8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934

Date of Report (date of earliest event reported): December 31, 2004

TERREMARK WORLDWIDE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1-12475	84-0873124
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2601 S. Bayshore Drive
Miami, Florida 33133

(Address of principal executive office)

Registrant’s telephone number, including area code (305) 856-3200

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

     See Item 2.01 below.

Item 2.01 Completion of Acquisition or Disposition of Assets.

     On December 31, 2004, Terremark Worldwide, Inc. (“TWW”), through Tecota Services Corp. (“Sub”), one of its wholly owned subsidiaries, completed the acquisition of the 99.16% of the membership interests in Technology Center of the Americas, LLC (“Tecota”) not already owned by Sub (the “Acquisition”) from Tecota’s other members, including LA Ref II Telecom Miami, LLC, LA Ref III Telecom Miami, LLC, LA Parallel II Telecom Miami, LLC, LA Parallel III Telecom Miami, LLC, LA Capital II Telecom Miami, LLC LA Equity III Telecom Miami, LLC, Barrow Street Tecota, LP and MHLP, LLC (f/k/a Calor Development, Ltd) (collectively, the “Sellers”). Tecota is the sole owner of a 750,000 square foot telecommunications building located in Miami, Florida (the “Tecota Building”). Prior to the Acquisition, Sub served as the managing member of Tecota. Sub purchased the remaining membership interests in Tecota from the Sellers for approximately $40 million in cash. Sub also repaid approximately $35 million in mortgage debt on the Tecota Building.

     TWW financed the Acquisition, including the repayment of the $35 million in mortgage debt on the Tecota Building, from multiple sources, including a $49 million senior mortgage loan (the “Senior Loan”) from Citigroup Global Markets Realty Corp (“Citigroup”). The Senior Loan is secured by a first mortgage on the Tecota Building, bears interest at a rate per annum equal to the greater of (a) 6.75% and (b) the sum of LIBOR plus 4.75%, and matures in February 2009. TWW and Tecota are subject to certain covenants and restrictions specified in the Senior Loan, including covenants that restrict TWW’s ability to pay dividends, make certain distributions, pledge certain assets or repay certain indebtedness. In connection with the Senior Loan, TWW issued to Citigroup, for no additional consideration, warrants (the “Citigroup Warrants”) to acquire 5 million shares of TWW common stock, $.001 par value per share (“TWW Common Stock”). The Citigroup Warrants are divided into four equal tranches, each of which expires on December 31, 2011 and are exercisable at $0.68, $0.74, $0.81 and $0.87, respectively. The number of shares for which the Citigroup Warrants are exercisable and the warrant exercise price are subject to adjustment under specified circumstances as set forth in the Citigroup Warrants. TWW granted Citigroup certain registration rights in connection with the Citigroup Warrants and shares of TWW Common Stock issuable upon exercise of such warrants, including the right to have such warrants and shares registered by June 29, 2005.

     TWW also financed the Acquisition, including the repayment of the $35 million in mortgage debt on the Tecota Building, through the sale of (i) $30 million aggregate principal amount of TWW’s Senior Secured Notes due 2009 (the “Notes”), (ii) 3,064,444 shares of TWW Common Stock (the “Common Equity”) and (iii) warrants to acquire 15 million shares of TWW Common Stock (the “Purchaser Warrants”) to three private equity investors, Falcon Mezzanine Partners, LP, Stichting Pensioenfonds Voor De Gezond-Heid Geestelijke En Maatschappelijke Belangen and Stichting Pensioenfonds ABP (collectively, the “Purchasers”). TWW received $30 million for the Notes and approximately $2 million, or $0.6535 per share, for the Common Equity. No additional consideration was received for the issuance of the Purchaser Warrants. The Notes are secured by substantially all of TWW’s and its subsidiaries’ (other than Tecota’s) assets, bear cash interest at a rate per annum of 9.875% and “payment in kind” interest

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at a rate per annum of 3.625% (subject to adjustment as set forth therein) and mature in March 2009. TWW and its subsidiaries are subject to certain covenants and restrictions specified in the purchase agreement with the Purchasers (the “Purchase Agreement”), including covenants that restrict their ability to pay dividends, make certain distributions or investments and incur certain indebtedness. The Purchaser Warrants are divided into four equal tranches, each of which expires on December 30, 2011 and are exercisable at $0.69, $0.75, $0.82 and $0.88, respectively. The number of shares for which the Purchaser Warrants are exercisable and the warrant exercise price are subject to adjustment under specified circumstances as set forth in the Purchaser Warrants. TWW also granted the Purchasers certain registration rights in connection with the Common Equity, Purchaser Warrants, and shares of TWW Common Stock issuable upon exercise of such warrants, including the right to have such warrants and shares registered by June 29, 2005.

     The foregoing summary of the Senior Loan, Citigroup Warrants, Notes, and Purchaser Warrants is not complete and is qualified in its entirety by reference to the agreements, which are attached hereto as Exhibits 10.26 through 10.32 and incorporated herein by reference. A copy of the press release entitled “Terremark Purchases Technology Center of the Americas,” dated as of January 4, 2005, is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 2.03 Creation of Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

     See Item 2.01 above.

Item 3.02 Unregistered Sales of Equity Securities.

     See Item 2.01 above. The Citigroup Warrants, Purchaser Warrants and Common Equity were issued in private placement transactions exempt from registration in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D of the Securities Act.

Item 9.01 Financial Statements and Exhibits

     (a) Financial Statements of Businesses Acquired

     The financial statements required by this Item will be filed by amendment not later than 71 calendar days after the date of this Report on Form 8-K.

     (b) Pro Forma Financial Information

     The financial statements required by this Item will be filed by amendment not later than 71 calendar days after the date of this Report on Form 8-K.

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     (c) Exhibits

Exhibit No.	Document
10.26	Loan Agreement dated as of December 31, 2004, by and among Technology Center of the Americas, LLC, as Borrower, Citigroup Global Markets Realty Corp., as Agent and each Lender signatory thereto.
10.27	Form of Warrant Certificate of Terremark Worldwide, Inc. issued to Citigroup Global Markets Realty Corp.
10.28	Purchase Agreement dated as of December 31, 2004, among Terremark Worldwide, Inc., as Issuer, the guarantors named therein, FMP Agency Services, LLC, as agent, and each of the purchasers named therein.
10.29	Security Agreement dated as of December 31, 2004, by Terremark Worldwide, Inc., as Issuer, the guarantors named therein and FMP Agency Services, LLC, as Agent.
10.30	Registration Rights Agreement dated as of December 31, 2004 among Terremark Worldwide, Inc. and Falcon Mezzanine Partners, LP, Stichting Pensioenfonds ABP and Stichting Pensioenfonds Voor De Gezondheid, Geestelijke En Maatschappelijke Belangen (the “Purchasers”).
10.31	Form of Warrant Certificate of Terremark Worldwide, Inc. issued to the Purchasers.
10.32	Form of Note of Terremark Worldwide, Inc. issued to the Purchasers.
99.1	Press Release dated January 4, 2005

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TERREMARK WORLDWIDE, INC.
Date: January 6, 2005	By:	/s/ Jose Segrera
		Name:	Jose Segrera
		Title:	Chief Financial Officer

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Index to Exhibits

Exhibit No.	Exhibit Title
10.26	Loan Agreement dated as of December 31, 2004, by and among Technology Center of the Americas, LLC, as Borrower, Citigroup Global Markets Realty Corp., as Agent and each Lender signatory thereto.
10.27	Form of Warrant Certificate of Terremark Worldwide, Inc. issued to Citigroup Global Markets Realty Corp.
10.28	Purchase Agreement dated as of December 31, 2004, among Terremark Worldwide, Inc., as Issuer, the guarantors named therein, FMP Agency Services, LLC, as agent, and each of the purchasers named therein.
10.29	Security Agreement dated as of December 31, 2004, by Terremark Worldwide, Inc., as Issuer, the guarantors named therein and FMP Agency Services, LLC, as Agent.
10.30	Registration Rights Agreement dated as of December 31, 2004 among Terremark Worldwide, Inc. and Falcon Mezzanine Partners, LP, Stichting Pensioenfonds ABP and Stichting Pensioenfonds Voor De Gezondheid, Geestelijke En Maatschappelijke Belangen (the “Purchasers”).
10.31	Form of Warrant Certificate of Terremark Worldwide, Inc. issued to the Purchasers.
10.32	Form of Note of Terremark Worldwide, Inc. issued to the Purchasers.
99.1	Press Release dated January 4, 2005

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EX-10.26

                                                                   EXHIBIT 10.26

                                 LOAN AGREEMENT

                          Dated as of December 31, 2004

                                  by and among

                     TECHNOLOGY CENTER OF THE AMERICAS, LLC
                                  as Borrower,

                      CITIGROUP GLOBAL MARKETS REALTY CORP.
                                    as Agent,

                                       and


                          Each Lender Signatory hereto







                                TABLE OF CONTENTS




                                                                                                               Page
                                                                                                               ----
                                                                                                          
ARTICLE I. CERTAIN DEFINITIONS....................................................................................2
         Section 1.1.      Definitions............................................................................2

ARTICLE II. GENERAL TERMS........................................................................................26
         Section 2.1.      The Loan..............................................................................26
         Section 2.2.      Use of Proceeds.......................................................................27
         Section 2.3.      Security for the Loan.................................................................27
         Section 2.4.      Borrower's Note.......................................................................27
         Section 2.5.      Principal and Interest................................................................27
         Section 2.6.      Voluntary Prepayment..................................................................28
         Section 2.7.      Mandatory Prepayment; Capital Events; Certain Transfers...............................28
         Section 2.8.      Application of Payments After Event of Default........................................29
         Section 2.9.      Method and Place of Payment From the Collection Account to Agent......................29
         Section 2.10.     Taxes.................................................................................30
         Section 2.11.     Release of Collateral.................................................................30
         Section 2.12.     Central Cash Management...............................................................31
         Section 2.13.     Reserve Account.......................................................................35
         Section 2.14.     Additional Provisions Relating to the Collection Account and the Reserve
                           Account...............................................................................38
         Section 2.15.     Security Agreement....................................................................39
         Section 2.16.     Mortgage Recording Taxes..............................................................41
         Section 2.17.     General Collateral Agent Provisions...................................................41

ARTICLE III. CONDITIONS PRECEDENT................................................................................44
         Section 3.1.      Conditions Precedent to Closing.......................................................44
         Section 3.2.      Execution and Delivery of Agreement...................................................49

ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................................................................49
         Section 4.1.      Representations and Warranties as to Borrower.........................................49
         Section 4.2.      Representations and Warranties as to the Mortgaged Property...........................55
         Section 4.3.      Survival of Representations...........................................................58

ARTICLE V. AFFIRMATIVE COVENANTS.................................................................................59
         Section 5.1.      Affirmative Covenants.................................................................59

ARTICLE VI. NEGATIVE COVENANTS...................................................................................84
         Section 6.1.      Negative Covenants....................................................................84

ARTICLE VII. EVENT OF DEFAULT....................................................................................87
         Section 7.1.      Event of Default......................................................................87
         Section 7.2.      Remedies..............................................................................89
         Section 7.3.      Remedies Cumulative...................................................................90




                                       i




                                                                                                               Page
                                                                                                               ----
                                                                                                          
         Section 7.4.      Default Administration Fee............................................................90
         Section 7.5.      Curative Advances.....................................................................90

ARTICLE VIII. MISCELLANEOUS......................................................................................91
         Section 8.1.      Survival..............................................................................91
         Section 8.2.      Agent's Discretion....................................................................91
         Section 8.3.      Governing Law.........................................................................91
         Section 8.4.      Modification, Waiver in Writing.......................................................92
         Section 8.5.      Delay Not a Waiver....................................................................92
         Section 8.6.      Notices...............................................................................92
         Section 8.7.      TRIAL BY JURY.........................................................................93
         Section 8.8.      Headings..............................................................................93
         Section 8.9.      Assignment............................................................................93
         Section 8.10.     Severability..........................................................................93
         Section 8.11.     Preferences...........................................................................94
         Section 8.12.     Waiver of Notice......................................................................94
         Section 8.13.     Failure to Consent....................................................................94
         Section 8.14.     Schedules Incorporated................................................................94
         Section 8.15.     Offsets, Counterclaims and Defenses...................................................94
         Section 8.16.     No Joint Venture or Partnership.......................................................95
         Section 8.17.     Waiver of Marshalling of Assets Defense...............................................95
         Section 8.18.     Waiver of Counterclaim................................................................95
         Section 8.19.     Conflict; Construction of Documents...................................................95
         Section 8.20.     Brokers and Financial Advisors........................................................95
         Section 8.21.     Counterparts..........................................................................95
         Section 8.22.     Estoppel Certificates.................................................................96
         Section 8.23.     Payment of Expenses...................................................................96
         Section 8.24.     Non-Recourse..........................................................................96

ARTICLE IX. THE AGENT............................................................................................99
         Section 9.1.      Appointment, Powers and Immunities....................................................99
         Section 9.2.      Reliance by Agent.....................................................................99
         Section 9.3.      Defaults..............................................................................99
         Section 9.4.      Rights as a Lender...................................................................100
         Section 9.5.      Indemnification......................................................................100
         Section 9.6.      Non-Reliance on Agent and Other Lenders..............................................100
         Section 9.7.      Failure to Act.......................................................................101
         Section 9.8.      Resignation of Agent.................................................................101
         Section 9.9.      Agency Fee...........................................................................101
         Section 9.10.     Consents under Loan Documents........................................................101
         Section 9.11.     Notices, Reports and Other Communications............................................101



SCHEDULES
1              -      Principal Payment Amounts
2              -      Capitalization


                                       ii



                                 LOAN AGREEMENT

                  THIS LOAN AGREEMENT, made as of December 31, 2004, is by and
among Technology Center of the Americas, LLC, a Delaware limited liability
company, having an address at c/o Terremark Worldwide, Inc., 2601 South Bayshore
Drive, 9th Floor, Miami, Florida 33133 ("BORROWER"); each of the financial
institutions signatory hereto that is identified as a "Lender" on the signature
pages hereto or that, pursuant to SECTION 8.9 hereof, shall become a "Lender"
hereunder (individually, a "LENDER", and collectively, the "LENDERS"); and
CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation, having an address
at 388 Greenwich Street, 11th Floor, New York, New York 10013 as agent for the
Lenders (in such capacity together with its successors in such capacity, the
"AGENT").

                                    RECITALS

                  WHEREAS, Borrower desires to obtain from the Lender the Loan
in an amount equal to the Loan Amount (each as hereinafter defined);

                  WHEREAS, Lender has agreed to acquire the Existing Note and
the Existing Mortgage by assignment from the Existing Lender, and to make an
advance to Borrower in the amount necessary to make the total principal amount
outstanding on the date hereof equal to the Loan Amount (as hereinafter
defined);

                  WHEREAS, Borrower desires to use the advance to be obtained
from Lender to make a distribution to its sole member so that its sole member
can purchase the membership interests in the Borrower, which owns the Mortgaged
Property (as hereinafter defined), not owned by Terremark Worldwide, Inc. or its
subsidiaries on the Closing Date and to pay certain other fees and expenses;

                  WHEREAS, the Lender is unwilling to acquire the Existing Note
and the Existing Mortgage and to make such advance unless Borrower amends and
restates the Existing Note and the Existing Mortgage in the form of the Note and
the Mortgage and joins in the execution and delivery of this Agreement and the
other Loan Documents (each as hereinafter defined) to which it is a party which
shall establish the terms and conditions of, and provide security for, the Loan;

                  WHEREAS, Borrower has agreed to establish certain accounts and
to grant to the Agent on behalf of, and for the benefit of, the Lenders, a
security interest therein upon the terms and conditions of the security
agreement set forth in SECTION 2.15;

                  WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, the Guarantor has agreed to sell to the initial Lender,
and the initial Lender has agreed to purchase from the Guarantor, 5 million
stock purchase warrants (the "WARRANTS") evidencing rights to purchase initially
5 million shares of the Guarantor's Common Stock, $.001 par value per share (the
"COMMON STOCK"); and

                  WHEREAS, the holders of Warrants from time to time will be
entitled to the benefits of the Registration Rights Agreement.






                  NOW, THEREFORE, in consideration of the acquisition of the
Existing Note and the Existing Mortgage and the making of the advance described
above by the Lenders and for other good and valuable consideration, the mutual
receipt and legal sufficiency of which are hereby acknowledged, the parties
hereby covenant, agree, represent and warrant as follows:

                                   ARTICLE I.
                               CERTAIN DEFINITIONS

                  Section 1.1. DEFINITIONS. For all purposes of this Agreement:
(1) the capitalized terms defined in this Article 1 have the meanings assigned
to them in this ARTICLE 1 and include the plural as well as the singular; (2)
all accounting terms have the meanings assigned to them in accordance with GAAP
(as hereinafter defined); (3) the words "herein", "hereof", and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, or other subdivision; and (4) the following terms
have the following meanings:

                  "ACCEPTED PRACTICES" means such customary practices as
commercial mortgage collateral agents or banks would follow in the normal course
of their business in performing administrative and custodial duties with respect
to collateral which is generally similar to the Account Collateral; PROVIDED,
HOWEVER, that "ACCEPTED PRACTICES" shall not be deemed to include any custodial
practices now followed by Collateral Agent for any such collateral held for its
own account to the extent that such practices are more stringent than the
practices followed by commercial mortgage collateral agents or banks generally.

                  "ACCOUNT COLLATERAL" has the meaning set forth in SECTION
2.15(A) hereof.

                  "ACCOUNTS" means all accounts (as defined in the relevant
UCC), now owned or hereafter acquired by Borrower, and arising out of or in
connection with, the operation of the Mortgaged Property and all other accounts
described in the Management Agreement and all present and future accounts
receivable, inventory accounts, chattel paper, notes, insurance policies,
Instruments, Documents or other rights to payment and all forms of obligations
owing at any time to Borrower thereunder, whether now existing or hereafter
created or otherwise acquired by or on behalf of Borrower, and all Proceeds
thereof and all liens, security interests, guaranties, remedies, privileges and
other rights pertaining thereto, and all rights and remedies of any kind forming
the subject matter of any of the foregoing.

                  "AFFILIATE" of any specified Person means any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise; and the
terms "controlling" and "controlled" have the meanings correlative to the
foregoing.

                  "AFFILIATE LEASES" has the meaning provided in Section
5.1(z)(ii).

                  "AGENT" has the meaning provided in the first paragraph of
this Agreement.



                                       2


                  "AGREEMENT" means this Loan Agreement, together with the
Schedules hereto, as the same may from time to time hereafter be modified,
supplemented or amended.

                  "APPLICATION DEPOSIT" means $50,000.

                  "APPLICATION LETTER" means the letter dated November 23, 2004,
as modified on December 6, 2004, between Terremark Worldwide, Inc. and the
initial Lender.

                  "APPRAISAL" means an appraisal with respect to the Mortgaged
Property prepared by an Appraiser in accordance with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Foundation, in compliance with
the requirements of Title 11 of the Financial Institution Reform, Recovery and
Enforcement Act and utilizing customary valuation methods such as the income,
sales/market or cost approaches.

                  "APPRAISER" means a nationally recognized MAI appraiser
selected by Borrower and reasonably approved by the Agent.

                  "ASSIGNMENT OF RENTS AND LEASES" means, with respect to the
Mortgaged Property, an Assignment of Rents and Leases, dated as of the Closing
Date, granted by Borrower to Agent for the benefit of the Lenders with respect
to the Leases, as same may thereafter from time to time be supplemented,
amended, modified or extended by one or more agreements supplemental thereto.

                  "BASIC CARRYING COSTS" means the following costs with respect
to the Mortgaged Property: (i) Impositions and (ii) insurance premiums for
policies of insurance required to be maintained by Borrower pursuant to this
Agreement or the other Loan Documents.

                  "BOARD OF DIRECTORS" means the Board of Directors of the
Guarantor or any authorized committee of such Board of Directors.

                  "BORROWER" has the meaning provided in the first paragraph of
this Agreement.

                  "BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which commercial banks in the State of New York or Illinois are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, "BUSINESS DAY"
shall mean any day other than a Saturday, a Sunday or a day on which banks in
London, England are closed for interbank or foreign exchange transactions.

                  "CAPITAL EVENT" means any transfer, sale, assignment,
conveyance, liquidation, disposition (other than a Taking) or refinancing of the
Mortgaged Property and "CAPITAL EVENTS" shall have a meaning correlative to the
foregoing.

                  "CAPITAL EVENT PROCEEDS" means any cash proceeds of a Capital
Event received by the Borrower net of any cash prorations, adjustments, taxes
and credits with respect to such Capital Event and net of reasonable third-party
expenses paid in connection with such Capital Event.



                                       3


                  "CAPITAL AND LEASING COSTS ACCOUNT" has the meaning set forth
in SECTION 2.13(A) hereof.

                  "CAPITAL IMPROVEMENT COSTS" means costs incurred or to be
incurred in connection with replacements and capital repairs made to the
Mortgaged Property (including without limitation, TI Costs and Leasing
Commissions).

                  "CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person, (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person, and (iii) any rights, warrants or options
exchangeable for or convertible into any of the foregoing.

                  "CGMI" means Citigroup Global Markets Inc. and its successors
in interest.

                  "CHANGE OF CONTROL" means the occurrence of either of the
following events: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of 33-1/3% or more of the total voting or
economic power of the Voting Stock of the Guarantor; or (ii) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Guarantor (together with any new
directors whose election to such board or whose nomination for election by the
stockholders of the Guarantor was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of such Board of Directors then in
office.

                  "CHATTEL PAPER" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under all "chattel
paper" as defined in the UCC (whether tangible chattel paper or electronic
chattel paper).

                  "CLOSING DATE" means the date of the funding of the Loan.

                  "CODE" means the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant
thereto in temporary or final form.

                  "COLLATERAL" means, collectively, the Land, Improvements,
Leases, Rents, Personalty, and all Proceeds, and (to the full extent assignable)
Permits, which is or hereafter may become subject to a Lien in favor of the
Agent on behalf of the Lenders as security for the Loan (whether pursuant to the
Mortgage, any other Loan Document or otherwise), all whether now owned or
hereafter acquired and all other property which is or hereafter may become
subject to a Lien in favor of the Agent on behalf of the Lenders as security for
the Loan and including all property of any kind described as part of the
Mortgaged Property under the Mortgage.



                                       4


                  "COLLATERAL AGENT" means LaSalle Bank National Bank
Association, a national banking association (or any successor thereto designated
by the Agent), in its capacities as a "bank" (as defined in Section 9-102(a)(8)
of the UCC), as a "securities intermediary" (as defined in Section 8-102(a)(14)
of the UCC) and as collateral agent for the Lenders.

                  "COLLATERAL ASSIGNMENT OF HEDGE" means the Collateral
Assignment of Hedge, dated as of the applicable date and executed by Borrower,
the Agent and the hedge counterparty.

                  "COLLATERAL SECURITIZATION" has the meaning provided in
SECTION 6.1(R).

                  "COLLATERAL SECURITY INSTRUMENT" means any right, document or
instrument, other than the Mortgage, given as security for the Loan, including,
without limitation, the Collateral Assignment of Hedge and the Contract
Assignment.

                  "COLLECTION ACCOUNT" has the meaning set forth in Section
2.12(A) hereof.

                  "COLLECTION PERIOD" means, with respect to any Payment Date,
the period commencing on and including the eleventh (11th) day in the month
preceding the month in which such Payment Date occurs through and including the
tenth (10th) day in the month in which such Payment Date occurs; provided,
however, that in the case of the first Payment Date, the "COLLECTION PERIOD"
shall commence on the Closing Date.

                  "COMMITMENT" means the commitment dated December 6, 2004,
entered into by Terremark Worldwide, Inc. and the initial Lender with respect to
the Loan.

                  "COMMITMENT FEE" means $490,000.

                  "COMMON STOCK" has the meaning specified in the recitals to
this Agreement.

                  "CONDEMNATION PROCEEDS" means, in the event of a Taking with
respect to the Mortgaged Property, the proceeds in respect of such Taking less
any reasonable third party out-of-pocket expenses incurred in collecting such
proceeds.

                  "CONSUMER PRICE INDEX" means the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, in the area where the Mortgaged Property is located; All
Items (1982-84 = 100), or any successor index thereto, appropriately adjusted
and if the Consumer Price Index ceases to be published and there is no successor
thereto, such other index as Agent and Borrower shall mutually agree upon.

                  "CONTINGENT OBLIGATION" means, as used in the definition of
Other Borrowings, without duplication, any obligation of Borrower guaranteeing
any indebtedness, leases, dividends or other obligations ("PRIMARY OBLIGATIONS")
of any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly. Without limiting the generality of the foregoing, the term
"CONTINGENT OBLIGATION" shall include any obligation of Borrower:

                  (i) to purchase any such primary obligation or any property
         constituting direct or indirect security therefor;



                                       5


                  (ii) to advance or supply funds (x) for the purchase or
         payment of any such primary obligation or (y) to maintain working
         capital or equity capital of the primary obligor;

                  (iii) to purchase property, securities or services primarily
         for the purpose of assuring the owner of any such primary obligation of
         the ability of the primary obligor to make payment of such primary
         obligation; or

                  (iv) otherwise to assure or hold harmless the holder of such
         primary obligation against loss in respect thereof.

The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming Borrower
is required to perform thereunder) as determined by Agent in good faith.

                  "CONTRACT ASSIGNMENT" means, with respect to the Mortgaged
Property, the Assignment of Contracts, Licenses, Permits, Agreements, Warranties
and Approvals, dated as of the Closing Date and executed by Borrower.

                  "CONTRACTS" means the Management Agreement and all other
agreements to which Borrower is a party or which are assigned to Borrower by the
Manager in the Management Agreement and which are executed in connection with
the construction, operation and management of the Mortgaged Property (including,
without limitation, agreements for the sale, lease or exchange of goods or other
property and/or the performance of services by it, in each case whether now in
existence or hereafter arising or acquired) as any such agreements have been or
may be from time to time amended, supplemented or otherwise modified.

                  "DEFAULT" means the occurrence of any event which, but for the
giving of notice or the passage of time, or both, would be an Event of Default.

                  "DEFAULT ADMINISTRATION FEE" means an amount equal to the
product of (x) 1% and (y) the Principal Indebtedness as of the date the Default
Administration Fee becomes payable.

                  "DEFAULT RATE" means the per annum interest rate equal to the
lesser of (a) 5.0% per annum in excess of the rate otherwise applicable
hereunder and (b) the maximum rate allowable by applicable law.

                  "DEFICIENT AMOUNT" has the meaning set forth in SECTION
5.1(X)(IV)(B).

                  "DEPOSIT ACCOUNT" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under all "deposit
accounts" as defined in the UCC.

                  "DOCUMENTS" means all of Borrower's right, title and interest,
whether now owned or hereafter acquired, in, to and under all "documents" as
defined in the UCC (whether negotiable or non-negotiable) or other receipts
covering, evidencing or representing goods.



                                       6


                  "ELIGIBLE ACCOUNT" means a separate and identifiable account
from all other funds held by the holding institution that is: (i) an account
maintained with a federal or state chartered depository institution or trust
company whose (1) commercial paper, short-term debt obligations or other
short-term deposits are rated by the Rating Agencies not less than "A-1"(or the
equivalent), if the deposits are to be held in the account for thirty (30) days
or less or (2) long-term unsecured debt obligations are rated at least "AA-" (or
the equivalent), if the deposits are to be held in the account more than thirty
(30) days or (ii) a segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company subject to regulations regarding fiduciary funds on deposit similar to
Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either
case, has corporate trust powers, acting in its fiduciary capacity. An Eligible
Account shall not be evidenced by a certificate of deposit, passbook, other
instrument or any other physical indicia of ownership. Following a downgrade,
withdrawal, qualification or suspension of such institution's rating, each
account must promptly (and in any case within not more than thirty (30) calendar
days) be moved to a qualifying institution or to one or more segregated trust
accounts in the trust department of such institution, if permitted.

                  "ENGINEER" means an Independent Engineer selected by Borrower
and reasonably approved by Agent.

                  "ENGINEERING REPORT" means the structural engineering reports
with respect to the Mortgaged Property prepared by an Engineer and delivered to
Agent in connection with the Loan and any amendments or supplements thereto
delivered to Agent.

                  "ENVIRONMENTAL AUDITOR" means an Independent environmental
auditor selected by Borrower and reasonably approved by Agent.

                  "ENVIRONMENTAL CLAIM" means any notice, notification, request
for information, claim, administrative, regulatory or judicial action, suit,
judgment, demand or other written communication (whether written or oral) by any
Person or Governmental Authority alleging or asserting liability with respect to
Borrower or the Mortgaged Property (whether for damages, contribution,
indemnification, cost recovery, compensation, injunctive relief, investigatory,
response, remedial or cleanup costs, damages to natural resources, personal
injuries, fines or penalties) arising out of, based on or resulting from (i) the
presence, Use or Release into the environment of any Hazardous Substance at any
location (whether or not owned, managed or operated by Borrower) that affects
Borrower or the Mortgaged Property, (ii) any fact, circumstance, condition or
occurrence forming the basis of any violation, or alleged violation, of any
Environmental Law or (iii) any alleged injury or threat of injury to human
health, safety or the environment.

                  "ENVIRONMENTAL INDEMNITY AGREEMENT" means the Environmental
Indemnity Agreement dated as of the Closing Date, from Borrower and the
Guarantor, as indemnitor, to the Lenders, Agent and Collateral Agent, as
indemnitees.

                  "ENVIRONMENTAL LAWS" means any and all present and future
federal, state or local laws, statutes, ordinances, rules or regulations, or any
judicial interpretation thereof, any judicial or administrative orders, decrees
or judgments thereunder issued by a Governmental Authority,



                                       7


and any permits, approvals, licenses, registrations, filings and authorizations,
in each case as now or hereafter in effect, relating to the environment, human
health or safety, or the Release or threatened Release of Hazardous Substances
or otherwise relating to the Use of Hazardous Substances.

                  "ENVIRONMENTAL REPORTS" means a "Phase I Environmental Site
Assessment" (and, if such Phase I Environmental Site Assessment identifies any
recognized environmental conditions requiring further investigation, a "Phase II
Environment Site Assessment" with respect to such recognized environmental
conditions) as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-2000 and an asbestos survey, with
respect to the Mortgaged Property, prepared by an Environmental Auditor and
delivered to Agent and any amendments or supplements thereto delivered to Agent.

                  "EO13224" has the meaning set forth in SECTION 4.1(V) hereof.

                  "EQUIPMENT" means all of Borrower's right, title and interest,
whether now owned or hereafter acquired, in, to and under (i) all "equipment" as
defined in the UCC, and (ii) all of the following (regardless of how classified
under the UCC): all building materials, construction materials, personal
property constituting furniture, fittings, appliances, apparatus, leasehold
improvements, machinery, devices, interior improvements, appurtenances,
equipment, plant, furnishings, fixtures, computers, electronic data processing
equipment, telecommunications equipment and other fixed assets now owned or
hereafter acquired by Borrower, and all Proceeds of (i) and (ii) and as well as
all additions to, substitutions for, replacements of or accessions to any of the
items recited as aforesaid and all attachments, components, parts (including
spare parts) and accessories, whether installed thereon or affixed thereto, all
regardless of whether the same are located on such Mortgaged Property or are
located elsewhere (including, without limitation, in warehouses or other storage
facilities or in the possession of or on the premises of a bailee, vendor or
manufacturer) for purposes of manufacture, storage, fabrication or
transportation and all extensions and replacements to, and proceeds of, any of
the foregoing.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.
Section references to ERISA are to ERISA, as in effect at the date of this
Agreement and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

                  "ERISA AFFILIATE" means any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which Borrower is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which Borrower is
a member.

                  "EVENT OF DEFAULT" has the meaning set forth in SECTION 7.1
hereof.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.



                                       8


                  "EXISTING LENDER" means Ocean Bank, a Florida banking
corporation.

                  "EXISTING MORTGAGE" means the Amended and Restated Mortgage
and Security Agreement, Assignment of Leases and Rents and Fixture Filings given
by Borrower to Existing Lender dated as of November 7, 2000, as amended.

                  "EXISTING NOTE" means the Amended and Restated Promissory Note
dated November 7, 2000 in the stated principal amount of $60,675,000.00 by
Borrower in favor of Existing Lender, as modified by letter dated November 17,
2000 from Borrower in favor of Existing Lender, as further amended and restated
by the Amended and Restated Promissory Note dated November 4, 2003 in the stated
principal amount of $35,401,566.82 from Borrower in favor of Existing Lender.

                  "EXISTING PREFERRED STOCK" means the Borrower's Series G
Convertible Preferred Stock, Series H Convertible Preferred Stock and Series I
Convertible Preferred Stock.

                  "EXPENSE DEPOSIT" means $50,000.

                  "FEE LETTER" means the letter dated the date hereof entered
into between Borrower and the Collateral Agent, with respect to the fees of the
Collateral Agent under this Agreement.

                  "FISCAL YEAR" means the 12-month period ending on March 31st
of each year (or, in the case of the first fiscal year, such shorter period from
the Closing Date through such date) or such other fiscal year of Borrower as
Borrower may select from time to time with the prior consent of Agent.

                  "FUND" has the meaning set forth in the definition of
"Permitted Investments".

                  "GAAP" means generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.

                  "GENERAL INTANGIBLES" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under (i) all
"general intangibles" as defined in the relevant UCC, now owned or hereafter
acquired by Borrower and (ii) all of the following (regardless of how
characterized): all agreements, covenants, restrictions or encumbrances
affecting the Mortgaged Property or any part thereof.

                  "GOVERNMENTAL AUTHORITY" means any national or federal
government, any state, regional, local or other political subdivision thereof
with jurisdiction and any Person with jurisdiction exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

                  "GROSS REVENUE" means, for any period, the total dollar amount
of all income and receipts received by, or for the account of, Borrower in the
ordinary course of business with respect to the Mortgaged Property, but
excluding Loss Proceeds (other than the proceeds of business interruption
insurance or the proceeds of a temporary Taking in lieu of Rents).

                  "GUARANTOR" means Terremark Worldwide, Inc., a Delaware
corporation.



                                       9


                  "GUARANTY OF NONRECOURSE OBLIGATIONS" means, with respect to
the Loan, the Guaranty of Nonrecourse Obligations guaranteeing the exceptions to
the nonrecourse provisions of the Loan Documents for which liability is retained
as described in Section 8.24 hereof from the Guarantor to the Agent for the
benefit of the Lenders.

                  "HAZARDOUS SUBSTANCE" means, collectively, (i) any petroleum
or petroleum products or waste oils, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBS"),
lead in drinking water, lead-based paint and radon, (ii) any chemicals or other
materials or substances which are now or hereafter become defined as or included
in the definitions of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (iii) any other chemical or any
other hazardous material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.

                  "IMPOSITIONS" means all taxes (including, without limitation,
all real estate, ad valorem, sales (including those imposed on lease rentals),
use, single business, gross receipts, value added, intangible transaction
privilege, privilege or license or similar taxes), assessments (including,
without limitation, all assessments for public improvements or benefits, whether
or not commenced or completed within the term of the Loan), ground rents, water,
sewer or other rents and charges, excises, levies, governmental fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, in respect of the
Mortgaged Property (including all interest and penalties thereon), accruing
during or in respect of the term hereof and which may be assessed against or
imposed on or in respect of or be a Lien upon (1) Borrower (including, without
limitation, all income, franchise, single business or other taxes imposed on
Borrower for the privilege of doing business in the jurisdiction in which the
Mortgaged Property, or any other collateral delivered or pledged to Agent in
connection with the Loan, is located) or Lenders, or (2) the Mortgaged Property,
or any other collateral delivered or pledged to Lenders in connection with the
Loan, or any part thereof or any Rents therefrom or any estate, right, title or
interest therein, or (3) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with the Mortgaged
Property or the leasing or use of the Mortgaged Property or any part thereof, or
the acquisition or financing of the acquisition of the Mortgaged Property by
Borrower.

                  "IMPROVEMENTS" means all buildings, structures, fixtures and
improvements now or hereafter owned by Borrower of every nature whatsoever
situated on any Land constituting part of the Mortgaged Property (including,
without limitation, all gas and electric fixtures, radiators, heaters, engines
and machinery, boilers, ranges, elevators and motors, plumbing and heating
fixtures, carpeting and other floor coverings, water heaters, awnings and storm
sashes, and cleaning apparatus which are or shall be affixed to the Land or said
buildings, structures or improvements and including any additions, enlargements,
extensions, modifications, repairs or replacements thereto).

                  "INDEBTEDNESS" means the Principal Indebtedness, together with
all other obligations and liabilities due or to become due to the Lenders
pursuant hereto, under the Note or



                                       10


in accordance with any of the other Loan Documents, and all other amounts, sums
and expenses paid by or payable to the Lenders hereunder or pursuant to the Note
or any of the other Loan Documents.

                  "INDEMNIFIED PARTIES" has the meaning set forth in SECTION
5.1(I).

                  "INDEPENDENT" means, when used with respect to any Person, a
Person that (i) does not have any direct financial interest or any material
indirect financial interest in Borrower or in any Affiliate of Borrower, and
(ii) is not connected with Borrower or any Affiliate of Borrower as an officer,
employee, trustee, partner, director or person performing similar functions.

                  "INDEX MATURITY" has the meaning set forth in the definition
of LIBOR.

                  "INSTRUMENTS" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under all
"instruments" as defined in the UCC.

                  "INSURANCE ESCROW ACCOUNT" has the meaning set forth in
SECTION 2.13(B).

