents reasonably necessary or desirable in Licensor's opinion for establishing Licensee as a user of the Marks hereunder and where required for the registration of Licensee's permitted use with governmental agencies. 4. INDEMNIFICATION. 4.1 INDEMNIFICATION BY LICENSEE. Licensee covenants and agrees to defend, indemnify and save and hold harmless Licensor, together with its officers, directors, partners, shareholders, employees, trustees, affiliates, beneficial owners, attorneys and representatives, from and against any and all losses, costs, expenses, liabilities, claims or legal damages (including, without limitation, reasonable fees and disbursements of counsel and accountants and other reasonable costs and expenses incident to any actual or threatened claim, TERREMARK SYSTEM LICENSE - SPAIN Page 3 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL suit, action or proceeding, whether incurred in connection with a claim against Licensee or a third party claim) arising out of or resulting from: (i) any material inaccuracy in or breach of any representation, warranty, covenant or agreement made by Licensee in this Agreement; (ii) the failure of Licensee to perform or observe fully any material covenant, agreement or provision to be performed or observed by it pursuant to this Agreement.. 4.2. INDEMNIFICATION BY LICENSOR. Licensor covenants and agrees to defend, indemnify and save and hold harmless Licensee, together with its officers, managers, partners, members, employees, trustees, affiliates, beneficial owners, attorneys and representatives, from and against any and all losses, costs, expenses, liabilities, claims or legal damages (including, without limitation, reasonable fees and disbursements of counsel and accountants and other reasonable costs and expenses incident to any actual or threatened claim, suit, action or proceeding, whether incurred in connection with a claim against Licensor or a third party claim) arising out of or resulting from: (i) any material inaccuracy in or breach of any representation, warranty, covenant or agreement made by Licensor in this Agreement; and (ii) the failure of Licensor to perform or observe fully any material covenant, agreement or provision to be performed or observed by it pursuant to this Agreement; (iii) Licensee's compliance with the terms and provisions of Section 3.3, above; and (iv) in connection with any infringement or claims of infringement of the Intellectual Property on the intellectual proprietary rights of third parties 4.3. PROCEDURE. Each party entitled to be indemnified pursuant to Sections 4.1 and 4.2 (each, an "Indemnified Party") shall notify the other party in writing of any action against such Indemnified Party in respect of which the other party is or may be obligated to provide indemnification on account of Section 4.1 or 4.2, promptly after the receipt of notice or knowledge of the commencement thereof. The omission of any Indemnified Party so to notify the other party of any such action shall not relieve such other party from any liability which it may have to such Indemnified Party, except to the extent the other party shall have been materially prejudiced by the omission of such Indemnified Party so to notify it pursuant to this Section 4.3. In case any such action shall be brought against any Indemnified Party and it shall notify the other party of the commencement thereof, the other party shall be entitled to participate therein and to assume and pay for the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and after notice from it to such Indemnified Party of its election so to assume and pay for the defense thereof, the other party will not be liable to such Indemnified Party under Section 4.1 or 4.2 for any legal or other expense subsequently incurred by such Indemnified Party with other counsel in connection with the defense thereof nor for any settlement thereof entered into without the consent of the other party; PROVIDED, HOWEVER, that (i) if the other party shall elect not to assume the defense of such claim or action or (ii) if the Indemnified Party reasonably determines (x) that there may be a conflict between the positions of the other party and of the Indemnified Party in defending such claim or action or (y) that there may be legal defenses available to such Indemnified Party different from or in addition to those available to the other party, then separate counsel for the Indemnified Party shall be entitled to participate in and conduct the defense, in the case of (i) and (ii)(x), or such different defenses, in the case of (ii)(y), and the other party shall be liable for any reasonable legal or other expenses incurred by the Indemnified Party in connection with the defense. 4.4. INDEMNIFICATION NON-EXCLUSIVE. The foregoing indemnification provisions are in addition to, and not in derogation of, any statutory, equitable or common-law remedy any party may have for breach of representation, warranty, covenant or agreement. 5. CONFIDENTIAL INFORMATION. Either Party and its Affiliates (the "Receiving Party") possess and may further develop and acquire certain confidential and proprietary information and trade secrets including but not limited to the categories of information, methods, techniques, procedures, and knowledge developed or to be developed by the other Party or its Affiliates (the "Disclosing Party") (the "Confidential Information"). Licensor shall disclose to Licensee such Confidential Information as may be required for the development and operation of the Business in the Territory. Such disclosures may be made during training and in guidance and assistance furnished to Licensee under this Agreement. The Receiving Party may also learn or otherwise obtain from the Disclosing Party additional or other Confidential Information during the term hereof. The Receiving Party acknowledges and agrees that neither the Receiving Party nor any other person or entity will acquire any interest in or right to TERREMARK SYSTEM LICENSE - SPAIN Page 4 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL use the Disclosing Party's Confidential Information, other than as may be set forth herein, and that the use or duplication of the Confidential Information for any other purpose would constitute an unfair method of competition with the Disclosing Party. The Receiving Party agrees to disclose the Confidential Information to its employees, consultants, agents or other advisors or Stockholders who are bound by nondisclosure obligations not to disclose the Confidential Information and only to the extent reasonably necessary for the development and operation of the Business in the Territory. The Receiving Party shall take all other steps reasonably required and/or appropriate to ensure compliance with the obligations set forth herein. 5.1. NONDISCLOSURE OBLIGATION. The Receiving Party acknowledges and agrees that the Confidential Information is confidential to and a valuable asset of the Disclosing Party, is proprietary, includes trade secrets of the Disclosing Party and is disclosed to the Receiving Party solely on the condition that the Receiving Party its Stockholders, employees, consultants, agents or other advisors who have access to Confidential Information agree, and the Receiving Party does hereby agree that the Receiving Party: (i) will not use the Confidential Information in any business or capacity other than for the purpose of the development and operation of the Business; (ii) will maintain at all times the absolute confidentiality of the Confidential Information and not disclose it to any third parties; (iii) will not at any time make unauthorized copies of any portion of the Confidential Information disclosed in written or other tangible form; and (iv) will adopt and implement all reasonable procedures prescribed from time to time by the Disclosing Party to prevent unauthorized use or disclosure of the Confidential Information. Nothing contained herein shall be construed to prohibit Licensee from using Licensor's Confidential Information in connection with the development and operation of the Business. 5.2. EXCEPTIONS TO NONDISCLOSURE OBLIGATION. Notwithstanding anything to the contrary contained in this Agreement, the restrictions on disclosure and use of the Confidential Information shall not apply to the following: (i) Confidential Information if and only to the extent that it is or has become generally known or easily accessible, other than through disclosure (whether deliberate or inadvertent) by the Receiving Party, its employees, consultants, agents, advisors or Stockholders or by third parties in violation of confidentiality obligations to the Disclosing Party, or become available to the Receiving Party on a non-confidential basis from a source that s entitled to so disclose it; and (ii) the disclosure of the Confidential Information in judicial or administrative proceedings to the extent that the Receiving Party is legally compelled to disclose such information, provided Receiving Party has notified the Disclosing Party prior to disclosure and shall have used its best efforts to obtain, and shall have afforded the Disclosing Party the opportunity to obtain, an appropriate protective order or other assurance satisfactory to the Disclosing Party of confidential treatment for the information required to be so disclosed. 5.3. DERIVATIVE WORKS. Licensee agrees to disclose to Licensor all ideas, concepts, methods, techniques and products relating to the development and operation of carrier-neutral Tier-1 NAPs conceived or developed by Licensee during the term of this Agreement. Licensee hereby grants to Licensor a perpetual, non-exclusive and worldwide right to use such works and license same for use in all carrier-neutral Tier-1 NAPs operated by Licensor or its Affiliates. Licensor and its Affiliates shall have no obligation to make any payment to Licensee or its employees, Stockholders or Affiliates with respect to any such idea, concept, method, technique or product. 5.4. The Parties agree to keep the terms and conditions of this Agreement confidential and not to disclose the contents of this Agreement to any third party (other than to each Party's attorneys and accountants for purposes of their rendering their professional services to Licensee) except as may otherwise be required by law. 5.5. All rights and obligations under this Section 5 shall remain in full force and effect notwithstanding any termination of this Agreement. TERREMARK SYSTEM LICENSE - SPAIN Page 5 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL 6. TERMINATION OF AGREEMENT. 6.1 Termination. If a Party materially breaches this Agreement, the non-breaching party may terminate this Agreement effective 30 days after delivery of written notice of termination if the non-breaching Party gives written notice of such breach to the breaching Party and the breaching Party does not correct such breach within 30 days after delivery of such notice of material breach; or if such breach cannot reasonably be cured within 30 days after delivery of such notice, undertake within 10 days after delivery of such notice, and continue until completion, efforts to cure such breach. 6.2 Licensor may terminate this license immediately if Licensee or any of its Stockholders challenges or seeks to claim rights in or to challenge the validity of (a) the Marks or Licensor's rights in any other names, marks or commercial symbols used by Licensor or its Affiliates anywhere in the world or Licensed hereunder by Licensee in connection with the operation or promotion of the Business, whether registered or unregistered, (b) the Licensor Confidential Information, (c) the Know-how, (d) the Copyrighted Works or (e) any other intellectual property rights licensed under this Agreement. 6.3 In the event (i) of any termination by Licensee pursuant to this section; (ii) that Licensor makes an assignment of the Intellectual Property for the benefit of creditors; (iii) that any petition shall be filed by or against Licensor under any section or chapter of the United States Bankruptcy Code, as amended, or under any similar law or statute of the United States or any state thereof, which petition is not dismissed within sixty (60) days after the filing thereof, or Licensor shall be adjudged bankrupt or insolvent in proceedings filed thereunder; or (iv) a receiver or trustee shall be appointed for all or substantially all of the assets of Licensor; then, Licensee shall, effective as of the date of such termination automatically and without further action, have a perpetual license to use the Intellectual Property without further charge or fee, but otherwise subject to and in accordance with the provisions and limitations of this Agreement. 7. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION OF THIS AGREEMENT. 7.1 Upon termination or expiration of the Term, Licensee shall return the Intellectual Property to Licensor. All obligations of Licensor and Licensee under this Agreement that expressly or by their nature survive or are intended to survive the expiration or termination of this Agreement or the Agreement Term shall continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire. 7.2 Licensee shall not at any time after expiration of the Term or termination of this Agreement adopt, use or claim ownership rights adverse to those of Licensor or its Affiliates in or to any Licensor name, trade name, trademark, service mark, logo, Know-how component, get up, commercial symbol, design or device (including, without limitation, the Marks, the Know-how and the Copyrighted Works) used by Licensor or its Affiliates anywhere in the world or used by Licensee in connection with the operation or promotion of the Business. This undertaking and agreement shall survive the termination or expiration of this Agreement and shall be binding on Licensee, its officers, owners, directors, agents, employees, heirs, successors and assigns. 