                  "INSURANCE PREMIUMS" has the meaning set forth in SECTION
5.1(X)(III).

                  "INSURANCE PROCEEDS" means, in the event of a casualty with
respect to the Mortgaged Property, the proceeds received under any insurance
policy applicable thereto less any reasonable third party out-of-pocket expenses
incurred in collecting such proceeds.

                  "INSURANCE REQUIREMENTS" means all material terms of any
insurance policy required pursuant to this Agreement or the Mortgage and all
material regulations, rules and other requirements of the National Board of Fire
Underwriters or such other body exercising similar functions applicable to or
affecting the Mortgaged Property or any part thereof or any use or condition
thereof.

                  "INSURED CASUALTY" has the meaning set forth in SECTION
5.1(X)(IV)(B).

                  "INTELLECTUAL PROPERTY" means all of Borrower's right, title
and interest, whether now owned or hereafter acquired, in, to and under the
trademark licenses, trademarks, rights in intellectual property, trade names,
service marks and copyrights, copyright licenses, patents, patent licenses or
the license to use intellectual property such as computer software owned or
licensed by Borrower or other proprietary business information relating to
Borrower's policies, procedures, manuals and trade secrets.

                  "INTEREST ACCRUAL PERIOD" means, in connection with the
calculation of interest accrued with respect to any Payment Date, the period
commencing on and including the eleventh (11th) day in the month preceding the
month in which such Payment Date occurs through and including the tenth (10th)
day in the month in which such Payment Date occurs; PROVIDED, HOWEVER, that the
first Interest Accrual Period for the Loan shall commence on the Closing Date.

                  "INTEREST DETERMINATION DATE" means, in connection with the
calculation of interest to accrue for any Interest Accrual Period, the second
Business Day preceding the



                                       11


fifteenth (15th) day of the month in which such Interest Accrual Period
commences; PROVIDED, HOWEVER, that the first Interest Determination Date for the
Loan shall be the second Business Day preceding the Closing Date.

                  "INVENTORY" means all of Borrower's right, title and interest,
whether now owned or hereafter acquired, in, to and under all "inventory" as
defined in the UCC and shall include all Documents representing the same.

                  "INVESTMENT PROPERTY" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under all
"investment property" as defined in the UCC.

                  "LAND" has the meaning provided in the Mortgage.

                  "LEASES" means all leases, subleases, lettings, occupancy
agreements, tenancies and licenses by Borrower as landlord of the Mortgaged
Property or any part thereof now or hereafter entered into, and all amendments,
extensions, renewals and guarantees thereof, and all security therefor.

                  "LEASING COMMISSIONS" means leasing commissions incurred by
Borrower in connection with leasing the Mortgaged Property or any portion
thereof (including renewals of existing Leases).

                  "LEGAL REQUIREMENTS" means all governmental statutes, laws,
rules, orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including, without limitation, Environmental Laws)
affecting Borrower or the Mortgaged Property or any part thereof or the
construction, use, alteration or operation thereof, or any part thereof (whether
now or hereafter enacted and in force), and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, at any time in force
affecting the Mortgaged Property or any part thereof (including, without
limitation, any which may (i) require repairs, modifications or alterations in
or to the Mortgaged Property or any part thereof, or (ii) in any way limit the
use and enjoyment thereof).

                  "LENDER" has the meaning provided in the first paragraph of
this Agreement.

                  "LETTER OF CREDIT RIGHTS" means all of Borrower's right, title
and interest, whether now owned or hereafter acquired, in, to and under all
"letter of credit rights" as defined in the UCC.

                  "LIBOR" means the rate per annum calculated as set forth
below:

                  (i) On each Interest Determination Date, LIBOR will be
         determined on the basis of the offered rate for deposits of not less
         than U.S. $1,000,000 for a period of one month (the "INDEX Maturity"),
         commencing on such Interest Determination Date, which appears on Dow
         Jones Market Service (formerly Telerate) Page 3750 as of 11:00 a.m.,
         London time (or such other page as may replace the Dow Jones Market
         Service (formerly Telerate) Page on that service for the purposes of
         displaying London interbank offered



                                       12


         rates of major banks). If no such offered rate appears, LIBOR with
         respect to the relevant Interest Accrual Period will be determined as
         described in (ii) below.

                  (ii) With respect to an Interest Determination Date on which
         no such offered rate appears on Dow Jones Market Service (formerly
         Telerate) Page 3750 as described in (i) above, LIBOR shall be the
         arithmetic mean, expressed as a percentage, of the offered rates for
         deposits in U.S. dollars for the Index Maturity which appears on the
         Reuters Screen LIBO Page as of 11:00 a.m., London time, on such date.
         If, in turn, such rate is not displayed on the Reuters Screen LIBO Page
         at such time, then LIBOR for such date will be obtained from the
         preceding Business Day for which the Reuters Screen LIBO Page displayed
         a rate for the Index Maturity.

                  (iii) If on any Interest Determination Date, Agent is required
         but unable to determine LIBOR in the manner provided in paragraphs (i)
         and (ii) above, LIBOR for the next Interest Accrual Period shall be
         determined from such financial reporting service as Agent shall
         reasonably determine and use with respect to its other loan facilities
         on which interest is determined based on LIBOR.

All percentages resulting from any calculations of LIBOR referred to in this
Agreement will be carried out to five decimal places and all U.S. dollar amounts
used in or resulting from such calculations will be rounded upwards to the
nearest cent.

                  "LIEN" means any mortgage, deed of trust, lien (statutory or
other), pledge, hypothecation, assignment, security interest, or any other
encumbrance or charge on or affecting Borrower or the Mortgaged Property or any
portion thereof, or any interest therein (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and mechanic's,
materialmen's and other similar liens and encumbrances).

                  "LOAN" means the loan made by Agent to Borrower pursuant to
the terms of this Agreement.

                  "LOAN AMOUNT" means an amount equal to $49,000,000.

                  "LOAN DOCUMENTS" means this Agreement, the Note, the Contract
Assignment, the Management Agreement, the Manager's Subordination, the Mortgage,
the Assignment of Rents and Leases, the Environmental Indemnity Agreement, the
Guaranty of Non-Recourse Obligations, the Collateral Assignment of Hedge, the
Warrants, the Registration Rights Agreement, and all other agreements,
instruments, certificates and documents delivered by or on behalf of Borrower or
an Affiliate of Borrower to evidence or secure the Loan as same may be amended
or modified from time to time.

                  "LOCAL DEPOSIT ACCOUNT" has the meaning set forth in Section
2.12(a)(i).

                  "LOCAL DEPOSIT ACCOUNT BANK" has the meaning set forth in
Section 2.12(a)(i).

                  "LOSS PROCEEDS" means Condemnation Proceeds and/or Insurance
Proceeds.



                                       13


                  "LOSSES" has the meaning set forth in Section 5.1(j).

                  "MANAGEMENT AGREEMENT" means with respect to the Mortgaged
Property, the Management and Leasing Agreement entered into between Borrower and
the Manager, or in such other form as may be reasonably approved by the Agent,
as such agreement may be amended, modified or supplemented and in effect from
time to time.

                  "MANAGER" means Terremark Realty, Inc., a Delaware
corporation.

                  "MANAGER'S SUBORDINATION" means, with respect to the Mortgaged
Property, the Manager's Consent and Subordination of Management Agreement,
executed by the Manager, Borrower and the Agent, dated as of the Closing Date.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the business operations, properties, assets or condition (financial or
otherwise) of Borrower, (ii) the ability of Borrower to perform, or of Agent to
enforce, any of the Loan Documents or (iii) the aggregate value of the Mortgaged
Property.

                  "MATURITY DATE" means the earlier of (a) the Payment Date in
February 2009, or (b) such earlier date on which the entire Loan is required to
be paid in full, by acceleration or otherwise under this Agreement or any of the
other Loan Documents.

                  "MONEY" means all of Borrower's right, title and interest,
whether now owned or hereafter acquired, in, to and under (i) all "money" as
defined in the UCC and (ii) all moneys, cash, or other items of legal tender
generated from the use or operation of the Mortgaged Property.

                  "MONTHLY STATEMENT" has the meaning provided in SECTION
2.12(D).

                  "MORTGAGE" means, with respect to the Mortgaged Property, a
first priority Amended and Restated Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated as of the Closing Date, granted by
Borrower to or for the benefit of Agent with respect to the Mortgaged Property
as security for the Loan, as same may thereafter from time to time be
supplemented, amended, modified or extended by one or more agreements
supplemental thereto.
                  "MORTGAGED PROPERTY" means, at any time, the Land, the
Improvements, the Personalty, the Leases and the Rents, and all rights, titles,
interests and estates appurtenant thereto, encumbered by, and more particularly
described in, the Mortgage.

                  "MULTIEMPLOYER PLAN" means a multiemployer plan defined as
such in Section 3(37) of ERISA and which is covered by Title IV of ERISA (i) to
which contributions have been, or were required to have been made by Borrower or
any ERISA Affiliate or (ii) with respect to which Borrower could reasonably be
expected to incur liability.

                  "NAP" means NAP of the Americas, Inc.

                  "NAP COLOCATION AGREEMENT" has the meaning provided in SECTION
2.12(A).



                                       14


                  "NAP LEASES" means, collectively, (i) that certain Technology
Center of the Americas@Miami Amended and Restated Lease Agreement - Standard
Provisions, with attached rider, between Borrower, as landlord, and NAP, as
tenant, dated as of June 1, 2003, with respect to the second floor of the
Improvements, and (ii) that certain Technology Center of the Americas@Miami
Lease Agreement, with attached rider, between Borrower, as landlord, and NAP, as
tenant, dated as of June 1, 2003, with respect to the third floor of the
Improvements, each as amended and in effect from time to time.

                  "NAP OBLIGOR" has the meaning provided in SECTION 2.12(A).

                  "NEGATIVE FINANCIAL COVENANTS" means the covenant that shall
be deemed to have been breached automatically (and without any additional action
required to be taken by the Agent) if any of the following shall occur during
the term of the Loan:

                  (i) Terremark Worldwide, Inc. shall make any cash
         distributions or otherwise pay any cash dividends in respect of its
         capital or common stock (other than with respect to the Existing
         Preferred Stock);

                  (ii) Terremark Worldwide, Inc. shall make any principal
         repayments of its outstanding debt (including, without limitation, its
         convertible debt or its Subordinate Loan), other than such monthly or
         quarterly principal repayments which are contractual obligations;

                  (iii) Terremark Worldwide, Inc. shall pledge any of its
         existing cash balances as of the Closing Date (such cash balances being
         not less than $14,500,000) or the Collateral as collateral security for
         another loan (other than the Subordinate Loan or the permitted
         indebtedness under the Subordinate Loan with respect to the accounts of
         Terremark Worldwide, Inc.(i) at Banco Pastor in an aggregate amount not
         to exceed (Euro)1.75 million plus interest which secure the lease
         obligations of the real estate space used by, and an existing loan of,
         NAP de las Americas - Madrid S.A and (ii) at Ocean Bank in an aggregate
         amount not to exceed $750,000 plus accrued interest to secure the lease
         obligations of the real estate space used by Nap of the Americas/West,
         Inc.) without the Agent's prior approval; or

                  (iv) Terremark Worldwide, Inc. shall make any repurchases of
         its common stock.

                  "NET PROCEEDS" means either (x) the purchase price (at
foreclosure or otherwise) actually received by Agent from a third party
purchaser with respect to the Mortgaged Property, as a result of the exercise by
Agent of its rights, powers, privileges and other remedies after the occurrence
of an Event of Default or (y) in the event that Agent (or its nominee) or a
Lender is the purchaser at foreclosure of the Mortgaged Property, the higher of
(i) the amount of Agent's or such Lender's credit bid or (ii) such amount as
shall be determined in accordance with applicable law, and in either case minus
all reasonable third party, out of pocket costs and expenses (including, without
limitation, all attorneys' fees and disbursements and any brokerage fees, if
applicable) incurred by Agent (and its nominee, if applicable) or such Lender in
connection with the exercise of such remedies; PROVIDED, HOWEVER, that such
costs and expenses



                                       15


shall not be deducted to the extent such amounts previously have been added to
the Indebtedness in accordance with the terms of the Loan Documents or
applicable law.

                  "NOTE" means the Renewal and Future Advance Promissory Note
made by Borrower to Lender pursuant to this Agreement, as such note may be
modified, amended, supplemented or extended.

                  "OFAC" has the meaning set forth in SECTION 4.1(V) hereof.

                  "OFFICER'S CERTIFICATE" means a certificate delivered to Agent
by Borrower which is signed by an authorized officer of Borrower.

                  "OPERATING BUDGET" means, with respect to any Fiscal Year, the
operating budget for the Mortgaged Property reflecting Borrower's projections of
Gross Revenues and Property Expenses for the Mortgaged Property for such Fiscal
Year and on an annual and monthly basis and submitted by Borrower to Agent in
accordance with the provisions of SECTION 5.1(R)(VI).

                  "ORGANIZATIONAL AGREEMENTS" means the Amended and Restated
Limited Liability Company Agreement of Borrower, dated as of the date hereof, as
amended or restated from time to time.

                  "ORIGINATION FEE" means the fee designated as such in the
Application Letter attached to the Commitment payable to Agent on the Closing
Date.

                  "OTHER BORROWINGS" means, with respect to Borrower, without
duplication (but not including the Indebtedness or any interest rate protection
agreement entered into pursuant hereto) (i) all indebtedness of Borrower for
borrowed money or for the deferred purchase price of property or services, (ii)
all indebtedness of Borrower evidenced by a note, bond, debenture or similar
instrument, (iii) the face amount of all letters of credit issued for the
account of Borrower and, without duplication, all unreimbursed amounts drawn
thereunder, and obligations evidenced by bankers' acceptances, (iv) all
indebtedness of Borrower secured by a Lien on any property owned by Borrower
(whether or not such indebtedness has been assumed), (v) all Contingent
Obligations of Borrower, (vi) liabilities and obligations for the payment of
money relating to a capitalized lease obligation or sale/leaseback obligation,
(vii) liabilities and obligations representing the balance deferred and unpaid
of the purchase price of any property or services, except those incurred in the
ordinary course of Borrower's business that would constitute ordinarily a trade
payable to trade creditors, and (viii) all payment obligations of Borrower under
any interest rate protection agreement (including, without limitation, any
interest rate swaps, caps, floors, collars or similar agreements) and similar
agreements.

                  "PAYMENT DATE" has the meaning provided in SECTION 2.5(A).

                  "PAYMENT DATE STATEMENT" has the meaning provided in SECTION
2.12(D).

                  "PAYMENT INTANGIBLES" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under all "payment
intangibles" as defined in the UCC.



                                       16


                  "PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA, or any successor thereto.

                  "PERMITS" means all licenses, permits, variances and
certificates required by Legal Requirements to be obtained by Borrower and used
in connection with the ownership, operation, use or occupancy of the Mortgaged
Property (including, without limitation, business licenses, state health
department licenses, licenses to conduct business and all such other permits,
licenses and rights, obtained from any Governmental Authority or private Person
concerning ownership, operation, use or occupancy of the Mortgaged Property).

                  "PERMITTED ENCUMBRANCES" means, with respect to the Mortgaged
Property, collectively, (i) the Lien created by the Mortgage, or any other Loan
Documents of record, (ii) all Liens and other matters disclosed on the Title
Insurance Policy concerning the Mortgaged Property, (iii) Liens, if any, for
Impositions imposed by any Governmental Authority not yet delinquent or being
contested in good faith and by appropriate proceedings in accordance with the
Mortgage, (iv) mechanic's or materialmen's Liens, if any, being contested in
good faith and by appropriate proceedings in accordance with the Mortgage,
provided that no foreclosure has been commenced by the lien claimant, (v) rights
of existing and future tenants and residents as tenants only pursuant to Leases,
and (vi) Liens for public utilities, which Liens and encumbrances referred to in
clauses (i)-(vi) above do not materially and adversely affect (1) the ability of
Borrower to pay in full the Principal Indebtedness and interest thereon in a
timely manner or (2) the use of the Mortgaged Property for the use currently
being made thereof, the operation of the Mortgaged Property as currently being
operated or the value of the Mortgaged Property.

                  "PERMITTED HOLDER" means (i) Manuel D. Medina, (ii) Francis
Lee and (iii) any "controlled" (as such term is defined in the definition of
Affiliate) Affiliate of Manuel D. Medina and/or Francis Lee.

                  "PERMITTED INVESTMENTS" means any one or more of the following
obligations or securities acquired at a purchase price of not greater than par:

                  (i) obligations of, or obligations fully guaranteed as to
         payment of principal and interest by, the United States or any agency
         or instrumentality thereof provided such obligations are backed by the
         full faith and credit of the United States of America;

                  (ii) obligations of the following United States of America
         government sponsored agencies: Federal Home Loan Mortgage Corp. (debt
         obligations), the Farm Credit System (consolidated systemwide bonds and
         notes), the Federal Home Loan Banks (consolidated debt obligations),
         the Federal National Mortgage Association (debt obligations), the
         Financing Corp. (debt obligations), and the Resolution Funding Corp.
         (debt obligations);

                  (iii) federal funds, unsecured certificates of deposit, time
         deposits, bankers' acceptances and repurchase agreements with
         maturities of not more than 365 days of any bank, the short-term
         obligations of which are rated in the highest short-term rating
         category by the Rating Agencies;



                                       17


                  (iv) unsecured certificates of deposit, time deposits, federal
         funds or banker's acceptances issued by any depository institution or
         trust company incorporated under the laws of the United States or of
         any state thereof and subject to supervision and examination by federal
         and/or state banking authorities, which investments are fully insured
         by the Federal Deposit Insurance Corp.;

                  (v) debt obligations with maturities of not more than 365 days
         and rated by the Rating Agencies in its highest long-term unsecured
         rating category;

                  (vi) commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
         or on a specified date not more than one year after the date of
         issuance thereof) with maturities of not more than 270 days and that is
         rated by the Rating Agencies in their highest short-term unsecured debt
         rating;

                  (vii) the Federated Prime Obligation Money Market Fund (the
         "FUND") so long as the Fund is rated "AAAm" or "AAAm-G" (or the
         equivalent) by the Rating Agencies;

                  (viii) any other demand, money market or time deposit, demand
         obligation or any other obligation, security or investment, which the
         Agent shall have approved in writing and for which, if the Loan has
         been included in a Secondary Market Transaction in which Securities are
         issued, Borrower shall have delivered a Rating Confirmation;

PROVIDED, HOWEVER, that (A) the investments described in clauses (i) through
(viii) above must have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (C)
such investments must not be subject to liquidation prior to their maturity or
have an "r" highlighter affixed to its rating; and provided, further, that, in
the judgment of Agent, such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and that no instrument or security shall be a Permitted
Investment if such instrument or security evidences (x) a right to receive only
interest payments or (y) the right to receive principal and interest payments
derived from an underlying investment at a yield to maturity in excess of 120%
of the yield to maturity at par of such underlying investment.

                  "PERMITTED TRANSFER" means any conveyance, assignment or sale
or other disposition (and not a mortgaging, encumbrance, pledging,
hypothecation, or granting of a security interest)(directly or indirectly) of
the voting and beneficial ownership interests in the Borrower following which
(1) Terremark Worldwide, Inc. owns (directly or indirectly) 80% or more of such
voting and beneficial ownership interests in the Borrower and (2) controls the
operations and management of the Borrower; provided, that any such Transfer
referred to above which takes the form of a Transfer of the equity ownership
interests in the Borrower to a transferee which (collectively amongst itself and
its Affiliates that own such equity ownership interests) acquires (directly or
indirectly) a greater than 49% ownership interest in the Borrower or which
acquires control over the operations and management of the Borrower, shall not
be permitted unless the Borrower delivers to the Agent (1) a substantive
non-consolidation opinion



                                       18


in form and substance acceptable to the Agent and if the Loan has been included
in a Secondary Market Transaction in which Securities are issued, the Rating
Agencies and (2) if the Loan has been included in a Secondary Market Transaction
in which Securities are issued, a Rating Confirmation. "PERMITTED TRANSFERS"
shall include sales and purchases of the capital stock of Terremark Worldwide,
Inc., provided, that Terremark Worldwide, Inc. remains the surviving entity of
any such sale or purchase and a publicly-traded company following such sale or
purchase.

                  "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

                  "PERSONALTY" means all right, title and interest of Borrower
in and to all Equipment, Inventory, Accounts, General Intangibles, Instruments,
Receivables, Pledged Accounts, Deposit Accounts, Contracts and Intellectual
Property and all other personal property as defined in the relevant UCC, now
owned or hereafter acquired by Borrower and now or hereafter affixed to, placed
upon, used in connection with, arising from or otherwise related to the
Mortgaged Property or which may be used in or relating to the planning,
development, financing or operation of such Mortgaged Property, including,
without limitation, furniture, furnishings, equipment, machinery, money,
insurance proceeds, accounts, contract rights, trademarks, goodwill, chattel
paper, documents, trade names, licenses and/or franchise agreements, rights of
Borrower under leases of fixtures or other personal property or equipment,
inventory, all refundable, returnable or reimbursable fees, deposits or other
funds or evidences of credit or indebtedness deposited by or on behalf of
Borrower with any governmental authorities, boards, corporations, providers of
utility services, public or private, including specifically, but without
limitation, all refundable, returnable or reimbursable tap fees, utility
deposits, commitment fees and development costs.

                  "PLAN" means an employee benefit or other plan, other than a
Multiemployer Plan, that is covered by Title IV of ERISA or Section 302 of ERISA
or Section 412 of the Code, and (i) was established or maintained by Borrower or
any ERISA Affiliate during the five year period ended prior to the date of this
Agreement or to which Borrower or any ERISA Affiliate makes, is obligated to
make or has, within the five year period ended prior to the date of this
Agreement, been required to make contributions or (ii) with respect to which
Borrower could reasonably be expected to incur liability.

                  "PLEDGED ACCOUNTS" means the Collection Account and the
Reserve Account and any successor accounts thereto.

                  "POLICIES" has the meaning provided in SECTION 5.1(X)(III).

                  "PREPAYMENT FEE" means, with respect to any prepayment of the
Principal Indebtedness during the initial thirty-six (36) months of the term of
the Loan, the product of (x) 0.39583%, (y) the outstanding Principal
Indebtedness prepaid and (z) the number of months remaining to the end of the
thirty-sixth (36th) month of the term of the Loan (i.e. prepayments during the
initial month have 36 months remaining, etc., until prepayments during the 36th
month



                                       19


have one month remaining). The Prepayment Fee shall not apply to (1) payments of
the Principal Payment Amount by the Borrower or (2) any principal payments on
the Loan the source of which is Loss Proceeds or (3) any prepayment of the Loan
in whole from any source following an Insured Casualty where the Agent has
elected to apply the Insurance Proceeds to prepay the Loan (i.e. the Insurance
Proceeds have not been made available to the Borrower to restore the Mortgaged
Property).

                  "PRINCIPAL INDEBTEDNESS" means the principal amount of the
Loan outstanding as adjusted by each increase (including for advances made by
Lenders to protect the Collateral), or decrease in such principal amount of the
Loan outstanding, whether as a result of prepayment or otherwise, from time to
time.

                  "PRINCIPAL PAYMENT AMOUNT" means the principal payment
required to be paid on the Note on each Payment Date in the applicable amount
set forth on Schedule 1 attached hereto.

                  "PROCEEDS" shall have the meaning given in the UCC and, in any
event, shall include, without limitation, all of Borrower's right, title and
interest in and to proceeds, product, offspring, rents, profits or receipts, in
whatever form, arising from the Collateral.

                  "PROHIBITED PERSON" has the meaning provided in SECTION
4.1(V).

                  "PROPERTY EXPENSES" means, with respect to the Mortgaged
Property, the following costs and expenses but only, in the case of costs and
expenses in respect of goods and services, to the extent that they (x) are paid
to Persons who are generally in the business of providing such goods and
services and (y) are customary for the types of goods or services provided in
the geographical area in which such goods or services are provided:

                  (i) Impositions;

                  (ii) insurance premiums for policies of insurance required to
         be maintained by Borrower with respect to the Mortgaged Property
         pursuant to this Agreement or the other Loan Documents;

                  (iii) the cost of all electricity, oil, gas, water, steam,
         heat, ventilation, air conditioning and any other energy, utility or
         similar item and overtime services with respect to the Mortgaged
         Property;

                  (iv) payments required under service contracts (including,
         without limitation, service contracts for heating, ventilation and air
         conditioning systems, elevators, landscape maintenance, pest
         extermination, security, furniture, trash removal, answering service
         and credit checks);

                  (v) wages, benefits, payroll taxes, uniforms, the cost of
         cleaning supplies, insurance costs and all related expenses for on-site
         maintenance personnel (including, without limitation, housekeeping
         employees, porters and general repair, maintenance and security
         employees), whether hired by Borrower, Manager, Collateral Agent or any
         other Person;



                                       20


                  (vi) costs required in connection with the enforcement of any
         Lease (including, without limitation, reasonable attorneys' fees,
         charges for lock changes and storage and moving expenses for furniture,
         fixtures and equipment);

                  (vii) advertising and rent-up expenses (including, without
         limitation, leasing services, tenant rent concessions, promotions for
         existing and prospective tenants, banners and signs);

                  (viii) out-of-pocket cleaning, maintenance and repair
         expenses;

                  (ix) any expense the proportionate cost of which is passed
         through to tenants pursuant to executed Leases;

                  (x) legal, accounting, auditing and other professional fees
         and expenses incurred in connection with the ownership, leasing and
         operation of the Mortgaged Property (including, without limitation,
         collection costs and expenses);

                  (xi) permits, licenses and registration fees and costs;

                  (xii) any expense necessary in order to prevent a breach under
         a Lease;

                  (xiii) any expense necessary in order to prevent or cure a
         violation of any Legal Requirement (including Environmental Law),
         regulation, code or ordinance;

                  (xiv) costs and expenses of any appraisals, valuations,
         surveys, inspections, environmental assessments or market studies;

                  (xv) costs and expenses of security and security systems
         provided to and/or installed and maintained with respect to the
         Mortgaged Property;

                  (xvi) costs of title, UCC, litigation and other searches and
         costs of maintaining the Lien of the Mortgage thereon and the security
         interest in any related Collateral;

                  (xvii) fees and expenses of property managers contracted with
         by Borrower to perform management, administrative, payroll or other
         services in connection with the operation of the Mortgaged Property
         (including, without limitation, the fees and expenses owed to Manager
         under the Management Agreement);

                  (xviii) any other costs and expenses contemplated by the
         Operating Budget and customarily incurred in connection with operating
         properties similar in type and character to the Mortgaged Property; and

                  (xix) any other category of property expense that is customary
         for a property of the type and size as the Mortgaged Property and is
         reasonably approved by Agent on behalf of the Lenders.



                                       21


                  "PURCHASE AGREEMENT" means the Purchase Agreement among the
Guarantor, as issuer, the guarantors named therein and the agent and purchasers
named therein dated as of the date hereof relating to the Subordinate Loan.

                  "QUALIFIED INTEREST RATE CAP PROVIDER" means an interest rate
cap counterparty either (x) whose long-term debt obligations are rated by the
Rating Agencies not lower than "AAA" (or the equivalent), or (y) whose long-term
debt obligations are rated by the Rating Agencies not lower than "AA-" (or the
equivalent) and whose short-term debt obligations are rated by the Rating
Agencies not lower than "A-1+" (or the equivalent).

                  "QUARTERLY STATEMENT" has the meaning provided in SECTION
2.12(E).

                  "RATING AGENCIES" means at least two of Fitch, Inc., Moody's
Investors Service, Inc. and Standard & Poor's Ratings Services (or, if a
Secondary Market Transaction has occurred in which Securities have been issued,
each of the foregoing that rated such Securities).

                  "RATING CONFIRMATION" means the written confirmation of the
Rating Agencies that a proposed action shall not, in and of itself, result in
the downgrading, withdrawal or qualification of the then-current ratings
assigned to any of the Securities issued in connection with a Secondary Market
Transaction.

                  "REAL ESTATE TAXES ESCROW ACCOUNT" has the meaning provided in
SECTION 2.13(B).

                  "RECEIVABLES" means all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in, to and under (i) any
Accounts, Chattel Paper, Instruments, Payment Intangibles, Letter of Credit
Rights, Documents, insurance policies, drafts, bills of exchange, trade
acceptances, notes or other indebtedness owing to Borrower from whatever source
arising, (ii) to the extent not otherwise included above, (a) all income, Rents,
issues, profits, revenues, deposits and other benefits from the Mortgaged
Property and (b) all receivables and other obligations now existing or hereafter
arising, or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of property or rendering of
services by Borrower or any operator or manager of the Mortgaged Property or
other commercial space located at the Mortgaged Property or acquired from others
(including, without limiting the generality of the foregoing, from rental of
space, halls, stores, and offices, and deposits securing reservations of such
space, exhibit or sales space of every kind, license, lease, sublease and
concession fees and rentals, health club membership fees, food and beverage
wholesale and retail sales of merchandise, service charges, vending machine
sales and proceeds, if any, from business interruption or other loss of income
insurance, (iii) all of the books and records (whether in tangible, electronic
or other form) now or hereafter maintained by or on behalf of Mortgagor in
connection with the operation of the Mortgaged Property or in connection with
any of the foregoing and (iv) all Supporting Obligations and all liens and
security interests securing any of the foregoing and all other rights,
privileges and remedies relating to any of the foregoing.



                                       22


                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, between the Guarantor and the initial Lender, dated as of the date
hereof, which agreement may be incorporated into the Warrants.

                  "RELEASE" means any active or passive release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including, without
limitation, the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata).

                  "REMEDIAL WORK" has the meaning set forth in SECTION
5.1(D)(I).

                  "RENTS" means all of Borrower's right, title and interest,
whether now owned or hereafter acquired, in, to and under all income, rents,
issues, profits, revenues (including all oil and gas or other mineral royalties
and bonuses), deposits (other than utility and security deposits) and other
benefits from the Mortgaged Property.

                  "REPLACEMENT RESERVE ACCOUNT" has the meaning set forth in
Section 2.13(a).

                  "RESERVE ACCOUNT" means the Capital and Leasing Costs Account,
the Replacement Reserve Account, the Real Estate Taxes Escrow Account and the
Insurance Escrow Account, collectively, and any successor accounts to any of the
foregoing.

                  "SECONDARY MARKET TRANSACTION" has the meaning set forth in
SECTION 5.1(W).

                  "SECURITIES" means mortgage pass-through certificates or other
securities issued in a Secondary Market Transaction and evidencing a beneficial
interest in or secured in whole or in part by the Loan in a rated or unrated
public offering or private placement.

                  "SECURITIZATION VEHICLE" means a trust, partnership, limited
liability company, business trust or other entity to which a loan secured by the
Mortgaged Property or the Mortgaged Property is sold or transferred in
connection with the simultaneous issuance by such vehicle of a debt or equity
security backed by or representing an interest in the Mortgaged Property, either
alone or together with other assets.

                  "SERVICING FEE" means a fee equal to the sum of (x)
one-twelfth (1/12th) of 0.0322449% multiplied by the outstanding Principal
Indebtedness plus (y) $6,000 per annum (i.e. $500 per month), payable monthly on
each Payment Date.

                  "SINGLE-PURPOSE ENTITY" means a Person, other than an
individual, which (i) is formed or organized under the laws of a state of the
United States or the District of Columbia solely for the purpose of acquiring
and directly holding an ownership interest in the Mortgaged Property, (ii) does
not engage in any business unrelated to the Mortgaged Property, (iii) does not
have any assets other than those related to its interest in the Mortgaged
Property or any indebtedness other than as permitted by this Agreement, the
Mortgage or the other Loan Documents, (iv) has its own separate books and
records and has its own accounts, in each case which are separate and apart from
the books and records and accounts of any other Person, (v) is subject to all of
the limitations on powers set forth in the Organizational Agreement of Borrower
as of the Closing Date, (vi) holds itself out as being a Person separate and
apart from any other



                                       23


Person and (vii) has, or is controlled, directly or indirectly, by a Person that
has, at least one independent director that is not an employee, officer,
director, or paid consultant of any Affiliate of such Person or of any principal
or officer of such Person.

                  "SUBORDINATE LENDER" means the purchasers of the Subordinate
Loan pursuant to the Purchase Agreement.

                  "SUBORDINATE LOAN" means $30,000,000 aggregate principal
amount of the Borrower's Senior Secured Notes due 2009.
                  "SUBORDINATION AGREEMENT" means the Subordination Agreement
between the Agent on behalf of the Lenders and the Subordinate Lender, dated as
of the Closing Date.

                  "SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which the outstanding shares of Voting Stock having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of the shares of Voting Stock are at the
time, directly or indirectly, owned by such first named Person.

                  "SUPPORTING OBLIGATIONS" means all of Borrower's right, title
and interest, whether now owned or hereafter acquired, in, to and under (i) all
"supporting obligations" as defined in the UCC and (ii) any other guarantee,
letter of credit, secondary obligation, right or privilege that supports or
pertains to any of the Mortgaged Property.

                  "SURVEY" means a certified ALTA/ACSM survey of the Mortgaged
Property prepared by a registered Independent surveyor, containing the form of
survey or certification provided to Borrower by the Agent and in form and
content satisfactory to the Agent and the company issuing the Title Insurance
Policy for the Mortgaged Property.

                  "TAKING" means a taking or voluntary conveyance during the
term hereof of all or part of the Mortgaged Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting the Mortgaged Property or any portion thereof whether or not
the same shall have actually been commenced.

                  "TI COSTS" means tenant improvement costs and allowances
incurred by Borrower in connection with renewing existing Leases or executing
new Leases for space located in the Mortgaged Property.

                  "TITLE INSURANCE POLICY" means a mortgagee's title insurance
policy or policies (i) issued by one or more title companies reasonably
satisfactory to Agent which policy or policies shall be in form ALTA 1992 (with
waiver of arbitration provisions) (with co-insurance or reinsurance as Agent may
require reasonably satisfactory to Agent), naming Agent as the insured party for
benefit of the Lenders, (ii) insuring the Mortgage as being a first and prior
lien upon the Mortgaged Property, (iii) showing no encumbrances against the
Mortgaged Property (whether junior or superior to the Mortgage) which are not
acceptable to Agent other than Permitted Encumbrances, (iv) in an amount
acceptable to Agent (but not more than the Loan Amount), and (v) otherwise in
form and content reasonably acceptable to Agent. Such Title Insurance Policy



                                       24


shall include the following endorsements or affirmative coverages in form and
substance reasonably acceptable to Agent, to the extent available in the
jurisdiction in which the Land is located: variable rate endorsement; survey
endorsement; comprehensive endorsement; contiguity (if applicable) coverage; and
such other endorsements as Agent shall reasonably require in order to provide
insurance against specific risks identified by Agent in connection with the
Mortgaged Property.

                  "TRANSACTION" means the transactions contemplated by the Loan
Documents.

                  "TRANSACTION COSTS" means all costs and expenses paid or
payable by Borrower relating to the Transaction (including, without limitation,
appraisal fees, legal fees and accounting fees and the costs and expenses
described in SECTION 8.23).

                  "TRANSFER" means the conveyance, assignment, sale, mortgaging,
encumbrance (other than a Permitted Encumbrance), pledging, hypothecation,
granting of a security interest in, granting of options with respect to, or
other disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest (a) in all or any
portion of the Mortgaged Property; or (b) in the stock, partnership interests,
membership interests or other ownership interests in Borrower shall also
include, without limitation to the foregoing, the following: an installment
sales agreement wherein Borrower agrees to sell the Mortgaged Property or any
part thereof or any interest therein for a price to be paid in installments; an
agreement by Borrower leasing all or a substantial part of the Mortgaged
Property to one or more Persons pursuant to a single or related transactions, or
a sale, assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rent; and any
instrument subjecting the Mortgaged Property to a condominium regime or
transferring ownership to a cooperative corporation.

                  "UCC" means with respect to any Collateral, the Uniform
Commercial Code as in effect from time to time in the State of New York;
provided, that if by reason of mandatory provisions of law, the perfection or
the effect of perfection or non-perfection or priority of the security interest
in any item or portion of the Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or priority. Wherever this agreement refers to
terms as defined in the UCC, if such term is defined in more than one Article of
the UCC, the definition in Article 9 of the UCC shall control.

                  "UCC SEARCHES" has the meaning set forth in SECTION 3.1(V)
hereof.

                  "USE" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance in connection with or affecting Borrower or the Mortgaged
Property.

                  "VOTING STOCK" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a


                                       25


majority of the Board of Directors, managers or trustees of any Person
(irrespective of whether or not, at the time, stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency).

                  "WARRANT SHARES" means a share of the Common Stock of the
Guarantor issuable upon exercise of a Warrant.

                  "WARRANTHOLDER" means a Person in whose name a Warrant or
Warrant Share is registered.

                  "WARRANTS" has the meaning specified in the recitals to this
Agreement.

                  "WELFARE PLAN" means an employee welfare benefit plan as
defined in Section 3(1) of ERISA established or maintained by Borrower or any
ERISA Affiliate or with respect to which Borrower or any ERISA Affiliate has an
obligation to make contributions and covers any current or former employee of
Borrower or any ERISA Affiliate.

                                   ARTICLE II.
                                  GENERAL TERMS

                  Section 2.1. THE LOAN; THE WARRANTS.