7.3 Nothing in this Agreement shall prohibit Licensee from challenging the validity of the intellectual property rights licensed under this Agreement. Licensee acknowledges and agrees that if it were to so challenge the validity of such rights, the provisions of Section 6.2 of this Agreement shall apply. With respect to the provisions of this Agreement regarding restrictions upon Licensee of the use of any name, trade name, trade mark, service mark, logo, Know-how component, get up, commercial symbol, design or device of Licensor subsequent to the expiration or termination of this Agreement, nothing in this Agreement shall be interpreted as granting additional rights to Licensor that it would not otherwise have under applicable law. 8. MISCELLANEOUS. 8.1 PUBLICITY. Neither of the Parties shall issue, publish or disseminate, or cause to be issued, published or disseminated, any press release or public TERREMARK SYSTEM LICENSE - SPAIN Page 6 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL communication relating to this Agreement or any of the transactions contemplated herein using the name or any trade mark, logo, trade name, Know-how or other intellectual property or otherwise referring to Licensor or Licensee, without the prior written consent of such other party. 8.2 LIABILITY: In no event shall either party be liable, one to the other, for any indirect, special or consequential damages arising out of or in connection with this Agreement. 8.3 EXCUSABLE DELAYS: In no event shall either party be liable to the other for any delay or failure to perform due to causes beyond the control and without the fault or negligence of the party claiming excusable delay. 8.4 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to contracts made and to be performed entirely within such State. Each of the Parties hereby submits to the nonexclusive jurisdiction of the courts in Miami-Dade County for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the Parties irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. In the event of any litigation regarding the rights and obligations under this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and court costs in addition to any other relief that may be granted. The "prevailing party" means the party who receives substantially the relief desired, whether by settlement, dismissal, summary judgment, judgment or otherwise after the expiration of the time to appeal any such judgment. 8.5 WAIVER OF JURY TRIAL. Each of the Parties hereby waives its rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement or the subject matter hereof. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. This Section has been fully discussed by each of the Parties and these provisions shall not be subject to any exceptions. Each of the Parties hereby further warrants and represents that such party has reviewed this waiver with its legal counsel, and that such party knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and this waiver shall apply to any subsequent amendments, supplements or modifications to (or assignments of) this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial (without a jury) by the court. 8.6 COUNTERPARTS/CAPTIONS AND HEADINGS. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall be deemed to constitute one and the same instrument. The captions and headings used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. 8.7 NOTICES. Unless otherwise provided, any notice or other communication required or permitted to be given or effected under this Agreement shall be in writing and shall be deemed effective upon personal or facsimile delivery to the party to be notified or two business days after deposit with an internationally recognized courier service, delivery fees prepaid, and addressed to the party to be notified at the following respective addresses, or at such other addresses as may be designated by written notice; PROVIDED, HOWEVER, that any notice of change of address shall be deemed effective only upon receipt: If to Licensor: Terremark Worldwide, Inc. 2601 South Bayshore Drive Miami, FL 33133 Attn: Chief Operating Officer Fax: 305-860-8190 TERREMARK SYSTEM LICENSE - SPAIN Page 7 TERREMARK - NAP/MADRID - PROPRIETARY & CONFIDENCIAL With a copy to Terremark Worldwide, Inc. 2601 South Bayshore Drive Miami, FL 33133 Attn: General Counsel Fax: 305-250-4290 If to Licensee: NAP de Las Americas - Madrid, S.A. Camara Oficial de Comercio e Industria de Madrid, Plaza de la Independencia, n(0)1 Madrid, Spain Attn: President Fax: 8.8 SEVERABILITY/ENTIRE AGREEMENT/COSTS. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. This Agreement (and the Exhibits hereto) constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and discussions between them. Except as otherwise provided for herein, each of the Parties shall pay all expenses incurred by it or on its behalf in connection with this Agreement or any of the transactions contemplated hereby. 8.9 SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS. Notwithstanding anything herein to the contrary, the representation, warranties and covenants contained herein shall survive termination or expiration of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Terremark Worldwide, Inc. By: /s/ Manuel D. Medina ------------------------------------ Name: Manuel D. Medina Title: President and CEO NAP de Las Americas - Madrid, S.A. By: ------------------------------------ Name: Title: TERREMARK SYSTEM LICENSE - SPAIN Page 8 EX-10.3 6 g80889a1exv10w3.txt EMPLOYMENT AGREEMENT W/BRIAN K. GOODKIND EXHIBIT 10.3 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") is made and entered into on this 3 day of March, 2003, effective as of the date set forth in paragraph 2.1 below, and is by and between Terremark Worldwide, Inc., a Delaware corporation (the "Company"), and Brian K. Goodkind (hereinafter called the "Executive"). R E C I T A L S A. The Executive possesses knowledge and skills which the Company believes will be of substantial benefit to its operations and success, and the Company desires to employ the Executive on the terms and conditions set forth below, on its behalf or on behalf of one or more of its subsidiaries or affiliates. B. The Executive is willing to make his services available to the Company and its subsidiaries and affiliates on the terms and conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties agree as follows: 1. Employment. 1.1 Employment and Term. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein. 1.2 Duties of Executive. During the Term of Employment under this Agreement, the Executive shall serve as the Executive Vice President and Chief Operating Officer of the Company, shall diligently perform all services as may be assigned to him by the Board (provided that, such services shall not materially differ from the services currently provided by the Executive), and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Executive shall devote his full time and attention to the business and affairs of the Company, render such services to the best of his ability, and use his best efforts to promote the interests of the Company. It shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities to the Company in accordance with this Agreement. 2. Term. 2.1 Commencement of Employment. The employment of the Executive under this Agreement shall commence on the date set forth above (the "Commencement Date"). 2.2 Termination of Employment. The period during which the Executive shall be employed by the Company pursuant to the terms of this Agreement is sometimes referred to in this Agreement as the "Term of Employment". The Executive's employment hereunder, and the Term of Employment, shall terminate upon notice by either the Company or the Executive in accordance with Section 5, below. 3. Compensation. 3.1 Base Salary. The Executive shall receive a base salary at the annual rate of $250,000.00 (the "Base Salary") during the Term of Employment, with such Base Salary payable in installments consistent with the Company's normal payroll schedule, subject to applicable withholding and other taxes. The Base Salary shall be reviewed, at least annually, for merit increases and may, by action and in the sole discretion of the Board, be increased at any time or from time to time. 3.2 Bonuses. During the Term of Employment, the Executive shall be eligible to receive bonuses in such amounts and at such times as the Board shall determine in its sole discretion. 4. Expense Reimbursement and Other Benefits. 4.1 Reimbursement of Expenses. Upon the submission of proper substantiation by the Executive, and subject to such rules and guidelines as the Company may from time to time adopt, the Company shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive during the Term of Employment in the course of and pursuant to the business of the Company. The Executive shall account to the Company in writing for all expenses for which reimbursement is sought and shall supply to the Company copies of all relevant invoices, receipts or other evidence reasonably requested by the Company. 4.2 Compensation/Benefit Programs. During the term of Employment, the Executive shall be entitled to participate in all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and any and all other plans as are presently and hereinafter offered by the Company to its executives, including savings, pension, profit-sharing and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plans. 4.3 Working Facilities. During the Term of Employment, the Company shall furnish the Executive with an office, administrative assistance and such other facilities and services suitable to his/her position and adequate for the performance of his/her duties hereunder. 4.4 Stock Options. During the Term of Employment, the Executive shall be eligible to be granted options (the "Stock Options") to purchase common stock (the "Common Stock") of the Company under (and therefore subject to all terms and conditions of) the Company's 2000 Stock Option Plan, as amended, and any successor plan thereto (the "Stock Option Plan") and all rules of regulation of the Securities and Exchange Commission applicable to stock option plans then in effect. The number of Stock Options and terms and conditions of the Stock Options shall be determined by the Committee appointed pursuant to the Stock Option Plan, or by the Board of Directors of the Company, in its sole discretion and pursuant to the Stock Option Plan. 4.5 Other Benefits. The Executive shall be entitled to three weeks of vacation each calendar year during the Term of Employment, (subject to the general eligibility provisions set forth in Company's personnel policy), to be taken at such times as the Executive and the Company shall mutually determine and provided that no vacation time shall interfere with the duties required to be rendered by the Executive hereunder. Any vacation time not taken by Executive during any calendar year may not be carried forward into any succeeding calendar year, except in accordance with general Company policy in -2- effect from time to time. The Executive shall receive such additional benefits, if any, as the Board of the Company shall from time to time determine. 5. Termination. 5.1 Termination for Cause. The Company shall at all times have the right, without notice, to terminate the Term of Employment, for Cause. For purposes of this Agreement, the term "Cause" shall mean (i) an action or omission of the Executive which constitutes a willful and material breach of, or failure or refusal (other than by reason of his disability) to perform his duties under, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in connection with his services hereunder, (iii) conviction of a felony or any other crime which involves dishonesty or a breach of trust, (iv) gross negligence in connection with the performance of the Executive's duties hereunder, (v) insubordination or other refusal to adhere to Company policy or the instructions of a superior, or (vi) negligence by commission or omission that results in injury or damage to the Company. Any termination for Cause shall be made in writing to the Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination. Upon any termination pursuant to this Section 5.1, the Company shall only be obligated to pay to the Executive his Base Salary to the date of termination. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1). 5.2 Disability. The Company shall at all times have the right, upon written notice to the Executive, to terminate the Term of Employment, if the Executive shall become entitled to benefits under the Company's group disability policy or any individual disability policy then in effect, or, if the Executive shall as the result of mental or physical incapacity, illness or disability, become unable to perform his obligations hereunder for a period of 90 days in any 12-month period. The Company shall have sole discretion based upon competent medical advice to determine whether the Executive continues to be disabled. Upon any termination pursuant to this Section 5.2, the Company shall (i) pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice, (ii) pay to the Executive a severance payment equal to one month of the Executive's Base Salary at the time of the termination of the Executive's employment with the Company. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Section 4.1). 5.3 Death. Upon the death of the Executive during the Term of Employment, the Company shall pay to the estate of the deceased Executive any unpaid Base Salary through the Executive's date of death. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive's death, subject, however to the provisions of Section 4.1). 5.4 Termination Without Cause. At any time the Company shall have the right to terminate the Term of Employment by written notice to the Executive. Upon any termination pursuant to this Section 5.4 (that is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6), the Company shall (i) pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice, (ii) continue to pay the Executive's Base Salary for a period (the " Continuation Period") of six (6) months from the effective date of termination hereunder, provided, however, Executive shall have been employed by Company for a period of at least one hundred eighty (180) days to be eligible for such payment, (iii) continue to provide the Executive with the benefits he/she was receiving under Sections 4.2 and 4.4 hereof (the "Benefits") through the end of the Continuation Period in the manner and at such times as the Incentive Compensation or Benefits otherwise would have been payable or -3- provided to the Executive, provided, however, Executive shall have been employed by Company for a period of at least one hundred eighty (180) days to be eligible for such Benefits or payment of the cash value of such Benefits, as set forth below. In the event that the Company is unable to provide the Executive with any Benefits required hereunder by reason of the termination of the Executive's employment pursuant to this Section 5.4, then the Company shall pay the Executive cash equal to the value of the Benefit that otherwise would have accrued for the Executive's benefit under the plan, for the period during which such Benefits could not be provided under the plans. The Company's good faith determination of the amount that would have been contributed or the value of any Benefits that would have accrued under any plan shall be binding and conclusive on the Executive. For this purpose, the Company may use as the value of any Benefit the cost to the Company of providing that Benefit to the Executive. Further, the vesting of the Executive's Stock Options, if any, shall be subject to the terms of the Stock Option Plan. The Company shall have no further liability hereunder (other than for (x) reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1, and (y) payment of compensation for unused vacation days accumulated in accordance with the Company's then general policy). 5.5 Termination by Executive. (a) The Executive shall at all times have the right, upon sixty (60) days written notice to the Company, to terminate the Term of Employment. (b) Upon termination of the Term of Employment pursuant to this Section 5.5 (that is not a termination under Section 5.6) by the Executive without Good Reason, the Company shall pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1). At the Company's sole option, upon receipt of notice from the Executive pursuant to this Section, the Company may immediately terminate the Term of Employment, in which case, in addition to the covenants set forth above, the Company shall pay the Executive 60 days of Base Salary. (c) Upon termination of the Term of Employment pursuant to this Section 5.5 (that is not a termination under Section 5.6) by the Executive for Good Reason, the Company shall pay to the Executive the same amounts that would have been payable by the Company to the Executive under Section 5.4 of this Agreement if the Term of Employment had been terminated by the Company without Cause. The Company shall have no further liability hereunder. (d) For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties or responsibilities inconsistent in any respect with the Executive's position or a similar position in the Company or one of its subsidiaries, as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a substantial and compelling diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Article 3 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location outside of the area for which Executive was originally hired to work except for travel reasonably required in the performance of the Executive's responsibilities. For purposes of this Section 5.5(d), any good faith determination of "Good Reason" made by the Board shall be conclusive. -4- 5.6 Change in Control of the Company. (a) In the event that (i) a Change in Control (as defined in paragraph (b) of this Section 5.6) in the Company shall occur during the Term of Employment, and (ii) within one year after the date of the Change in Control, either (x) the Term of Employment is terminated by the Company without Cause, pursuant to Section 5.4 hereof or (y) the Executive terminates the Term of Employment for Good Reason, the Company shall (1) pay to the Executive any unpaid Base Salary through the effective date of termination, (2) pay to the Executive as a single lump sum payment, within 30 days of the termination of his employment hereunder, a lump sum payment equal to the sum of (x) two times the sum of Executive's annual Base Salary, Incentive Compensation, and the value of the annual fringe benefits (based upon their cost to the Company) required to be provided to the Executive under Sections 4.2 and 4.4 hereof, for the year immediately preceding the year in which his employment terminates, plus (y) the value of the portion of his benefits under any savings, pension, profit sharing or deferred compensation plans that are forfeited under those plans by reason of the termination of his employment hereunder. The Company shall have no further liability hereunder (other than for (1) reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1, and (2) payment of compensation for unused vacation days that have accumulated during the calendar year in which such termination occurs). (b) For purposes of this Agreement, the term "Change in Control" shall mean: (i) Approval by the shareholders of the Company of (x) a reorganization, merger, consolidation or other form of corporate transaction or series of transactions, in each case, with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, in substantially the same proportions as their ownership immediately prior to such reorganization, merger, consolidation or other transaction, or (y) a liquidation or dissolution of the Company or (z) the sale of all or substantially all of the assets of the Company (unless such reorganization, merger, consolidation or other corporate transaction, liquidation, dissolution or sale is subsequently abandoned); (ii) the acquisition (other than from the Company) by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 30% of either the then outstanding shares of the Company's Common Stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors (hereinafter referred to as the ownership of a "Controlling Interest") excluding, for this purpose, any acquisitions by (1) the Company or its Subsidiaries, (2) any person, entity or "group" that as of the Commencement Date of this Agreement owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a Controlling Interest or (3) any employee benefit plan of the Company or its Subsidiaries. (iii) The resignation of Manuel D. Medina as both Chairman and CEO of the Company, his death, or his absence from the day to day business affairs of the Company for more than 90 consecutive days due to disability or incapacity. 5.7 Resignation. Upon any notice or termination of employment pursuant to this Article 5, the Executive shall automatically and without further action be deemed to have resigned as an -5- officer, and if he or she was then serving as a director of the Company, as a director, and if required by the Board, the Executive hereby agrees to immediately execute a resignation letter to the Board. 5.8 Survival. The provisions of this Article 5 shall survive the termination of this Agreement, as applicable. 6. Restrictive Covenants. 6.1 Non-competition. At all times while the Executive is employed by the Company and for a one year period after the termination of the Executive's employment with the Company for any reason (other than by the Company without Cause (as defined in Section 5.1 hereof) or by the Executive for Good Reason (as defined in Section 5.5(d) hereof)), the Executive shall not, directly or indirectly, engage in or have any interest in any sole proprietorship, partnership, corporation or business or any other person or entity (whether as an employee, officer, director, partner, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) engages in competition with the Company (based on the business in which the Company was engaged or was actively planning on being engaged as of the date of termination of the Employee's employment and in the geographic areas in which the Company operated or was actively planning on operating as of date of termination of the Employee's employment); provided that such provision shall not apply to the Executive's ownership of: Common Stock of the Company or the acquisition by the Executive, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Executive does not control, acquire a controlling interest in or become a member of a group which exercises direct or indirect control or, more than five percent of any class of capital stock of such corporation. 6.2 Nondisclosure. The Executive shall not at any time divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company (which shall include, but not be limited to, information concerning the Company's financial condition, prospects, technology, customers, suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, "Confidential Information" means information disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) prior to or after the date hereof, and not generally known, about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing Confidential Information to the extent required by law. 6.3 Nonsolicitation of Employees and Clients. At all times while the Executive is employed by the Company and for a two (2) year period after the termination of the Executive's employment with the Company for any reason, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity (a) employ or attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months, and/or (b) call on or solicit any of the actual or targeted prospective -6- clients of the Company on behalf of any person or entity in connection with any business competitive with the business of the Company, nor shall the Executive make known the names and addresses of such clients or any information relating in any manner to the Company's trade or business relationships with such customers, other than in connection with the performance of Executive's duties under this Agreement. 6.4 Ownership of Developments. All copyrights, patents, trade secrets, or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by Executive during the course of performing work for the Company or its clients (collectively, the "Work Product") shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by the Executive for hire for the Company within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by the Executive for hire for the Company, the Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest the Executive may have in such Work Product. Upon the request of the Company, the Executive shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment. 6.5 Books and Records. All books, records, and accounts relating in any manner to the customers or clients of the Company, whether prepared by the Executive or otherwise coming into the Executive's possession, shall be the exclusive property of the Company and shall be returned immediately to the Company on termination of the Executive's employment hereunder or on the Company's request at any time. 6.6 Definition of Company. Solely for purposes of this Article 6, the term "Company" also shall include any existing or future subsidiaries of the Company that are operating during the time periods described herein and any other entities that directly or indirectly, through one or more intermediaries, control, are controlled by or are under common control with the Company during the periods described herein. 6.7 Acknowledgment by Executive. The Executive acknowledges and confirms that (a) the restrictive covenants contained in this Article 6 are reasonably necessary to protect the legitimate business interests of the Company, and (b) the restrictions contained in this Article 6 (including without limitation the length of the term of the provisions of this Article 6) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Executive further acknowledges and confirms that his full, uninhibited and faithful observance of each of the covenants contained in this Article 6 will not cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not impair his ability to obtain employment commensurate with his abilities and on terms fully acceptable to him or otherwise to obtain income required for the comfortable support of him and his family and the satisfaction of the needs of his creditors. The Executive acknowledges and confirms that his special knowledge of the business of the Company is such as would cause the Company serious injury or loss if he were to use such ability and knowledge to the benefit of a competitor or were to compete with the Company in violation of the terms of this Article 6. The Executive further acknowledges that the restrictions contained in this Article 6 are intended to be, and shall be, for the benefit of and shall be enforceable by, the Company's successors and assigns. 