                  (a) Subject to the terms and conditions of this Agreement, on
the Closing Date the Lenders shall acquire the Existing Note and the Existing
Mortgage (by assignment) from the Existing Lender and make an advance to
Borrower in the amount necessary to make the total principal amount outstanding
on the date hereof equal to the Loan Amount. The proceeds of the Loan shall be
used solely for the purposes identified in SECTION 2.2 hereof. On the Closing
Date, upon the satisfaction of the conditions set forth in SECTION 3.1, the
Agent shall wire immediately available funds to an account designated by
Borrower in an amount equal to (x) the Loan Amount, less (y) the sum of (i) the
Origination Fee (giving credit to the Commitment Fee), (ii) the deposits to the
Capital and Leasing Costs Account, the Real Estate Taxes Escrow Account and the
Insurance Escrow Account required to be funded from Loan proceeds pursuant to
SECTION 2.13, (iii) the out-of-pocket expenses incurred by Agent in connection
with the origination and funding of the Loan in excess of the sum of the
Application Deposit and the Expense Deposit and (iv) the reasonable fees and
expenses of Agent's, Borrower's and Collateral Agent's counsel.

                  (b) The Loan shall constitute one general obligation of
Borrower to Lenders and shall be secured by the security interest in and Liens
granted upon all of the Collateral, and by all other security interests and
Liens at any time or times hereafter granted by Borrower to Agent or to
Collateral Agent on behalf of Lenders as security for the Loan.

                  (c) Concurrently with the execution and delivery of this
Agreement, the Guarantor has authorized the issue and sale to the initial Lender
of 5 million Warrants to purchase initially 5 million shares of Common Stock.

                  (d) The Borrower on behalf of itself and the Guarantor, the
Agent and the initial Lender hereby acknowledge that, for the purposes of
Section 1273(c)(2) of the Code, the



                                       26


Warrant is part of an investment unit with the Loan being made by the Lender to
the Borrower under this Agreement, and that the allocated purchase price of the
Warrant for such purposes, as evidenced by a separate document to be delivered
to Lender by Borrower, shall be acceptable to Lender. The Borrower on behalf of
itself and the Guarantor and the initial Lender agree to use the foregoing
allocated purchase price as the purchase price of the Warrant for all income tax
purposes.

                  Section 2.2. USE OF PROCEEDS. Proceeds of the Loan shall be
used only for the following purposes: (a) to acquire the Existing Note and
Existing Mortgage and to purchase the membership interests in the Borrower not
owned by Terremark Worldwide, Inc. or its subsidiaries as of the Closing Date,
(b) to pay to Agent the Origination Fee, (c) to make the required deposits to
the Capital and Leasing Costs Account, the Real Estate Taxes Escrow Account and
the Insurance Escrow Account, (d) to pay Transaction Costs (including the
reasonable out of pocket expenses incurred by Lenders in connection with the
origination and funding of the Loan) and (e) to pay to counsel to each of the
Agent and Borrower its respective reasonable fees, expenses and disbursements.
If any Loan proceeds remain after application thereof as set forth in the
preceding sentence, such excess proceeds may be used for the general corporate
purposes of Borrower.

                  Section 2.3. SECURITY FOR THE LOAN. The Note and Borrower's
obligations hereunder and under all other Loan Documents shall be secured by (a)
Liens upon the Mortgaged Property pursuant to the Mortgage, (b) the Contract
Assignment, (c) the Manager's Subordination, (d) the Assignment of Leases and
Rents, (e) the Collateral Assignment of Hedge and all other security interests
and Liens granted in this Agreement and in the other Loan Documents.

                  Section 2.4. BORROWER'S NOTE. Borrower's obligation to pay the
principal of and interest on the Loan and all other amounts due under the Loan
Documents shall be evidenced initially by the Note, duly executed and delivered
by Borrower on the Closing Date. The Note shall be payable as to principal,
interest and all other amounts due under the Loan Documents, as specified in
this Agreement, with a final maturity on the Maturity Date. The initial Lender
shall have the right, at no cost to Borrower, to have the Note subdivided, by
exchange for promissory notes of lesser denominations in the form of the initial
Note, upon written request to Borrower and, in such event, Borrower shall
promptly execute additional or replacement Notes. At no time shall the aggregate
original principal amount of the Note (or of such replacement Notes) exceed the
Loan Amount.

                  Section 2.5. PRINCIPAL AND INTEREST.

                  (a) Borrower shall pay to Agent interest on the Principal
Indebtedness of the Loan from the Closing Date through the end of the Interest
Accrual Period following or during which the Loan is paid in full at the
interest rate provided in SECTION 2.5 below. Interest on the Loan shall accrue
on the Principal Indebtedness commencing on the Closing Date and shall be
payable in arrears on the eleventh (11th) day of the month following the month
in which the Closing Date occurs and on the eleventh (11th) day of each and
every month thereafter until such time as the Loan shall be repaid in full,
unless, in any such case, such day is not a Business Day, in which event such
interest shall be payable on the first Business Day following such date (such




                                       27


date for any particular month, the "PAYMENT DATE"). The Agent or its servicer
shall calculate LIBOR on each Interest Determination Date for the related
Interest Accrual Period and promptly communicate to Borrower such rate for such
period. The entire outstanding Principal Indebtedness of the Loan and the Note,
together with all accrued but unpaid interest thereon and all other amounts due
under the Loan Documents, shall be due and payable by Borrower to the Lenders on
the Maturity Date. Interest shall be computed on the basis of a 360 day year and
the actual number of days elapsed.

                  (b) For the initial Interest Accrual Period, the Principal
Indebtedness shall bear interest at a rate per annum equal to 7.17%. For each
Interest Accrual Period thereafter, the Principal Indebtedness shall bear
interest at a rate per annum equal to the greater of (a) 6.75% and (b) the sum
of (x) LIBOR determined as of the Interest Determination Date for such Interest
Accrual Period plus (y) 4.75%.

                  (c) Borrower shall make principal payments on the Loan on each
Payment Date in an amount equal to the sum of the Principal Payment Amount and,
without duplication, the amount, if any, required to be paid pursuant to CLAUSE
FIRST of SECTION 2.12(B).

                  (d) While an Event of Default has occurred and is continuing,
Borrower shall pay to Agent interest at the Default Rate on any amount owing to
the Lenders not paid when due until such amount is paid in full.

                  Section 2.6. VOLUNTARY PREPAYMENT.

                  (a) Borrower may voluntarily prepay the Loan in whole or in
part on any Payment Date; PROVIDED, HOWEVER, that, any such prepayment shall be
accompanied by an amount representing all accrued interest on the portion of the
Loan being prepaid and other amounts then due under the Loan Documents
(including, without limitation, the Prepayment Fee, if any).

                  (b) In the event of any such voluntary prepayment, Borrower
shall give Agent written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay, which notice shall be given at least thirty
(30) days' prior to the date upon which prepayment is to be made and shall
specify the Payment Date on which such prepayment is to be made and the amount
of such prepayment (which shall not be less than $1,000,000). If any such notice
is given, the amount specified in such notice shall be due and payable on the
Payment Date specified therein (unless such notice is revoked by Borrower prior
to the date specified therein in which event Borrower shall immediately
reimburse Agent for any out-of-pocket costs incurred in connection with the
giving of such notice and its revocation).

                  Section 2.7. MANDATORY PREPAYMENT; CAPITAL EVENTS; CERTAIN
TRANSFERS.

                  (a) Borrower may effect a Capital Event with respect to the
Mortgaged Property on any Business Day on the condition that the Capital Event
Proceeds (and, if necessary, any contributions from the principals of Borrower
necessary to make the payments required hereunder) are deposited in the
Collection Account and applied on the date of deposit in the Collection Account
to repay the Indebtedness in full (including (1) all accrued interest on the
Principal Indebtedness through the end of the Interest Accrual Period during
which such deposit



                                       28


occurs, (2) the Prepayment Fee, if any, and (3) other amounts then due under the
Loan Documents). Notwithstanding, the foregoing, Borrower may effect a Transfer
(other than a Capital Event of a Mortgaged Property as provided in this SECTION
2.7(A) or a Permitted Transfer), provided (1) if the Loan has not been included
in a Secondary Market Transaction in which Securities are issued, Borrower
obtains the prior written consent of the Agent or (2) if the Loan has been
included in a Secondary Market Transaction in which Securities were issued,
Borrower shall have delivered to the Agent a Rating Confirmation and (3) the
Borrower pays all out-of-pocket expenses incurred by the Agent in connection
with the transaction.

                  (b) Except as otherwise provided in SECTION 2.12(F) in the
event Loss Proceeds are required to be made available for restoration pursuant
to SECTION 5.1(X) of this Agreement and excluding Loss Proceeds which Borrower
is obligated to turn over to tenants or other third persons pursuant to
applicable law, in the event of a casualty or a Taking of the Mortgaged
Property, in whole or in part, Borrower shall cause all such Loss Proceeds
otherwise payable with respect to the Mortgaged Property to be deposited
directly into the Collection Account in accordance with SECTION 2.12(A)(III) and
shall on the Payment Date occurring immediately following the receipt of such
Loss Proceeds, apply such portion of Loss Proceeds solely to make the payments
required pursuant to item (iii) of CLAUSE FIRST of SECTION 2.12(B) of this
Agreement.

                  (c) Upon payment or prepayment of the Loan in full, Borrower
shall pay to the Lenders, in addition to the amounts specified in SECTION 2.5,
SECTION 2.6 and SECTION 2.7, as applicable, all other amounts then due and
payable to the Lenders pursuant to the Loan Documents.

                  Section 2.8. APPLICATION OF PAYMENTS AFTER EVENT OF DEFAULT.
All proceeds relating to any repayments of the Loan after the Collateral Agent
shall have received written notice of the occurrence of an Event of Default
shall be applied by Agent, in Agent's sole discretion, to amounts then
outstanding under this Agreement (including, without limitation, any unpaid fees
of the Collateral Agent payable pursuant to the Fee Letter and any reasonable
out-of-pocket costs and expenses of Collateral Agent and the Lenders, in that
order, reimbursable pursuant to the terms of this Agreement arising as a result
of such repayment; any accrued and unpaid interest then payable with respect to
the Loan or the portion thereof being repaid; any accrued and unpaid Prepayment
Fee in respect of any such Principal Indebtedness being repaid; the Principal
Indebtedness or the portion thereof being repaid; and any other sums then due
and payable to or for the benefit of Agent pursuant to this Agreement or any
other Loan Document(s)).

                  Section 2.9. METHOD AND PLACE OF PAYMENT FROM THE COLLECTION
ACCOUNT TO AGENT.

                  (a) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Note shall be made to
Agent not later than 2:00 p.m., New York City time, on the date when due and
shall be made in lawful money of the United States of America by wire transfer
in federal or other immediately available funds to its account at J.P. Morgan
Chase Bank, New York, New York (ABA No. 021-000-021, Account No. 066-612-187,
Reference: Terremark) and Agent shall disburse such payments to the Person
entitled thereto on the Business Day of receipt of such payments (or the next
Business Day if the



                                       29


payments are received after 2:00 p.m., New York City time on such Business Day)
to the account designated by such Person in writing to Agent from time to time.
Any funds received by Agent after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day. Agent shall notify
Borrower in writing of any changes in the account to which payments are to be
made. All payments made by Borrower hereunder, or by Borrower under the other
Loan Documents, shall be made irrespective of, and without any deduction for,
any set-offs or counterclaims.

                  (b) Except to the extent otherwise provided herein, (i) each
payment or prepayment of principal of the Loan by Borrower shall be made to
Agent for the account of the Lenders pro rata in accordance with the respective
unpaid portion of the Loan held by such Lenders and (ii) each payment of
interest on the Loan by Borrower shall be made to Agent for the account of the
Lenders pro rata in accordance with the amounts of interest on the portion of
the Loan held by such Lenders then due and payable to the respective Lenders.

                  Section 2.10. TAXES. All payments made by Borrower under the
Note and this Agreement shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (other than taxes imposed on the income of the Lenders).

                  Section 2.11. RELEASE OF COLLATERAL.

                  (a) Notwithstanding any other provision of this Agreement or
any other Loan Document, upon the occurrence of a Capital Event with respect to
the Mortgaged Property as described in Section 2.7(a) hereof, Agent, on behalf
of the Lenders, shall, simultaneously with such Capital Event, release of record
the Lien of the Mortgage and UCC-1 financing statements and any other Liens in
favor of the Lenders relating to the Mortgaged Property or the portion thereof
affected by such Capital Event provided, however, that the Agent shall not be
required to release its Lien unless any Proceeds of such Capital Event are paid
to Agent in full satisfaction of the Indebtedness as required hereunder.

                  (b) In the event Borrower satisfies the outstanding
Indebtedness in full, Agent and, at the written direction of Agent, Collateral
Agent shall withdraw and hold uninvested for Borrower in an Eligible Account at
the Collateral Agent from the Business Day immediately preceding the date upon
which the release of funds is to be made to Borrower and release on the date on
which the outstanding Indebtedness is repaid in full any and all amounts then on
deposit in the Reserve Account and/or the Collection Account to Borrower. Upon
repayment of the Loan and all other amounts due hereunder and under the Loan
Documents in full in accordance with the terms hereof and thereof, the Lenders
shall, promptly after such payment, release or cause to be released all Liens
with respect to all Collateral (including, without limitation, terminating the
tenant direction letters delivered pursuant to Section 2.12(a)) or assign such
Liens to Borrower's new lender(s), provided that any such assignments shall be
without recourse, representation, or warranty of any kind, except that Agent and
each Lender shall represent and warrant (1) the then outstanding amount of the
Principal Indebtedness and (2) that such Liens have not been previously assigned
by Agent or any Lender.



                                       30


                  Section 2.12. CENTRAL CASH MANAGEMENT.

                  (a) COLLECTION ACCOUNT; LOCAL DEPOSIT ACCOUNT; DEPOSITS TO AND
WITHDRAWALS FROM THE COLLECTION ACCOUNT AND LOCAL DEPOSIT ACCOUNT.

                  (i) On or before the Closing Date, Borrower shall establish
         and maintain with the Collateral Agent a collection account (the
         "COLLECTION ACCOUNT"), which shall be an Eligible Account with a
         separate and unique identification number and entitled "Citigroup
         Global Markets Realty Corp. as Agent, as secured party from `Technology
         Center of the Americas, LLC' pursuant to a Loan Agreement dated as of
         December 31, 2004 between `Technology Center of the Americas, LLC' and
         Citigroup Global Markets Realty Corp. as Agent." Not later than the
         Closing Date, Borrower shall deliver to each tenant under a Lease an
         irrevocable direction letter in a form approved by Agent requiring the
         tenant to pay all Rents and Money received from Accounts or under
         Leases and derived from the Mortgaged Property and Proceeds thereof
         owed to Borrower directly to the Collection Account. Borrower shall
         provide to Agent proof of such delivery. In addition, Borrower shall
         deliver an irrevocable direction letter in such form to each tenant
         under a new Lease entered into after the date hereof prior to the
         commencement of such Lease. If a tenant under a Lease forwards such
         Rents, Money or Proceeds to Borrower rather than directly to the
         Collection Account, Borrower shall (i) deliver an additional
         irrevocable direction letter to the tenant and make other commercially
         reasonable efforts to cause the tenant to forward such Rents, Money or
         Proceeds directly to the Collateral Account and (ii) immediately
         deposit or cause the Manager to deposit in the Collection Account such
         Rents, Money or Proceeds. On or before the Closing Date, Borrower shall
         (x) also establish and maintain with a financial institution acceptable
         to the Agent (the Agent hereby confirming that Ocean Bank shall be an
         acceptable financial institution as of the Closing Date) (the "LOCAL
         DEPOSIT ACCOUNT BANK") one or more local deposit accounts
         (collectively, the "LOCAL DEPOSIT Account"), which shall be an Eligible
         Account with a separate and unique identification number and entitled
         in the name of NAP and (y) cause the Local Deposit Account Bank to
         deliver to the Agent a control agreement concerning deposit accounts in
         form and substance reasonably acceptable to the Agent acknowledging
         Agent's security interest in and, following the occurrence and during
         the continuance of an Event of Default, control over the Local Deposit
         Account. Borrower shall cause NAP to deposit all payments made by each
         subtenant or licensee of NAP (each, a "NAP OBLIGOR") pursuant to any
         agreement between NAP and such NAP Obligor (each, a "NAP COLOCATION
         AGREEMENT") with respect to the Mortgaged Property, and proceeds
         thereof, into the Local Deposit Account by not later than the Business
         Day following the collection and receipt of such payments and proceeds.
         Prior to the payment in full of the Indebtedness, any and all
         withdrawals from the Local Deposit Account shall be made strictly in
         accordance with the Subordination Agreement. Borrower shall not have
         any right to withdraw Money



                                       31


         from the Collection Account, which shall be under the sole dominion and
         control, and the "control" within the meaning of Sections 9-104 and
         9-106 of the UCC, of the Agent. Any such Rents, Money or Proceeds held
         by Borrower or the Manager prior to deposit into the Collection Account
         shall be held in trust for the benefit of the Agent and the Lenders.
         Upon the occurrence and during the continuance of an Event of Default,
         neither Borrower, NAP, nor the Subordinate Lender shall have any right
         to withdraw Money from the Local Deposit Account, which shall be under
         the sole dominion and control, and the "control" within the meaning of
         Sections 9-104 and 9-106 of the UCC, of the Agent. The Agent and its
         servicer shall monitor the amount of funds deposited into the
         Collection Account on each Business Day during a Collection Period. By
         not later than the second (2nd) Business Day following the Business Day
         as of which the amount of funds on deposit in the Collection Account is
         sufficient to make all of the payments required to be made on the
         succeeding Payment Date pursuant to clauses first through fifth of
         SECTION 2.12(B), the Agent and its servicer shall commence remitting to
         an account of the Borrower designated by the Borrower free of the
         Agent's security interest any funds on deposit in the Collection
         Account in excess of such amount. The Agent and its servicer shall
         cease making such remittances as of the last Business Day of each
         Collection Period. The cycle described above of hard lockbox
         remittances to the Collection Account and remittances to the Borrower
         when the Collection Account is adequately funded shall be repeated
         during each Collection Period during the term of the Loan.

                  (ii) In the event that Agent has notified the Collateral Agent
         and Borrower that an Event of Default has occurred and is continuing,

                           (A) all Rents and Money received from Accounts or
                  under Leases and derived from the Mortgaged Property and all
                  Proceeds thereof shall be payable to Agent for the account of
                  Lenders or as otherwise directed by Agent on behalf of Lenders
                  (provided that such direction shall not result in the
                  nonpayment of any outstanding fees payable to the Collateral
                  Agent pursuant to the Fee Letter),

                           (B) Agent on behalf of the Lenders shall make
                  deposits, or cause deposits to be made, of such Rents, Money
                  and Proceeds directly to the Collection Account, and Borrower
                  shall cooperate (and shall cause the Manager to cooperate)
                  with Agent on behalf of the Lenders in the making of such
                  deposits or causing such deposits to be made,

                           (C) Borrower shall not have any right to make or
                  direct any withdrawals from the Collection Account or the
                  Reserve Account without the prior written consent of Agent on
                  behalf of the Lenders, and

                           (D) proceeds on deposit in the Collection Account and
                  the Reserve Account may be applied by Collateral Agent on
                  behalf of the Lenders for the payment of the Indebtedness
                  pursuant to SECTION 2.8 of this Agreement.

                  (iii) So long as no Event of Default shall have occurred and
         be continuing, Borrower shall deposit in the Collection Account: (a) as
         and when required by Section 2.7(b), Loss Proceeds received by Borrower
         and (b) simultaneously with the consummation of any Capital Event, the
         Capital Event Proceeds resulting from such Capital Event and any
         contributions from Borrower's principals required by SECTION 2.7(A) in
         connection with such Capital Event.



                                       32


                  (b) DISTRIBUTION OF CASH. So long as an Event of Default has
not occurred and is not continuing, the Agent shall hold uninvested for Borrower
or the Lenders in an Eligible Account, the funds on deposit in the Collection
Account as of the close of business on the Business Day immediately preceding
each Payment Date to such Payment Date and shall apply such funds on such
Payment Date, in each case to the extent of the amounts set forth in the related
Payment Date Statement delivered by the Collateral Agent, as follows:

                  FIRST, to the payment to the Agent of (i) the interest then
         due and payable on the Note with respect to the related Interest
         Accrual Period, (ii) the Prepayment Fee, if any, then due and payable
         and (iii) the Principal Indebtedness in an amount equal to the sum of
         the Principal Payment Amount, if any, and any additional amount to
         which the Agent is then entitled pursuant to Section 2.7(b) of this
         Agreement;

                  SECOND, to the payment to the Agent's servicer of the
         Servicing Fee and the servicer's expenses then due and payable pursuant
         to this Agreement;

                  THIRD, to the Real Estate Taxes Escrow Account and the
         Insurance Escrow Account, in that order, in the respective amounts
         required to be deposited therein as described in Section 2.13(b);

                  FOURTH, to the Replacement Reserve Account in the amount
         required to be deposited therein as described in SECTION 2.13(A);

                  FIFTH, to the payment of any outstanding indemnification
         payment to which an Indemnified Party is then entitled pursuant to
         SECTIONS 5.1(I) and 5.1(J); and

                  SIXTH, to Borrower in an amount equal to remaining available
         funds, if any.

                  (c) PERMITTED INVESTMENTS. Borrower shall, or shall direct
Agent in writing to, invest and reinvest any balance in the Collection Account,
from time to time in Permitted Investments; PROVIDED, HOWEVER, that

                  (i) the maturity of the Permitted Investments on deposit
         therein shall be at the discretion of Borrower, but in any event no
         later than the Business Day immediately preceding the date on which
         such funds are required to be withdrawn therefrom pursuant to SECTION
         2.12(A) or 2.12(B) of this Agreement,

                  (ii) after Collateral Agent has received written notice from
         Agent that an Event of Default has occurred and is continuing Borrower
         shall not have any right to direct investment of the balance in the
         Collection Account,

                  (iii) all such Permitted Investments shall be held in the name
         of Collateral Agent and shall be credited to the Collection Account,
         and

                  (iv) if no written investment direction is provided to
         Collateral Agent by Borrower, Agent shall invest any balance in the
         Collection Account in a Permitted Investment selected by Agent.



                                       33


Agent, the Lenders and Collateral Agent shall have no liability for any loss in
investments of funds in the Collection Account that are invested in Permitted
Investments and no such loss shall affect Borrower's obligation to fund, or
liability for funding, the Collection Account. All interest paid or other
earnings on the Permitted Investments of funds deposited into the Collection
Account made hereunder shall be deposited into the Collection Account. Borrower
shall include all earnings on the Collection Account as income of Borrower for
federal and applicable state tax purposes.

                  (d) MONTHLY AND PAYMENT DATE STATEMENTS. With respect to each
Collection Period, Agent shall prepare and deliver, or shall cause to be
prepared and delivered, to Borrower a statement no later than ten (10) Business
Days after the end of such Collection Period setting forth the aggregate
deposits to and withdrawals from the Collection Account and each account of the
Reserve Account and the opening and closing balances in such accounts
(collectively, the "MONTHLY STATEMENT"). With respect to each Payment Date and
the related Collection Period and Interest Accrual Period, Agent shall prepare
and deliver, or shall cause to be prepared and delivered to Borrower, a
statement (each, a "PAYMENT DATE STATEMENT") no later than the Business Day
prior to such Payment Date with respect to each of the items below, setting
forth the following:

                  (i) the aggregate deposits to the Collection Account during
         the related Collection Period for each type of deposit under this
         Agreement and the opening and closing balances in the Collection
         Account;

                  (ii) the amount of interest then due and payable with respect
         to the Interest Accrual Period (including the applicable number of days
         and interest rate which were applied in determining such amount) and
         the Principal Payment Amount then due and payable;

                  (iii) the amount of the Prepayment Fee, if any, then due and
         payable;

                  (iv) the amount of the Servicing Fee of the Agent's servicer
         and any expenses payable to the Agent's servicer and any outstanding
         indemnification payment to which an Indemnified Party is then entitled
         under this Agreement;

                  (v) the following information with respect to the Principal
         Indebtedness in a format reasonably acceptable to Agent: (1) the
         Principal Indebtedness as of the preceding Payment Date, (2) any
         principal payable to the Lenders pursuant to SECTIONS 2.5, 2.6, 2.7 or
         2.12 on such Payment Date, and (3) the Principal Indebtedness on the
         current Payment Date (taking into account such payments); and

                  (vi) the amount withdrawn from or remitted to each account of
         the Reserve Account in accordance with SECTIONS 2.12 and 2.13 and the
         amount remitted to the Borrower.

                  (e) QUARTERLY STATEMENTS. No later than thirty (30) days
following the end of each of the months of December, March, June, and September,
beginning with the month ending at December 31, 2004, Borrower shall prepare and
deliver to the Agent a statement (each a "QUARTERLY STATEMENT") in hard copy and
on diskette and/or a copy through electronic mail, in



                                       34


         form and substance reasonably satisfactory to Agent, setting forth with
         respect to the Mortgaged Property,

                  (i) a rent roll dated as of the last day of such quarter
         identifying each of the Leases by the term, renewal options (including
         rental base), space occupied, rental and other charges required to be
         paid, security deposit paid, real estate taxes paid by tenants, common
         area charges paid by tenants, tenant pass-throughs, any rental
         concessions or special provisions or inducements, tenant sales (if the
         tenant is required to report sales to Borrower), rent delinquencies,
         rent escalations, amounts taken in settlement of outstanding arrears,
         collections of rent for more than one (1) month in advance,
         "non-competition" provisions (restricting Borrower or any tenant), any
         defaults thereunder, any space which has "gone dark" (and any affected
         Leases through co-tenancy clauses) and any other information reasonably
         required by Lender;

                  (ii) monthly and year-to-date operating statements prepared
         for each calendar month during each such quarter, each of which shall
         include an itemization of actual (not pro forma) capital expenditures
         during the applicable period; and

                  (iii) a comparison of the budgeted income and expenses with
         the actual income and expenses for such month and year to date,
         together with a detailed explanation of any variances between budgeted
         and actual amounts that are in excess of the greater of: (1) $1,000, or
         (2) five percent (5%) or more for each line item therein.

                  (f) LOSS PROCEEDS. In the event of a casualty or Taking with
respect to the Mortgaged Property, unless pursuant to SECTION 5.1(X) of this
Agreement or applicable law, the Loss Proceeds are to be made available to
Borrower for restoration, all of Borrower's interest in Loss Proceeds shall be
paid directly to the Collection Account to satisfy the requirements of SECTION
2.7(B). If the Loss Proceeds are to be made available for restoration pursuant
to this Agreement, such Loss Proceeds shall be held by the Agent in a segregated
interest-bearing Eligible Account with the Collateral Agent in the name of the
Agent on behalf of the Lenders to be opened by the Agent within three (3)
Business Days after the Agent receives written notice of the necessity therefor,
to be withdrawn by the Collateral Agent and held uninvested in an Eligible
Account at the Collateral Agent account from the Business Day immediately
preceding the date upon which payment to Borrower is to be made to such payment
date for delivery to Borrower from time to time to pay restoration costs
pursuant to a schedule reasonably acceptable to Agent and Borrower. Funds on
deposit in any such account opened by the Collateral Agent shall be invested in
Permitted Investments in the same manner and subject to the same restrictions as
set forth in SECTION 2.12(C) with respect to the Collection Account (except that
the maturity shall be not later than as necessary to satisfy the schedule
referred to in the preceding sentence). If any Loss Proceeds are received by
Borrower, such Loss Proceeds shall be received in trust for the Lenders, shall
be segregated from other funds of Borrower, and shall be forthwith paid to
Collateral Agent to the extent necessary to comply with this Agreement.

                  Section 2.13. RESERVE ACCOUNT.

                  (a) CAPITAL AND LEASING COSTS ACCOUNT AND REPLACEMENT RESERVE
ACCOUNT.



                                       35


                  (i) On or before the Closing Date, Borrower shall establish
         and maintain with the Collateral Agent two separate accounts for
         Capital Improvement Costs, Leasing Commissions, TI Costs and
         replacement reserves, each of which shall be an Eligible Account and
         shall have the same title as the Collection Account, for the benefit of
         the Lenders until the Loan is paid in full. The two accounts shall be
         designated the Capital and Leasing Costs Account (the "CAPITAL AND
         LEASING COSTS ACCOUNT"), and the Replacement Reserve Account (the
         "REPLACEMENT RESERVE ACCOUNT"). On the Closing Date, the initial Lender
         shall deposit out of the Loan proceeds $4,000,000 in the Capital and
         Leasing Costs Account. On each Payment Date, Agent shall deposit from
         the Collection Account (or if the funds for such deposit are not
         available pursuant to SECTION 2.12(B), Borrower shall make a deposit of
         Borrower's funds) in the Replacement Reserve Account, an amount equal
         to one-twelfth (1/12th) of the product of $0.25 and 750,000 (i.e. the
         rentable square footage of the Mortgaged Property).

                  (ii) Any and all Moneys remitted to the Capital and Leasing
         Costs Account, together with any Permitted Investments in which such
         Moneys are or will be invested or reinvested during the term of this
         Agreement, shall be held in the Capital and Leasing Costs Account (a)
         to be withdrawn by Collateral Agent upon written request of Borrower
         made not more than once each month in an amount not less than $10,000
         and held uninvested for Borrower or the Lenders in an Eligible Account
         at the Collateral Agent from the close of business on the Business Day
         immediately preceding the date upon which payment is to be made to
         Borrower to such date, and applied at Borrower's option to pay directly
         or reimburse Borrower for Capital Improvement Costs, Leasing
         Commissions and TI Costs reasonably approved by Agent for the build out
         of the third floor of the Mortgaged Property pursuant to Leases
         executed by Borrower after the Closing Date or other contracts executed
         by Borrower after the Closing Date covering such space, or (b) for
         purposes otherwise requested by Borrower and reasonably approved by the
         Agent in writing.

                  (iii) Any and all Moneys remitted to the Replacement Reserve
         Account, together with any Permitted Investments in which such Moneys
         are or will be invested or reinvested during the term of this
         Agreement, shall be held in the Replacement Reserve Account (a) to be
         withdrawn by Collateral Agent upon written request by Borrower made not
         more than once each month in an amount not less than $10,000 and held
         uninvested for Borrower or the Lenders in an Eligible Account at the
         Collateral Agent from the close of business on the Business Day
         immediately preceding the date upon which payment is to be made to
         Borrower to such date, and applied at Borrower's option to pay directly
         or reimburse Borrower for replacement reserve costs reasonably
         determined by Borrower or (b) for purposes otherwise requested by
         Borrower and reasonably approved by the Agent in writing.

                  (iv) Not less than three (3) Business Days prior to Borrower's
         delivery of a request to Collateral Agent to withdraw the funds on
         deposit in the Capital and Leasing Costs Account or Replacement Reserve
         Account, in whole or in part, Borrower shall provide the Agent with
         written notice (with a copy to Collateral Agent) of such request
         (including therein a statement of the purpose for the withdrawal and in
         the case of a reimbursement of the Borrower, evidence that the related
         costs have been paid).



                                       36


REAL ESTATE TAXES ESCROW ACCOUNT AND INSURANCE ESCROW ACCOUNT. On or before the
Closing Date, Borrower shall establish and maintain with the Collateral Agent
two separate accounts for Property Expenses, each of which shall be an Eligible
Account and shall have the same title as the Collection Account for the benefit
of the Lenders until the Loan is paid in full. The two accounts shall be
designated the Real Estate Taxes Escrow Account (the "REAL ESTATE TAXES ESCROW
ACCOUNT") and the Insurance Escrow Account (the "INSURANCE ESCROW ACCOUNT"). On
the Closing Date, the initial Lender shall deposit out of the Loan proceeds
$158,778.24 in the Real Estate Taxes Escrow Account and $22,960.61 in the
Insurance Escrow Account. With respect to each Payment Date, Agent shall deposit
from the Collection Account (or, if the funds for such deposit are not available
pursuant to SECTION 2.12(B), Borrower shall make a deposit of Borrower's funds),

                  (1) an amount equal to the Impositions portion of Monthly
         Property Expenses in the Real Estate Taxes Escrow Account, and

                  (2) an amount equal to the portion of Monthly Property
         Expenses equal to insurance premiums for policies of insurance required
         to be maintained by Borrower with respect to the Mortgaged Property
         pursuant to this Agreement or the other Loan Documents in the Insurance
         Escrow Account.

Any and all Moneys remitted to the Real Estate Taxes Escrow Account or Insurance
Escrow Account together with any Permitted Investments in which such Moneys are
or will be invested or reinvested during the term of this Agreement, shall be
held in the Real Estate Taxes Escrow Account or Insurance Escrow Account to be
withdrawn from the Real Estate Taxes Escrow Account or Insurance Escrow Account,
as applicable, by the Collateral Agent upon written request of Borrower
delivered to Agent and Collateral Agent together with documentation and other
evidence (including invoices and in the case of a reimbursement of the Borrower,
evidence that the related costs have been paid) with respect to the respective
Basic Carrying Costs towards which such funds are to be applied and held
uninvested for Borrower or the Lenders in an Eligible Account at the Collateral
Agent from the close of business on the Business Day immediately preceding the
date upon which direct payment or reimbursement to Borrower is to be made to
such date, and applied at Borrower's option to pay directly (or reimburse
Borrower) for (x) any Impositions (in the case of the Real Estate Taxes Escrow
Account) or (y) any insurance premiums for policies of insurance required to be
maintained by Borrower with respect to the Mortgaged Property pursuant to this
Agreement or the other Loan Documents (in the case of the Insurance Escrow
Account), in each case currently due to be paid and not previously paid or
reimbursed. The Borrower shall deliver to the Agent tax certificates or other
evidence of tax paid promptly following payment of same in order to enable the
Agent to verify the payment of taxes.

                  (b) Reserved.

                  (c) INVESTMENT OF FUNDS. All or a portion of any Moneys in the
Reserve Account shall be invested and reinvested, so long as Collateral Agent
has not received written notice from Agent that an Event of Default has occurred
and is continuing, by Agent in accordance with written instructions delivered by
Borrower, or after Agent has received written notice from Agent that an Event of
Default has occurred and is continuing, by Agent, in one or more Permitted
Investments. If no written investment direction is provided to Agent by



                                       37


Borrower, Agent shall invest such Moneys in a Permitted Investment selected by
Agent. Agent, the Lenders and Collateral Agent shall have no liability for any
loss in investments of funds in the Reserve Account that are invested in
Permitted Investments and no such loss shall affect Borrower's obligation to
fund, or liability for funding, the Reserve Account. So long as an Event of
Default has not occurred and is not continuing, all such Permitted Investments
shall be made in the name of Agent on behalf of the Lenders or as otherwise
directed by Agent. Agent shall cause all income or other gain from investments
of Money held in the Reserve Account to be deposited in such respective account
of the Reserve Account immediately upon receipt and any loss resulting from such
investments shall be charged to such respective account of the Reserve Account;
PROVIDED, that notwithstanding the foregoing, Agent shall not have such
obligation with respect to the Real Estate Taxes Escrow Account and the
Insurance Escrow Account, as to which the Agent's servicer may retain all such
reinvestment income. Unless and until title to the funds therein shall have
vested in any Person other than Borrower, Borrower shall include all such income
or gain on any account of the Reserve Account as income of Borrower for federal
and applicable state tax purposes.

                  (d) EVENT OF DEFAULT. After Collateral Agent has received
written notice from Agent that an Event of Default has occurred and is
continuing, Borrower shall not be permitted to make any withdrawal(s) from the
Reserve Account and Agent may liquidate any Permitted Investments of the amount
on deposit in such account, withdraw and hold the proceeds of such liquidation
uninvested for Lenders in an Eligible Account at the Collateral Agent account
from the Business Day immediately preceding the date such funds are to be used
and use such amount on deposit in the Reserve Account on the succeeding Business
Day to make payments on account of the Loan in accordance with the priorities
set forth in Section 2.8.

                  Section 2.14. ADDITIONAL PROVISIONS RELATING TO THE COLLECTION
ACCOUNT AND THE RESERVE ACCOUNT.

                  (a) The Borrower covenants and agrees that: (i) all securities
or other property underlying any financial assets credited to any Pledged
Account shall be registered in the name of the Collateral Agent, indorsed to the
Collateral Agent or indorsed in blank or credited to another securities account
maintained in the name of the Collateral Agent and in no case will any financial
asset credited to any Pledged Account be registered in the name of the Borrower,
payable to the order of the Borrower or specially indorsed to the Borrower
except to the extent the foregoing have been specially indorsed to the
Collateral Agent or in blank; and (ii) all Permitted Investments and all other
property delivered to the Collateral Agent pursuant to this Agreement shall be
promptly credited to one of the Pledged Accounts.

                  (b) The Borrower hereby agrees that each item of property
(whether investment property, financial asset, security, instrument, cash or
otherwise) credited to any Pledged Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.

                  (c) If at any time the Collateral Agent shall receive from the
Agent an entitlement order (i.e. an order directing transfer or redemption of
any financial asset relating to a Pledged Account) or any instruction (within
the meaning of Section 9-104 of the UCC) originated by the Agent (i.e. an
instruction directing the disposition of funds in a Pledged



                                       38


Account), the Borrower shall comply with such entitlement order or instruction
without further consent by any other Person.

                  (d) Regardless of any provision in any other agreement, for
purposes of the UCC, with respect to each Pledged Account, New York shall be
deemed to be the bank's jurisdiction (within the meaning of Section 9-304 of the
UCC) and the securities intermediary's jurisdiction (within the meaning of
Section 8-110 of the UCC). The Pledged Accounts shall be governed by the laws of
the State of New York.

                  (e) Except for the claims and interest of the Agent and of the
Borrower in the Pledged Accounts, the Borrower represents and warrants that it
does not know of any Lien on or claim to, or interest in, any Pledged Account or
in any "financial asset" (as defined in Section 8-102(a) of the UCC) credited
thereto. If any Person asserts any Lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Pledged Accounts or in any financial asset carried therein,
the Borrower will promptly notify the Agent thereof.

                  Section 2.15. SECURITY AGREEMENT.

                  (a) PLEDGE OF ACCOUNT. To secure the full and punctual payment
and performance of all of the Indebtedness, Borrower hereby assigns, conveys,
pledges and transfers to the Agent on behalf of the Lenders as secured party,
and grants Agent on behalf of the Lenders a first and continuing security
interest in and to, the following property, whether now owned or existing or
hereafter acquired or arising and regardless of where located (collectively, the
"ACCOUNT COLLATERAL"):

                  (i) all of Borrower's right, title and interest in the Pledged
         Accounts and all Money and Permitted Investments, if any, from time to
         time deposited or held in the Pledged Accounts or purchased with funds
         or assets on deposit in the Pledged Accounts;

                  (ii) all of Borrower's right, title and interest in interest,
         dividends, Money, Instruments and other property from time to time
         received, receivable or otherwise payable in respect of, or in exchange
         for, any of the foregoing until such time as such items are disbursed
         from the Pledged Accounts; and

                  (iii) to the extent not covered by clause (i) or (ii) above,
         all Borrower's right, title and interest in Proceeds of any or all of
         the foregoing until such time as such items are disbursed from the
         Pledged Accounts.

                  (b) COVENANTS. So long as any portion of the Indebtedness is
outstanding, Borrower shall not open any account other than the Collection
Account for the deposit of Rents or Money received from Accounts or under Leases
and derived from the Mortgaged Property and all Proceeds to pay amounts owing
hereunder, other than any account for amounts required by law to be segregated
by Borrower. Borrower shall not have any right to withdraw Money from the
Reserve Account, which shall be under the sole dominion and control, and the
"control" within the meaning of Sections 9-104 and 9-106 of the UCC, of the
Agent. The Account Collateral shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other banking authority or Governmental



                                       39


Authority, as may now or hereafter be in effect, and to the rules, regulations
and procedures of Collateral Agent relating to demand deposit accounts generally
from time to time in effect.

                  (c) FINANCING STATEMENTS; FURTHER ASSURANCES. The Borrower
hereby authorizes the filing of any financing statements or continuation
statements, and amendments to financing statements, in any jurisdictions and
with any filing offices as the Agent may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to the Agent in
connection herewith. Such financing statements may describe the collateral in
the same manner as described in any security agreement or pledge agreement
entered into by the parties in connection herewith or may contain an indication
or description of collateral that describes such property in any other manner as
the Agent may determine, in its sole discretion, is necessary, advisable or
prudent to ensure the perfection of the security interest in the collateral
granted to the Agent in connection herewith, including, without limitation,
describing such property as "all assets" or "all personal property" whether now
owned or hereafter acquired. From time to time, at the expense of Borrower,
Borrower shall promptly execute and deliver all further instruments, and take
all further action, that Agent may reasonably request, in order to continue the
perfection and protection of the pledge and security interest granted or
purported to be granted hereby.

                  (d) TRANSFERS AND OTHER LIENS. Borrower shall not sell or
otherwise dispose of any of the Account Collateral other than pursuant to the
terms of this Agreement and the other Loan Documents, or create or permit to
exist any Lien upon or with respect to all or any of the Account Collateral,
except for the Lien granted to Agent, and the rights of the institution acting
as Agent, under or as contemplated by this Agreement.

                  (e) NO WAIVER. Every right and remedy granted to Agent under
this Agreement or by law may be exercised by Agent at any time and from time to
time, and as often as Agent may deem it expedient. Any and all of Agent's rights
with respect to the pledge of and security interest in the Account Collateral
granted hereunder shall continue unimpaired, and to the extent permitted by law,
Borrower shall be and remain obligated in accordance with the terms hereof,
notwithstanding (i) any proceeding of Borrower under the United States
Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes
of any state, (ii) the release or substitution of Account Collateral at any
time, or of any rights or interests therein or (iii) any delay, extension of
time, renewal, compromise or other indulgence granted by Agent in the event of
any Default with respect to the Account Collateral or otherwise hereunder. No
delay or extension of time by Agent in exercising any power of sale, option or
other right or remedy hereunder, and no notice or demand which may be given to
or made upon Borrower by Agent, shall constitute a waiver thereof, or limit,
impair or prejudice Agent's right, without notice or demand, to take any action
against Borrower or to exercise any other power of sale, option or any other
right or remedy.

                  (f) AGENT APPOINTED ATTORNEY-IN-FACT. Borrower hereby
irrevocably constitutes and appoints Agent as Borrower's true and lawful
attorney-in-fact, with full power of substitution, at any time after the
occurrence and during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of Borrower with respect to the Account
Collateral, and do in the name, place and stead of Borrower, all such acts,
things and deeds for and on behalf of and in the name of Borrower with respect
to the Account Collateral, which Borrower could or might



                                       40


do or which Agent may deem necessary or desirable to more fully vest in Agent
the rights and remedies provided for herein with respect to the Account
Collateral and to accomplish the purposes of this Agreement. The foregoing
powers of attorney are irrevocable and coupled with an interest and shall
terminate upon repayment of the Indebtedness in full.

                  (g) CONTINUING SECURITY INTEREST; TERMINATION. This Section
2.15 shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until payment in full by
Borrower of the Indebtedness. Upon payment in full by Borrower of the
Indebtedness, Agent shall promptly return to Borrower such of the Account
Collateral as shall not have been applied pursuant to the terms hereof, and
shall execute such instruments and documents as may be reasonably requested by
Borrower to evidence such termination and the release of the pledge and lien
hereof.

                  Section 2.16. MORTGAGE RECORDING TAXES. The Lien created by
the Mortgage is intended to encumber the Mortgaged Property to the full extent
of the Loan Amount. On or before the Closing Date, Borrower shall have paid all
state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgage, if any.

                  Section 2.17. GENERAL COLLATERAL AGENT PROVISIONS.

                  (a) APPOINTMENT. The Lenders hereby designate and appoint the
Collateral Agent as Collateral Agent on behalf of the Lenders under this
Agreement, and authorize the Collateral Agent, as Collateral Agent for the
Lenders, to take such actions on their behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to Collateral Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with the Lenders, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Collateral
Agent.

                  (b) COLLATERAL AGENT'S RIGHT TO PERFORM. If an Event of
Default shall have occurred and be continuing, then Collateral Agent may, but
shall have no obligation to, itself perform, or cause performance of, such
covenant or obligation giving rise to such Event of Default. The reasonable fees
and expenses of Collateral Agent incurred in connection therewith shall be
payable by Borrower to Collateral Agent upon demand, which obligation shall be
secured by all Collateral.

                  (c) STANDARD OF CARE. Beyond the observance of Accepted
Practices and the exercise of reasonable care in the custody or disbursements
thereof, Collateral Agent shall not have any duty as to any Account Collateral
or any income thereon in its possession or control or in the possession or
control of any agents for, or of Collateral Agent, or the preservation of rights
against any Person or otherwise with respect thereto. Collateral Agent shall be
deemed to have exercised reasonable care in the custody of the Account
Collateral in its possession if the Account Collateral is accorded treatment in
accordance with the Accepted Practices.



                                       41


                  (d) EXCULPATORY PROVISIONS. Neither Collateral Agent nor any
of its officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates shall be responsible in any manner to the Lenders for any recitals,
statements, representations or warranties made by Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by Collateral Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Note or any other Loan
Document or for any failure of Borrower to perform its obligations hereunder or
thereunder. Collateral Agent shall not be under any obligation to the Lenders to
ascertain or to inquire as to the agreements contained in, or conditions of,
this Loan Agreement or any other Loan Document, or to inspect the properties,
books or records of Borrower. Collateral Agent shall not be required to take any
discretionary actions hereunder except at the written direction of Borrower or
Agent, it being understood and agreed that Collateral Agent's duties hereunder
shall be wholly ministerial in nature and that Collateral Agent shall not be
responsible for calculating any financial ratios or generating any reports
(other than the Monthly Statement) for the Lenders or Borrower. In connection
with any discretionary action which Borrower is permitted hereunder to direct
Collateral Agent to take, if Collateral Agent shall follow Agent's directions
and not Borrower's directions, it shall have no liability to Borrower (or to any
other Person) for following any such directions of Agent and for not following
such directions of Borrower (if expressly permitted herein). Collateral Agent
shall not be under any obligation or duty to perform any act which, in
Collateral Agent's sole reasonable judgment, could involve it in expense or
liability or to institute or defend any suit in respect hereof, or to advance
any of its own monies, unless Agent or Borrower, as the case may be, shall have
offered to Collateral Agent reasonable security or indemnity against such
expense, liability, suit or advance.

                  (e) INDEMNIFICATION. Borrower shall indemnify and hold
Collateral Agent, and its agents, attorneys, employees and officers harmless
from and against any loss, cost or damage (including, without limitation,
reasonable attorneys' fees and disbursements) incurred by Collateral Agent in
connection with the transactions contemplated hereby, excluding any such loss,
cost or damage arising as a result of Collateral Agent's failure to adopt and
follow Accepted Practices, gross negligence, bad faith, willful misconduct or
violation of applicable law. The indemnification set forth in this paragraph
shall survive the satisfaction and payment of the Indebtedness and the
termination of this Agreement.

                  (f) COLLATERAL AGENT'S RELIANCE. Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
fax, electronic mail message, telex or teletype message, written statement,
order or other document reasonably believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel and other experts selected in good faith
by Collateral Agent. Collateral Agent may deem and treat the payee of the Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with Collateral Agent.
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of Agent as it deems appropriate or it shall
first be indemnified to its satisfaction by Agent against any and all liability
and expense which may be incurred by it by reason of taking or



                                       42


continuing to take any such action. Provided that Collateral Agent acts in
accordance with Accepted Practices, Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of Agent, and such request and any action taken or
failure to act pursuant thereto shall be binding upon Agent and all future
holders of the Note. All requests to Collateral Agent for wire transfers of
funds, for transfers between accounts established pursuant to this Agreement or
any other transfer not specifically described in this Agreement shall be in
writing.

                  (g) NOTICE OF DEFAULT. Collateral Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless Collateral Agent has received written notice from Agent
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". Collateral Agent shall take
such action with respect to such Default or Event of Default as shall be
directed by Agent, including any action under this Agreement.

                  (h) NON-RELIANCE ON COLLATERAL AGENT. Neither Collateral Agent
nor any of its officers, directors, employees, agents, attorneys,
attorneys-in-fact or Affiliates has made any representations or warranties to
the Lenders and no act by Collateral Agent hereinafter taken (including any
review of the affairs of Borrower) shall be deemed to constitute any
representation or warranty by Collateral Agent to the Lenders. Except for
notices, reports and other documents expressly required to be furnished to Agent
by Collateral Agent hereunder, Collateral Agent shall not have any duty or
responsibility to provide the Lenders with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Borrower which may come into the
possession of Collateral Agent or any of its officers, directors, employees,
agents, attorneys, attorneys-in-fact or Affiliates.

                  (i) REMOVAL AND RESIGNATION. Collateral Agent shall have the
right to resign as collateral agent hereunder and Agent shall have the right to
remove Collateral Agent as collateral agent hereunder, in each case upon thirty
(30) days' written notice to the other parties to this Agreement. In the event
of such resignation or removal, Agent shall appoint a successor Collateral Agent
with the consent of Borrower (such consent not to be unreasonably withheld or
delayed), or at Agent's option in Agent's sole and absolute discretion Agent may
assume and perform the rights and obligations of Collateral Agent. No such
removal of or resignation by Collateral Agent shall become effective until a
successor Collateral Agent shall have accepted such appointment (or Agent shall
have determined to designate itself as Collateral Agent) and executed an
instrument by which it shall have assumed all of the rights and obligations of
Collateral Agent hereunder. If no such successor Collateral Agent is appointed
within sixty (60) days (or, if fees payable under the Fee Letter have not been
paid, thirty (30) days) after receipt of the resigning Collateral Agent's notice
of resignation or removal, the resigning Collateral Agent may petition a court
for the appointment of a successor Collateral Agent unless Agent elects, in its
sole and absolute discretion, to assume the rights and obligations of Collateral
Agent itself. In connection with any removal of or resignation by Collateral
Agent, (A) the removed or resigning Collateral Agent shall (1) duly assign,
transfer and deliver to the successor Collateral Agent this Agreement and all
Money and Permitted Investments held by it hereunder, (2) execute such financing
statements and other instruments as may be necessary to assign to the successor
Collateral Agent the security interest existing in favor of the retiring
Collateral Agent hereunder,



                                       43


and to otherwise give effect to such succession and (3) take such other actions
as may be reasonably required by Borrower, Agent or the successor Collateral
Agent in connection with the foregoing and (B) the successor Collateral Agent
shall establish in its name, as agent for the Lenders, as secured party, the
Collection Account and Reserve Account as Borrower is required to maintain
pursuant to the terms of this Agreement.

                  (j) INDIVIDUAL CAPACITY. Collateral Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Borrower or any Affiliate, as though Collateral Agent were not
Collateral Agent hereunder, or under the other Loan Documents.

                                  ARTICLE III.
                              CONDITIONS PRECEDENT

                  Section 3.1. CONDITIONS PRECEDENT TO CLOSING. The obligation
of the initial Lender to make the Loan is subject to the satisfaction by
Borrower (and Guarantor, where applicable) or waiver by Agent and initial Lender
of the following conditions no later than the Closing Date:

                  (a) LOAN AGREEMENT. Borrower, Agent and initial Lender shall
have executed and delivered this Agreement.

                  (b) NOTE. Borrower shall have executed and delivered to
initial Lender the Note.

                  (c) ENVIRONMENTAL INDEMNITY AGREEMENT; GUARANTY OF
NON-RECOURSE OBLIGATIONS; INTEREST RATE CAP AGREEMENT; SUBORDINATION AGREEMENT.
Borrower and Guarantor shall have executed and delivered the Environmental
Indemnity Agreement to the Agent for benefit of the Lenders. Guarantor shall
have executed and delivered the Guaranty of Non-Recourse Obligations. Borrower
shall have delivered to the Agent the interest rate cap agreement in a form
acceptable to the Agent from a Qualified Interest Rate Cap Provider with a
notional amount equal to the Loan Amount and a strike rate equal to 6.00% and
the fully executed Collateral Assignment of Hedge. The Subordinate Lender shall
have executed and delivered the Subordination Agreement to the Agent for the
benefit of the Lenders.

                  (d) OPINIONS OF COUNSEL. The Lender and Collateral Agent shall
have received from counsel to Borrower and the Guarantor, legal opinions in form
and substance acceptable to Agent, with respect to corporate matters and with
respect to substantive non-consolidation of the Guarantor, the sole member of
the Borrower and the Manager on the one hand and Borrower on the other in the
event of the bankruptcy of the Guarantor, the sole member of the Borrower or the
Manager. Such legal opinions shall be addressed to Agent and its successors and
assigns, dated the Closing Date, and in form and substance reasonably
satisfactory to Agent and its counsel.

                  (e) ORGANIZATIONAL DOCUMENTS. The Lender shall have received
with respect to each of Borrower and the Guarantor its certificate of formation
or certificate of incorporation, as applicable, as amended, modified or
supplemented to the Closing Date, as filed with the Secretary of State in the
jurisdiction of organization and in effect on the Closing Date and



                                       44


certified to be true, correct and complete by the appropriate Secretary of State
as of a date not more than ten (10) days prior to the Closing Date, together
with, if available, a good standing certificate from such Secretary of State
and, for Borrower only, a good standing certificate from the Secretaries of
State (or the equivalent thereof) of each other State in which Borrower is
required to be qualified to transact business.

                  (f) CERTIFIED RESOLUTIONS, ETC. The Lender shall have received
a certificate of each of Borrower and the Guarantor dated the Closing Date,
certifying (i) the names and true signatures of its incumbent officers
authorized to sign the Loan Documents to which Borrower or the Guarantor is a
party, (ii) the Organizational Agreement of Borrower as in effect on the Closing
Date, (iii) the resolutions of each of the Borrower and the Guarantor, approving
and authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, and (iv) that there have been no changes in any
Organizational Agreement since the date of execution or preparation thereof.

                  (g) ADDITIONAL MATTERS. The Agent shall have received such
other certificates, opinions, documents and instruments relating to the Loan as
may have been reasonably requested by Agent. All corporate and other
organizational proceedings, all other documents (including, without limitation,
all documents referred to herein and not appearing as exhibits hereto) and all
legal matters in connection with the Loan shall be reasonably satisfactory in
form and substance to Agent.

                  (h) TRANSACTION COSTS. Borrower shall have paid all
Transaction Costs for which bills have been submitted in accordance with the
provisions of SECTION 8.23.

                  (i) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on the Closing Date.

                  (j) NO INJUNCTION. No law or regulation shall have been
adopted, no order, judgment or decree of any Governmental Authority shall have
been issued, and no litigation shall be pending or threatened, which in the good
faith judgment of the initial Lender would enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition upon, the
making or repayment of the Loan or the consummation of the Transaction.

                  (k) REPRESENTATIONS AND WARRANTIES. The representations and
warranties herein and in the other Loan Documents shall be true and correct in
all material respects on the Closing Date.

                  (l) SURVEY; APPRAISAL. Agent shall have received the Survey
and the Appraisal with respect to the Mortgaged Property, which shall be in form
and substance reasonably satisfactory to Agent.

                  (m) ENGINEERING REPORT. Agent shall have received the
Engineering Report with respect to the Mortgaged Property prepared by the
Engineer, which Engineering Report shall be reasonably acceptable to Agent.



                                       45


                  (n) ENVIRONMENTAL MATTERS. Agent shall have received an
Environmental Report prepared by an Environmental Auditor with respect to the
Mortgaged Property, which Environmental Report shall be reasonably acceptable to
Agent.

                  (o) FINANCIAL INFORMATION. Agent shall have received
reasonably acceptable financial information relating to the Mortgaged Property.
Such information shall include the following, to the extent reasonably
available:

                  (i) operating statements for the current year (including
         actual to date information, an annual budget and trailing twelve month
         data in hard copy and on diskette) and for not less than the two
         preceding years (including tenant improvements costs, leasing
         commissions, capital reserves, major repairs, replacement items and
         occupancy rates in hard copy and on diskette);

                  (ii) copies of Leases with respect to the tenants of the
         Mortgaged Property, a copy of the standard lease form, if any, and
         tenant lease abstracts, if available;

                  (iii) current property rent roll data on a tenant by tenant
         basis in hard copy (including name, square footage, lease term,
         expiration date, renewal options, base rent per square foot, sales
         volume psf (if applicable), percentage rent terms (if applicable),
         additional rent clauses (including stops, offsets, and other special
         provisions), escalation clauses for increase in operating expense,
         maintenance, insurance, real estate taxes and utilities, assignment,
         sublet and cancellation provisions and purchase options);

                  (iv) current real estate tax bills and historical real estate
         tax bills of record for the Mortgaged Property for not less than the
         three preceding years;

                  (v) insurance certificates indicating the type and amount of
         coverage; and

                  (vi) the most recent annual financial statements and unaudited
         quarterly financial statements.

The annual financial statements relating to the Mortgaged Property shall be
either (x) audited by a "Big Four" accounting firm or another firm of certified
public accountants reasonably acceptable to Agent or (y) done in accordance with
agreed upon procedures reasonably acceptable to Agent to be performed by a "Big
Four" accounting firm or another firm of certified public accountants reasonably
acceptable to Agent to create similar information.

                  (p) PRO-FORMA FINANCIAL STATEMENT; OPERATING BUDGET. Agent
shall have received (i) the initial pro forma financial statement and Operating
Budget for the Mortgaged Property for the following twelve months (including on
an annual and monthly basis a break-down of projected Gross Revenues, Property
Expenses, Capital Improvement Costs (including Leasing Commissions and TI
Costs), replacement reserve costs and average occupancy level (expressed as a
percentage)) and (ii) a financial statement that forecasts projected revenues
and operating expenses for not less than three years (including the assumptions
used in such forecast).



                                       46


                  (q) SITE INSPECTION. Borrower shall have provided to Agent the
opportunity to perform, or cause to be performed on its behalf, an on-site due
diligence review of the Mortgaged Property to be refinanced with the Loan which
inspection is satisfactory to Agent in its sole discretion.

                  (r) MORTGAGED PROPERTY DOCUMENTS.

                  (i) MORTGAGE; ASSIGNMENT OF RENTS AND LEASES. Borrower shall
         have executed and delivered to Agent the Mortgage and the Assignment of
         Rents and Leases with respect to the Mortgaged Property and such
         Mortgage and Assignment of Rents and Leases shall have been filed of
         record in the appropriate filing office in the jurisdiction in which
         the Mortgaged Property is located or irrevocably delivered to a title
         agent for such recordation.

                  (ii) FINANCING STATEMENTS. Borrower shall have executed and
         delivered to Agent all financing statements required by Agent pursuant
         hereto and such financing statements shall have been filed of record in
         the appropriate filing offices in each of the appropriate jurisdictions
         or irrevocably delivered to a title agent for such recordation.

                  (iii) MANAGEMENT AGREEMENT AND MANAGER'S SUBORDINATION. With
         respect to the Mortgaged Property, Agent shall have received the
         executed Management Agreement and the Manager shall have executed and
         delivered the Manager's Subordination to Agent.

                  (iv) CONTRACT ASSIGNMENT. With respect to the Mortgaged
         Property, Borrower shall have executed and delivered to Agent a
         Contract Assignment with respect to the Mortgaged Property.

                  (s) OPINIONS OF COUNSEL. Agent shall have received from
counsel to Borrower its legal opinion in form and substance satisfactory to
Agent, as to the enforceability of the Mortgage and Assignment of Rents and
Leases, perfection of Liens and security interests and other matters referred to
therein. The legal opinions will be addressed to Agent and Lenders and their
successors and assigns, dated the Closing Date, and in form and substance
reasonably satisfactory to Agent and its counsel.

                  (t) INSURANCE. Agent shall have received certificates of
insurance demonstrating insurance coverage in respect of the Mortgaged Property
of types, in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth in this Agreement. Such certificates shall
indicate that Agent is a named additional insured and shall contain a loss payee
endorsement in favor of Agent with respect to the property policies required to
be maintained under this Agreement.

                  (u) TITLE INSURANCE POLICY. Agent shall have received an
unconditional commitment (in form and substance reasonably satisfactory to
Agent) to issue the Title Insurance Policy covering the Mortgaged Property with
an amount of insurance reasonably acceptable to Agent up to maximum coverage
equal to the Loan Amount.



                                       47


                  (v) LIEN SEARCH REPORTS. Agent shall have received
satisfactory reports of UCC (collectively, the "UCC SEARCHES"), tax lien,
judgment and litigation searches and title updates conducted by the companies
issuing the Title Insurance Policy with respect to the Collateral, Borrower and
each member of Borrower, such searches to be conducted in each of the locations
required by Agent.

                  (w) CONSENTS, LICENSES, APPROVALS, ETC. Agent shall have
received copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Borrower and
Collateral Agent, and the validity and enforceability, of the Loan Documents,
and such consents, licenses and approvals shall be in full force and effect.

                  (x) ADDITIONAL REAL ESTATE MATTERS. Agent shall have received
such other real estate related certificates and documentation relating to the
Mortgaged Property as Agent may have reasonably requested. Such documentation
shall include the following as requested by Agent and to the extent reasonably
available:

                  (i) certificates of occupancy issued by the appropriate
         Governmental Authority of the jurisdiction in which the Mortgaged
         Property is located reflecting, and consistent with, the use of the
         Mortgaged Property as of the Closing Date;

                  (ii) a report from The Planning and Zoning Resources
         Corporation indicating that the Mortgaged Property is in compliance
         with all applicable zoning laws, rules and regulations;

                  (iii) abstracts of all Leases in effect at the Mortgaged
         Property and copies of such of the Leases as Agent may request (in
         addition to the copies delivered above);

                  (iv) estoppel certificates in form and substance acceptable to
         Agent in respect of NAP of the Americas, Inc.; Sprint Communications
         Company, L.P.; and Global Crossing Latin America & Caribbean Company;
         and

                  (v) graphics (including interior and exterior photographs,
         rental brochures and a competitive properties map) as required by
         Agent.

                  (y) CLOSING STATEMENT. The Agent and Borrower shall have
agreed upon a detailed closing statement from Borrower in a form reasonably
acceptable to the Agent, which includes a complete description of Borrower's
sources and uses of funds on the Closing Date.

                  (z) LOAN-TO-COST RATIO. The Agent shall have determined that
the Loan Amount is not more than 65% of the acquisition cost of the Mortgaged
Property and the membership interests in the Borrower not owned by Terremark
Worldwide, Inc. as of the Closing Date (i.e. purchase price plus Agent-approved
related costs and expenses).

                  (aa) NAP LEASES. Agent shall have received amendments to the
existing NAP Leases for not less than 298,000 square feet in the aggregate at
the Mortgaged Property, which shall (i) reflect a market rent of not less than
$19.00 triple net per square foot commencing being due and payable as of the
Closing Date (but with subsequent rent steps to remain in place), (ii) provide
that all of tenant's monetary obligations under such Lease shall be guaranteed
by



                                       48


Guarantor, (iii) provide that the tenant shall thereby convey fixtures,
furnishings, and equipment and certain of NAP's personalty at the Mortgaged
Property to Borrower as set forth in such Leases, and (iv) be in form and
substance acceptable to the Agent.

                  (bb) WARRANTS; REGISTRATION RIGHTS AGREEMENT. Guarantor shall
have issued to Agent detachable Warrants in form and substance acceptable to
Agent and executed and delivered the Registration Rights Agreement.

                  Section 3.2. EXECUTION AND DELIVERY OF AGREEMENT. The
execution and delivery of this Agreement by each party to this Agreement shall
be deemed to constitute the satisfaction or waiver of the conditions set forth
in SECTION 3.1.

                                   ARTICLE IV.
                         REPRESENTATIONS AND WARRANTIES

                  Section 4.1. REPRESENTATIONS AND WARRANTIES AS TO BORROWER.
Borrower represents and warrants that, as of the Closing Date:

                  (a) ORGANIZATION. Borrower (i) is a duly and solely organized
and validly existing limited liability company in good standing under the laws
of the State of Delaware, (ii) has the requisite power and authority to own its
properties (including, without limitation, the Mortgaged Property) and to carry
on its business as now being conducted and is qualified to do business in the
jurisdiction in which the Mortgaged Property is located, and (iii) has the
requisite power to execute and deliver, and perform its obligations under, this
Agreement, the Note and all of the other Loan Documents to which it is a party.

                  (b) AUTHORIZATION; NO CONFLICT; CONSENTS AND APPROVALS.

                  (i) The execution and delivery by Borrower of this Agreement,
         the Note and each of the other Loan Documents to which it is a party,
         Borrower's performance of its obligations hereunder and thereunder and
         the creation of the security interests and liens provided for in this
         Agreement and the other Loan Documents to which it is a party (i) have
         been duly authorized by all requisite action on the part of Borrower,
         (ii) will not violate any provision of any Legal Requirements, any
         order of any court or other Governmental Authority, the Organizational
         Agreement or any indenture or agreement or other instrument to which
         Borrower is a party or by which Borrower is bound, and (iii) will not
         be in conflict with, result in a breach of, or constitute (with due
         notice or lapse of time or both) a default under, or result in the
         creation or imposition of any Lien of any nature whatsoever upon the
         Mortgaged Property pursuant to, any such indenture or agreement or
         material instrument other than the Loan Documents. Other than those
         obtained or filed on or prior to the Closing Date, Borrower is not
         required to obtain any consent, approval or authorization from, or to
         file declaration or statement with, any Governmental Authority or other
         agency in connection with or as a condition to the execution, delivery
         or performance of this Agreement, the Note or the other Loan Documents
         executed and delivered by Borrower.

                  (ii) The Warrants to be purchased by the initial Lender from
         the Guarantor have been duly authorized for issuance and sale pursuant
         to this Agreement and, when



                                       49


         issued and delivered by the Guarantor on the Closing Date, will have
         been duly executed, issued and delivered by the Guarantor, and will
         constitute valid and legally binding obligations of the Guarantor,
         enforceable against the Guarantor in accordance with their terms,
         subject to bankruptcy, insolvency, and other limitations on creditors'
         rights generally and to equitable principles.

                  (iii) The Registration Rights Agreement has been duly
         authorized, executed and delivered by the Guarantor and constitutes a
         valid and legally binding obligation of the Guarantor, enforceable
         against the Guarantor in accordance with its terms, subject to
         bankruptcy, insolvency, and other limitations on creditors' rights
         generally and to equitable principles.

                  (c) ENFORCEABILITY. This Agreement, the Note and each other
Loan Document executed by Borrower in connection with the Loan (including,
without limitation, any Collateral Security Instrument), is the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, subject to bankruptcy, insolvency, and other limitations on
creditors' rights generally and to equitable principles. This Agreement, the
Note and such other Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrower (including the defense of usury),
and Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.

                  (d) LITIGATION. There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority or other agency now
pending and served or, to the best knowledge of Borrower, threatened against
Borrower or any Collateral, which actions, suits or proceedings, if determined
against Borrower or such Collateral, are reasonably likely to result in a
Material Adverse Effect.

                  (e) AGREEMENTS. Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which
Borrower or any Collateral is bound which is reasonably likely to have a
Material Adverse Effect. Borrower is not a party to any agreement or instrument
or subject to any restriction that is reasonably likely to have a Material
Adverse Effect.

                  (f) NO BANKRUPTCY FILING. Borrower is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property. To the best knowledge of Borrower, no Person is contemplating the
filing of any such petition against it.

                  (g) SOLVENCY. Giving effect to the transactions contemplated
hereby, the fair saleable value of Borrower's assets exceeds and will,
immediately following the making of the Loan, exceed Borrower's total
liabilities (including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities). The fair saleable value of Borrower's assets is and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities (including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured). Borrower's assets do
not and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted



                                       50


or as proposed to be conducted. Borrower does not intend to, and does not
believe that it will, incur debts and liabilities (including, without
limitation, contingent liabilities and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of Borrower).

                  (h) OTHER DEBT. Borrower has not borrowed or received other
debt financing whether unsecured or secured by the Mortgaged Property or any
part thereof (other than the loan evidenced by the Existing Note).

                  (i) FULL AND ACCURATE DISCLOSURE. No statement of fact made by
or on behalf of Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading. To
the best knowledge of Borrower, there is no fact that has not been disclosed to
Agent that is likely to result in a Material Adverse Effect.

                  (j) FINANCIAL INFORMATION. All historical financial statements
of Borrower and the Mortgaged Property that has been delivered by or on behalf
of Borrower to Agent is true, complete and correct in all material respects and
has been prepared in accordance with GAAP. Since the delivery of such data,
except as otherwise disclosed in writing to Agent, there has been no change in
the financial position of Borrower or the Mortgaged Property, or in the results
of operations of Borrower, which change results or is reasonably likely to
result in a Material Adverse Effect. Borrower has not incurred any obligation or
liability, contingent or otherwise, not reflected in such financial data, which
is likely to have a Material Adverse Effect upon its business operations or the
Mortgaged Property.

                  (k) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Borrower is not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money in accordance
with this Agreement.

                  (l) COMPLIANCE. Borrower is in compliance with all applicable
Legal Requirements, except for noncompliance that is not reasonably likely to
have a Material Adverse Effect. Borrower is not in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority except
for defaults or violations which are not reasonably likely to have a Material
Adverse Effect.

                  (m) USE OF PROCEEDS; MARGIN REGULATIONS. Borrower will use the
proceeds of the Loan for the purposes described in SECTION 2.2. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System or for any other purpose which would be inconsistent
with such Regulation U or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements.



                                       51


                  (n) SINGLE-PURPOSE ENTITY.

                  (i) Borrower at all times since its formation has been a duly
         formed and existing limited liability company under the laws of the
         State of its formation and a Single-Purpose Entity.

                  (ii) Borrower at all times since its formation has complied
         with the provisions of its Organizational Agreement since such
         agreement was executed and delivered and the laws of the State of
         Delaware relating to limited liability companies.

                  (iii) All customary formalities regarding the limited
         liability company existence of Borrower have been observed at all times
         since the Organizational Agreement was executed and delivered.

                  (iv) Borrower has at all times since it began maintaining such
         items accurately maintained its financial statements, accounting
         records and other limited liability company documents separate from
         those of its members, Affiliates of its members and any other Person.
         Borrower has not at any time since its formation commingled its assets
         with those of its members, any Affiliates of its members, or any other
         Person. Borrower has at all times since establishing its own bank
         accounts accurately maintained its own bank accounts and separate books
         of account.

                  (v) Borrower has at all times since receiving funds paid its
         own liabilities from its own separate assets.

                  (vi) Borrower has at all times since its formation identified
         itself in all dealings with the public, under its own name and as a
         separate and distinct entity. Borrower has not at any time since its
         formation identified itself as being a division or a part of any other
         entity. Borrower has not at any time since its formation identified its
         members or any Affiliates of its members as being a division or part of
         Borrower.

                  (vii) Borrower is as of the date hereof adequately capitalized
         in light of the nature of its business.

                  (viii) Borrower has not at any time since its formation
         assumed or guaranteed the liabilities of its members (or any
         predecessor corporation, partnership or limited liability company), any
         Affiliates of its members, or any other Persons, except for liabilities
         relating to the Collateral. Borrower has not at any time since its
         formation acquired obligations or securities of its members (or any
         predecessor corporation, partnership or limited liability company), or
         any Affiliates of its members or any other Person. Borrower has not at
         any time since its formation pledged its assets for the benefit of any
         other entity (other than the Agent) or made loans or advances to its
         members (or any predecessor corporation, partnership or limited
         liability company), or any Affiliates of its members or any other
         Person.

                  (ix) Borrower has not at any time since its formation entered
         into and was not a party to any transaction with its members (or any
         predecessor corporation, partnership or limited liability company) or
         any Affiliates of its members, except for in the ordinary



                                       52


         course of business of Borrower on terms which are no less favorable to
         Borrower than would be obtained in a comparable arm's length
         transaction with an unrelated third party (other than in connection
         with the execution by Borrower and Manager of the Management
         Agreement).

                  (o) NO DEFAULTS. No Default or Event of Default exists under
or with respect to any Loan Document.

                  (p) PLANS AND WELFARE PLANS. The assets of Borrower are not
treated as "plan assets" under regulations currently promulgated under ERISA.
Each Plan, and, to the best knowledge of Borrower, each Multiemployer Plan, is
in compliance in all material respects with, and has been administered in all
material respects in compliance with, its terms and the applicable provisions of
ERISA, the Code and any other federal or state law, and no event or condition
has occurred and is continuing as to which Borrower would be under an obligation
to furnish a report to Lender under SECTION 5.1(V)(I). Other than an application
for a favorable determination letter with respect to a Plan, there are no
pending issues or claims before the Internal Revenue Service, the United States
Department of Labor or any court of competent jurisdiction related to any Plan
or Welfare Plan. No event has occurred, and there exists no condition or set of
circumstances, in connection with any Plan or Welfare Plan under which Borrower
or, to the best knowledge of Borrower, any ERISA Affiliate, directly or
indirectly (through an indemnification agreement or otherwise), is reasonably
likely to be subject to any material risk of liability under Section 409 or
502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or will
provide benefits, including, without limitation, death or medical benefits
(whether or not insured) with respect to any current or former employee of
Borrower, or, to the best knowledge of Borrower, any ERISA Affiliate beyond his
or her retirement or other termination of service other than (i) coverage
mandated by applicable law, (ii) death or disability benefits that have been
fully provided for by fully paid up insurance or (iii) severance benefits.

                  (q) ADDITIONAL BORROWER UCC INFORMATION. Borrower's
organizational identification number is 3283537 and the full legal name of
Borrower is as set forth on the signature pages hereof and Borrower has not done
in the last five (5) years, and does not do, business under any other name
(including any trade-name or fictitious business name).

                  (r) NOT FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning ofss.1445(f)(3) of the Code.

                  (s) LABOR MATTERS. Borrower is not a party to any collective
bargaining agreements.

                  (t) PRE-CLOSING DATE ACTIVITIES. Borrower has not conducted
any business or other activity on or prior to the Closing Date, other than in
connection with the acquisition, management and ownership of the Mortgaged
Property.

                  (u) NO BANKRUPTCIES OR CRIMINAL PROCEEDINGS INVOLVING BORROWER
OR RELATED PARTIES. No bankruptcy, insolvency, reorganization or comparable
proceedings have ever been instituted by or against Borrower, any Affiliate of
Borrower, any Guarantor or any individual or entity owning, with his, her or its
family members, 20% or more of the direct, or indirect



                                       53


beneficial ownership interests in Borrower (each such Guarantor, individual, or
entity being herein referred to as a "PRINCIPAL"), and no such proceeding is now
pending or contemplated. None of Borrower, any Principal, or to Borrower's
knowledge, any other individual or entity directly or indirectly owning or
controlling, or the family members of which own or control, any direct or
indirect beneficial ownership interest in Borrower or in the Manager or asset
manager for the Mortgaged Property, have been charged, indicted or convicted, or
are currently under the threat of charge, indictment or conviction, for any
felony or crime punishable by imprisonment.