6.8 Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of this Article 6 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Article 6 within the jurisdiction of -7- such court, such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law. 6.9 Extension of Time. If the Executive shall be in violation of any provision of this Article 6, then each time limitation set forth in this Article 6 shall be extended for a period of time equal to the period of time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in this Article 6 shall be extended for a period of time equal to the pendency of such proceeding including all appeals by the Executive. 6.10 Survival. The provisions of this Article 6 shall survive the termination of this Agreement, as applicable. 7. Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Article 6 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Article 6 of this Agreement by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess. 8. Assignment. Neither party shall have the right to assign or delegate his rights or obligations hereunder, or any portion thereof, to any other person. 9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. 10. Section 162(m) Limits. Notwithstanding any other provision of this Agreement to the contrary, if and to the extent that any remuneration payable by the Company to the Executive for any year would exceed the maximum amount of remuneration that the Company may deduct for that year under Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the "Code"), payment of the portion of the remuneration for that year that would not be so deductible under Section 162(m) shall, in the sole discretion of the Board, be deferred and become payable at such time or times as the Board determines that it first would be deductible by the Company under Section 162(m), with interest at the "short-term applicable rate" as such term is defined in Section 1274(d) of the Code. The limitation set forth under this Section 10 shall not apply with respect to any amounts payable to the Executive pursuant to Article 5 hereof. 11. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Executive. 12. Notices: All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three (3) days after deposit in the U.S. mail. -8- Notice shall be sent (i) if to the Company, addressed to Terremark Worldwide, Inc., 2601 S. Bayshore Drive, 9th Floor, Miami, Florida 33133, Attn: Brian K. Goodkind, Executive Vice-President and Chief Operating Officer, and (ii) if to the Executive, to his address as reflected on the payroll records of the Company, or to such other address as either party hereto may from time to time give notice of to the other. 13. Benefits; Binding Effect. This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise. 14. Severability. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity. 15. Waivers. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation. 16. Damages. Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto brings suit for the collection of any damages resulting from, or the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable court costs and attorneys' fees of the other. 17. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 18. No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, the parties hereto and their respective heirs, personal representatives, legal representatives, successors and assigns, any rights or remedies under or by reason of this Agreement. 19. Indemnification. The indemnification obligations of the Company to Executive shall be in accordance with the Company's standard indemnity agreement. 20. Attorneys' Fees. In the event of any litigation arising out of or in any way related to this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees and costs incurred in connection therewith. 21. Controlling Agreement. This Agreement shall supercede, replace and be considered a novation of any prior agreements, contracts, offer letters, oral promises and the like regarding compensation, employment, benefits or any other subject addressed herein. -9- IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. COMPANY: TERREMARK WORLDWIDE, INC. By: /s/ Jose E. Gonzalez -------------------------------- Name: Jose E. Gonzalez Title: Sr. V.P. and General Counsel EXECUTIVE: /s/ Brian K. Goodkind ------------------------ Name: Brian K. Goodkind -10- EX-10.4 7 g80889a1exv10w4.txt EMPLOYMENT AGREEMENT W/JOSE E. GONZALEZ EXHIBIT 10.4 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") is made and entered into on this 3 day of March, 2003, effective as of the date set forth in paragraph 2.1 below, and is by and between Terremark Worldwide, Inc., a Delaware corporation (the "Company"), and Jose E. Gonzalez (hereinafter called the "Executive"). R E C I T A L S A. The Executive possesses knowledge and skills which the Company believes will be of substantial benefit to its operations and success, and the Company desires to employ the Executive on the terms and conditions set forth below, on its behalf or on behalf of one or more of its subsidiaries or affiliates. B. The Executive is willing to make his services available to the Company and its subsidiaries and affiliates on the terms and conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties agree as follows: 1. Employment. 1.1 Employment and Term. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein. 1.2 Duties of Executive. During the Term of Employment under this Agreement, the Executive shall serve as the Senior Vice President and General Counsel of the Company, shall diligently perform all services as may be assigned to him by the Board (provided that, such services shall not materially differ from the services currently provided by the Executive), and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Executive shall devote his full time and attention to the business and affairs of the Company, render such services to the best of his ability, and use his best efforts to promote the interests of the Company. It shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities to the Company in accordance with this Agreement. 2. Term. 2.1 Commencement of Employment. The employment of the Executive under this Agreement shall commence on the date set forth above (the "Commencement Date"). 2.2 Termination of Employment. The period during which the Executive shall be employed by the Company pursuant to the terms of this Agreement is sometimes referred to in this Agreement as the "Term of Employment". The Executive's employment hereunder, and the Term of Employment, shall terminate upon notice by either the Company or the Executive in accordance with Section 5, below. 3. Compensation. 3.1 Base Salary. The Executive shall receive a base salary at the annual rate of $185,000.00 (the "Base Salary") during the Term of Employment, with such Base Salary payable in installments consistent with the Company's normal payroll schedule, subject to applicable withholding and other taxes. The Base Salary shall be reviewed, at least annually, for merit increases and may, by action and in the sole discretion of the Board, be increased at any time or from time to time. 3.2 Bonuses. During the Term of Employment, the Executive shall be eligible to receive bonuses in such amounts and at such times as the Board shall determine in its sole discretion. 4. Expense Reimbursement and Other Benefits. 4.1 Reimbursement of Expenses. Upon the submission of proper substantiation by the Executive, and subject to such rules and guidelines as the Company may from time to time adopt, the Company shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive during the Term of Employment in the course of and pursuant to the business of the Company. The Executive shall account to the Company in writing for all expenses for which reimbursement is sought and shall supply to the Company copies of all relevant invoices, receipts or other evidence reasonably requested by the Company. 4.2 Compensation/Benefit Programs. During the term of Employment, the Executive shall be entitled to participate in all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and any and all other plans as are presently and hereinafter offered by the Company to its executives, including savings, pension, profit-sharing and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plans. 4.3 Working Facilities. During the Term of Employment, the Company shall furnish the Executive with an office, administrative assistance and such other facilities and services suitable to his/her position and adequate for the performance of his/her duties hereunder. 4.4 Stock Options. During the Term of Employment, the Executive shall be eligible to be granted options (the "Stock Options") to purchase common stock (the "Common Stock") of the Company under (and therefore subject to all terms and conditions of) the Company's 2000 Stock Option Plan, as amended, and any successor plan thereto (the "Stock Option Plan") and all rules of regulation of the Securities and Exchange Commission applicable to stock option plans then in effect. The number of Stock Options and terms and conditions of the Stock Options shall be determined by the Committee appointed pursuant to the Stock Option Plan, or by the Board of Directors of the Company, in its sole discretion and pursuant to the Stock Option Plan. 4.5 Other Benefits. The Executive shall be entitled to three weeks of vacation each calendar year during the Term of Employment, (subject to the general eligibility provisions set forth in Company's personnel policy), to be taken at such times as the Executive and the Company shall mutually determine and provided that no vacation time shall interfere with the duties required to be rendered by the Executive hereunder. Any vacation time not taken by Executive during any calendar year may not be carried forward into any succeeding calendar year, except in accordance with general Company policy in -2- effect from time to time. The Executive shall receive such additional benefits, if any, as the Board of the Company shall from time to time determine. 5. Termination. 5.1 Termination for Cause. The Company shall at all times have the right, without notice, to terminate the Term of Employment, for Cause. For purposes of this Agreement, the term "Cause" shall mean (i) an action or omission of the Executive which constitutes a willful and material breach of, or failure or refusal (other than by reason of his disability) to perform his duties under, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in connection with his services hereunder, (iii) conviction of a felony or any other crime which involves dishonesty or a breach of trust, (iv) gross negligence in connection with the performance of the Executive's duties hereunder, (v) insubordination or other refusal to adhere to Company policy or the instructions of a superior, or (vi) negligence by commission or omission that results in a material injury or damage to the Company. Any termination for Cause shall be made in writing to the Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination. Upon any termination pursuant to this Section 5.1, the Company shall only be obligated to pay to the Executive his Base Salary to the date of termination. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1). 5.2 Disability. The Company shall at all times have the right, upon written notice to the Executive, to terminate the Term of Employment, if the Executive shall become entitled to benefits under the Company's group disability policy or any individual disability policy then in effect, or, if the Executive shall as the result of mental or physical incapacity, illness or disability, become unable to perform his obligations hereunder for a period of 90 days in any 12-month period. The Company shall have sole discretion based upon competent medical advice to determine whether the Executive continues to be disabled. Upon any termination pursuant to this Section 5.2, the Company shall (i) pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice, (ii) pay to the Executive a severance payment equal to one month of the Executive's Base Salary at the time of the termination of the Executive's employment with the Company. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Section 4.1). 5.3 Death. Upon the death of the Executive during the Term of Employment, the Company shall pay to the estate of the deceased Executive any unpaid Base Salary through the Executive's date of death. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive's death, subject, however to the provisions of Section 4.1). 