                  (v) NO PROHIBITED PERSONS. Neither Borrower, Guarantor nor any
of their respective officers, directors, shareholders, partners, members or
Affiliates, if applicable (including, without limitation, the indirect holders
of equity interests in Borrower) is or will be an entity or person: (i) that is
listed in the Annex to, or is otherwise subject to the provisions of Executive
Order 13224 issued on September 24, 2001 ("EO13224"); (ii) whose name appears on
the United States Treasury Department's Office of Foreign Assets Control
("OFAC") most current list of "Specifically Designated National and Blocked
Persons" (which list may be published from time to time in various mediums
including, but not limited to, the OFAC website,
http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or
supports "terrorism", as that term is defined in EO13224; or (iv) who is
otherwise affiliated with any entity or person listed above (any and all parties
or persons described in clauses (i) through (iv) above are herein referred to as
a "PROHIBITED PERSON").

                  (w) CAPITALIZATION. As of the date of this Agreement the
authorized Capital Stock of the Guarantor consists solely of 600,000,000 shares
of its Common Stock, of which 351,394,737 shares were issued and outstanding, 20
shares of its Series G Preferred Stock, all of which were issued and
outstanding, 5,882 shares of its Series H Preferred Stock, all of which were
issued and outstanding, and 600 shares of its Series I Preferred Stock, all of
which were issued and outstanding. Except as provided on SCHEDULE 2, no shares
of the Common Stock of the Guarantor were held by the Guarantor in its treasury
or by the Guarantor's Subsidiaries. Except as set forth on SCHEDULE 2, since
March 31, 2004, the Guarantor (i) has not issued any shares of any class of its
Capital Stock and (ii) has not split, combined or reclassified any of its shares
of any class of its Capital Stock. All the issued and outstanding shares of
Common Stock (including the shares issued to the Subordinate Lender on the date
hereof and all shares of Common Stock to be issued upon exercise of the
Warrants) have been duly authorized and are (or in the case of the shares issued
to the Subordinate Lender on the date hereof and Common Stock issued upon
exercise of the Warrants, will be) validly issued, fully paid and nonassessable
and are (or in the case of the shares issued to the Subordinate Lender on the
date hereof and Common Stock issued upon exercise of the Warrants, will be) free
of preemptive rights. The Guarantor has duly reserved for issuance a sufficient
number of shares of Common Stock for issuance upon exercise of the Warrants at
the initial exercise rate thereof. Except as set forth on SCHEDULE 2, there are
no securities of the Guarantor or any of its Subsidiaries that are convertible
into or exchangeable for shares of any Capital Stock of the Guarantor or any of
its Subsidiaries, and no options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments which obligate the
Guarantor or any of its Subsidiaries to issue, transfer or sell any shares of
Capital Stock of, or other interests in, the Guarantor or any of its
Subsidiaries. Except as set forth on SCHEDULE 2, there are no outstanding
obligations of the Guarantor or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of Capital Stock of the Guarantor or any of its
Subsidiaries and neither the Guarantor nor any of its Subsidiaries has any



                                       54


awards or options outstanding under any stock option plans or agreements or any
other outstanding stock-related awards. Except as set forth on SCHEDULE 2, after
the Closing Date, neither the Guarantor nor any of its Subsidiaries will have
any obligation to issue, transfer or sell any shares of Capital Stock of the
Guarantor or its Subsidiaries. Except as set forth on SCHEDULE 2, there are no
voting trusts or other agreements or understandings to which the Guarantor or
any of its Subsidiaries is a party with respect to the holding, voting or
disposing of Capital Stock of the Guarantor or any of its Subsidiaries. Except
as set forth on SCHEDULE 2, as of the date hereof, neither the Guarantor nor any
of its Subsidiaries has any outstanding bonds, debentures, notes or other
obligations or other securities (other than the Common Stock) that entitle the
holders thereof to vote with the stockholders of the Guarantor or any of its
Subsidiaries on any matter or which are convertible into or exercisable for
securities having such a right to vote.

                  Section 4.2. REPRESENTATIONS AND WARRANTIES AS TO THE
MORTGAGED PROPERTY. Borrower hereby represents and warrants to the Agent that,
as to the Mortgaged Property and the Mortgage, as of the Closing Date:

                  (a) TITLE TO THE MORTGAGED PROPERTY. Borrower owns good,
marketable and insurable fee simple title to the applicable Land, free and clear
of all Liens, other than the Permitted Encumbrances applicable to the Land.
Borrower owns the other Mortgaged Property free and clear of any and all Liens,
other than Permitted Encumbrances. There are no outstanding options to purchase
or rights of first refusal or restrictions on transferability affecting such
Mortgaged Property.

                  (b) UTILITIES AND PUBLIC ACCESS. The Mortgaged Property has
adequate rights of access to public ways and is served by water, electric,
sewer, sanitary sewer and storm drain facilities. All public utilities necessary
to the continued use and enjoyment of the Mortgaged Property as presently used
and enjoyed are located in the public right-of-way abutting the premises, and
all such utilities are connected so as to serve the Mortgaged Property without
passing over other property except for land or easement areas of or available to
the utility company providing such utility service. All roads necessary for the
full utilization of the Mortgaged Property for its current purpose have been
completed and dedicated to public use and accepted by all Governmental
Authorities or are the subject of access easements for the benefit of the
Mortgaged Property.

                  (c) CONDEMNATION. No Taking has been commenced or, to the best
of Borrower's knowledge, is contemplated with respect to all or any portion of
the Mortgaged Property or for the relocation of roadways providing access to the
Mortgaged Property.

                  (d) COMPLIANCE. The Mortgaged Property is in compliance with
all applicable Legal Requirements (including, without limitation, building and
zoning ordinances and codes) and all applicable Insurance Requirements, except
for noncompliance which is not reasonably likely to have a Material Adverse
Effect.

                  (e) ENVIRONMENTAL COMPLIANCE. Except for matters set forth in
the Environmental Reports delivered to Agent in connection with the Loan (true,
correct and complete copies of which have been provided to Agent by Borrower):



                                       55


                  (i) Borrower is in full compliance with all applicable
         Environmental Laws (which compliance includes, but is not limited to,
         the possession by Borrower or the Manager of all environmental, health
         and safety permits, licenses and other governmental authorizations
         required in connection with the ownership and operation of the
         Mortgaged Property under all Environmental Laws), except for
         noncompliance which is not reasonably likely to have a Material Adverse
         Effect.

                  (ii) There is no Environmental Claim pending and Borrower has
         not received any notices of any threatened Environmental Claims, and no
         penalties arising under Environmental Laws have been assessed, against
         Borrower or the Manager or, to the actual knowledge of Borrower,
         against any Person whose liability for any Environmental Claim Borrower
         or the Manager has or may have retained or assumed either contractually
         or by operation of law, and no investigation or review is pending or,
         to the actual knowledge of Borrower, threatened by any Governmental
         Authority, citizens group, employee or other Person with respect to any
         alleged failure by Borrower or the Manager or the Mortgaged Property to
         have any environmental, health or safety permit, license or other
         authorization required under, or to otherwise comply with, any
         Environmental Law or with respect to any alleged liability of Borrower
         or the Manager for any Use or Release of any Hazardous Substances.

                  (iii) There are no present and there have been no past
         Releases of any Hazardous Substance that are reasonably likely to form
         the basis of any Environmental Claim against Borrower, the Manager or
         against any Person whose liability for any Environmental Claim Borrower
         or the Manager has or may have retained or assumed either contractually
         or by operation of law.

                  (iv) Without limiting the generality of the foregoing, there
         is not present at, on, in or under the Mortgaged Property,
         PCB-containing equipment, asbestos or asbestos containing materials,
         underground storage tanks or surface impoundments for Hazardous
         Substances, lead in drinking water (except in concentrations that
         comply with all Environmental Laws), or lead based paint, the presence
         of which is reasonably likely to result in a Material Adverse Effect.

                  (v) No liens are presently recorded with the appropriate land
         records under or pursuant to any Environmental Law with respect to the
         Mortgaged Property and no Governmental Authority has been taking or, to
         the actual knowledge of Borrower, is in the process of taking any
         action that could subject the Mortgaged Property to Liens under any
         Environmental Law.

                  (vi) There have been no environmental investigations, studies,
         audits, reviews or other analyses conducted by or that are in the
         possession of Borrower in relation to the Mortgaged Property which have
         not been made available to the Agent.

                  (f) MORTGAGE AND OTHER LIENS. The Mortgage creates a valid and
enforceable first priority Lien on the Mortgaged Property described therein, as
security for the repayment of the Indebtedness, subject only to the Permitted
Encumbrances applicable to the Mortgaged Property. This Agreement creates a
valid and enforceable first priority Lien on all Account



                                       56


Collateral. Each Collateral Security Instrument establishes and creates a valid,
subsisting and enforceable Lien on and a security interest in, or claim to, the
rights and property described therein. All property covered by any Collateral
Security Instrument in which a security interest can be perfected by the filing
of a financing statement is subject to a UCC financing statement filed and/or
recorded, as appropriate (or irrevocably delivered to an agent for such
recordation or filing) in all places necessary to perfect a valid first priority
Lien with respect to the rights and property that are the subject of such
Collateral Security Instrument to the extent governed by the UCC.

                  (g) ASSESSMENTS. There are no pending or, to the best
knowledge of Borrower, proposed special or other assessments for public
improvements or otherwise affecting the Mortgaged Property, nor are there any
contemplated improvements to the Mortgaged Property that may result in such
special or other assessments.

                  (h) NO JOINT ASSESSMENT; SEPARATE LOTS. Borrower has not
suffered, permitted or initiated the joint assessment of the Mortgaged Property
(i) with any other real property constituting a separate tax lot, and (ii) with
any portion of the Mortgaged Property which may be deemed to constitute personal
property, or any other procedure whereby the lien of any taxes which may be
levied against such personal property shall be assessed or levied or charged to
the Mortgaged Property as a single lien. The Mortgaged Property is comprised of
one or more parcels, each of which constitutes a separate tax lot and none of
which constitutes a portion of any other tax lot.

                  (i) NO PRIOR ASSIGNMENT. The Agent is the collateral assignee
of Borrower's interest under the Leases. There are no prior assignments of the
Leases or any portion of the Rent due and payable or to become due and payable
which are presently outstanding (other than in connection with the loan
evidenced by the Existing Note).

                  (j) PERMITS; CERTIFICATE OF OCCUPANCY. To the actual knowledge
of Borrower, (i) Borrower has obtained all Permits necessary to the use and
operation of the Mortgaged Property except where the failure to obtain such
Permits is not reasonably likely to have a Material Adverse Effect; and (ii) the
use being made of the Mortgaged Property is in conformity with the certificate
of occupancy and/or such Permits for the Mortgaged Property and any other
restrictions, covenants or conditions affecting the Mortgaged Property.

                  (k) FLOOD ZONE. Except as shown on the Survey, the Mortgaged
Property described therein is not located in a flood hazard area as defined by
the Federal Insurance Administration.

                  (l) PHYSICAL CONDITION. Except as set forth in the Engineering
Report, to the best knowledge of Borrower, the Mortgaged Property is free of
structural defects and all building systems contained therein are in good
working order subject to ordinary wear and tear.

                  (m) SECURITY DEPOSITS. Borrower and the Manager are in
compliance with all Legal Requirements relating to all security deposits with
respect to the Mortgaged Property, except where the failure to comply is not
reasonably likely to result in a Material Adverse Effect.



                                       57


                  (n) INTELLECTUAL PROPERTY. All material Intellectual Property
that Borrower owns or has pending, or under which it is licensed, are in good
standing and uncontested. There is no right under any Intellectual Property
necessary to the business of Borrower as presently conducted or as Borrower
contemplates conducting its business. Borrower has not infringed, is not
infringing, and has not received notice of infringement with respect to asserted
Intellectual Property of others. There is no infringement by others of material
Intellectual Property of Borrower.

                  (o) NO ENCROACHMENTS. Except as shown on the Survey, to the
best knowledge of Borrower, (i) all of the Improvements which were included in
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property, (ii) no
improvements on adjoining properties encroach upon the Mortgaged Property, (iii)
no easements or other encumbrances upon the Mortgaged Property encroach upon any
of the Improvements, so as to materially and adversely affect the value or
marketability of the Mortgaged Property and (iv) all of the Improvements comply
with all material requirements of any applicable zoning and subdivision laws and
ordinances.

                  (p) MANAGEMENT AGREEMENT. The Management Agreement is in full
force and effect. There is no default, breach or violation existing thereunder
by Borrower or, to the best knowledge of Borrower, any other party thereto and
no event (other than payments due but not yet delinquent) which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach or violation by Borrower or, to the best
knowledge of Borrower, any other party thereunder or entitle Borrower or, to the
best knowledge of Borrower, any other party thereto to terminate any such
agreement.

                  (q) LEASES. The Mortgaged Property is not subject to any
Leases other than the Leases described in the rent roll delivered to Agent in
connection with the making of the Loan. No person has any possessory interest in
the Mortgaged Property or right to occupy the same except under and pursuant to
the provisions of the Leases. The current Leases are in full force and effect
and there are no defaults thereunder by either party and no conditions which
with the passage of time and/or notice would constitute defaults thereunder,
except for such defaults as are not reasonably likely to result in a Material
Adverse Effect.

                  Section 4.3. SURVIVAL OF REPRESENTATIONS. Borrower agrees that
(i) all of the representations and warranties of Borrower set forth in SECTION
4.1 and 4.2 and in the other Loan Documents delivered on the Closing Date are
made as of the Closing Date, and (ii) all representations and warranties made by
Borrower shall survive the delivery of the Note and making of the Loan and
continue for so long as any amount remains owing to the Lenders under this
Agreement, the Note or any of the other Loan Documents; PROVIDED, HOWEVER, that
the representations set forth in SECTION 4.2(E) shall survive in perpetuity. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents shall be deemed to have been relied upon by the
Lenders and Collateral Agent notwithstanding any investigation heretofore or
hereafter made by the Lenders and Collateral Agent or on their behalf.




                                       58


                                   ARTICLE V.
                              AFFIRMATIVE COVENANTS

                  Section 5.1. AFFIRMATIVE COVENANTS. Borrower covenants and
agrees that, from the date hereof and until payment in full of the Indebtedness:

                  (a) EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS: INSURANCE.
Borrower shall do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its existence as a limited liability company,
rights, licenses, Permits and franchises necessary for the conduct of its
business and comply with all Legal Requirements and Insurance Requirements
applicable to it and the Mortgaged Property, except for such non-compliance
which is not reasonably likely to result in a Material Adverse Effect. Borrower
shall at all times maintain, preserve and protect all franchises and trade names
and preserve all the remainder of its property necessary for the continued
conduct of its business and keep the Mortgaged Property in good repair, working
order and condition, except for reasonable wear and use (and except for casualty
losses as to which other provisions hereof shall govern), and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto. Borrower shall or shall
cause its tenants to keep the Mortgaged Property insured at all times, by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as more fully provided in this
Agreement, and otherwise perform and comply with all obligations of Borrower
under the Mortgage.

                  (b) BASIC CARRYING COSTS AND OTHER CLAIMS. Borrower shall pay
and discharge all Impositions, as well as all lawful claims for labor, materials
and supplies or otherwise when due and payable all as more fully provided in,
and subject to any rights to contest contained in, the Mortgage. Borrower shall
pay all Basic Carrying Costs with respect to Borrower and the Mortgaged Property
in accordance with the provisions of the Mortgage and this Agreement, subject,
however, to Borrower's rights to contest payment of Impositions in accordance
with the Mortgage. Borrower's obligation to pay Basic Carrying Costs pursuant to
this Agreement shall include, to the extent permitted by applicable law,
Impositions resulting from future changes in law which impose upon a Lender an
obligation to pay any property taxes on the Mortgaged Property or other
Impositions. Borrower shall (x) pay its trade payables within sixty (60) days
from the date such trade payables are incurred (except for any such trade
payables that are being disputed by Borrower in good faith and for which
adequate reserves are maintained in accordance with GAAP) and (y) not permit its
trade payables to exceed 2% of the Principal Indebtedness.

                  (c) LITIGATION. Borrower shall give prompt written notice to
Agent of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower, or the Mortgaged Property which is reasonably likely
to have a Material Adverse Effect.

                  (d) ENVIRONMENTAL REMEDIATION.

                  (i) If any investigation, site monitoring, cleanup, removal,
         restoration or other remedial work of any kind or nature is required
         pursuant to an order or directive of any Governmental Authority or
         under any applicable Environmental Law, because of or in connection
         with the current or future presence, suspected presence, Release or
         suspected





                                       59



         Release of a Hazardous Substance on, under or from the Mortgaged
         Property or any portion thereof (collectively, the "REMEDIAL WORK"),
         Borrower shall promptly commence and diligently prosecute to completion
         all such Remedial Work, and shall conduct such Remedial Work in
         accordance with the National Contingency Plan promulgated under the
         Comprehensive Environmental Response, Compensation and Liability Act,
         42 U.S.C.ss.9601 et seq., if applicable, and in accordance with other
         applicable Environmental Laws. In all events, such Remedial Work shall
         be commenced within such period of time as required under any
         applicable Environmental Law; PROVIDED, HOWEVER, that Borrower shall
         not be required to commence such Remedial Work within the above
         specified time periods: (x) if prevented from doing so by any
         Governmental Authority, (y) if commencing such Remedial Work within
         such time periods would result in Borrower or such Remedial Work
         violating any Environmental Law or (z) if Borrower, at its expense and
         after prior notice to Agent, is contesting by appropriate legal,
         administrative or other proceedings conducted in good faith and with
         due diligence the need to perform Remedial Work, as long as (1)
         Borrower is permitted by the applicable Environmental Laws to delay
         performance of the Remedial Work pending such proceedings, (2) neither
         the Mortgaged Property nor any part thereof or interest therein shall
         be sold, forfeited or lost if Borrower does not perform the Remedial
         Work being contested, and Borrower would have the opportunity to do so,
         in the event of Borrower's failure to prevail in the contest, (3) the
         Lenders would not, by virtue of such permitted contest, be exposed to
         any risk of any civil liability for which Borrower has not furnished
         additional security as provided in CLAUSE (4) below, or to any risk of
         criminal liability, and neither the Mortgaged Property nor any interest
         therein would be subject to the imposition of any lien for which
         Borrower has not furnished additional security as provided in CLAUSE
         (4) below, as a result of the failure to perform such Remedial Work and
         (4) Borrower shall have furnished to the Agent additional security in
         respect of the Remedial Work being contested and the loss or damage
         that may result from Borrower's failure to prevail in such contest in
         such amount as may be reasonably requested by the Agent.

                  (ii) If requested by the Agent, all Remedial Work under CLAUSE
         (I) above shall be performed by contractors, and under the supervision
         of a consulting Engineer, each approved in advance by the Agent which
         approval shall not be unreasonably withheld or delayed. Borrower shall
         pay all costs and expenses reasonably incurred in connection with such
         Remedial Work. If Borrower does not timely commence and diligently
         prosecute to completion the Remedial Work, the Agent may (but shall not
         be obligated to), upon 30 days prior written notice to Borrower of its
         intention to do so, cause such Remedial Work to be performed. Borrower
         shall pay or reimburse the Agent on demand for all expenses (including
         reasonable attorneys' fees and disbursements, but excluding internal
         overhead, administrative and similar costs of the Lenders) reasonably
         relating to or incurred by the Agent in connection with monitoring,
         reviewing or performing any Remedial Work in accordance herewith.

                  (iii) Borrower shall not commence any Remedial Work under
         CLAUSE (I) above, nor enter into any settlement agreement, consent
         decree or other compromise relating to any Hazardous Substances or
         Environmental Laws without providing notice to the Agent as provided in
         SECTION 5.1(F). Notwithstanding the foregoing, if the presence or
         threatened presence of Hazardous Substances on, under, about or
         emanating from the





                                       60



         Mortgaged Property poses an immediate threat to the health, safety or
         welfare of any Person or the environment, or is of such a nature that
         an immediate response is necessary or required under applicable
         Environmental Law, Borrower may complete all necessary Remedial Work.
         In such events, Borrower shall notify Agent as soon as practicable and,
         in any event, within three Business Days, of any action taken.

                  (e) ENVIRONMENTAL MATTERS: INSPECTION.

                  (i) Borrower shall not permit a Hazardous Substance to be
         present on, under or to emanate from the Mortgaged Property, or migrate
         from adjoining property controlled by Borrower onto or into the
         Mortgaged Property, except under conditions permitted by applicable
         Environmental Laws and, in the event that such Hazardous Substances are
         present on, under or emanate from the Mortgaged Property, or migrate
         onto or into the Mortgaged Property, Borrower shall cause the removal
         or remediation of such Hazardous Substances, in accordance with this
         Agreement and Environmental Laws (including, where applicable, the
         National Contingency Plan promulgated pursuant to the Comprehensive
         Environmental Response, Compensation and Liability Act, 42,
         U.S.C.ss.9601 et seq. ), either on its own behalf or by causing a
         tenant or other party primarily at fault to perform such removal and
         remediation. Borrower shall use commercially reasonable efforts to
         prevent, and to seek the remediation of, any migration of Hazardous
         Substances onto or into the Mortgaged Property from any adjoining
         property.

                  (ii) Upon reasonable prior written notice, the Agent shall
         have the right, except as otherwise provided under Leases, at all
         reasonable times during normal business hours to enter upon and inspect
         all or any portion of the Mortgaged Property, PROVIDED that such
         inspections shall not unreasonably interfere with the operation or the
         tenants, residents or occupants of the Mortgaged Property and shall be
         done by persons with the appropriate level of security clearance, as
         may be required. If the Agent has reasonable grounds to suspect that
         Remedial Work may be required, the Agent shall notify Borrower and,
         thereafter, may select a consulting Engineer to conduct and prepare
         reports of such inspections (with notice to Borrower prior to the
         commencement of such inspection). Borrower shall be given a reasonable
         opportunity to review any reports, data and other documents or
         materials reviewed or prepared by the Engineer, and to submit comments
         and suggested revisions or rebuttals to same. The inspection rights
         granted to the Agent in this SECTION 5.1(E) shall be in addition to,
         and not in limitation of, any other inspection rights granted to the
         Agent in this Agreement, and shall expressly include the right (if the
         Agent reasonably suspects that Remedial Work may be required) to
         conduct soil borings, establish ground water monitoring wells and
         conduct other customary environmental tests, assessments and audits.

                  (iii) Borrower agrees to bear and shall pay or reimburse the
         Lenders on demand for all sums advanced and reasonable expenses
         incurred (including reasonable attorneys' fees and disbursements, but
         excluding internal overhead, administrative and similar costs of the
         Lenders) reasonably relating to, or incurred by Lenders in connection
         with, the inspections and reports described in this SECTION 5.1(E) (to
         the extent such inspections and reports relate to the Mortgaged
         Property) in the following situations:





                                       61



                           (x) If the Agent has reasonable grounds to believe,
                  at the time any such inspection is ordered, that there exists
                  an occurrence or condition that could lead to an Environmental
                  Claim;

                           (y) If any such inspection reveals an occurrence or
                  condition that is reasonably likely to lead to an
                  Environmental Claim; or

                           (z) If an Event of Default with respect to the
                  Mortgaged Property exists at the time any such inspection is
                  ordered, and such Event of Default relates to any
                  representation, covenant or other obligation pertaining to
                  Hazardous Substances, Environmental Laws or any other
                  environmental matter.

                  (f) ENVIRONMENTAL NOTICES. Borrower shall promptly provide
notice to Agent of:

                  (i) any Environmental Claim asserted by any Governmental
         Authority with respect to any Hazardous Substance on, in, under or
         emanating from the Mortgaged Property, which might involve remediation
         cost or liability greater than $25,000;

                  (ii) any proceeding, investigation or inquiry commenced or
         threatened in writing by any Governmental Authority, against Borrower,
         with respect to the presence, suspected presence, Release or threatened
         Release of Hazardous Substances from or onto, in or under any property
         not owned by Borrower (including, without limitation, proceedings under
         the Comprehensive Environmental Response, Compensation, and Liability
         Act, as amended, 42 U.S.C. ss.9601, ET SEQ.), which might involve
         remediation cost or liability greater than $25,000;

                  (iii) all Environmental Claims asserted or threatened against
         Borrower, against any other party occupying the Mortgaged Property or
         any portion thereof or against the Mortgaged Property which become
         known to Borrower, which might involve remediation cost or liability
         greater than $25,000;

                  (iv) the discovery by Borrower of any occurrence or condition
         on the Mortgaged Property or on any real property adjoining or in the
         vicinity of the Mortgaged Property which affects the Mortgaged Property
         and which could involve remediation cost or liability greater than
         $25,000;

                  (v) the commencement or completion of any Remedial Work; and

                  (vi) any of the foregoing clauses (i) - (v) that a tenant
         notifies to Borrower under a Lease with respect to such tenant.

                  (g) COPIES OF NOTICES. Borrower shall transmit to the Agent
copies of any citations, orders, notices or other written communications
received from any Person and any notices, reports or other written
communications submitted to any Governmental Authority with respect to the
matters described in SECTION 5.1(F).





                                       62



                  (h) ENVIRONMENTAL CLAIMS. The Agent may join and participate
in, as a party if the Agent so determines, any legal or administrative
proceeding or action concerning the Mortgaged Property or any portion thereof
under any Environmental Law, if, in the Agent's reasonable judgment, the
interests of the Lenders shall not be adequately protected by Borrower;
PROVIDED, HOWEVER, that the Lenders shall not participate in day-to-day decision
making with respect to environmental compliance. Borrower shall pay or reimburse
the Lenders on demand for all reasonable sums advanced and reasonable expenses
incurred (including reasonable attorneys' fees and disbursements, but excluding
internal overhead, administrative and similar costs of the Lenders) by the
Lenders in connection with any such action or proceeding.

                  (i) ENVIRONMENTAL INDEMNIFICATION. Borrower shall indemnify,
reimburse, defend, and hold harmless the Agent, each Lender, the Collateral
Agent and each of its respective parents, subsidiaries, Affiliates,
shareholders, directors, officers, employees, representatives, agents,
successors, assigns and attorneys (collectively, the "INDEMNIFIED PARTIES") for,
from, and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses (including, without limitation,
interest, penalties, reasonable attorneys' fees, disbursements and expenses, and
reasonable consultants' fees, disbursements and expenses (but excluding internal
overhead, administrative, lost opportunity and similar costs of the Lenders and
the Collateral Agent)), asserted against, resulting to, imposed on, or incurred
by any Indemnified Party, directly or indirectly, in connection with any of the
following (except to the extent same are directly and solely caused by the gross
negligence or willful misconduct of any Indemnified Party and except that any
Indemnified Party shall not be indemnified against claims resulting from actions
taken or events occurring with respect to the Mortgaged Property after the Agent
forecloses its Lien or security interest upon the Mortgaged Property or accepts
a deed in lieu of foreclosure or is a so-called "mortgagee-in-possession" unless
and to the extent such indemnification relates to any of the following which
occurred while Borrower owned the Mortgaged Property):

                  (i) events, circumstances, or conditions which form the
         reasonable basis for an Environmental Claim;

                  (ii) any pollution or threat to human health or the
         environment that is related in any way to Borrower's or any previous
         owner's or operator's management, use, control, ownership or operation
         of the Mortgaged Property (including, without limitation, all on-site
         and off-site activities involving Hazardous Substances), and whether
         occurring, existing or arising prior to or from and after the date
         hereof, and whether or not the pollution or threat to human health or
         the environment is described in the Environmental Reports;

                  (iii) any Environmental Claim against any Person whose
         liability for such Environmental Claim Borrower has or may have assumed
         or retained either contractually or by operation of law; or

                  (iv) the breach of any representation, warranty or covenant
         set forth in Section 4.2(e) and SECTIONS 5.1(D) through 5.1(I),
         inclusive.



                                       63


The provisions of and undertakings and indemnification set forth in this SECTION
5.1(I) shall survive the satisfaction and payment of the Indebtedness and
termination of this Agreement.

                  (j) GENERAL INDEMNITY.

                  (i) Borrower shall, at its sole cost and expense, protect,
         defend, indemnify, release and hold harmless the Indemnified Parties
         for, from and against any and all claims, suits, liabilities
         (including, without limitation, strict liabilities), administrative and
         judicial actions and proceedings, obligations, debts, damages, losses,
         costs, expenses, fines, penalties, charges, fees, expenses, judgments,
         awards, amounts paid in settlement, and litigation costs, of whatever
         kind or nature and whether or not incurred in connection with any
         judicial or administrative proceedings (including, but not limited to,
         reasonable attorneys' fees and other reasonable costs of defense) (the
         "LOSSES") imposed upon or incurred by or asserted against any
         Indemnified Parties (except to the extent same are directly and solely
         caused by the gross negligence or willful misconduct of any Indemnified
         Party) and directly or indirectly arising out of or in any way relating
         to any one or more of the following:

                           (A) any breach by Borrower of obligations under, or a
                  material misrepresentation contained in, the Note or any of
                  the other Loan Documents;

                           (B) any untrue statement of any material fact
                  contained in any information concerning Borrower, the
                  Mortgaged Property or the Loan or the omission to state
                  therein a material fact required to be stated in such
                  information or necessary in order to make the statements in
                  such information or in light of the circumstances under which
                  they were made not misleading;

                           (C) any and all lawful action that may be taken and
                  is taken by the Lender in connection with the enforcement of
                  the provisions of this Agreement, the Note or any of the other
                  Loan Documents, whether or not suit is filed in connection
                  with same, or in connection with Borrower or any Affiliate of
                  Borrower becoming a party to a voluntary or involuntary
                  federal or state bankruptcy, insolvency or similar proceeding;

                           (D) any accident, injury to or death of persons or
                  loss of or damage to property occurring in, on or about the
                  Mortgaged Property or any part thereof or on the adjoining
                  sidewalks, curbs, adjacent property or adjacent parking areas,
                  streets or ways;

                           (E) any use, nonuse or condition in, on or about the
                  Mortgaged Property or any part thereof or on the adjoining
                  sidewalks, curbs, adjacent property or adjacent parking areas,
                  streets or ways;

                           (F) any failure on the part of Borrower to perform or
                  be in compliance with any of the terms of this Agreement or
                  any of the other Loan Documents;



                                       64


                           (G) performance of any labor or services or the
                  furnishing of any materials or other property in respect of
                  the Mortgaged Property or any part thereof pursuant to
                  provisions of this Agreement;

                           (H) any failure of the Mortgaged Property to be in
                  compliance with any Legal Requirement;

                           (I) the enforcement by any Indemnified Party of the
                  provisions of this SECTION 5.1(J); and

                           (J) any and all claims and demands whatsoever which
                  may be asserted against the Lenders by reason of any alleged
                  obligations or undertakings on its part to perform or
                  discharge any of the terms, covenants, or agreements contained
                  in any Lease.

Any amounts payable to an Indemnified Party by reason of the application of this
SECTION 5.1(J)(I) shall become due and payable ten (10) days after written
demand and shall bear interest at the Default Rate from the tenth (10th) day
after demand until paid.

                  (ii) Borrower shall, at its sole cost and expense, protect,
         defend, indemnify, release and hold harmless the Indemnified Parties
         from and against any and all Losses imposed upon or incurred by or
         asserted against any of the Indemnified Parties and directly or
         indirectly arising out of or in any way relating to any tax on the
         making and/or recording of this Agreement, the Note or any of the other
         Loan Documents (excluding income and/or franchise taxes).

                  (iii) Borrower shall, at its sole cost and expense, protect,
         defend, indemnify, release and hold harmless the Indemnified Parties
         from and against any and all Losses (including, without limitation,
         reasonable attorneys' fees and costs incurred in the investigation,
         defense, and settlement of Losses incurred in correcting any prohibited
         transaction or in the sale of a prohibited loan, and in obtaining any
         individual prohibited transaction exemption under ERISA that may be
         required, in the Lender's reasonable discretion) that the Indemnified
         Parties may incur, directly or indirectly, as a result of a default
         under Borrower's covenants with respect to ERISA and employee benefits
         plans contained herein.

                  (iv) Promptly after receipt by an Indemnified Party under this
         SECTION 5.1(J) of notice of the making of any claim or the commencement
         of any action, such Indemnified Party shall, if a claim in respect
         thereof is to be made by such Indemnified Party against Borrower under
         this SECTION 5.1(J), notify Borrower in writing, but the omission so to
         notify Borrower will not relieve Borrower from any liability which it
         may have to any Indemnified Party under this SECTION 5.1(J) or
         otherwise unless and to the extent that Borrower did not otherwise
         possess knowledge of such claim or action and such failure resulted in
         the forfeiture by Borrower of substantial rights and defenses. In case
         any such claim is made or action is brought against any Indemnified
         Party and such Indemnified Party seeks or intends to seek indemnity
         from Borrower, Borrower will be entitled to participate in, and, to the
         extent that it may wish, to assume the defense thereof with



                                       65


         counsel reasonably satisfactory to the Indemnified Party; and, upon
         receipt of notice from Borrower to such Indemnified Party of its
         election so to assume the defense of such claim or action and only upon
         approval by the Indemnified Party of such counsel (such approval not to
         be unreasonably withheld or delayed), Borrower will not be liable to
         such Indemnified Party under this SECTION 5.1(J) for any legal or other
         expenses subsequently incurred by such Indemnified Party in connection
         with the defense thereof. Notwithstanding the preceding sentence, each
         Indemnified Party will be entitled to employ counsel separate from such
         counsel for Borrower and from any other party in such action if such
         Indemnified Party reasonably determines that a conflict of interest
         exists which makes representation by counsel chosen by Borrower not
         advisable. In such event, Borrower shall pay the reasonable fees and
         disbursements of such separate counsel, subject to reimbursement of
         such costs if the Indemnified Party requiring such separate counsel is
         found not to be entitled to the indemnity protection of this SECTION
         5.1(J). Borrower shall not, without the prior written consent of an
         Indemnified Party, settle or compromise or consent to the entry of any
         judgment with respect to any pending or threatened claim, action, suit
         or proceeding in respect of which indemnification may be sought
         hereunder (whether or not such Indemnified Party is an actual or
         potential party to such claim or action) unless such settlement,
         compromise or consent includes an unconditional release of each
         Indemnified Party from all liability arising out of such claim, action,
         suit or proceeding. No Indemnified Party shall enter into a settlement
         of or consent to the entry of any judgment with respect to any action,
         claim, suit or proceeding as to which an Indemnified Party would be
         entitled to indemnification hereunder without the prior written consent
         of Borrower.

The provisions of and undertakings and indemnification set forth in this SECTION
5.1(J) shall survive the satisfaction and payment of the Indebtedness and
termination of this Agreement.

                  (k) ACCESS TO MORTGAGED PROPERTY. Borrower shall permit
agents, representatives and employees of the Agent (with the appropriate level
of security clearance, as may be required) to inspect the Mortgaged Property or
any part thereof at such reasonable times as may be requested by Agent upon
reasonable advance written notice, subject, however, to the rights of Borrower
and of the tenants of the Mortgaged Property.

                  (l) NOTICE OF DEFAULT. Borrower shall promptly advise Agent in
writing of any change in Borrower's condition, financial or otherwise, that is
reasonably likely to have a Material Adverse Effect, or of the occurrence of any
Default or Event of Default.

                  (m) COOPERATE IN LEGAL PROCEEDINGS. Except with respect to any
claim by Borrower, the Managing Member or the Guarantor against the Agent or any
Lender, Borrower shall reasonably cooperate with Agent with respect to any
proceedings before any Governmental Authority that are reasonably likely to in
any way materially affect the rights of the Lenders hereunder or any rights
obtained by the Lenders under any of the Loan Documents and, in connection
therewith, shall not prohibit Agent, at its election, from participating in any
such proceedings.

                  (n) PERFORM LOAN DOCUMENTS. Borrower shall observe, perform
and satisfy all the terms, provisions, covenants and conditions required to be
observed, performed or satisfied



                                       66


by it, and shall pay when due all costs, fees and expenses required to be paid
by it, under the Loan Documents.

                  (o) INSURANCE BENEFITS. Borrower shall reasonably cooperate
with Agent in obtaining for the Lenders the benefits of any Insurance Proceeds
lawfully or equitably payable to Borrower or Lenders in connection with the
Mortgaged Property. Agent shall be reimbursed for any expenses reasonably
incurred in connection therewith (including reasonable attorneys' fees and
disbursements, but excluding internal overhead, administrative and similar costs
of Agent) out of such Insurance Proceeds, all as more specifically provided in
this Agreement.

                  (p) FURTHER ASSURANCES. Borrower shall, at Borrower's sole
cost and expense:

                  (i) upon Agent's reasonable request therefor given from time
         to time, pay for (a) reports of UCC, tax lien, judgment and litigation
         searches with respect to Borrower, and (b) searches of title to the
         Mortgaged Property, each such search to be conducted by search firms
         designated by Agent in each of the locations designated by Agent;

                  (ii) furnish to Agent all instruments, documents,
         certificates, title and other insurance reports and agreements, and
         each and every other document, certificate, agreement and instrument
         required to be furnished pursuant to the terms of the Loan Documents;

                  (iii) execute and deliver to Agent such documents,
         instruments, certificates, assignments and other writings, and do such
         other acts necessary, to evidence, preserve and/or protect the
         Collateral at any time securing or intended to secure the Note, as
         Agent may reasonably require (including, without limitation, tenant
         estoppel certificates, an amended or replacement Mortgage, UCC
         financing statements or Collateral Security Instruments); and

                  (iv) do and execute all and such further lawful and reasonable
         acts, conveyances and assurances for the better and more effective
         carrying out of the intents and purposes of this Agreement and the
         other Loan Documents, as Agent shall reasonably require from time to
         time.

                  (q) MANAGEMENT OF MORTGAGED PROPERTY.

                  (i) The Mortgaged Property shall be managed at all times by
         the Manager or another manager reasonably satisfactory to Agent,
         pursuant to a Management Agreement; PROVIDED, that notwithstanding the
         foregoing, management of the Mortgaged Property may be transferred to
         Borrower or a successor manager that is an Affiliate of the Borrower
         without the Agent's approval, so long as such manager, if an Affiliate,
         is paid a management fee at a market rate and delivers a Manager's
         Subordination. Borrower shall cause any manager of the Mortgaged
         Property to agree that such manager's management agreement is subject
         and subordinate in all respects to the Lien of the Mortgage. A
         Management Agreement may be terminated (1) by Borrower at any time in
         accordance with the provisions of such Management Agreement so long as
         a successor manager shall have been appointed and such successor
         manager has (i) entered into a Management Agreement, subject to any
         modifications approved by Agent, which approval shall not be




                                       67


         unreasonably denied, conditioned or delayed, and (ii) has executed and
         delivered the Manager's Subordination to Agent, and (2) by Agent upon
         thirty (30) days' prior written notice to Borrower and the Manager (a)
         upon the occurrence and continuation of an Event of Default or (b) if
         the Manager commits any act which would permit termination under the
         Management Agreement (subject to any applicable notice, grace and cure
         periods provided in the Management Agreement) or (c) if a change of
         majority control occurs with respect to the Manager. Borrower shall
         cooperate with the transfer of management to a successor manager
         appointed by Agent at any time pursuant to the preceding sentence.
         Subject to the first sentence of this SECTION 5.1(Q)(I), Borrower may
         from time to time appoint a successor manager to manage the Mortgaged
         Property with Agent's prior written consent, such consent not to be
         unreasonably withheld. Notwithstanding the foregoing, any successor
         manager selected hereunder by Agent or Borrower to manage the Mortgaged
         Property shall be a reputable management company having substantial
         experience in the management of real property of a similar type, size
         and quality in the state in which the Mortgaged Property is located.
         Notwithstanding anything herein to the contrary, if the Loan has been
         included in a Secondary Market Transaction in which Securities are
         issued, neither the Agent or Borrower shall appoint a successor or
         replacement manager, without first having obtained a Rating
         Confirmation. Borrower further covenants and agrees that any manager of
         Mortgaged Property shall at all times while any Indebtedness is
         outstanding maintain worker's compensation insurance as required by
         Governmental Authorities, if any.

                  (ii) Borrower further covenants and agrees that the Mortgaged
         Property shall be operated pursuant to the Management Agreement and
         that Borrower shall: (w) promptly perform and/or observe all of the
         material covenants and agreements required to be performed and observed
         by it under the Management Agreement and do all things reasonably
         necessary to preserve and to keep unimpaired its material rights
         thereunder; (x) promptly notify the Agent of any material default under
         the Management Agreement of which it is aware; (y) promptly deliver to
         the Agent a copy of each financial statement, business plan, capital
         expenditures plan, notice and report received by it under the
         Management Agreement, including, but not limited to, financial
         statements; and (z) promptly enforce the performance and observance of
         the covenants and agreements required to be performed and/or observed
         by the Manager under the Management Agreement.

                  (r) FINANCIAL REPORTING.

                  (i) Borrower shall keep and maintain or shall cause to be kept
         and maintained on a Fiscal Year basis in accordance with GAAP
         consistently applied, books, records and accounts reflecting in
         reasonable detail all of the financial affairs of Borrower and all
         items of income and expense in connection with the operation of the
         Mortgaged Property and ownership of the Mortgaged Property and in
         connection with any services, equipment or furnishings provided in
         connection with the operation of the Mortgaged Property, whether such
         income or expense may be realized by Borrower or by any other Person
         whatsoever. Agent shall have the right from time to time at all times
         during normal business hours upon reasonable prior written notice to
         Borrower to examine such books, records and accounts at the office of
         Borrower or other Person maintaining such



                                       68


         books, records and accounts and to make such copies or extracts thereof
         as Agent shall desire. During the continuation of an Event of Default
         (including, without limitation, an Event of Default resulting from the
         failure of the Borrower to deliver any of the financial information
         required to be delivered pursuant to this SECTION 5.1(R)), Borrower
         shall pay any reasonable costs and expenses incurred by Agent to
         examine Borrower's accounting records, as Agent shall reasonably
         determine to be necessary or appropriate in the protection of the
         Lenders' interest.

                  (ii) Borrower shall furnish to Agent annually, within ninety
         (90) days following the end of each Fiscal Year, a complete copy of
         Borrower's financial statement certified by the chief executive
         officer, the chief financial officer or the treasurer of the Guarantor
         in accordance with GAAP consistently applied covering Borrower's
         financial position and results of operations, for such Fiscal Year and
         containing a statement of revenues and expenses, a statement of assets
         and liabilities and a statement of Borrower's equity, all of which
         shall be in form and substance reasonably acceptable to Agent;
         PROVIDED, that notwithstanding the foregoing, following the occurrence
         and during the continuance of an Event of Default, if requested by
         Agent, any such annual financial statement shall be audited by a "Big
         Four" accounting firm or such other Independent certified public
         accountant acceptable to Agent. Agent shall have the right from time to
         time to review and consult with respect to the auditing procedures used
         in the preparation of such annual financial statements. Together with
         Borrower's annual financial statements, Borrower shall furnish to Agent
         an Officer's Certificate certifying as of the date thereof (x) that the
         annual financial statements present fairly in all material respects the
         results of operations and financial condition of Borrower all in
         accordance with GAAP consistently applied, and (y) whether there exists
         an Event of Default or Default, and if such Event of Default or Default
         exists, the nature thereof, the period of time it has existed and the
         action then being taken to remedy same.

                  (iii) Borrower shall furnish to Agent, within forty-five (45)
         days following the end of each Fiscal Year quarter a true, complete and
         correct quarterly unaudited financial statement prepared in accordance
         with GAAP (subject to the absence of footnote disclosure and normal
         year end adjustments) with respect to Borrower for the portion of the
         Fiscal Year then ended. Agent shall have the right from time to time to
         review and consult with respect to the procedures used in the
         preparation of such quarterly financial statements.

                  (iv) Borrower shall furnish to Agent, within fifteen (15)
         Business Days after request, such further information with respect to
         the operation of the Mortgaged Property and the financial affairs of
         Borrower as may be reasonably requested by Agent, including all
         business plans prepared for Borrower.

                  (v) Borrower shall furnish to Agent, within fifteen (15)
         Business Days after request, such further information regarding any
         Plan or Multiemployer Plan and any reports or other information
         required to be filed under ERISA as may be reasonably requested by
         Agent in writing.



                                       69


                  (vi) At least thirty (30) days prior to the end of each of
         Borrower's Fiscal Years, Borrower shall submit or cause to be submitted
         to Agent for its approval, such approval not to be unreasonably
         withheld or delayed, an Operating Budget for Property Expenses, Capital
         Improvement Costs, Leasing Commissions, TI Costs and replacement
         reserve costs for the next Fiscal Year for the Mortgaged Property.
         Until so approved by Agent for the subsequent Fiscal Year, the
         Operating Budget approved by Agent for the preceding Fiscal Year shall
         remain in effect for purposes of SECTION 2.12; PROVIDED, that for so
         long as such prior Operating Budget remains in effect, amounts set
         forth in the prior Operating Budget with respect to Property Expenses,
         TI Costs and Leasing Commissions shall be deemed increased on a
         percentage basis by an amount equal to the greater of (x) actual
         increases then known to Borrower and (y) the increase in the Consumer
         Price Index (expressed as a percentage) as measured over the calendar
         year that the prior Operating Budget was in effect.

                  (vii) The Borrower shall deliver or cause to be delivered to
         the Agent copies of all financial statements, reports, forecasts and
         other information delivered to the Subordinate Lender pursuant to
         Section 6 of the Purchase Agreement, simultaneously with the delivery
         of such items to the Subordinate Lender.

                  (s) OPERATION OF MORTGAGED PROPERTY. Borrower shall cause the
operation of the Mortgaged Property to be conducted at all times in a manner
consistent with at least the level of operation of the Mortgaged Property as of
the Closing Date, including, without limitation, the following:

                  (i) to maintain or cause to be maintained the standard of the
         Mortgaged Property at all times at a level not lower than that
         maintained by prudent managers of similar facilities or land in the
         region where the Mortgaged Property is located;

                  (ii) to operate or cause to be operated the Mortgaged Property
         in a prudent manner in compliance in all material respects with
         applicable Legal Requirements and Insurance Requirements relating
         thereto and maintain or cause to be maintained all licenses, Permits
         and any other agreements necessary for the continued use and operation
         of the Mortgaged Property; and

                  (iii) to maintain or cause to be maintained sufficient
         Inventory and Equipment of types and quantities at the Mortgaged
         Property to enable Borrower to operate the Mortgaged Property and to
         comply in all material respects with all Leases affecting the Mortgaged
         Property.

                  (t) SINGLE-PURPOSE ENTITY.

                  (i) Borrower at all times will continue to be a duly formed
         and validly existing limited liability company under the laws of the
         State of its formation and a Single-Purpose Entity.

                  (ii) Borrower shall at all times comply with the provisions of
         its Organizational Agreement and the laws of the State of its formation
         relating to limited liability companies.



                                       70


                  (iii) Borrower shall observe all customary formalities
         regarding its existence.

                  (iv) Borrower shall accurately maintain its financial
         statements, accounting records and other corporate documents separate
         from those of its members, Affiliates of its members and any other
         Person. Borrower shall not commingle its assets with those of its
         members, any Affiliates of its members, or any other Person. Borrower
         shall continue to accurately maintain its own bank accounts and
         separate books of account.

                  (v) Borrower shall continue to pay its own liabilities from
         its own separate assets.

                  (vi) Borrower shall continue to identify itself in all
         dealings with the public, under its own name or trade names and as a
         separate and distinct entity. Borrower will not identify itself as
         being a division or a part of any other entity. Borrower will not
         identify its members or any Affiliates of its members as being a
         division or part of Borrower.

                  (vii) Borrower shall continue to be adequately capitalized in
         light of the nature of its business.

                  (viii) Borrower shall not assume or guarantee the liabilities
         of its members (or any predecessor corporation), any Affiliates of its
         members or shareholders or any other Persons, except for liabilities
         relating to the Mortgaged Property. Borrower shall not acquire
         obligations or securities of its members (or any predecessor
         corporation, partnership or limited liability company), or any
         Affiliates of its members or any other Persons. Except for the Liens
         granted pursuant to the Loan Documents, Borrower shall not pledge its
         assets for the benefit of any other Person (other than the Agent) or
         make loans or advances to its members (or any predecessor corporation),
         or any Affiliates of its members or any other Persons.

                  (ix) Borrower shall not enter into or be a party to any
         transaction with its members (or any predecessor corporation,
         partnership or limited liability company) or any Affiliates of its
         members, except for in the ordinary course of business on terms which
         are no less favorable to Borrower than would be obtained in a
         comparable arm's length transaction with an unrelated third party
         (other than in connection with the execution by Borrower and the
         Manager of the Management Agreement).

                  (u) ERISA. Borrower shall deliver to Agent as soon as
possible, and in any event within ten days after Borrower knows or has reason to
believe that any of the events or conditions specified below with respect to any
Plan or Multiemployer Plan has occurred or exists, an Officer's Certificate
setting forth details respecting such event or condition and the action, if any,
that Borrower or its ERISA Affiliate proposes to take with respect thereto (and
a copy of any report or notice required to be filed with or given to PBGC by
Borrower or an ERISA Affiliate with respect to such event or condition):

                  (i) any reportable event, as defined in Section 4043(b) of
         ERISA and the regulations issued thereunder, with respect to a Plan, as
         to which PBGC has not by regulation waived the requirement of Section
         4043(a) of ERISA that it be notified within



                                       71


         thirty (30) days of the occurrence of such event (provided that a
         failure to meet the minimum funding standard of Section 412 of the Code
         or Section 302 of ERISA, including, without limitation, the failure to
         make on or before its due date a required installment under Section
         412(m) of the Code or Section 302(e) of ERISA, shall be a reportable
         event regardless of the issuance of any waivers in accordance with
         Section 412(d) of the Code); and any request for a waiver under Section
         412(d) of the Code for any Plan;

                  (ii) the distribution under Section 4041(c) of ERISA of a
         notice of intent to terminate any Plan or any action taken by Borrower
         or an ERISA Affiliate to terminate any Plan;

                  (iii) the institution by PBGC of proceedings under Section
         4042 of ERISA for the termination of, or the appointment of a trustee
         to administer, any Plan, or the receipt by Borrower or any ERISA
         Affiliate of Borrower of a notice from a Multiemployer Plan that such
         action has been taken by PBGC with respect to such Multiemployer Plan;

                  (iv) the complete or partial withdrawal from a Multiemployer
         Plan by Borrower or any ERISA Affiliate of Borrower that results in
         material liability under Section 4201 or 4204 of ERISA (including the
         obligation to satisfy secondary liability as a result of a purchaser
         default) or the receipt by Borrower or any ERISA Affiliate of Borrower
         of notice from a Multiemployer Plan that it is in reorganization or
         insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends
         to terminate or has terminated under Section 4041A of ERISA;

                  (v) the institution of a proceeding by a fiduciary of any
         Multiemployer Plan against Borrower or any ERISA Affiliate of Borrower
         to enforce Section 515 of ERISA, which proceeding is not dismissed
         within thirty (30) days;

                  (vi) the adoption of an amendment to any Plan that, pursuant
         to Section 401(a)(29) of the Code or Section 307 of ERISA, would result
         in the loss of tax-exempt status of the trust of which such Plan is a
         part if Borrower or an ERISA Affiliate of Borrower fails to timely
         provide security to the Plan in accordance with the provisions of said
         Sections; and

                  (vii) the imposition of a lien or a security interest in
         connection with a Plan.

                  (v) Reserved.

                  (w) SECONDARY MARKET TRANSACTION. Borrower acknowledges that
Agent and its successors and assigns may (i) sell the Loan to one or more
investors as a whole loan, (ii) participate the Loan to one or more investors,
(iii) deposit the Loan with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in CLAUSES (I) through (IV) above are hereinafter each referred to
as a "SECONDARY MARKET TRANSACTION"). Borrower shall cooperate with Agent in
attempting to effect or effecting any such Secondary Market Transaction and
shall cooperate in attempting to implement or implementing all requirements
imposed by any Rating Agency involved in any Secondary Market Transaction,
including but not limited to,



                                       72


                  (i) providing Agent an estoppel certificate and such
         information, legal opinions and documents relating to Borrower, the
         Guarantor, the Mortgaged Property and any tenants of the Mortgaged
         Property (in the case of tenants, limited to such information that is
         in the Borrower's possession or that can be obtained without
         significant expense) as Agent or the Rating Agencies may reasonably
         request in connection with such Secondary Market Transaction,

                  (ii) amending the Loan Documents and Organizational Agreement
         of Borrower, and updating and/or restating officer's certificates,
         title insurance and other closing items, as may be required by the
         Rating Agencies (except Borrower shall not be required to update the
         Appraisal),

                  (iii) participating in bank, investors and Rating Agencies'
         meetings if requested by Agent,

                  (iv) upon Agent's request, amending the Loan Documents (and
         updating and/or restating officer's certificates, title insurance and
         other closing items in connection therewith) to divide the Loan into
         two or more separate or component notes, which notes may be included in
         separate transactions and have different interest rates and
         amortization schedules (but with aggregated financial terms which are
         equivalent to that of the Loan prior to such separation), and

                  (v) reviewing the offering documents relating to any Secondary
         Market Transaction to ensure that all information concerning Borrower,
         the Guarantor, the Mortgaged Property, and the Loan is correct, and
         certifying to the accuracy thereof.

Agent and the Lenders shall be permitted to share all such information with the
investment banking firms, Rating Agencies, accounting firms, law firms and other
third-party advisory firms and investors involved with the Loan and the Loan
Documents or the applicable Secondary Market Transaction. Agent, the Lenders and
the Rating Agencies shall be entitled to rely on the information supplied by, or
on behalf of, Borrower. Agent and the Lenders may publicize the existence of the
Loan in connection with its marketing for a Secondary Market Transaction or
otherwise as part of its business development. Notwithstanding the foregoing,
this SECTION 5.1(W) shall not obligate Borrower and/or Guarantor to participate
in any registered public offering of any securities.

                  (x) INSURANCE.

                  (i) Borrower, at its sole cost and expense, shall keep the
         Improvements and Equipment insured (including, but not limited to, any
         period of renovation, alteration and/or construction) during the term
         of the Loan with the coverage and in the amounts required under this
         Agreement for the mutual benefit of Borrower and Agent against loss or
         damage by fire, lightning, wind and such other perils as are
         customarily included in a standard "all-risk" or "special cause of
         loss" form and against loss or damage by other risks and hazards
         covered by a standard extended coverage insurance policy (including,
         without limitation, riot and civil commotion, vandalism, malicious
         mischief, burglary, collapse, theft and such other coverages as may be
         reasonably required by Agent on the



                                       73


         special form (formerly known as an all risk form)). Such insurance
         shall be in an amount (i) equal to at least the greater of then full
         replacement cost of the Improvements and Equipment (exclusive of the
         cost of foundations and footings), without deduction for physical
         depreciation and the outstanding Principal Indebtedness, and (ii) such
         that the insurer would not deem Borrower a co-insurer under said
         policies. The policies of insurance carried in accordance with this
         SECTION 5.1(X) shall be paid not less than ten (10) days in advance of
         the due date thereof and shall contain the "Replacement Cost
         Endorsement" with a waiver of depreciation. If terrorism coverage is
         excluded on an "all-risk" basis, then the Borrower shall obtain
         coverage for terrorism and similar acts in the standalone terrorism
         market. Notwithstanding the foregoing, Agent shall not unreasonably
         withhold its consent to reductions in the stated amounts and types of
         coverage required to be maintained by Borrower hereunder if such levels
         of coverage or types of insurance, as determined by Agent in its sole
         discretion, (A) are not available at commercially reasonable rates and
         (B) are not at the time commonly maintained for properties similar to
         the Mortgaged Property and located in or around the region in which the
         Mortgaged Property is located.

                  (ii) Borrower, at its sole cost and expense, for the mutual
         benefit of Borrower and Agent, shall also obtain and maintain or cause
         to be obtained and maintained during the entire term of the Loan the
         following policies of insurance:

                           (A) flood insurance, if any part of the Mortgaged
                  Property is located in an area identified by the Federal
                  Emergency Management Agency as an area having special flood
                  hazards and in which flood insurance has been made available
                  under the National Flood Insurance Act of 1968, the Flood
                  Disaster Protection Act of 1973 or the National Flood
                  Insurance Reform Act of 1994 (and any amendment or successor
                  act thereto) in an amount at least equal to the maximum limit
                  of coverage available with respect to the Improvements and
                  Equipment under said Act;

                           (B) Comprehensive General Liability or Commercial
                  General Liability insurance, including a broad form
                  comprehensive general liability endorsement and coverage for
                  broad form property damage, contractual damages, personal
                  injuries (including death resulting therefrom) and a liquor
                  liability endorsement if liquor is sold on the Mortgaged
                  Property, containing minimum limits of liability of $1 million
                  for both injury to or death of a person and for property
                  damage per occurrence and $3 million in the aggregate for the
                  Mortgaged Property, and such other liability insurance
                  reasonably requested by Agent; in addition, at least $10
                  million excess and/or umbrella liability insurance shall be
                  obtained and maintained for any and all claims, including all
                  legal liability imposed upon Borrower and all court costs and
                  attorneys' fees incurred in connection with the ownership,
                  operation and maintenance of the Mortgaged Property;

                           (C) business interruption insurance (including rental
                  value) in an annual aggregate amount equal to the estimated
                  gross revenues from the Leases of the Mortgaged Property
                  (including, without limitation, the loss of all Rents and
                  additional Rents payable by all of the lessees under the
                  Leases (whether or not



                                       74


                  such Leases are terminable in the event of a fire or
                  casualty)), such insurance to cover losses for a period of the
                  longer of (x) one year (or, if the Loan has been included in a
                  Secondary Market Transaction in which Securities are issued
                  and the Rating Agencies so require, eighteen (18) months)
                  after the date of the fire or casualty in question or (y) the
                  period from the time of loss until all repairs are fully
                  completed with reasonable diligence and dispatch, plus an
                  extended period of indemnity commencing at the time repairs
                  are completed for a period of not less than 90 days and to be
                  increased or decreased, as applicable, from time to time
                  during the term of the Loan if, and when, the gross revenues
                  from the Leases of the Mortgaged Property materially increase
                  or decrease, as applicable (including, without limitation,
                  increases from new Leases and renewal Leases entered into in
                  accordance with the terms of this Agreement), to reflect all
                  increased Rent and increased additional Rent payable by all of
                  the lessees under such renewal Leases and all Rent and
                  additional Rent payable by all of the lessees under such new
                  Leases;

                           (D) insurance against loss or damage from (x) leakage
                  of sprinkler systems and (y) explosion of steam boilers, air
                  conditioning equipment, high pressure piping, machinery and
                  equipment, pressure vessels or similar apparatus now or
                  hereafter installed in the Improvements (without exclusion for
                  explosions), covering all boilers or other pressure vessels,
                  machinery and equipment located in, on, or about the
                  Improvements; coverage is required in an amount at least equal
                  to the full replacement cost of such equipment and the
                  building or buildings housing same and shall extend to
                  electrical equipment, sprinkler systems, heating and air
                  conditioning equipment, refrigeration equipment and piping;

                           (E) worker's compensation insurance coverage (in
                  amounts not less than the statutory minimums for all persons
                  employed by Borrower or its tenants at the Mortgaged Property
                  and in compliance with all other requirements of applicable
                  local, state and federal law) and "Employers Liability"
                  insurance in amounts not less than required by statute;

                           (F) during any period of repair or restoration,
                  builder's "all risk" insurance in an amount equal to not less
                  than the full insurable value of the Mortgaged Property
                  against such risks (including, without limitation, fire and
                  extended coverage and collapse of the Improvements to agreed
                  limits) as Agent may request, in form and substance acceptable
                  to Agent;

                           (G) ordinance or law coverage to compensate for the
                  cost of demolition, increased cost of construction, and loss
                  to any undamaged portions of the Improvements, if the current
                  use of the Mortgaged Property or the Improvements themselves
                  are or become "nonconforming" pursuant to the applicable
                  zoning regulations, or full rebuildability following casualty
                  is otherwise not permitted under such zoning regulations;



                                       75


                           (H) if required by Agent as a result of the Mortgaged
                  Property being located in an area with a high degree of
                  seismic activity, earthquake damage insurance in an amount and
                  form acceptable to Agent; and

                           (I) such other insurance as may from time to time be
                  reasonably required by Agent in order to protect its interests
                  with respect to the Loan and the Mortgaged Property and to
                  conform such requirements to then current standards for a
                  Secondary Market Transaction in which Securities are issued.

                  (iii) All policies of insurance (the "POLICIES") required
         pursuant to this SECTION 5.1(X):

                           (A) shall be issued by an insurer approved by Agent
                  which has a claims paying ability rating of not less than "AA"
                  (or the equivalent) by Rating Agencies satisfactory to Agent
                  (one of which shall be Standard & Poor's Ratings Group) and
                  A:VIII or better as to claims paying ability by AM Best,

                           (B) shall name Agent as an additional insured and
                  contain a standard noncontributory mortgagee clause and a
                  Agent's Loss Payable Endorsement, or their equivalents, naming
                  Agent (and/or such other party as may be designated by Agent)
                  as the party to which all payments made by such insurance
                  company shall be paid,

                           (C) shall be maintained throughout the term of the
                  Loan without cost to Agent,

                           (D) shall contain such provisions as Agent deems
                  reasonably necessary or desirable to protect its interest
                  (including, without limitation, endorsements providing that
                  neither Borrower, Agent nor any other party shall be a
                  co-insurer under said Policies and that Agent shall receive at
                  least thirty (30) days prior written notice of any
                  modification, reduction or cancellation),

                           (E) shall contain a waiver of subrogation against
                  Agent,

                           (F) shall be for a term of not less than one year,

                           (G) shall be issued by an insurer licensed in the
                  state in which the Mortgaged Property is located,

                           (H) shall provide that Agent may, but shall not be
                  obligated to, make premium payments to prevent any
                  cancellation, endorsement, alteration or reissuance, and such
                  payments shall be accepted by the insurer to prevent same, and

                           (I) shall be reasonably satisfactory in form and
                  substance to Agent and reasonably approved by Agent as to
                  amounts, form, risk coverage, deductibles, loss payees and
                  insureds to the extent not otherwise specified in this SECTION
                  5.1(X).



                                       76


         Copies of said Policies, certified as true and correct by Borrower, or
         insurance certificates thereof, shall be delivered to Agent. Not later
         than ten (10) days prior to the expiration date of each of the
         Policies, Borrower shall deliver to Agent satisfactory evidence of the
         renewal of each Policy. The insurance coverage required under this
         SECTION 5.1(X) may be effected under a blanket policy or policies
         covering the Mortgaged Property and other property and assets not
         constituting a part of the Collateral; PROVIDED that any such blanket
         policy shall provide at least the same amount and form of protection as
         would a separate policy insuring the Mortgaged Property individually,
         which amount shall not be less than the amount required pursuant to
         this SECTION 5.1(X) and which shall in any case comply in all other
         respects with the requirements of this SECTION 5.1(X). Upon demand
         therefor, Borrower shall reimburse Agent for all of Agent's or its
         designee's reasonable costs and expenses incurred in obtaining any or
         all of the Policies or otherwise causing the compliance with the terms
         and provisions of this SECTION 5.1(X), including (without limitation)
         obtaining updated flood hazard certificates and replacement of any
         so-called "forced placed" insurance coverages to the extent Borrower
         was required to obtain and maintain any such Policy or Policies
         hereunder and failed to do so. Borrower shall pay the premiums for such
         Policies (the "INSURANCE PREMIUMS") as the same become due and payable,
         it being understood that, without limiting Borrower's obligation to pay
         the Insurance Premiums, Borrower may requisition and apply funds from
         the Insurance Escrow Account to pay such Insurance Premiums shall
         furnish to Agent evidence of the renewal of each of the Policies with
         receipts for the payment of the Insurance Premiums or other evidence of
         such payment reasonably satisfactory to Agent (provided, however, that
         Borrower is not required to furnish such evidence of payment to Agent
         in the event that such Insurance Premiums have been paid by Agent or
         the Collateral Agent). If Borrower does not furnish such evidence and
         receipts at least ten (10) days prior to the expiration of any expiring
         Policy, then Agent may procure, but shall not be obligated to procure,
         such insurance and pay the Insurance Premiums therefor, and Borrower
         agrees to reimburse Agent for the cost of such Insurance Premiums
         promptly on demand. Within thirty (30) days after request by Agent,
         Borrower shall obtain such increases in the amounts of coverage
         required hereunder as may be reasonably requested by Agent, based on
         then industry-standard amounts of coverage then being obtained by
         prudent owners of properties similar to the Mortgaged Property in the
         same applicable market region as the Mortgaged Property. Borrower shall
         give Agent prompt written notice if Borrower receives from any insurer
         any written notification or threat of any actions or proceedings
         regarding the non-compliance or non-conformity of the Mortgaged
         Property with any insurance requirements.

                  (iv) If the Mortgaged Property shall be damaged or destroyed,
         in whole or in part, by fire or other casualty, Borrower shall give
         prompt notice thereof to Agent.

                           (A) In case of loss covered by Policies, Agent may
                  either (a) jointly with a Borrower settle and adjust any claim
                  and agree with the insurance company or companies on the
                  amount to be paid on the loss or (b) allow Borrower to agree
                  with the insurance company or companies on the amount to be
                  paid upon the loss; PROVIDED, that Borrower may settle and
                  adjust losses aggregating not in excess of $50,000, agree with
                  the insurance company or companies on the amount to be paid
                  upon the loss and collect and receipt for any



                                       77


                  such Insurance Proceeds; PROVIDED, FURTHER, that if (x) at the
                  time of the settlement of such claim an Event of Default has
                  occurred and is continuing or (y) the Agent and the Borrower
                  are unable to agree upon a joint settlement or (z) the Agent
                  disapproves of the Borrower's proposed settlement with the
                  insurance company, then Agent shall settle and adjust such
                  claim without the consent of Borrower. In any such case Agent
                  shall and is hereby authorized to collect and receipt for any
                  such Insurance Proceeds subject to and to the extent provided
                  for in this Agreement. The reasonable out-of-pocket expenses
                  incurred by Agent in the adjustment and collection of
                  Insurance Proceeds shall become part of the Indebtedness and
                  be secured by the Mortgage and shall be reimbursed by Borrower
                  to Agent upon demand therefor.

                           (B) In the event of any insured damage to or
                  destruction of the Mortgaged Property or any part thereof
                  (herein called an "INSURED CASUALTY") where the aggregate
                  amount of the loss, as reasonably determined by an Independent
                  insurance adjuster, (i) is less than twenty percent (20%) of
                  the Principal Indebtedness or (ii) if the damage is to
                  personal property of the Borrower located on the Mortgaged
                  Property and the concurrent damage to the real property is
                  less than twenty percent (20%) of the Principal Indebtedness,
                  and if, in the reasonable judgment of Agent, the Mortgaged
                  Property can be restored by not later than the first to occur
                  of (a) twelve (12) months of settlement of the claim and (b)
                  the expiration of the business interruption insurance and, in
                  any case, not later than six (6) months prior to the Maturity
                  Date to an economic unit not less materially valuable
                  (including an assessment of the impact of the termination of
                  any Leases due to such Insured Casualty) and not less useful
                  than the same was prior to the Insured Casualty, or if Agent
                  otherwise elects to allow a Borrower to restore the Mortgaged
                  Property, then, if no Event of Default shall have occurred and
                  be continuing, the Insurance Proceeds (after reimbursement of
                  any reasonable out-of-pocket expenses incurred by Agent in
                  connection with the collection of any applicable Insurance
                  Proceeds) shall be made available at Borrower's option to
                  directly pay or to reimburse Borrower for the cost of
                  restoring, repairing, replacing or rebuilding the Mortgaged
                  Property or part thereof subject to the Insured Casualty, as
                  provided for below, and, in the case of personal property,
                  such replacement or restoration shall be utilized to maintain
                  existing Leases or contracts with NAP Obligors. Borrower
                  hereby covenants and agrees to commence and diligently to
                  prosecute such restoring, repairing, replacing or rebuilding.
                  Borrower shall pay all out-of-pocket costs (and if required by
                  Agent, Borrower shall deposit the total thereof with Agent in
                  advance) of such restoring, repairing, replacing or rebuilding
                  in excess of the Insurance Proceeds made available pursuant to
                  the terms hereof (the "DEFICIENT AMOUNT").

                           (C) Except as provided above, the Insurance Proceeds
                  collected upon any Insured Casualty shall, at the option of
                  Agent in its sole discretion, be applied to the payment of the
                  Indebtedness as provided in SECTION 2.7(B) of this Agreement
                  or applied to the cost of restoring, repairing, replacing or
                  rebuilding



                                       78


                  the affected Mortgaged Property or part thereof subject to the
                  Insured Casualty, in the manner set forth below.

                           (D) In the event that Insurance Proceeds (after
                  reimbursement of any reasonable expenses incurred by Agent in
                  connection with the collection of any applicable Insurance
                  Proceeds), if any, shall be made available to Borrower for the
                  restoring, repairing, replacing or rebuilding of any portion
                  of the affected Mortgaged Property, Borrower covenants to
                  restore, repair, replace or rebuild the same to be of at least
                  comparable value as prior to such damage or destruction, all
                  to be effected in accordance with Legal Requirements and plans
                  and specifications approved in advance by Agent, such approval
                  not to be unreasonably withheld or delayed.

                           (E) In the event Borrower is entitled to payment or
                  reimbursement out of Insurance Proceeds, such proceeds shall
                  be held in an Eligible Account as provided in SECTION 2.12(F)
                  and disbursed from time to time as the restoration progresses
                  upon Agent being furnished with (1) evidence reasonably
                  satisfactory to it (which evidence may include inspection(s)
                  of the work performed) that the restoration, repair,
                  replacement and rebuilding covered by the disbursement has
                  been completed in accordance with plans and specifications
                  approved by Agent, (2) evidence reasonably satisfactory to it
                  of the estimated cost of completion of the restoration,
                  repair, replacement and rebuilding, (3) funds, or, at Agent's
                  option, assurances reasonably satisfactory to Agent that such
                  funds are available and sufficient in addition to the
                  Insurance Proceeds to complete the proposed restoration,
                  repair, replacement and rebuilding, and (4) such architect's
                  certificates, waivers of lien for prior disbursements,
                  contractor's sworn statements, title insurance endorsements,
                  bonds and other evidences of cost, payment (if applicable) and
                  performance of the foregoing repair, restoration, replacement
                  or rebuilding as Agent may reasonably require and approve.
                  Agent may, in any event, require that all plans and
                  specifications for such restoration, repair, replacement and
                  rebuilding be submitted to and reasonably approved by Agent
                  prior to commencement of work. Agent may retain a construction
                  consultant to inspect such work and review Borrower's request
                  for payments and Borrower shall, on demand by Agent, reimburse
                  Agent for the reasonable fees and disbursements of such
                  consultant. No payment made prior to the final completion of
                  the restoration, repair, replacement and rebuilding shall
                  exceed ninety percent (90%) of the hard construction costs
                  value of the work performed from time to time (except for
                  restoration work on a trade by trade basis or on an hourly
                  basis for professional services in which event, payment may be
                  made in full upon the completion of such work); funds other
                  than Insurance Proceeds shall be disbursed prior to
                  disbursement of such proceeds; and, at all times, the
                  undisbursed balance of such proceeds remaining in the accounts
                  of Agent, together with funds deposited for that purpose or
                  irrevocably committed to the repayment of Agent by or on
                  behalf of Borrower for that purpose, shall be at least
                  sufficient in the reasonable judgment of Agent to pay for the
                  cost of completion of the restoration, repair, replacement or
                  rebuilding, free and clear of all liens or claims for lien,
                  except for Permitted Encumbrances. Any surplus which may
                  remain out of



                                       79


                  Insurance Proceeds held by Agent after payment of such costs
                  of restoration, repair, replacement or rebuilding shall be
                  paid to Borrower so long as no Event of Default has occurred
                  and is continuing.

                  (v) Borrower shall not carry separate insurance, concurrent in
         kind or form or contributing in the event of loss, with any insurance
         required under this Agreement that would be considered "co-insurance"
         or adversely affect the ability to collect under a policy of insurance
         required hereunder.

                  (y) CONDEMNATION.

                  (i) Borrower shall promptly give Agent written notice of the
         actual or threatened commencement of any proceeding for a Taking and
         shall deliver to Agent copies of any and all papers served in
         connection with such proceedings. Agent is hereby irrevocably appointed
         as Borrower's attorney-in-fact, coupled with an interest, with
         exclusive power to collect, receive and retain any Condemnation
         Proceeds for said Taking. With respect to any compromise or settlement
         in connection with such proceeding, Agent shall jointly with Borrower
         compromise and reach settlement unless at the time of such Taking an
         Event of Default has occurred and is continuing and the Indebtedness
         has been accelerated, in which event Agent shall compromise and reach
         settlement without the consent of Borrower. Notwithstanding the
         foregoing provisions of this SECTION 5.1(Y), Borrower is authorized to
         negotiate, compromise and settle, without participation by Agent,
         Condemnation Proceeds of up to $50,000 in connection with any Taking.
         Notwithstanding any Taking, Borrower shall continue to pay the
         Indebtedness at the time and in the manner provided for in this
         Agreement and the other Loan Documents and the Indebtedness shall not
         be reduced except in accordance therewith.

                  (ii) Borrower shall cause the Condemnation Proceeds to be paid
         directly to the Collection Account as provided in SECTION 2.7(B) of
         this Agreement. Agent may, in its sole discretion, apply any such
         Condemnation Proceeds to the reduction or discharge of the Indebtedness
         (whether or not then due and payable).

                  (iii) With respect to a Taking in part, which shall mean any
         Taking which does not render the affected Mortgaged Property physically
         or economically unsuitable in the reasonable judgment of Agent for the
         use to which it was devoted prior to the Taking, Borrower shall cause
         the Condemnation Proceeds to be paid to Agent as described above or
         deposited into the applicable account pursuant to the provisions of
         this Agreement, to be applied to the cost of repairing, replacing,
         restoring or rebuilding the affected Mortgaged Property as follows:

                           (A) Provided that Condemnation Proceeds shall be made
                  available to Borrower for the restoring, repairing, replacing
                  or rebuilding of the affected Mortgaged Property, Borrower
                  hereby covenants to restore, repair, replace or rebuild the
                  same to be of at least comparable value and, to the extent
                  commercially practicable, of substantially the same character
                  as prior to the Taking, all to be effected in accordance with
                  applicable law and plans and specifications reasonably
                  approved in advance by Agent. Borrower shall pay all



                                       80


                  costs (and if required by Agent, Borrower shall deposit the
                  total thereof with Agent in advance) of such restoring,
                  repairing, replacing or rebuilding in excess of the
                  Condemnation Proceeds made available pursuant to the terms
                  hereof.