5.4 Termination Without Cause. At any time the Company shall have the right to terminate the Term of Employment by written notice to the Executive. Upon any termination pursuant to this Section 5.4 (that is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6), the Company shall (i) pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice, (ii) continue to pay the Executive's Base Salary for a period (the " Continuation Period") of six (6) months from the effective date of termination hereunder, provided, however, Executive shall have been employed by Company for a period of at least one hundred eighty (180) days to be eligible for such payment (Executive and the Company expressly agree that the Executive has already been employed by the Company for a period greater than one-hundred and eighty (180) days as of the date hereof and is therefore eligible for such payment), (iii) continue to provide the Executive with the -3- benefits he/she was receiving under Sections 4.2 and 4.4 hereof (the "Benefits") through the end of the Continuation Period in the manner and at such times as the Incentive Compensation or Benefits otherwise would have been payable or provided to the Executive, provided, however, Executive shall have been employed by Company for a period of at least one hundred eighty (180) days to be eligible for such Benefits or payment of the cash value of such Benefits, as set forth below. In the event that the Company is unable to provide the Executive with any Benefits required hereunder by reason of the termination of the Executive's employment pursuant to this Section 5.4, then the Company shall pay the Executive cash equal to the value of the Benefit that otherwise would have accrued for the Executive's benefit under the plan, for the period during which such Benefits could not be provided under the plans. The Company's good faith determination of the amount that would have been contributed or the value of any Benefits that would have accrued under any plan shall be binding and conclusive on the Executive. For this purpose, the Company may use as the value of any Benefit the cost to the Company of providing that Benefit to the Executive. Further, the vesting of the Executive's Stock Options, if any, shall be subject to the terms of the Stock Option Plan. The Company shall have no further liability hereunder (other than for (x) reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1, and (y) payment of compensation for unused vacation days accumulated in accordance with the Company's then general policy). 5.5 Termination by Executive. (a) The Executive shall at all times have the right, upon sixty (60) days written notice to the Company, to terminate the Term of Employment. (b) Upon termination of the Term of Employment pursuant to this Section 5.5 (that is not a termination under Section 5.6) by the Executive without Good Reason, the Company shall pay to the Executive any unpaid Base Salary through the effective date of termination specified in such notice. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1). At the Company's sole option, upon receipt of notice from the Executive pursuant to this Section, the Company may immediately terminate the Term of Employment, in which case, in addition to the covenants set forth above, the Company shall pay the Executive 60 days of Base Salary. (c) Upon termination of the Term of Employment pursuant to this Section 5.5 (that is not a termination under Section 5.6) by the Executive for Good Reason, the Company shall pay to the Executive the same amounts that would have been payable by the Company to the Executive under Section 5.4 of this Agreement if the Term of Employment had been terminated by the Company without Cause. The Company shall have no further liability hereunder. (d) For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties or responsibilities inconsistent in any respect with the Executive's position or a similar position in the Company or one of its subsidiaries, as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a substantial and compelling diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Article 3 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location outside of the area for which Executive was originally hired to work except for -4- travel reasonably required in the performance of the Executive's responsibilities. For purposes of this Section 5.5(d), any good faith determination of "Good Reason" made by the Board shall be conclusive. 5.6 Change in Control of the Company. (a) In the event that (i) a Change in Control (as defined in paragraph (b) of this Section 5.6) in the Company shall occur during the Term of Employment, and (ii) within one year after the date of the Change in Control, either (x) the Term of Employment is terminated by the Company without Cause, pursuant to Section 5.4 hereof or (y) the Executive terminates the Term of Employment for Good Reason, the Company shall (1) pay to the Executive any unpaid Base Salary through the effective date of termination, (2) pay to the Executive as a single lump sum payment, within 30 days of the termination of his employment hereunder, a lump sum payment equal to the sum of (x) two times the sum of Executive's annual Base Salary, Incentive Compensation, and the value of the annual fringe benefits (based upon their cost to the Company) required to be provided to the Executive under Sections 4.2 and 4.4 hereof, for the year immediately preceding the year in which his employment terminates, plus (y) the value of the portion of his benefits under any savings, pension, profit sharing or deferred compensation plans that are forfeited under those plans by reason of the termination of his employment hereunder. The Company shall have no further liability hereunder (other than for (1) reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however, to the provisions of Section 4.1, and (2) payment of compensation for unused vacation days that have accumulated during the calendar year in which such termination occurs). (b) For purposes of this Agreement, the term "Change in Control" shall mean: (i) Approval by the shareholders of the Company of (x) a reorganization, merger, consolidation or other form of corporate transaction or series of transactions, in each case, with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, in substantially the same proportions as their ownership immediately prior to such reorganization, merger, consolidation or other transaction, or (y) a liquidation or dissolution of the Company or (z) the sale of all or substantially all of the assets of the Company (unless such reorganization, merger, consolidation or other corporate transaction, liquidation, dissolution or sale is subsequently abandoned); (ii) the acquisition (other than from the Company) by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 30% of either the then outstanding shares of the Company's Common Stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors (hereinafter referred to as the ownership of a "Controlling Interest") excluding, for this purpose, any acquisitions by (1) the Company or its Subsidiaries, (2) any person, entity or "group" that as of the Commencement Date of this Agreement owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a Controlling Interest or (3) any employee benefit plan of the Company or its Subsidiaries. (iii) The resignation of Manuel D. Medina as both Chairman and CEO of the Company, his death, or his absence from the day to day business affairs of the Company for more than 90 consecutive days due to disability or incapacity. -5- 5.7 Resignation. Upon any notice or termination of employment pursuant to this Article 5, the Executive shall automatically and without further action be deemed to have resigned as an officer, and if he or she was then serving as a director of the Company, as a director, and if required by the Board, the Executive hereby agrees to immediately execute a resignation letter to the Board. 5.8 Survival. The provisions of this Article 5 shall survive the termination of this Agreement, as applicable. 6. Restrictive Covenants. 6.1 Non-competition. At all times while the Executive is employed by the Company and for a one year period after the termination of the Executive's employment with the Company for any reason (other than by the Company without Cause (as defined in Section 5.1 hereof) or by the Executive for Good Reason (as defined in Section 5.5(d) hereof)), the Executive shall not, directly or indirectly, engage in or have any interest in any sole proprietorship, partnership, corporation or business or any other person or entity (whether as an employee, officer, director, partner, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) engages in competition with the Company (based on the business in which the Company was engaged or was actively planning on being engaged as of the date of termination of the Employee's employment and in the geographic areas in which the Company operated or was actively planning on operating as of date of termination of the Employee's employment); provided that such provision shall not apply to the Executive's ownership of: Common Stock of the Company or the acquisition by the Executive, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Executive does not control, acquire a controlling interest in or become a member of a group which exercises direct or indirect control or, more than five percent of any class of capital stock of such corporation. 6.2 Nondisclosure. The Executive shall not at any time divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company (which shall include, but not be limited to, information concerning the Company's financial condition, prospects, technology, customers, suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, "Confidential Information" means information disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) prior to or after the date hereof, and not generally known, about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing Confidential Information to the extent required by law. 6.3 Nonsolicitation of Employees and Clients. At all times while the Executive is employed by the Company and for a two (2) year period after the termination of the Executive's employment with the Company for any reason, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity (a) employ or attempt to employ or enter into any contractual arrangement with any employee or former employee of the -6- Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months, and/or (b) call on or solicit any of the actual or targeted prospective clients of the Company on behalf of any person or entity in connection with any business competitive with the business of the Company, nor shall the Executive make known the names and addresses of such clients or any information relating in any manner to the Company's trade or business relationships with such customers, other than in connection with the performance of Executive's duties under this Agreement. 6.4 Ownership of Developments. All copyrights, patents, trade secrets, or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by Executive during the course of performing work for the Company or its clients (collectively, the "Work Product") shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by the Executive for hire for the Company within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by the Executive for hire for the Company, the Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest the Executive may have in such Work Product. Upon the request of the Company, the Executive shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment. 6.5 Books and Records. All books, records, and accounts relating in any manner to the customers or clients of the Company, whether prepared by the Executive or otherwise coming into the Executive's possession, shall be the exclusive property of the Company and shall be returned immediately to the Company on termination of the Executive's employment hereunder or on the Company's request at any time. 6.6 Definition of Company. Solely for purposes of this Article 6, the term "Company" also shall include any existing or future subsidiaries of the Company that are operating during the time periods described herein and any other entities that directly or indirectly, through one or more intermediaries, control, are controlled by or are under common control with the Company during the periods described herein. 6.7 Acknowledgment by Executive. The Executive acknowledges and confirms that (a) the restrictive covenants contained in this Article 6 are reasonably necessary to protect the legitimate business interests of the Company, and (b) the restrictions contained in this Article 6 (including without limitation the length of the term of the provisions of this Article 6) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Executive further acknowledges and confirms that his full, uninhibited and faithful observance of each of the covenants contained in this Article 6 will not cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not impair his ability to obtain employment commensurate with his abilities and on terms fully acceptable to him or otherwise to obtain income required for the comfortable support of him and his family and the satisfaction of the needs of his creditors. The Executive acknowledges and confirms that his special knowledge of the business of the Company is such as would cause the Company serious injury or loss if he were to use such ability and knowledge to the benefit of a competitor or were to compete with the Company in violation of the terms of this Article 6. The Executive further acknowledges that the restrictions contained in this Article 6 are intended to be, and shall be, for the benefit of and shall be enforceable by, the Company's successors and assigns. -7- 6.8 Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of this Article 6 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Article 6 within the jurisdiction of such court, such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law. 6.9 Extension of Time. If the Executive shall be in violation of any provision of this Article 6, then each time limitation set forth in this Article 6 shall be extended for a period of time equal to the period of time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in this Article 6 shall be extended for a period of time equal to the pendency of such proceeding including all appeals by the Executive. 