                           (B) The Condemnation Proceeds held by Agent shall be
                  held in an Eligible Account as provided in SECTION 2.12(F) and
                  disbursed from time to time as the restoration progresses upon
                  Agent being furnished with (1) evidence reasonably
                  satisfactory to it (which evidence may include inspection(s)
                  of the work performed) that the restoration, repair,
                  replacement and rebuilding covered by the disbursement has
                  been completed in accordance with plans and specifications
                  approved by Agent, (2) evidence reasonably satisfactory to it
                  of the estimated cost of completion of the restoration,
                  repair, replacement and rebuilding, (3) funds, or, at Agent's
                  option, assurances satisfactory to Agent that such funds are
                  available and sufficient in addition to the Condemnation
                  Proceeds to complete the proposed restoration, repair,
                  replacement and rebuilding, and (4) such architect's
                  certificates, waivers of lien for prior disbursements,
                  contractor's sworn statements, title insurance endorsements,
                  bonds and other evidences of cost, payment and performance of
                  the foregoing repair, restoration, replacement or rebuilding
                  as Agent may reasonably require and approve. Agent may, in any
                  event, require that all plans and specifications for such
                  restoration, repair, replacement and rebuilding be submitted
                  to and reasonably approved by Agent prior to commencement of
                  work. Agent may retain a construction consultant to inspect
                  such work and review any request by Borrower for payments and
                  Borrower shall, on demand by Agent, reimburse Agent for the
                  reasonable fees and disbursements of such consultant. No
                  payment made prior to the final completion of the restoration,
                  repair, replacement and rebuilding shall exceed ninety percent
                  (90%) of the hard construction costs value of the construction
                  work performed from time to time (except for restoration work
                  on a trade by trade basis or on an hourly basis for
                  professional services in which event, payment may be made in
                  full upon the completion of such work); funds other than
                  Condemnation Proceeds shall be disbursed prior to disbursement
                  of such proceeds; and at all times, the undisbursed balance of
                  such proceeds remaining in the hands of Agent, together with
                  funds deposited for that purpose or irrevocably committed to
                  the repayment of Agent by or on behalf of Borrower for that
                  purpose, shall be at least sufficient in the reasonable
                  judgment of Agent to pay for the cost of completion of the
                  restoration, repair, replacement or rebuilding, free and clear
                  of all liens or claims for lien. Any surplus which may remain
                  out of Condemnation Proceeds held by Agent after payment of
                  such costs of restoration, repair, replacement or rebuilding
                  shall be paid to Borrower so long as no Event of Default has
                  occurred and is continuing.

                           (C) If the affected Mortgaged Property is sold,
                  through foreclosure or otherwise, prior to the receipt by
                  Agent of any such Condemnation Proceeds to which it is
                  entitled hereunder, Agent shall have the right, whether or not
                  a deficiency judgment on the Note shall have been sought,
                  recovered or denied, to have reserved in any foreclosure
                  decree a right to receive said award or payment, or a portion
                  thereof sufficient to pay the Indebtedness. In no case shall
                  any such



                                       81


                  application reduce or postpone any payments otherwise required
                  pursuant to this Agreement, other than the final payment on
                  the Note.

                  (z) LEASES AND RENTS.

                  (i) Borrower absolutely and unconditionally assigns to Agent,
         Borrower's right, title and interest in all current and future Leases
         and Rents as collateral for the Loan, it being intended by Borrower
         that this assignment constitutes a present, absolute assignment and not
         an assignment for additional security only. Such assignment to Agent
         shall not be construed to bind Agent to the performance of any of the
         covenants, conditions or provisions contained in any such Lease or
         otherwise impose any obligation upon Agent. Borrower shall execute and
         deliver to Agent such additional instruments, in form and substance
         reasonably satisfactory to Agent, as may hereafter be reasonably
         requested in writing by Agent to further evidence and confirm such
         assignment. Nevertheless, subject to the terms of this SECTION 5.1(z),
         Agent grants to Borrower a license to lease, own, maintain, operate and
         manage the Mortgaged Property and to collect, use and apply the Rent,
         which license is revocable only upon the occurrence and during the
         continuance of an Event of Default under this Agreement. Any portion of
         the Rents held by Borrower shall be held in trust for the benefit of
         Agent for use in the payment of the Indebtedness. Upon the occurrence
         of an Event of Default and during the continuance thereof, the license
         granted to Borrower herein shall automatically be revoked, and Agent
         shall immediately be entitled to possession of all Rents, whether or
         not Agent enters upon or takes control of the Mortgaged Property. Agent
         is hereby granted and assigned by Borrower the right, at its option,
         upon revocation of the license granted herein, to enter upon the
         Mortgaged Property in person, by agent or by court-appointed receiver
         to collect the Rents. Any Rents collected after the revocation of the
         license shall be applied toward payment of the Indebtedness as set
         forth in SECTION 2.8 hereof.

                  (ii) All Leases entered into by Borrower shall provide for
         rental rates comparable to then-existing local market rates and terms
         and conditions commercially reasonable and consistent with
         then-prevailing local market terms and conditions for similar type
         properties. With respect to any new third party Lease for more than 10%
         of the net rentable area of the Mortgaged Property, Borrower shall not
         enter into such Lease, without the prior written approval of Agent,
         which approval shall not be unreasonably withheld or delayed. With
         respect to any new Lease which Borrower proposes to enter into after
         the Closing Date where Terremark Worldwide, Inc. or its Affiliates
         shall be the tenant ("AFFILIATE LEASES"), Borrower shall not enter into
         such Lease unless such Lease shall be on market terms and conditions
         which the Agent shall have approved in advance. Borrower shall furnish
         Agent with (1) detailed term sheets in advance in the case of any
         Leases, modifications, amendments or renewals for which Agent's consent
         is required and (2) in the case of any other Leases, executed copies of
         such Leases upon written request. All renewals or amendments or
         modifications of Leases that do not satisfy the requirements of the
         first sentence of this SECTION 5.1(Z)(II) shall be subject to the prior
         approval of Agent. All Leases shall be substantially written on the
         standard lease form previously approved by Agent which form shall not
         be materially changed without Agent's prior written consent, which
         consent shall not be unreasonably withheld;



                                       82


                  provided, however, that in the case of Affiliate Leases, such
                  standard lease form shall be substantially in the form of the
                  NAP Leases without the amendments to the NAP Leases executed
                  in connection with the closing (i.e., will not require the
                  conveyance of the tenant's personal property in connection
                  therewith). All Leases executed after the date hereof shall
                  provide that they are subordinate to the Mortgage, and that
                  the lessee agrees to attorn to Agent. Borrower:

                           (A) shall observe and perform all of the material
                  obligations imposed upon the lessor under the Leases and shall
                  not do or permit to be done anything to materially impair the
                  value of the Leases as security for the Indebtedness;

                           (B) shall promptly send copies to Agent of all
                  written notices of default which Borrower shall send or
                  receive thereunder;

                           (C) shall enforce all of the material terms,
                  covenants and conditions contained in the Leases upon the part
                  of the lessee thereunder to be observed or performed and shall
                  effect a termination or diminution of the obligations of
                  tenants under leases, only in a manner that a prudent owner of
                  a similar property to the Mortgaged Property would enforce
                  such terms covenants and conditions or effect such termination
                  or diminution in the ordinary course of business;

                           (D) shall not collect any of the Rents more than one
                  (1) month in advance (excluding common area maintenance
                  reimbursement estimates);

                           (E) shall not execute any other assignment of
                  lessor's interest in the Leases or Rents; and

                           (F) shall not convey or transfer or suffer or permit
                  a conveyance or transfer of the Mortgaged Property or of any
                  interest therein so as to effect a merger of the estates and
                  rights of, or a termination or diminution of the obligations
                  of, lessees thereunder.

                  (iii) Borrower shall deposit security deposits of lessees
         which are turned over to or for the benefit of Borrower or otherwise
         collected by or on behalf of Borrower, into an Eligible Account with
         the same name as the Collection Account and shall not commingle such
         funds with any other funds of Borrower. Any bond or other instrument
         which Borrower is permitted to hold in lieu of cash security deposits
         under any applicable Legal Requirements (including, without limitation,
         any letter of credit held as security under a Lease) shall be
         maintained in full force and effect unless replaced by cash deposits as
         hereinabove described, shall name Agent as payee or mortgagee
         thereunder (or at Agent's option, be fully assignable to Agent) and
         shall, in all respects, comply with any applicable Legal Requirements
         and otherwise be reasonably satisfactory to Agent; PROVIDED that all
         letters of credit received by Borrower shall be assigned to Agent.
         Borrower shall, upon request, provide Agent with evidence reasonably
         satisfactory to Agent of Borrower's compliance with the foregoing. Upon
         the occurrence and during the continuance of any Event of Default,
         Borrower shall, upon Agent's request, if permitted by any applicable
         Legal Requirements, turn over to Agent the security deposits (and any




                                       83


         interest theretofore earned thereon) with respect to all or any portion
         of the Mortgaged Property, to be held by Agent subject to the terms of
         the Leases.

                  (aa) MAINTENANCE OF MORTGAGED PROPERTY. Borrower shall cause
the Mortgaged Property to be maintained in a good and safe condition and repair,
subject to wear and tear and damage caused by casualty or condemnation. The
Improvements and the Equipment shall not be removed, demolished or altered
(except for normal replacement of the Equipment, Improvements contemplated in an
approved Operating Budget or pursuant to Leases in effect from time to time or
for removals, demolition or alterations that cost up to $50,000) without the
consent of the Agent which consent shall not be unreasonably withheld or
delayed. Except with respect to an Insured Casualty which shall be governed by
the terms and conditions provided herein, Borrower shall, or shall cause any
tenants obligated under their respective Leases to, promptly repair, replace or
rebuild any part of the Mortgaged Property that becomes damaged, worn or
dilapidated except where the failure to do so is not reasonably likely to have a
Material Adverse Effect. Borrower shall complete and pay for any structure at
any time in the process of construction or repair on the Land. Borrower shall
not initiate, join in, or consent to any change in any private restrictive
covenant, zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Mortgaged Property or any part
thereof which can be reasonably likely to result in a Material Adverse Effect
without consent of the Agent. If under applicable zoning provisions the use of
all or any portion of the Mortgaged Property is or shall become a nonconforming
use, Borrower will not cause or permit such nonconforming use to be discontinued
or abandoned if such discontinuance of abandonment would cause such
nonconforming use to no longer be permitted without the express written consent
of the Agent. Borrower shall not (i) change the use of the Land in any material
respect, (ii) permit or suffer to occur any waste on or to the Mortgaged
Property or to any portion thereof or (iii) take any steps whatsoever to convert
the Mortgaged Property, or any portion thereof, to a condominium or cooperative
form of management.

                  (bb) TAXES ON SECURITY. Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect
to the Note or the Lien created or secured by the Loan Documents, other than
income, franchise and doing business taxes imposed on Agent or any Lender or
Collateral Agent. If there shall be enacted any law (1) deducting the Loan from
the value of the Collateral for the purpose of taxation, (2) affecting Agent's
Lien on the Collateral or (3) changing existing laws of taxation of mortgages,
deeds of trust, security deeds, or debts secured by realty, or changing the
manner of collecting any such taxes, Borrower shall promptly pay to Agent, on
demand, all taxes, costs and charges for which Agent is or may be liable as a
result thereof; PROVIDED, HOWEVER, if such payment would be prohibited by law or
would render the Loan usurious, then instead of collecting such payment, Agent
may declare all amounts owing under the Loan Documents to be immediately due and
payable.

                                   ARTICLE VI.
                               NEGATIVE COVENANTS

                  Section 6.1. NEGATIVE COVENANTS. Borrower covenants and agrees
that, until payment in full of the Indebtedness, it will not do, directly or
indirectly, any of the following unless Agent consents thereto in writing:




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                  (a) LIENS ON THE MORTGAGED PROPERTY. Incur, create, assume,
become or be liable in any manner with respect to, or permit to exist, except as
permitted by the Mortgage, any Lien with respect to the Mortgaged Property,
except: (i) Liens in favor of the Lenders and (ii) the Permitted Encumbrances.

                  (b) OWNERSHIP AND TRANSFER. Except as expressly permitted by
or pursuant to this Agreement or the other Loan Documents, own any property of
any kind other than the Mortgaged Property, or Transfer the Mortgaged Property
or any portion thereof.

                  (c) OTHER BORROWINGS. Incur, create, assume, become or be
liable in any manner with respect to Other Borrowings.

                  (d) DISSOLUTION; MERGER OR CONSOLIDATION. Dissolve, terminate,
liquidate, merge with or consolidate into another Person.

                  (e) CHANGE IN BUSINESS. Cease to be a Single-Purpose Entity,
or make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.

                  (f) DEBT CANCELLATION. Cancel or otherwise forgive or release
any material claim or debt owed to Borrower by any Person, except for adequate
consideration or in the ordinary course of Borrower's business.

                  (g) AFFILIATE TRANSACTIONS. Enter into, or be a party to, any
transaction with an Affiliate of Borrower, except in the ordinary course of
business and on terms which are fully disclosed to Agent in advance and on terms
which are no less favorable to Borrower or such Affiliate than would be obtained
in a comparable arm's length transaction with an unrelated third party (other
than the Management Agreement).

                  (h) CREATION OF EASEMENTS. Except as expressly permitted by or
pursuant to the Mortgage or this Agreement, create, or permit the Mortgaged
Property or any part thereof to become subject to, any easement, license or
restrictive covenant, other than a Permitted Encumbrance, provided, that the
consent of Agent shall not be unreasonably withheld or delayed to the extent
that any such easement, license or restrictive covenant is reasonably necessary
for the continued use, enjoyment, access to or operation of the applicable
Mortgaged Property.

                  (i) MISAPPLICATION OF FUNDS. Distribute any Rents or Moneys
received from Accounts in violation of the provisions of SECTION 2.12, or fail
to pledge any security deposit to Agent, or misappropriate any security deposit
or portion thereof.

                  (j) CERTAIN RESTRICTIONS. Enter into any agreement that
expressly restricts the ability of Borrower to enter into amendments,
modifications or waivers of any of the Loan Documents.

                  (k) ASSIGNMENT OF LICENSES AND PERMITS. Assign or transfer any
of its interest in any Permits pertaining to the Mortgaged Property, or assign,
transfer or remove or permit any other Person to assign, transfer or remove any
records pertaining to the Mortgaged Property.





                                       85



                  (l) PLACE OF ORGANIZATION. Change its jurisdiction of
organization, creation or formation, as applicable, without giving Agent at
least fifteen (15) days' prior written notice thereof and promptly providing
Agent such information as Agent may reasonably request in connection therewith.

                  (m) LEASES. Enter into, amend or cancel Leases, except as
permitted by or pursuant to or would not result in a violation of this
Agreement.

                  (n) MANAGEMENT AGREEMENT. Except in accordance with this
Agreement, (i) terminate or cancel the Management Agreement, (ii) consent to
either the reduction of the term of or the assignment of the Management
Agreement, (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement, or (iv) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, the Management Agreement in any material respect.

                  (o) PLANS AND WELFARE PLANS. Knowingly engage in or permit any
transaction in connection with which Borrower or any ERISA Affiliate could be
subject to either a material civil penalty or tax assessed pursuant to Section
502(i) or 502(1) of ERISA or Section 4975 of the Code, permit any Welfare Plan
to provide benefits, including without limitation, medical benefits (whether or
not insured), with respect to any current or former employee of Borrower beyond
his or her retirement or other termination of service other than (i) coverage
mandated by applicable law, (ii) death or disability benefits that have been
fully provided for by paid up insurance or otherwise or (iii) severance benefits
(unless such coverage is provided after notification of and with the reasonable
approval of Agent), permit the assets of Borrower to become "plan assets",
whether by operation of law or under regulations promulgated under ERISA or
adopt, amend (except as may be required by applicable law) or increase the
amount of any benefit or amount payable under, or permit any ERISA Affiliate to
adopt, amend (except as may be required by applicable law) or increase the
amount of any benefit or amount payable under, any Plan or Welfare Plan, except
for normal increases in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in
benefits expense to Borrower or any ERISA Affiliate.

                  (p) TRANSFER OF OWNERSHIP INTERESTS. Permit any Transfer of a
direct or indirect ownership interest or voting right in Borrower (other than a
Permitted Transfer).

                  (q) EQUIPMENT AND INVENTORY. Except pursuant to the Management
Agreement, permit any Equipment owned by Borrower to be removed at any time from
the Mortgaged Property unless the removed item is consumed or sold in the usual
and customary course of business, removed temporarily for maintenance and repair
or, if removed permanently, replaced by an article of equivalent suitability and
not materially less value, owned by Borrower free and clear of any Lien.

                  (r) COLLATERAL SECURITIZATION. Sell or transfer the Mortgaged
Property to a Securitization Vehicle accompanied by the simultaneous issuance by
such Securitization Vehicle of, or obtain a loan secured by the Mortgaged
Property that is simultaneously transferred to a Securitization Vehicle and
accompanied by the simultaneous issuance by such Securitization Vehicle of, or
propose to itself cause the issuance of, a security backed in part or in full
by, or



                                       86


representing an interest in part or in full in, such Mortgaged Property (the
proceeds of such issuance paid to Borrower being applied in accordance with
ARTICLE 2) (any such transaction, a "COLLATERAL SECURITIZATION"), unless
Borrower consummates the Collateral Securitization in accordance with the
following:

                  (i) Citigroup Global Markets Inc. ("CGMI") or an Affiliate of
         CGMI designated by CGMI shall have the exclusive right to act as the
         sole underwriter or placement agent for any commercial mortgage backed
         securities offering with respect to the Mortgaged Property issued in a
         Collateral Securitization and the right to be a co-manager for any
         equity offering with respect to Borrower or the Mortgaged Property;

                  (ii) Borrower shall bear all customary expenses incurred in
         connection with the Collateral Securitization (including, without
         limitation, underwriter/placement agent fees, rating agency costs and
         reasonable legal and accounting expenses); and

                  (iii) Borrower shall reimburse such underwriter/placement
         agent for all reasonable out-of-pocket expenses incurred by such
         underwriter/placement agent related to any Collateral Securitization.

                  (s) MANAGEMENT FEES. Pay Borrower or any Affiliate of Borrower
any management fees with respect to the Mortgaged Property except as
contemplated by the Management Agreement.

                  (t) MODIFICATION OF INTEREST RATE CAP AGREEMENT. Amend,
modify, cancel or terminate any interest rate cap entered into by the Borrower
pursuant to this Agreement or permit same to be amended, modified, cancelled or
terminated.

                  (u) PROHIBITED PERSONS. With respect to Borrower, Guarantor
and any of their respective officers, directors, shareholders, partners, members
or Affiliates, if applicable (including, without limitation, the indirect
holders of equity interests in Borrower): (i) conduct any business, nor engage
in any transaction or dealing, with any Prohibited Person, including, but not
limited to, the making or receiving of any contribution of funds, goods, or
services, to or for the benefit of a Prohibited Person; or (ii) engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in EO13224.

                                  ARTICLE VII.
                                EVENT OF DEFAULT

                  Section 7.1. EVENT OF DEFAULT. The occurrence of one or more
of the following events shall be an "EVENT OF DEFAULT" hereunder:

                  (a) if on any Payment Date Borrower fails to pay any accrued
and unpaid interest on the Loan or any Principal Payment Amount then due and
payable in accordance with the provisions hereof;

                  (b) if Borrower fails (a) to pay (1) the outstanding
Indebtedness on the Maturity Date or (2) the fees then due and payable to
Collateral Agent pursuant to the Fee Letter



                                       87


on any Payment Date or (b) to deposit into the Collection Account, the amount
required pursuant to SECTIONS 2.7(A) or 2.7(B), respectively;

                  (c) if Borrower fails to make any required deposit to a
Reserve Account or to pay any other amount payable pursuant to this Agreement or
any other Loan Document when due and payable in accordance with the provisions
hereof or thereof, as the case may be, and such failure continues for ten (10)
days after Agent delivers written notice thereof to Borrower;

                  (d) if any representation or warranty made herein or in any
other Loan Document, or in any report, certificate, financial statement or other
Instrument, agreement or document furnished by Borrower in connection with this
Agreement, the Note or any other Loan Document executed and delivered by any
Borrower shall be false in any material respect as of the date such
representation or warranty was made (or if such representation or warranty
relates to an earlier date, then as of such earlier date);

                  (e) if Borrower or the Guarantor makes an assignment for the
benefit of creditors;

                  (f) if a receiver, liquidator or trustee shall be appointed
for Borrower or the Guarantor or if Borrower or the Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Borrower or the Guarantor, or if any proceeding for the dissolution or
liquidation of Borrower or the Guarantor shall be instituted; PROVIDED, HOWEVER,
that if such appointment, adjudication, petition or proceeding was involuntary
and not consented to by Borrower or the Guarantor, upon the same not being
discharged, stayed or dismissed within ninety (90) days, or if Borrower or the
Guarantor shall generally not be paying its debts as they become due;

                  (g) if Borrower attempts to delegate its obligations or assign
its rights under this Agreement, any of the other Loan Documents or any interest
herein or therein, or if any Transfer occurs other than in accordance with or as
permitted under this Agreement;

                  (h) if any provision of the Organizational Agreement affecting
the purpose for which Borrower is formed is amended or modified in any material
respect which is reasonably likely to adversely affect the Lenders, Agent or
Collateral Agent, or if Borrower fails to perform or enforce the provisions of
the Organizational Agreement and such failure has a Material Adverse Effect or
attempts to dissolve Borrower without Agent's consent;

                  (i) if an Event of Default as defined or described in the
Note, any other Loan Document or either of the NAP Leases occurs, whether as to
Borrower or the Mortgaged Property or any portion thereof (beyond any applicable
notice or cure periods);

                  (j) if any of the assumptions made with respect to Borrower
and its Affiliates in that certain substantive non-consolidation opinion letter
dated as of December 31, 2004 delivered by Greenberg Traurig in connection with
the Loan is not true and correct in all material respects;



                                       88


                  (k) (i) if Borrower fails to maintain any insurance required
to be maintained pursuant to SECTION 5.1(X) hereof or (ii) if a Negative
Financial Covenant shall have occurred or (iii) if a Change of Control occurs;
and

                  (l) if Borrower shall fail to perform any of the terms,
covenants or conditions of this Agreement, the Note, the Mortgage or the other
Loan Documents, other than as specifically otherwise referred to above in this
definition of "Event of Default," for ten (10) days after notice to Borrower
from Agent or its successors or assigns, in the case of any Default which can be
cured by the payment of a sum of money (other than Events of Default pursuant to
SECTIONS 7.1(A) and 7.1(B) above as to which the grace period, if any, set forth
therein is applicable), or for thirty (30) days after notice from Agent or its
successors or assigns, in the case of any other Default (unless a longer notice
period is otherwise provided herein or in such other Loan Document); PROVIDED,
HOWEVER, that if such non-monetary Default is susceptible of cure but cannot
reasonably be cured within such thirty (30) day period and such Borrower shall
have commenced to cure such Default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for an additional sixty (60) days;

then, upon the occurrence of any such Event of Default and at any time
thereafter, Agent or Collateral Agent or its successors or assigns, may, in
addition to any other rights or remedies available to it pursuant to this
Agreement and the other Loan Documents, or at law or in equity, take such
action, without further notice or demand, as Agent on behalf of the Lenders or
its successors or assigns, deems advisable to protect and enforce its rights
against Borrower and in and to all or any portion of the Collateral (including,
without limitation, declaring the entire Indebtedness to be immediately due and
payable) and may enforce or avail itself of any or all rights or remedies
provided in the Loan Documents against Borrower and/or the Collateral
(including, without limitation, all rights or remedies available at law or in
equity).

                  Section 7.2. REMEDIES.

                  (a) Upon the occurrence and during the continuance of an Event
of Default, all or any one or more of the rights, powers, other remedies
available to Agent or Collateral Agent or the Lenders against Borrower under
this Agreement or any of the other Loan Documents executed by or with respect to
Borrower, or at law or in equity may be exercised by Lenders at any time and
from time to time, whether or not all or any portion of the Indebtedness shall
be declared due and payable, and whether or not Agent shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all or any portion of
the Collateral. Any such actions taken by Agent or Collateral Agent shall be
cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Agent may
determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Agent
and the Lenders permitted by law, equity or contract or as set forth herein or
in the other Loan Documents.

                  (b) In the event of the foreclosure or other action by Agent
or Collateral Agent to enforce Agent's remedies in connection with all or any
portion of the Collateral, Agent shall apply all Net Proceeds received to repay
the Indebtedness in accordance with SECTION 2.8,



                                       89


the Indebtedness shall be reduced to the extent of such Net Proceeds and the
remaining portion of the Indebtedness shall remain outstanding and secured by
the Loan Documents, it being understood and agreed by Borrower that Borrower is
liable for the repayment of all the Indebtedness; PROVIDED, HOWEVER, that the
Note shall be deemed to have been accelerated only to the extent of the Net
Proceeds actually received by Agent with respect to the Collateral and applied
in reduction of the Indebtedness evidenced by the Note in accordance with the
provisions of this Agreement, after payment by Borrower of all Transaction Costs
and costs of enforcement.

                  (c) Upon and during the continuation of an Event of Default,
the Agent shall have the right, but not the obligation, with respect to any and
all bankruptcy proceedings that are now or hereafter commenced in connection
with the Mortgaged Property, to (i) vote to accept or reject any plans of
reorganization, (ii) vote in any election of a trustee, (iii) elect the
treatment of secured claims as specified in SECTION 1111(B) of the Bankruptcy
Code, and (iv) make any other decisions requested of holders of claims or
interests that the Borrower would have had the right to do in such bankruptcy
proceedings in the absence of an Event of Default.

                  Section 7.3. REMEDIES CUMULATIVE. The rights, powers and
remedies of Agent, Collateral Agent, or any Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Agent,
Collateral Agent or any Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents executed by or with respect to Borrower,
or existing at law or in equity or otherwise. Agent or any Lender's rights,
powers and remedies may be pursued singly, concurrently or otherwise, at such
time and in such order as Agent may determine in Agent's sole discretion. No
delay or omission to exercise any remedy, right or power accruing upon an Event
of Default shall impair any such remedy, right or power or shall be construed as
a waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of any Default or
Event of Default shall not be construed to be a waiver of any subsequent Default
or Event of Default or to impair any remedy, right or power consequent thereon.
Notwithstanding any other provision of this Agreement, Agent for the benefit of
the Lenders reserves the right to seek a deficiency judgment or preserve a
deficiency claim, in connection with the foreclosure of the Mortgage on the
Mortgaged Property, to the extent necessary to foreclose on other parts of the
Collateral.

                  Section 7.4. DEFAULT ADMINISTRATION FEE. At any time after the
occurrence of an Event of Default and the acceleration of the Indebtedness, as
reimbursement and compensation for the additional internal expenditures,
administrative expenses, fees and other costs associated with actions to be
taken in connection with such Event of Default, and regardless of whether Agent
shall have commenced the exercise of any remedies pursuant to SECTION 7.2, the
Default Administration Fee shall be payable by Borrower to Agent upon demand.

                  Section 7.5. CURATIVE ADVANCES. If any Event of Default occurs
and is not cured by Borrower after notice from the Agent, then Agent or
Collateral Agent may expend such sums as either shall reasonably deem
appropriate to cure or attempt to cure such Event of Default. Borrower shall
immediately repay all such sums so advanced, which sums shall immediately become
part of the Indebtedness, bear interest at the Default Rate from the date
advanced until the date repaid, and be secured by all Collateral.



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                                  ARTICLE VIII.
                                  MISCELLANEOUS

                  Section 8.1. SURVIVAL. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, the making by the initial Lender of the Loan hereunder and the
execution and delivery by Borrower to the initial Lender of the Loan Documents,
and shall continue in full force and effect so long as any portion of the
Indebtedness is outstanding and unpaid. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party. All covenants, promises and agreements in
this Agreement contained, by or on behalf of Borrower, shall inure to the
benefit of the respective successors and assigns of Agent and each Lender.
Nothing in this Agreement or in any other Loan Document, express or implied,
shall give to any Person other than the parties and the holder of the Note and
the other Loan Documents, and their legal representatives, successors and
assigns, any benefit or any legal or equitable right, remedy or claim hereunder.

                  Section 8.2. AGENT'S DISCRETION. Whenever pursuant to this
Agreement, Agent exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Agent, the decision of Agent to
approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Agent and shall be final and
conclusive.

                  Section 8.3. GOVERNING LAW.

                  (a) This Agreement was negotiated in New York and made by the
initial Lender and accepted by Borrower in the State of New York, and the
proceeds of the Note delivered pursuant hereto were disbursed from New York,
which State the parties agree has a substantial relationship to the parties and
to the underlying transaction embodied hereby, and in all respects (including,
without limitation, matters of construction, validity, performance, and maximum
permissible rates of interest), this Agreement and the obligations arising
hereunder shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts made and performed in such State
and any applicable law of the United States of America.

                  (b) Any legal suit, action or proceeding against the Lenders
or Borrower arising out of or relating to this Agreement may be instituted in
any federal or state court in New York, New York. Borrower hereby (i)
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or 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,
and (ii) irrevocably submits to the jurisdiction of any such court in any such
suit, action or proceeding. Borrower does hereby designate and appoint
Corporation Service Company, as its authorized agent to accept and acknowledge
on its behalf service of any and all process which may be served in any such
suit, action or proceeding in any federal or state court in New York, New York,
and agrees that service of process upon said agent at said address (or at such
other office in New York, New York as may be designated by Borrower from time to
time in accordance with the terms hereof)



                                       91


with a copy to Borrower at its principal executive offices, and written notice
of said service of Borrower mailed or delivered to Borrower in the manner
provided herein shall be deemed in every respect effective service of process
upon Borrower, in any such suit, action or proceeding in the State of New York.
Borrower (i) shall give prompt notice to Agent of any change in address of its
authorized agent hereunder, (ii) may at any time and from time to time designate
a substitute authorized agent with an office in New York, New York (which office
shall be designated as the address for service of process), and (iii) shall
promptly designate such a substitute if its authorized agent ceases to have an
office in New York, New York or is dissolved without leaving a successor.

                  Section 8.4. MODIFICATION, WAIVER IN WRITING. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement or any other Loan Document, or consent or waiver referred to in any
Loan Document or consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to or demand on
Borrower shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances.

                  Section 8.5. DELAY NOT A WAIVER. Neither any failure nor any
delay on the part of Agent or any Lender in insisting upon strict performance of
any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder, or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Agent and each Lender shall not be deemed to have waived any right
either to require prompt payment when due of all other amounts due under this
Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.

                  Section 8.6. NOTICES. All notices, consents, approvals and
requests required or permitted hereunder or under any other Loan Document shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) certified or registered United States mail, postage prepaid, or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, and by facsimile transmission,
addressed if to Lender at its address set forth on the first page hereof,
Attention: Michael Fallin, and if to Borrower at its addresses set forth on the
first page hereof, Attention: Jose Segrera, or at such other address and Person
as shall be designated from time to time by any party hereto, as the case may
be, in a written notice to the other parties hereto in the manner provided for
in this SECTION 8.6. A notice shall be deemed to have been given: in the case of
hand delivery, at the time of delivery; in the case of registered or certified
mail, when delivered or three Business Days after mailing; or in the case of
expedited prepaid delivery and facsimile transmission, on the Business Day after
the same was sent. A party receiving a notice which does not comply with the
technical requirements for notice under this SECTION 8.6 may elect to waive any
deficiencies and treat the notice as having been properly given.



                                       92


                  Section 8.7. TRIAL BY JURY. BORROWER, TO THE FULLEST EXTENT
THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH
RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

                  Section 8.8. HEADINGS. The Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.

                  Section 8.9. ASSIGNMENT.

                  (a) Borrower may not sell, assign or transfer any interest in
the Loan Documents, or any portion of the foregoing (including, without
limitation, Borrower's rights, title, interests, remedies, powers and duties
hereunder and thereunder) without Agent's prior written consent. Each Lender
shall have the right to assign or participate this Agreement and/or its interest
in any of the other Loan Documents and the obligations hereunder to any Person.
In the event of an assignment by any Lender, (a) the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as it would
have if it were an original "Lender" hereunder; (b) the assignee shall be deemed
for all purposes to be a "Lender" hereunder; and (c) upon any such substitution
of Lender, a replacement or addition "Lender signature page" shall be executed
by the new Lender and attached to this Agreement and thereupon become a part of
this Agreement. After the effectiveness of any assignment, the new Lender shall
provide notice to Borrower of the identity, address and other pertinent
information pertaining to the new Lender. Notwithstanding anything in this
Agreement to the contrary, after an assignment by any Lender, the "Lender"
(prior to such assignment) shall continue to have the benefits of any rights or
indemnifications and shall continue to have the obligations contained herein
which such Lender had during the period such party was a "Lender" hereunder.

                  (b) The Agent may from time to time elect to enter into a
servicing agreement with a servicer, pursuant to which the servicer shall be
appointed to service and administer the Loan and the Account Collateral in
accordance with the terms hereof and to exercise any and all other rights of the
Lenders with respect to the Loan as set forth in such servicing agreement. The
Agent shall promptly notify the Borrower if the Agent shall elect to appoint or
change the servicer, and all notices and other communications from the Borrower
to the Agent shall be delivered to the servicer with a copy concurrently
delivered to the Agent, and any notice, direction or other communication from
the servicer to the Borrower shall have the same force and effect as a notice,
direction or communication from the Agent. The servicer shall be entitled to be
reimbursed for any cost, expense or liability which is incurred by the servicer
pursuant to such servicing and administrative duties and which would otherwise
be reimbursable to the Lenders under this Agreement or any other Loan Document
in the same manner and to the same extent as if the Lenders incurred such cost,
expense or liability in the first place. The parties hereto acknowledge and
agree that the servicer shall be a third party beneficiary to this Agreement and
the other Loan Documents.

                  Section 8.10. SEVERABILITY. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any



                                       93


provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

                  Section 8.11. PREFERENCES. Agent and the Lenders shall have no
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the obligations of Borrower pursuant to
this Agreement, the Note or any other Loan Document. The Lenders shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the obligations of Borrower hereunder,
provided that such application or reapplication is performed by the Lenders in
accordance with the terms of this Agreement or any other applicable Loan
Document. To the extent Borrower makes a payment or payments to Agent or any
Lender for Borrower's benefit, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by Agent
or such Lender.

                  Section 8.12. WAIVER OF NOTICE. Borrower shall not be entitled
to any notices of any nature whatsoever from Agent, any Lender or Collateral
Agent except with respect to matters for which this Agreement or another Loan
Document specifically and expressly provides for the giving of notice by Agent,
such Lender and/or Collateral Agent to Borrower and except with respect to
matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Agent, any Lender and Collateral Agent with
respect to any matter for which this Agreement or the other Loan Documents does
not specifically and expressly provide for the giving of notice by Agent or such
Lender or Collateral Agent to Borrower.

                  Section 8.13. FAILURE TO CONSENT. If Borrower shall seek the
approval by or consent of Agent or the Lenders hereunder or under the Note, or
any of the other Loan Documents, and Agent or the Lenders shall fail or refuse
to give such consent or approval, then Borrower shall not be entitled to any
damages for any withholding or delay of such approval or consent by Agent or the
Lenders, it being intended that Borrower's sole remedy shall be to bring an
action for an injunction or specific performance.

                  Section 8.14. SCHEDULES INCORPORATED. The information set
forth on the cover, heading and recitals hereof, and the Schedules attached
hereto, are hereby incorporated herein as a part of this Agreement with the same
effect as if set forth in the body hereof.

                  Section 8.15. OFFSETS, COUNTERCLAIMS AND DEFENSES. Any
assignee of any Lender's interest in and to this Agreement and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to this Agreement and the other Loan Documents
which Borrower may otherwise have against any assignor or this Agreement and the
other Loan Documents. No such unrelated counterclaim or defense shall be
interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon this Agreement or upon any other Loan Document. Any such
right to interpose or assert



                                       94


any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Borrower.

                  Section 8.16. NO JOINT VENTURE OR PARTNERSHIP. Borrower, Agent
and each Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and any Lender nor to grant any Lender any interest in the Collateral other than
that of secured party, mortgagee or lender.

                  Section 8.17. WAIVER OF MARSHALLING OF ASSETS DEFENSE. To the
fullest extent Borrower may legally do so, Borrower waives all rights to a
marshalling of the assets of Borrower, and others with interests in Borrower,
and of the Collateral, or to a sale in inverse order of alienation in the event
of foreclosure of the interests hereby created, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of any Lender under the Loan Documents to a sale of any Collateral for the
collection of the Indebtedness without any prior or different resort for
collection, or the right of any Lender to the payment of the Indebtedness out of
the Net Proceeds of the Collateral in preference to every other claimant
whatsoever.

                  Section 8.18. WAIVER OF COUNTERCLAIM. To the extent permitted
by applicable law, Borrower hereby waives the right to assert a counterclaim,
other than compulsory counterclaim, in any action or proceeding brought against
it by Agent or its agents.

                  Section 8.19. CONFLICT; CONSTRUCTION OF DOCUMENTS. In the
event of any conflict between the provisions of this Agreement and the
provisions of any of the other Loan Documents, the provisions of this Agreement
shall prevail. The parties hereto acknowledge that they were represented by
counsel in connection with the negotiation and drafting of the Loan Documents
and that the Loan Documents shall not be subject to the principle of construing
their meaning against the party that drafted same.

                  Section 8.20. BROKERS AND FINANCIAL ADVISORS. Borrower and the
initial Lender hereby represent that they have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement (other than Credit Suisse First
Boston, the expenses of which shall be paid solely by the Borrower and its
Affiliates). Borrower and initial Lender hereby agree to indemnify and hold the
other and Collateral Agent harmless from and against any and all claims,
liabilities, costs and expenses of any kind in any way relating to or arising
from a claim by any Person that such Person acted on behalf of the indemnifying
party in connection with the transactions contemplated herein. The provisions of
this SECTION 8.20 shall survive the expiration and termination of this Agreement
and the repayment of the Indebtedness.