6.10 Survival. The provisions of this Article 6 shall survive the termination of this Agreement, as applicable. 7. Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Article 6 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Article 6 of this Agreement by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess. 8. Assignment. Neither party shall have the right to assign or delegate his rights or obligations hereunder, or any portion thereof, to any other person. 9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. 10. Section 162(m) Limits. Notwithstanding any other provision of this Agreement to the contrary, if and to the extent that any remuneration payable by the Company to the Executive for any year would exceed the maximum amount of remuneration that the Company may deduct for that year under Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the "Code"), payment of the portion of the remuneration for that year that would not be so deductible under Section 162(m) shall, in the sole discretion of the Board, be deferred and become payable at such time or times as the Board determines that it first would be deductible by the Company under Section 162(m), with interest at the "short-term applicable rate" as such term is defined in Section 1274(d) of the Code. The limitation set forth under this Section 10 shall not apply with respect to any amounts payable to the Executive pursuant to Article 5 hereof. 11. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Executive. 12. Notices: All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, -8- sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if to the Company, addressed to Terremark Worldwide, Inc., 2601 S. Bayshore Drive, 9th Floor, Miami, Florida 33133, Attn: Brian K. Goodkind, Executive Vice-President and Chief Operating Officer, and (ii) if to the Executive, to his address as reflected on the payroll records of the Company, or to such other address as either party hereto may from time to time give notice of to the other. 13. Benefits; Binding Effect. This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise. 14. Severability. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity. 15. Waivers. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation. 16. Damages. Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto brings suit for the collection of any damages resulting from, or the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable court costs and attorneys' fees of the other. 17. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 18. No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, the parties hereto and their respective heirs, personal representatives, legal representatives, successors and assigns, any rights or remedies under or by reason of this Agreement. 19. Indemnification. The indemnification obligations of the Company to Executive shall be in accordance with the Company's standard indemnity agreement. 20. Attorneys' Fees. In the event of any litigation arising out of or in any way related to this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees and costs incurred in connection therewith. -9- 21. Controlling Agreement. This Agreement shall supercede, replace and be considered a novation of any prior agreements, contracts, offer letters, oral promises and the like regarding compensation, employment, benefits or any other subject addressed herein. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. COMPANY: TERREMARK WORLDWIDE, INC. By: /s/ Brian K. Goodkind --------------------------- Name: Brian K. Goodkind Title: Chief Operating Officer EXECUTIVE: /s/ Jose E. Gonzalez ---------------------- Name: Jose E. Gonzalez -10- EX-10.5 8 g80889a1exv10w5.txt INDEMNIFICATION AGREEMENT EXHIBIT 10.5 INDEMNIFICATION AGREEMENT THIS AGREEMENT (the "Agreement") is made and entered into as of ___________, 2000 between Terremark Worldwide, Inc., a Delaware corporation (the "Company"), and _______________ ("Indemnitee"). Certain capitalized terms are defined in Section 13. WITNESSETH THAT: WHEREAS, Indemnitee performs a valuable service for the Company; and WHEREAS, the Board of Directors of the Company has adopted Bylaws (the "Bylaws") providing for the indemnification of the officers and directors of the Company to the maximum extent authorized by law; and WHEREAS, the Bylaws by their nonexclusive nature, permit contracts between the Company and the officers or directors of the Company with respect to indemnification of such officers or directors; and WHEREAS, in accordance with the authorization as provided by the Bylaws, the Company may purchase and maintain a policy or policies of directors' and officers' liability insurance ("D & O Insurance"), covering certain liabilities which may be incurred by its officers or directors in the performance of their obligations to the Company; and WHEREAS, in order to induce Indemnitee to continue to serve as an officer or director of the Company, the Company has determined and agreed to enter into this contract with Indemnitee; NOW, THEREFORE, in consideration of Indemnitee's service as an officer or director after the date hereof, the parties hereto agree as follows: SECTION 1. INDEMNITY OF INDEMNITEE. The Company hereby agrees to hold harmless and indemnify Indemnitee to the full extent authorized or permitted by law, as such may be amended from time to time, and the Bylaws, as such may be amended. In furtherance of the foregoing indemnification, and without limiting the generality thereof: (a) PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. (b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that a court of competent jurisdiction shall determine that such indemnification may be made. (c) INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter so long as such successfully resolved claim is not so intertwined with a claim that was not successfully resolved as to render indemnification inequitable. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. SECTION 2. ADDITIONAL INDEMNITY. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company's obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under law. SECTION 3. CONTRIBUTION IN THE EVENT OF JOINT LIABILITY. (a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. Company shall not enter into any settlement of any action, suit or proceeding in which Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee. 2 (b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), Company shall contribute to the amount of expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive. (c) Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee. SECTION 4. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. SECTION 5. ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee's Corporate Status within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free. Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 5 shall 3 be subject to the condition that, if, when and to the extent that the Company determines that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). SECTION 6. PROCEDURES AND PRESUMPTIONS FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the law. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement: (a) To obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at the election of Indemnitee: (1) by a majority vote of the disinterested directors, even though less than a quorum, or (2) by independent legal counsel in a written opinion, or (3) by the stockholders. (c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors). Indemnitee or the Company, as the case may be, may, within ten days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of "Independent Counsel" as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days 4 after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed. (d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 6(a) of this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof. (e) Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence. (f) If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such thirty day period may be extended for a reasonable time, not to exceed an additional fifteen days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen days after receipt by the Company of the request for such determination the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within 75 days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat. 5 (g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board of Directors, or stockholder of the Company shall act reasonably and in good faith in making a determination under the Agreement of the Indemnitee's entitlement to indemnification. Any costs or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. (h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence. SECTION 7. REMEDIES OF INDEMNITEE. (a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in a court of competent jurisdiction, of his entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee's right to seek any such adjudication. (b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination under Section 6(b). (c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding 6 commenced pursuant to this Section 7, absent a prohibition of such indemnification under applicable law. (d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors' and officers' liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, subject to the obligation of the Indemnitee to reimburse such amounts if it is determined that Indemnitee is not entitled to such indemnification under applicable law by a final judicial determination (as to which all rights of appeal have been exhausted or lapsed). (e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. SECTION 8. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION. (a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all 7 action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. (d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. SECTION 9. EXCEPTION TO RIGHT OF INDEMNIFICATION. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors of the Company or (b) such Proceeding is being brought by the Indemnitee to assert, interpret or enforce his rights under this Agreement. SECTION 10. DURATION OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or any other Enterprise at the Company's request. SECTION 11. SECURITY. To the extent requested by the Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time, in its sole and absolute discretion, provide security to the Indemnitee for the Company's obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee. SECTION 12. ENFORCEMENT. (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company. (b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. 8 SECTION 13. DEFINITIONS. For purposes of this Agreement: (a) "Corporate Status" describes the status of a person who is or was a director, officer, employee or agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the Company. (b) "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. (c) "Enterprise" shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary. (d) "Expenses" shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding. (e) "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. (f) "Proceeding" includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement; and excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement. 9 SECTION 14. SEVERABILITY. If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. SECTION 15. MODIFICATION AND WAIVER. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. SECTION 16. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company. SECTION 17. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (a) If to Indemnitee, to the address set forth below Indemnitee signature hereto. 10 (b) If to the Company, to: Terremark Worldwide, Inc. 2601 S. Bayshore Drive, Suite 400 Coconut Grove, Florida 33133 Attention: Brian K. Goodkind General Counsel With a copy to: Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Paul Berkowitz, Esq. or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be. SECTION 18. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. SECTION 19. HEADINGS. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. SECTION 20. GOVERNING LAW. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without application of the conflict of laws principles thereof. SECTION 21. GENDER. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. SECTION 22. TERMINATION OF PRIOR INDEMNIFICATION AGREEMENTS. Upon the effectiveness of this Agreement, any prior Indemnification Agreements between the parties hereto shall terminate and be of no further force and effect, and shall be superseded and replaced in its entirety by this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written. TERREMARK WORLDWIDE, INC. By: -------------------------------- Name: -------------------------- 12 EX-23.1 9 g80889a1exv23w1.htm CONSENT OF PRICEWATERHOUSECOOPERS exv23w1

We hereby consent to the incorporation by reference in this Registration Statement on Form S-3/A of our report dated July 12, 2002 relating to the financial statements, which appears in Terremark Worldwide, Inc.’s Annual Report on Form 10-K for the year ended Mach 31, 2002. We also consent to the reference to us under the heading “Experts” in such Registration Statement.


Delaware		84-0873124
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)






		Proposed Maximum	Proposed Maximum
Title of Shares to	Amount to be	Aggregate Price Per	Aggregate Offering	Amount of
be Registered	Registered	Unit	Price	Registration Fee*


Common Shares, $0.001 par value	21,757,308	$0.28(1)	$3,492,524.80	$282.89

Common Shares, $0.001 par value(2)	7,887,109	$0.40-$0.75	$4,940,331.70	$400.17


TABLE OF CONTENTS
PROSPECTUS SUMMARY
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
RISK FACTORS
USE OF PROCEEDS
SELECTED FINANCIAL DATA
DESCRIPTION OF COMMON STOCK
SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
INTERESTS OF NAMED EXPERTS AND COUNSEL
LEGAL MATTERS
EXPERTS
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
INCORPORATION BY REFERENCE
SIGNATURES
SIGNATURES
Opinion of Greenberg Traurig
Stock Purchase Agreement
License Agreement
Employment Agreement w/Brian K. Goodkind
Employment Agreement w/Jose E. Gonzalez
Indemnification Agreement
Consent of PricewaterhouseCoopers



										Nine Months Ended
	Twelve Months Ended March 31,									December 31,

	2002			2001			2000			2002			2001


	(Dollars in Thousands except per Share Data)

										(Unaudited)
Results of operations:
Total revenue	$	15,872		$	40,147		$	15,390		$	11,708		$	11,295
Operating expenses		67,424			60,323			20,798			29,341			42,605
Other expenses		5,820			1,197			626			13,936			2,610
Loss from continuing operations		(57,372	)		(21,373	)		(6,033	)		(31,569	)		(33,920	)
Loss — discontinued operations		—			(82,627	)		—			—			—
Net loss	$	(57,372	)	$	(104,000	)	$	(6,033	)		(31,569	)		(33,920	)
Loss from continuing operations per common share	$	(0.29	)	$	(0.11	)	$	(0.09	)		(0.14	)		(0.17	)
Loss — discontinued operations per common share		—			(0.44	)		—			—			—
Net loss per common share	$	(0.29	)	$	(0.55	)	$	(0.09	)		(0.14	)		(0.17	)



										Nine Months Ended
	Twelve Months Ended March 31,									December 31,

	2002			2001			2000			2002			2001


	(Dollars in Thousands except per Share Data)
Reported net loss	$	(57,372	)	$	(104,000	)	$	(6,033	)	$	(31,569	)	$	(33,920	)
Add back: goodwill amortization		3,502			2,849			—			—			2,491

Adjusted net loss	$	(53,870	)	$	(101,151	)	$	(6,033	)	$	(31,569	)	$	(31,429	)

Basic and diluted loss per share:
Reported net loss	$	(0.29	)	$	(0.55	)	$	(0.09	)	$	(0.14	)	$	(0.17	)
Goodwill amortization		0.02			0.01			—			—			0.01

Adjusted net loss	$	(0.27	)	$	(0.54	)	$	(0.09	)	$	(0.14	)	$	(0.16	)

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					Number of Shares		Percentage of Shares
	Number of Shares		Number of		Beneficially Owned		Beneficially Owned
Selling Stockholder	Beneficially Owned(1)		Shares Offered		After Offering(1)(2)		After Offering(1)(2)

Rachel L. Mellon		4,137,925		3,228,669		909,256		*
Probedel S.A.(3) c/o Orlando Guerrero Vargas		4,925,063		2,659,541		2,265,522
Brad & Jill Grey Living Trust 2/6/02		732,172		732,172		0		0
Richard Avedon		377,871		377,871		0		0
The Lopez Living Trust UA DTD 4/7/99		1,533,507		1,533,507		0		0
Gisele Bundchen		966,183		966,183		0		0
Arielle Tepper		966,183		966,183		0		0
Howard Glicken		421,000		400,000		21,000		*
Charles Dusseau		102,045		102,045		0		0
La Rochelle Corp. Ltd.(4) c/o Carlos Vasallo Tome		100,000		100,000		0		0
Adorno & Yoss(5) c/o George T. Yoss		344,408		202,104		142,304		0
AHV Associates LLP c/o Andrew Harrington		100,000		100,000		0		0
Bermello, Ajamil & Partners, Inc. c/o Willy A. Bermello		432,591		196,917		235,620		*
Interim Capital Management, Inc. c/o Alberto De Palilo		540,000		100,000		440,000		*
Quantum Overseas, Inc.(6) c/o Beile Gross		869,500		200,000		669,500		*
Sarati Ocean Corp.(7) c/o Carlos Pedreschi		521,941		521,941		0		0
Leonard J. Sokolow		90,000		90,000		0		0
Strategic Growth International, Inc.(8) c/o Stanley Altschuler		1,200,000		1,200,000		0		0
Amancio V. Suarez		1,358,535		373,241		985,294		*
50 State Security Service, Inc. c/o Ted L. Kretzschmar		212,533		212,533		0		0
Arcadia International Corporation c/o Miguel J. Rosenfeld		1,134,120		988,000		146,120		*
Kokopelli Foundation, Inc. c/o Lynn Wiener		166,667		91,817		74,850		*
Brian K. Goodkind(9)		273,361		91,361		182,000		*
Joseph R. Wright(10)		4,465,086		365,442		4,099,644		1.60	%
NAP de las Americas-Madrid, SA c/o Jose Maria Isardo		8,562,016		8,562,016		0		0
Thomas & Emma Ginley		1,377,630		878,179		499,451		*
Alexandra Shiva		1,377,630		451,189		926,441		*
Aviva Budd(11)		1,447,469		182,721		1,264,748		*
Guillermo Amore(12)		3,813,534		1,501,503		2,312,031		*
Miguel Rosenfeld(13)		1,584,105		1,134,641		449,463		*
Manuel D. Medina(14)		35,540,108		1,134,641		34,405,467		13.43	%


	(2)	Assuming that all shares offered here are sold but no other securities held by the selling securityholder are sold.

	(3)	Miguel Rosenfeld, one of our directors, has power of attorney of Probedel S.A.


	(4)	Miguel Rosenfeld, one of our directors, has power of attorney of La Rochelle Corp.


	(5)	Adorno & Yoss is a law firm which has provided legal services to us.


	(6)	Miguel Rosenfeld, one of our directors, has power of attorney of Quantum Overseas, Inc.


	(7)	Miguel Rosenfeld, one of our directors, has power of attorney of Sarati Ocean Corp.


	(8)	In April 2002, we appointed Strategic Growth International to serve as our investor relations advisor.


	(9)	Brian K. Goodkind is our Executive Vice President and Chief Operating Officer.



(10)	Joseph R. Wright is Vice-Chairman of our board of directors.


(11)	Aviva Budd is our Senior Vice President of Business Development.


(12)	Guillermo Amore is a member of our Board of Directors.


(13)	Miguel Rosenfeld is a member of our Board of Directors.


(14)	Manuel Medina is our Chairman, President and Chief Executive Officer.


SEC registration fee		$	1,083.69
American Stock Exchange listing fee			22,500.00
Accounting fees and expenses			5,500.00
Legal fees and expenses			35,000.00
Printing and engraving expenses			7,500.00
Miscellaneous			1,416.31

	Total	$	73,000.00


3.1		Restated Certificate of Incorporation of the Registrant(1)
3.2		Amended and Restated Bylaws of the Registrant(2)
5.1		Opinion of Greenberg Traurig, P.A.
10.1		Stock Purchase Agreement between the Registrant and NAP de Las Americas — Madrid, S.A., dated June 13, 2002.
10.2		License Agreement between the Registrant and NAP de Las Americas — Madrid, S.A., dated June 13, 2002.
10.3		Employment Agreement between the Registrant and Brian K. Goodkind, dated March 3, 2003.
10.4		Employment Agreement between the Registrant and José E. Gonzalez, dated March 3, 2003.
10.5		Form of Indemnification Agreement.
23.1		Consent of PricewaterhouseCoopers LLP
23.2		Consent of Greenberg Traurig, P.A. (contained in Exhibit 5.1)
24.1		Power of Attorney(3)



Signature	Title	Date


/s/ MANUEL D. MEDINA Manuel D. Medina	Chairman of the Board, Chief Executive Officer (Principal Executive)	March 10, 2003

* Guillermo Amore	Director	March 10, 2003

* Timothy Elwes	Director	March 10, 2003

* Jose Maria Figueres-Olsen	Director	March 10, 2003

* Marvin S. Rosen	Director	March 10, 2003

* Miguel Rosenfeld	Director	March 10, 2003

* Joel A. Schleicher	Director	March 10, 2003

* Kenneth I. Starr	Director	March 10, 2003


*	Executed on behalf of these individuals by Manuel D. Medina as Attorney-in-fact.


Exhibits

	3.1	Restated Certificate of Incorporation of the Registrant(1)
	3.2	Restated Bylaws of the Registrant(2)
	5.1	Opinion of Greenberg Traurig, P.A.
	10.1	Stock Purchase Agreement between the Registrant and NAP de Las Americas — Madrid, S.A., dated June 13, 2002.
	10.2	License Agreement between the Registrant and NAP de Las Americas — Madrid, S.A., dated June 13, 2002.
	10.3	Employment Agreement between the Registrant and Brian K. Goodkind, dated March 3, 2003.
	10.4	Employment Agreement between the Registrant and José E. Gonzalez, dated March 3, 2003.
	10.5	Form of Indemnification Agreement.
	23.1	Consent of PricewaterhouseCoopers LLP
	23.2	Consent of Greenberg Traurig, P.A. (contained in Exhibit 5.1)
	24.1	Power of Attorney(3)


Prospectus Summary			1
Cautionary Note Regarding Forward-Looking Statements			5
Risk Factors			5
Use of Proceeds			9
Selected Financial Data			9
Description of Common Stock			10
Selling Stockholders			12
Plan of Distribution			13
Interests of Named Experts and Counsel			14
Legal Matters			14
Experts			14
Where You Can Obtain Additional Information			14
Incorporation by Reference			15


Prospectus Summary			1
Cautionary Note Regarding Forward-Looking Statements			5
Risk Factors			5
Use of Proceeds			9
Selected Financial Data			9
Description of Common Stock			10
Selling Stockholders			12
Plan of Distribution			13
Interests of Named Experts and Counsel			14
Legal Matters			14
Experts			14
Where You Can Obtain Additional Information			14
Incorporation by Reference			15