                  Section 8.21. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the same
instrument.



                                       95


                  Section 8.22. ESTOPPEL CERTIFICATES. Agent, Borrower and each
Lender hereby agree at any time and from time to time upon not less than fifteen
(15) days prior written notice by Borrower or such Lender to execute,
acknowledge and deliver to the party specified in such notice, a statement, in
writing, certifying that this Agreement is unmodified and in full force and
effect (or if there have been modifications, that the same, as modified, is in
full force and effect and stating the modifications hereto), and stating whether
or not, to the knowledge of such certifying party, any Default or Event of
Default has occurred and is then continuing, and, if so, specifying each such
Default or Event of Default; PROVIDED, HOWEVER, that it shall be a condition
precedent to any Lender's obligation to deliver the statement pursuant to this
SECTION 8.22, that such Lender shall have received, together with Borrower's
request for such statement, an Officer's Certificate stating that, to the
knowledge of Borrower, no Default or Event of Default exists as of the date of
such certificate (or specifying such Default or Event of Default).

                  Section 8.23. PAYMENT OF EXPENSES. Borrower shall pay all
Transaction Costs, which shall include, without limitation, (a) reasonable
out-of-pocket costs and expenses of Agent in connection with (i) the
negotiation, preparation, execution and delivery of the Loan Documents and the
documents and instruments referred to therein; (ii) the creation, perfection or
protection of Lenders' Liens in the Collateral (including, without limitation,
fees and expenses for title and lien searches or amended or replacement
Mortgages, UCC financing statements or Collateral Security Instruments, title
insurance premiums and filing and recording fees, third party due diligence
expenses for the Mortgaged Property plus travel expenses, accounting firm fees,
costs of the Appraisals, Environmental Reports (and an environmental
consultant), and the Engineering Reports and costs and fees incurred in
connection with arranging, setting up, servicing and maintaining the Account
Collateral); (iii) the negotiation, preparation, execution and delivery of any
amendment, waiver, restructuring or consent relating to any of the Loan
Documents, and (iv) the preservation of rights under and enforcement of the Loan
Documents and the documents and instruments referred to therein, including any
communications or discussions relating to any action that Borrower shall from
time to time request Agent to take, as well as any restructuring or rescheduling
of the Indebtedness, (b) the reasonable fees, expenses and other charges of
counsel to Agent in connection with all of the foregoing, (c) all reasonable
fees and expenses of each of the servicer appointed pursuant to SECTION 8.9(B)
and Collateral Agent and its respective counsel and (d) Agent's (or, where
reasonably deemed necessary by Agent, any other Lender's) reasonable
out-of-pocket travel expenses in connection with site visits to the Mortgaged
Property.

                  Section 8.24. NON-RECOURSE. Anything contained herein, in the
Note or in any other Loan Document to the contrary notwithstanding, no recourse
shall be had for the payment of the principal or interest on the Loan or for any
other Indebtedness, obligation or liability hereunder or under any other Loan
Document or for any claim based hereon or thereon or otherwise in respect hereof
or thereof against (i) any agent, contractor, director, officer, member,
consultant, manager, stockholder, subscriber to capital stock, incorporator,
beneficiary, participant, trustee or advisor of Borrower, or any partner or
member therein; (ii) any legal representative, heir, estate, successor or assign
of any thereof; (iii) any corporation (or any officer, director, employee or
shareholder thereof), limited liability company (or member thereof), partnership
(or any partner thereof), individual or entity to which any ownership interest
in Borrower shall have been directly or indirectly transferred; (iv) any
purchaser of any asset of Borrower; or (v) any other Person (except Borrower),
for any deficiency or other sum owing



                                       96


with respect to the Note or any other Indebtedness, obligation or liability or
arising under this Agreement or any Loan Document. It is understood that neither
the Note nor any other Indebtedness, obligation or liability under or with
respect to this Agreement and any other Loan Document may be enforced against
any Person described in CLAUSES (I) through (V) above; PROVIDED, HOWEVER, that
the foregoing provisions of this paragraph shall not:

                  (A) prevent recourse to Borrower, the assets of Borrower, the
         Mortgaged Property or any other instrument or document which is pledged
         by Borrower to the Lenders pursuant to the Loan Documents, including
         all Collateral;

                  (B) limit the liability of the parties under the Guaranty of
         Non-Recourse Obligations; or

                  (C) constitute a waiver, release or discharge of any
         indebtedness or obligation evidenced by the Note or secured by the Loan
         Documents, and the same shall continue until paid or discharged in
         full; or

                  (D) prevent recourse to Borrower and Guarantor and their
         respective assets for repayment of the Indebtedness, and the
         Indebtedness shall be fully recourse to the Borrower and the Guarantor,
         in the event that either (1) any petition for bankruptcy,
         reorganization or arrangement pursuant to federal bankruptcy law, or
         any similar federal or state law, shall be filed (A) by Borrower or (B)
         against Borrower with the consent or acquiescence of Borrower or the
         Guarantor or their respective Affiliates or (2) any breach or violation
         by Terremark Worldwide, Inc. of the Negative Financial Covenants
         occurs; or

                  (E) prevent recourse to Borrower and Guarantor and their
         respective assets, and Borrower and Guarantor shall be fully and
         personally liable, for any loss, costs, liability, damage or expense
         suffered or incurred by Agent or any Indemnified Party related to or
         arising from:

                  (1)      any fraud, misappropriation or misapplication of
                           funds (including Loss Proceeds or Rents and payments
                           under non-assignable subleases or other contractual
                           arrangements with third parties which payments are
                           received by NAP after the occurrence and during the
                           continuance of an Event of Default with respect to
                           space covered by any Lease to NAP) committed by or on
                           behalf of Borrower in contravention of the Loan
                           Documents, or intentional misrepresentation contained
                           in any Loan Documents or report furnished pursuant to
                           any Loan Document;

                  (2)      any Transfer in violation of the terms of the Loan
                           Documents;

                  (3)      violation of any of the terms, covenants and
                           conditions to maintain Borrower as a Single Purpose
                           Entity;

                  (4)      additional financing obtained by Borrower (whether
                           secured or unsecured) in violation of the terms of
                           the Loan Documents;



                                       97


                  (5)      actual intentional physical waste committed by
                           Borrower or an Affiliate of Borrower to the Mortgaged
                           Property;

                  (6)      breach of any representation, warranty or covenant in
                           this Agreement or the Environmental Indemnity
                           Agreement, concerning Environmental Laws and
                           Hazardous Substances;

                  (7)      any security deposits received by Borrower or Manager
                           from tenants not being properly applied, returned to
                           tenants when due or delivered to Agent, a receiver or
                           a purchaser of the Mortgaged Property in the event of
                           a foreclosure sale upon such Person taking possession
                           of the Mortgaged Property;

                  (8)      any Legal Requirement mandating the forfeiture by
                           Borrower of the Collateral or any portion thereof
                           because of the conduct or purported conduct of
                           criminal activity by Borrower or any Affiliate in
                           connection therewith;

                  (9)      if any Lien is voluntarily placed on the Collateral
                           or any portion thereof in contravention of the Loan
                           Documents and such Lien is not discharged and removed
                           within ten (10) days after notice;

                  (10)     Borrower or any Affiliate contesting or in any way
                           interfering with, directly or indirectly
                           (collectively, a "CONTEST"), any foreclosure action
                           or sale commenced by Agent or with any other
                           enforcement of Agent's rights, powers or remedies
                           under any of the Loan Documents or under any document
                           evidencing, securing or otherwise relating to any of
                           the Collateral (whether by making any motion,
                           bringing any counterclaim, claiming any defense,
                           seeking any injunction or other restraint, commencing
                           any action seeking to consolidate any such
                           foreclosure or other enforcement with any other
                           action, or otherwise) (except this clause (10) shall
                           not apply if Borrower or such Affiliate successfully
                           asserts a Contest and obtains a final non-appealable
                           order as to same);

                  (11)     the cost of enforcement of any of Agent's rights or
                           remedies hereunder or under any of the other Loan
                           Documents, or costs incurred in any bankruptcy or
                           similar proceeding which may be brought by or against
                           Borrower, or any pledgor or Guarantor; or

                  (12)     the failure to pay Impositions assessed against the
                           Mortgaged Property to the extent there was sufficient
                           funds available to pay the same, or the failure to
                           maintain insurance as required under the Loan
                           Documents, or the failure to pay any deductible
                           amount in respect of any insurance maintained in
                           respect of the Mortgaged Property, or the failure to
                           pay and discharge any mechanic's or materialman's
                           Liens against the Mortgaged Property to the extent
                           there was sufficient funds available to pay and
                           discharge the same or the work relating to such Liens
                           was not approved by Agent in writing or permitted by
                           the Loan Documents or the failure to pay brokerage
                           commissions.



                                       98


                                   ARTICLE IX.
                                    THE AGENT

                  Section 9.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Lender
hereby irrevocably appoints and authorizes Agent to act as its agent hereunder
and under the other Loan Documents with such powers as are specifically
delegated to Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Agent (which term as used in this sentence and in SECTION 9.5 and the first
sentence of SECTION 9.6 hereof shall include reference to its Affiliates and its
own and its Affiliates' officers, directors, employees and agents): (a) shall
have no duties or responsibilities to the Lenders except those expressly set
forth in this Agreement and in the other Loan Documents, and shall not by reason
of this Agreement or any other Loan Document be a trustee for any Lender; (b)
shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by Borrower, or
any other Person to perform any of their obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document; and (d) shall not be
responsible to the Lenders for any action taken or omitted to be taken by it
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. Agent may employ agents and attorneys-in-fact and shall not be
responsible to the Lenders for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith.

                  Section 9.2. RELIANCE BY AGENT. Agent shall be entitled to
rely upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, facsimile transmission, telex, electronic
mail, or cable) believed by it to be genuine and correct and to have been signed
or sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by Agent in good faith. As to any matters not expressly provided for by this
Agreement or any other Loan Document, Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or thereunder in
accordance with the instructions given by all of the Lenders, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.

                  Section 9.3. DEFAULTS. Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
Agent has received written notice from a Lender or Borrower specifying such
Default and stating that such notice is a "Notice of Default". In the event that
Agent receives such a notice of the occurrence of a Default or Event of Default,
Agent shall give prompt notice thereof to the Lenders. Agent shall (subject to
SECTION 9.7 hereof) take such action with respect to such Default or Event of
Default as shall be



                                       99


directed by all Lenders, PROVIDED THAT, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of all
of the Lenders.

                  Section 9.4. RIGHTS AS A LENDER. With respect to the Loan made
by it, Agent in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not acting as Agent, and the term "LENDER" or "LENDERS" shall, unless the
context otherwise indicates, include Agent in its individual capacity. Agent and
its affiliates may (without having to account therefor to any Lender) lend money
to, make investments in and generally engage in any kind of business with
Borrower or any of their Affiliates as if it were not acting as Agent, and Agent
and its Affiliates may accept fees and other consideration from Borrower or such
Affiliate for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.

                  Section 9.5. INDEMNIFICATION. The Lenders agree to indemnify
Agent (to the extent not reimbursed by Borrower, but without limiting the
obligations of Borrower under the Loan Documents) ratably in accordance with
their respective interests in the Loan, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against Agent (including by any Lender) arising out
of or by reason of any investigation in or in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the Transaction (including, without
limitation, the costs and expenses that Borrower is obligated to pay under the
Loan Documents, but excluding, unless a Default or Event of Default has occurred
and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.

                  Section 9.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender agrees and acknowledges that it has, independently and without reliance
on Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of Borrower and its own
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document. Agent shall not be required to keep itself
informed as to the performance or observance by Borrower of this Agreement or
any of the other Loan Documents or to inspect the properties or books of
Borrower or any of their Affiliates. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
Agent hereunder, Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of Borrower or any of their Affiliates that may come into
the possession of Agent or any of its Affiliates.



                                      100


                  Section 9.7. FAILURE TO ACT. Except for action expressly
required of Agent hereunder and under the other Loan Documents, Agent shall in
all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction from
the Lenders of their indemnification obligations under SECTION 9.5 hereof
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.

                  Section 9.8. RESIGNATION OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign upon
giving notice thereof to the Lenders; PROVIDED, HOWEVER, that such resignation
shall not be effective until such time as the successor Agent is in place and
shall deliver written notice of such appointment to Borrower. Upon any such
resignation, the Lenders shall have the right to appoint a successor Agent. If
no successor Agent shall have been so appointed by the Lenders and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders
appoint a successor Agent, that shall be a sophisticated financial institution.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this ARTICLE
9 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.

                  Section 9.9. AGENCY FEE. Each Lender will pay to Agent an
agency fee as may be agreed upon between such Lender and Agent. Borrower shall
not be liable for the payment of such fee.

                  Section 9.10. CONSENTS UNDER LOAN DOCUMENTS. Agent may consent
to any modification, supplement or waiver under any of the Loan Documents,
PROVIDED that, without the prior consent of each Lender, Agent shall not release
any Collateral or otherwise terminate any Lien under any Loan Document providing
for collateral security, or agree to additional obligations being secured by
such collateral security (unless the Lien for such additional obligations shall
be junior to the Lien in favor of the Lenders), except that no such consent
shall be required, and Agent is hereby authorized, to release any Lien covering
Collateral that is the subject of a disposition permitted hereunder.

                  Section 9.11. NOTICES, REPORTS AND OTHER COMMUNICATIONS. Agent
shall provide, at its expense, copies of each notice, report, document,
correspondence or other written communication delivered to Agent by Borrower or
any Affiliate of Borrower pursuant to any Loan Document, to each Lender
identified in such notice, report, document, correspondence or other written
communication or reasonably determined by Agent to be entitled thereto or
affected thereby, as soon as practicable after Agent's receipt thereof.




                                      101

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.

                                       AGENT AND LENDER:

                                       CITIGROUP GLOBAL MARKETS REALTY CORP.,
                                       a New York corporation



                                       By: /s/ MICHAEL FALLIN
                                           -------------------------------------
                                           Name:  Michael Fallin
                                           Title: Authorized Agent


                                       BORROWER:

                                       TechNOLOGY Center of THE Americas, LLC,
                                       a Delaware limited liability company



                                       By: /s/ JOSE A. SEGRERA
                                           -------------------------------------
                                           Name:  Jose A. Segrera
                                           Title: Executive Vice President and
                                                  Chief Financial Officer




                                      102

EX-10.27

                                                                   EXHIBIT 10.27


                               WARRANT CERTIFICATE


NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). ACCORDINGLY, NEITHER THE WARRANTS
REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY 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 TO THESE SECURITIES, (II)
PURSUANT TO RULE 144 OR RULE 144A UNDER THE SECURITIES ACT ONLY UPON A HOLDER
HEREOF FIRST HAVING DELIVERED TO THE COMPANY A CERTIFICATE SETTING FORTH THE
BASIS FOR APPLYING SUCH RULE TO THE PROPOSED DISPOSITION OR (III) PURSUANT TO
ANOTHER SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT BUT ONLY
UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE
COMPANY, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY (WHO MAY BE AN
EMPLOYEE OF THE HOLDER), TO THE EFFECT THAT THE PROPOSED DISPOSITION IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

DATED DECEMBER 31, 2004

                            TERREMARK WORLDWIDE, INC.

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE


                               WARRANT CERTIFICATE
                      To Purchase Shares of Common Stock of
                            TERREMARK WORLDWIDE, INC


                                                                 [    ] Warrants

                  THIS CERTIFIES THAT, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, CITIGROUP GLOBAL
MARKETS REALTY CORP. or its registered assigns (the "HOLDER"), is the registered
owner of the number of warrants specified above (collectively, the "WARRANTS"),
each of which warrants entitles the holder, subject to the adjustment provisions
and the conditions and limitations hereinafter set forth, to purchase from
TERREMARK WORLDWIDE, INC., a corporation organized and existing under the laws
of the State of Delaware (together with its successors and assigns, the
"COMPANY"), one (1) share (as adjusted pursuant to Section 4 hereof) of the
Company's Common Stock at a purchase price of $[ ] per share (as such purchase
price is adjusted pursuant to Section 4 hereof, the "EXERCISE PRICE"). Certain
capitalized terms used in this Warrant Certificate are defined in Section 10
hereof.



                                      -2-


                  The Warrants represented by this certificate are part of an
authorized issue of Warrants (the "AUTHORIZED WARRANTS") initially exercisable
for an aggregate of 5,000,000 shares of Common Stock issued on the date hereof
pursuant to the terms of the Loan Agreement.

                  The Warrants shall be void and all rights represented hereby
shall cease after 5:00 p.m. Eastern Time on the Expiration Date. The Warrants
shall not be terminable by the Company prior to the Expiration Date.

                  The shares of Common Stock issuable upon exercise of the
Warrants (and any other or additional shares, securities or property that may
hereafter be issuable upon exercise of the Warrants) are sometimes referred to
herein as the "WARRANT SHARES," and the maximum number of shares so issuable
under this Warrant Certificate is sometimes referred to as the "AGGREGATE
NUMBER" as such number may be increased or decreased, as more fully set forth
herein.

                  The Warrants are subject to the following provisions, terms
and conditions:

                  1. EXERCISE; ISSUE OF CERTIFICATES; PAYMENT FOR SHARES. (a)
The Warrants represented by this Warrant Certificate may be exercised by the
Holder, in whole at any time or in part (but not as to fractional shares of
Common Stock) from time to time, to purchase the Aggregate Number of shares
(initially equal to [ ] shares) of Common Stock at all times on or prior to 5:00
p.m. Eastern Time on the Expiration Date.

                  (b) The Warrants shall be exercisable in whole at any time or
in part from time to time by surrendering this Warrant Certificate on any
Business Day (with the Exercise Form annexed hereto as SCHEDULE 1 properly
completed and executed) to the Company at its principal office specified in
Section 15, or its then current address, and upon payment to the Company of the
Exercise Price for the Warrant Shares being purchased.

                  (c) Payment of the aggregate Exercise Price with respect to an
exercise in whole or in part of any Warrants may be made, in the sole discretion
of the Holder, in the form of any of the following: (i) by cash or a check or
bank draft in New York Clearing House funds; (ii) by the surrender of the
applicable Warrant or Warrants, and without the payment of the Exercise Price in
cash, for such number of Warrant Shares equal to the product of (1) the number
of Warrant Shares for which such Warrant or Warrants are exercisable with
payment in cash of the Exercise Price as of the date of exercise and (2) the
Cashless Exercise Ratio; (iii) by tendering Notes having an aggregate principal
amount, plus accrued and unpaid interest, if any, thereon to the date of
exercise, equal to the Exercise Price; or (iv) by any combination of (i), (ii)
and (iii) above. Such certificate or certificates shall be deemed to have been
issued and any Person so designated to be named therein shall be deemed for all
purposes to have become a holder of record of such Warrant Shares as of the
close of business on the Business Day of the surrender of this Warrant
Certificate and payment of the Exercise Price as aforesaid.

                  (d) Certificates for the shares so purchased and cash in lieu
of any fractional shares shall be delivered to the Holder as promptly as
practicable, not exceeding five (5) Business Days, after this Warrant
Certificate shall have been so exercised, and unless the Warrants represented by
this Warrant Certificate have expired or been fully exercised, a new




                                      -3-


Warrant Certificate representing the number of shares with respect to which this
Warrant Certificate shall not then have been exercised shall also be delivered
to the Holder within such time.

                  2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES; LISTING.
The Company covenants and agrees that: (a) all Warrant Shares will, upon
issuance, be original-issue shares (and not treasury stock) fully paid and
nonassessable and free from all taxes, claims, liens, charges and other
encumbrances with respect to the issue thereof; (b) without limiting the
generality of the foregoing, it will from time to time take all such action as
may be required to assure that the par value per share of Common Stock shall at
all times be less than or equal to the Exercise Price; (c) during the period
within which the Warrants represented by this Warrant Certificate may be
exercised, the Company will at all times have authorized and reserved for the
purpose of issue or transfer upon exercise of the Warrants represented by this
Warrant Certificate a sufficient number of original-issue shares of its Common
Stock to provide for the exercise of all the Warrants represented by this
Warrant Certificate; and (d) upon the exercise of the Warrants represented by
this Warrant Certificate, it will, at its expense, promptly notify each
securities exchange on which any Common Stock is at the time listed of such
issuance, and use its best efforts to maintain a listing of all shares of Common
Stock from time to time issuable upon the exercise of the Warrants represented
by this Warrant Certificate to the extent such shares can be listed.

                  3. [Intentionally Omitted.]

                  4. ADJUSTMENTS TO EXERCISE PRICE AND AGGREGATE NUMBER. The
Exercise Price and the Aggregate Number of shares of Common Stock issuable upon
the exercise of each Warrant (the "EXERCISE RATE") are subject to adjustment
from time to time upon the occurrence of the events enumerated in this Section
4.

                  (a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:

                  (1) pays a dividend or makes any other distribution on its
         Common Stock in shares of its Common Stock or in other capital stock of
         the Company; or

                  (2) subdivides, combines or reclassifies its outstanding
         shares of Common Stock,

then, in each case, the Exercise Rate and the Exercise Price in effect
immediately prior to such action shall be proportionately adjusted so that the
Holder may, upon payment of the same aggregate Exercise Price payable
immediately prior to such action, receive the Aggregate Number and kind of
shares of capital stock of the Company which the Holder would have owned
immediately following such action if such Warrants had been exercised
immediately prior to such action.

                  Any such adjustment shall become effective immediately after
the record date of such dividend or distribution or the effective date of such
subdivision, combination or reclassification, as applicable.

                  If after an adjustment the Holder upon exercise of a Warrant
may receive shares of two or more classes of capital stock of the Company, the
board of directors of the




                                      -4-


Company shall determine the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 4.

                  Such adjustment shall be made successively whenever any event
listed above shall occur.

                  (b) ADJUSTMENT FOR CERTAIN ISSUANCES OF COMMON STOCK. If the
Company issues, sells or distributes to any Person (i) shares of its Common
Stock, (ii) any rights, options or warrants entitling any Person to purchase
shares of Common Stock or (iii) any rights, warrants or options or other
securities convertible into or exchangeable for Common Stock, in each case, at a
price per share less than the Current Market Value on the record date for
determining entitlements to participate in such issuance, sale or distribution
(the "TIME OF DETERMINATION"), the Exercise Rate shall be adjusted in accordance
with the formula:

                           E' = E x    O + N
                                   ---------
                                   O + N x P
                                       -----
                                           M

and the Exercise Price shall be adjusted in accordance with the following
formula:

                            EP' = EP x E
                                      --
                                      E'

where:

                  E' =      the adjusted Exercise Rate.

                  E  =      the Exercise Rate immediately prior to the Time of
                            Determination for any such issuance, sale or
                            distribution.

                  EP' =     the Adjusted Exercise Price.

                  EP  =     the Exercise Price immediately prior to the Time
                            of Determination for any such issuance, sale or
                            distribution.

                  O   =     the number of Fully Diluted Shares (as defined
                            below) outstanding immediately prior to the Time of
                            Determination for any such issuance, sale or
                            distribution.

                  N   =     the number of additional shares of Common Stock
                            issued, sold or issuable upon exercise of such
                            rights, options or warrants or other convertible or
                            exchangeable securities.

                  P   =     the per share price received and receivable by the
                            Company in the case of any issuance or sale of
                            Common Stock or rights, options or warrants or other
                            convertible or exchangeable securities (inclusive of
                            the exercise



                                      -5-


                            price per share of Common Stock payable upon
                            exercise of such rights, options or warrants or
                            other convertible or exchangeable securities).

                  M  =      the Current Market Value per share of Common Stock
                            on the Time of Determination for any such issuance,
                            sale or distribution.

                  For purposes of this Section 4 the term "FULLY DILUTED SHARES"
shall mean (i) the shares of Common Stock outstanding as of a specified time,
and (ii) the shares of Common Stock into or for which rights, options, warrants
or other convertible or exchangeable securities outstanding as of such date are
exercisable, convertible or exchangeable (other than the Warrants or any of the
other Authorized Warrants).

                  The adjustments shall be made successively whenever any such
shares, rights, options or warrants or other convertible or exchangeable
securities are issued and shall become effective immediately after the relevant
Time of Determination. Notwithstanding the foregoing, the Exercise Rate and the
Exercise Price shall not be subject to adjustment pursuant to this subsection
(b) in connection with (i) the issuance of any shares of Common Stock upon
exercise of any such rights, options or warrants or other convertible or
exchangeable securities which have previously been the subject of an adjustment
under this Agreement for which the required adjustment has been made, (ii)
Common Stock Equivalents or shares of Common Stock issued upon exercise of any
Common Stock Equivalents issued to employees, officers or directors of, or
consultants or advisors to the Company or any of its subsidiaries, pursuant to
stock purchase or stock option plans or other arrangements that are approved by
the board of directors of the Company for the purpose of compensation or similar
payment in connection with employment or services rendered to the Company or its
Subsidiaries, (iii) shares of Common Stock issued upon exercise of any Common
Stock Equivalents outstanding on the date hereof and (iv) any exercise of the
Warrants or any of the other Authorized Warrants. If at the end of the period
during which any such rights, options or warrants or other convertible or
exchangeable securities are exercisable, not all rights, options or warrants or
other convertible or exchangeable securities shall have been exercised, the
Warrants shall be immediately readjusted to what it would have been if "N" in
each of the above formulas had been the number of shares actually issued.

(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to holders of
its Common Stock (i) any evidences of indebtedness of the Company or any of its
subsidiaries, (ii) any assets of the Company or any of its subsidiaries (whether
in cash, property or otherwise), or (iii) any rights, options or warrants to
acquire any of the foregoing or to acquire any other securities of the Company,
the Exercise Rate shall be adjusted in accordance with the formula:

                             E' = E x   M
                                    -----
                                    M - F

and the Exercise Price shall be decreased (but not increased) in accordance with
the following formula:

                             EP' = EP x E
                                        -
                                        E'



                                      -6-


where:

                  E'  =     the adjusted Exercise Rate.

                  E   =     the current Exercise Rate on the record date
                            referred to in this subsection (c) below.

                  EP' =     the Adjusted Exercise Price.

                  EP  =     the current Exercise Price on the record date
                            referred to in this subsection (c) below.

                  M   =     the Current Market Value per share of Common Stock
                            on the record date referred to in this subsection
                            (c) below.

                  F   =     the fair market value (as determined in good faith
                            by the Company's board of directors) on the record
                            date referred to in this subsection (c) below of the
                            indebtedness, assets, rights, options or warrants
                            distributable in respect of one share of Common
                            Stock.

                  The adjustments shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If any adjustment is made pursuant to clause (iii) above of this subsection (c)
as a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable, not
all such rights, options or warrants shall have been exercised, the Warrants
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the record date. Notwithstanding
anything to the contrary contained in this subsection (c), if "M-F" in the above
formula is less than $1.00 (or is a negative number) then in lieu of the
adjustment otherwise required by this subsection (c), the Company may elect to
distribute to the Holder, upon exercise of any Warrants, the evidences of
indebtedness, assets, rights, options or warrants which would have been
distributed to such Holder had such Warrants been exercised immediately prior to
the record date for such distribution.

                  This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 4.

                  (d) The following provisions shall be applicable to the making
of adjustments of the Exercise Price and Exercise Rate herein before provided
for in this Section 4:

                  (i) The sale or other disposition of any issued shares of
         Common Stock owned or held by or for the account of the Company shall
         be deemed an issuance thereof for the purposes of this Section 4.

                  (ii) The adjustments required by the preceding subsections of
         this Section 4 shall be made whenever and as often as any specified
         event requiring an adjustment shall



                                      -7-


         occur, except as expressly provided herein. For the purpose of any
         adjustment, any specified event shall be deemed to have occurred at the
         close of business on the date of its occurrence.

                  (iii) In computing adjustments under this Section 4 fractional
         interests in Common Stock shall be taken into account to the nearest
         one-thousandth (.001) of a share and shall be aggregated until they
         equal one whole share.

                  (iv) If the Company shall take a record of the holders of its
         Common Stock for the purpose of entitling them to receive any item
         described in Sections 4(a) through 4(c) hereof, but abandon its plan to
         pay or deliver such item, then no adjustment shall be required by
         reason of the taking of such record and any such adjustment previously
         made in respect thereof shall be rescinded and annulled.

                  (v) The consideration for any additional shares of Common
         Stock issuable pursuant to any options, warrants or other rights to
         subscribe for or purchase the same shall be the consideration received
         or receivable by the Company for issuing such options, warrants or
         other rights, plus the additional consideration payable to the Company
         upon the exercise of such options, warrants or other rights. The
         consideration for any additional shares of Common Stock issuable
         pursuant to the terms of any convertible or exchangeable securities
         shall be the consideration received or receivable by the Company for
         issuing any options, warrants or other rights to subscribe for or
         purchase such convertible or exchangeable securities, plus the
         consideration paid or payable to the Company in respect of the
         subscription for or purchase of such convertible or exchangeable
         securities, plus the additional consideration, if any, payable to the
         Company upon the exercise of the right of conversion, exercise or
         exchange of such convertible or exchangeable securities. In case of the
         issuance at any time of any additional shares of Common Stock or
         convertible or exchangeable securities in payment or satisfaction of
         any dividend upon any class of stock other than Common Stock, the
         Company shall be deemed to have received for such additional shares of
         Common Stock or convertible or exchangeable securities a consideration
         equal to the amount of such dividend so paid or satisfied.

                  (e) (i) If any event occurs as to which the other provisions
of this Section 4 are not strictly applicable but the lack of any provision for
the exercise of the rights of the Holder would not fairly protect the purchase
rights of such Holder in accordance with the essential intent and principles of
such provisions, or, if strictly applicable, would not fairly protect the
conversion rights of such Holder in accordance with the essential intent and
principles of such provisions, then the Company shall appoint a firm of
independent certified public accountants in the United States (which may be the
regular auditors of the Company) of recognized national standing in the United
States reasonably satisfactory to the Required Holders, which shall give their
opinion as to the adjustments, if any, necessary to preserve, without dilution,
on a basis consistent with the essential intent and principles established in
the other provisions of this Section 4, the exercise rights of such Holder. Upon
receipt of such opinion, the Company shall forthwith make the adjustments
described therein.



                                      -8-


                  (ii) In case of any capital reorganization, other than in the
cases referred to in Section 4(a), (b) or (c) hereof and other than any capital
reorganization that does not result in any reclassification of the outstanding
shares of Common Stock into shares of other stock or other securities or
property, or the consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock into shares of other stock or other
securities or property), or the sale of all or substantially all of the assets
of the Company (collectively such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock that would otherwise have
been deliverable upon the exercise of such Warrant would have been entitled upon
such Reorganization if such Warrant had been exercised in full immediately prior
to such Reorganization. In case of any Reorganization, appropriate adjustment,
as determined in good faith by the board of directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company's Secretary or Assistant Secretary, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any such shares or other securities or
property thereafter deliverable upon exercise of Warrants.

                  The Company shall not effect any such Reorganization unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such Reorganization or
the corporation or other entity purchasing such assets shall (i) expressly
assume, by a supplemental warrant or other acknowledgment executed and delivered
to the Holder the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase, and the due and punctual performance and
observance of each and every covenant, condition, obligation and liability under
this Warrant Certificate to be performed and observed by the Company in the
manner prescribed herein and (ii) if such Reorganization takes place prior to
consummation by the Company of all of its registration obligations under the
Stockholders Agreement, enter into an agreement providing to the Holder rights
and benefits substantially similar to those enjoyed by the Holder hereof under
the Stockholders Agreement.

                  The foregoing provisions of this Section 4(e)(ii) shall apply
to successive Reorganization transactions.

                  (f) (i) In case:

                           (A) the Company shall authorize the issuance to
         holders of shares of Common Stock of rights, options or warrants to
         subscribe for or purchase shares of Common Stock or of any other
         subscription rights or warrants; or

                           (B) the Company shall authorize the distribution to
         holders of shares of Common Stock of evidences of its indebtedness or
         assets or of rights, options or warrants to subscribe for or purchase
         any of the foregoing; or



                                      -9-


                           (C) of any consolidation or merger to which the
         Company is a party and for which approval of any stockholders of the
         Company is required, or of the sale of all or substantially all of the
         assets of the Company, or of any reclassification or change of Common
         Stock issuable upon exercise of the Warrants, or a tender offer or
         exchange offer for shares of Common Stock; or

                           (D) of the voluntary or involuntary dissolution,
         liquidation or winding up of the Company; or

                           (E) the Company proposes to take any action that
         would require an adjustment to the Exercise Rate or Exercise Price
         pursuant to this Section 4;

then the Company shall give prompt written notice to the Holder at least fifteen
(15) days prior to the applicable record date hereinafter specified, or the date
of the event in the case of events for which there is no record date, by
first-class mail, postage prepaid, a written notice stating (i) the date as of
which the holders of record of shares of Common Stock to be entitled to receive
any such shares, rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or exchange
offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up. The failure by the Company to give such notice or any defect therein
shall not affect the legality or validity of any distribution, right, option,
warrant, consolidation, merger, conveyance, dissolution, liquidation or winding
up, or the vote upon any action.

                  (ii) Within five (5) days after the occurrence of an event
resulting in an adjustment pursuant to this Section 4, the Company shall cause
to be promptly mailed to the Holder (and upon the exercise hereof, to the
exercising Holder) by first-class mail, postage prepaid, notice of each
adjustment or adjustments to the Exercise Price and Exercise Rate effected since
the date of the last such notice and a certificate of the Company's Chief
Financial Officer or Chief Accounting Officer, setting forth the Exercise Price
and Exercise Rate after such adjustment(s), a brief statement of the facts
requiring such adjustment(s) and the computation by which such adjustment(s) was
made.

                  (g) The occurrence of a single event shall not trigger an
adjustment of the Exercise Price and Exercise Rate under more than one
subsection of this Section 4.

                  5. TAXES ON CONVERSION. The issuance of certificates for
Warrant Shares upon the exercise of the Warrants shall be made without charge to
the Holder exercising the Warrants for any issue or stamp tax in respect of the
issuance of such certificates, and such certificates shall be issued in the
respective names of, or in such names as may be directed by, the Holder;
PROVIDED, HOWEVER, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the Holder, and the Company
shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have



                                      -10-


paid to the Company the amount of such tax or shall have established to the
reasonable satisfaction of the Company that such tax has been paid.

                  6. LIMITATION OF LIABILITY. No provision hereof in the absence
of the exercise of the Warrants by the Holder and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability on the part
of the Holder for the Exercise Price of the Warrant Shares or as a stockholder
of the Company, whether such liability is asserted by the Company or by any
creditor of the Company. Upon exercise of Warrants the Holder will have the
right to vote the Common Stock received upon such exercise. No Holder shall be
entitled to vote or be deemed the holder of Common Stock (or any other
securities as may be issuable upon the exercise of the Warrants) nor shall
anything contained herein be construed to confer upon the Holder the rights of a
stockholder of the Company or the right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders or to receive dividends, distributions or
subscription rights or otherwise (except as provided herein), until the Warrants
shall have been exercised in accordance with the terms and conditions of the
Warrants.

                  7. CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of the Warrants or any Warrant Shares that
have been issued or are issuable upon the exercise of the Warrants in any manner
that interferes with the timely exercise hereof. The Company shall deem and
treat the Holder as the absolute owner thereof for all purposes, including
without limitation for the purpose of exercise thereof. The Company agrees that,
upon exercise of the Warrants in accordance with the terms hereof (including
receipt by the Company of payment of the aggregate Exercise Price), the shares
so purchased shall be deemed to be issued to such holder as the record owner of
such shares as of the close of business on the date on which the Warrants shall
have been exercised and the Holder shall be deemed for all purposes a
stockholder of the Company with respect to such shares as though the certificate
for such shares had been issued on the date of such exercise.

                  8. RESTRICTIONS ON TRANSFER.

                  (a) Each certificate for any Warrant Shares issued upon the
exercise of the Warrants, and each stock certificate issued upon the transfer of
any such Warrant Shares (except as otherwise permitted by this Section 8) shall
be stamped or otherwise imprinted with a legend in substantially the following
form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE 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
         TO THESE SECURITIES, (II) PURSUANT TO RULE 144 OR RULE 144A UNDER THE
         SECURITIES ACT ONLY UPON A HOLDER HEREOF FIRST HAVING DELIVERED TO THE
         COMPANY A CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO
         THE PROPOSED DISPOSITION OR (III) PURSUANT TO ANOTHER



                                      -11-


         SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT BUT ONLY
         UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF
         COUNSEL TO THE COMPANY, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE
         COMPANY (WHO MAY BE AN EMPLOYEE OF THE HOLDER), TO THE EFFECT THAT THE
         PROPOSED DISPOSITION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT.

(b) Each Warrant Certificate issued in substitution for any Warrant Certificate
pursuant to Section 11, 12 or 13 hereof and each Warrant Certificate issued upon
the transfer of any Warrant (except as otherwise permitted by this Section 8)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:

         NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
         SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
         ACCORDINGLY, NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR
         ANY OF THE SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY 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 TO THESE SECURITIES, (II)
         PURSUANT TO RULE 144 OR RULE 144A UNDER THE SECURITIES ACT ONLY UPON A
         HOLDER HEREOF FIRST HAVING DELIVERED TO THE COMPANY A CERTIFICATE
         SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE PROPOSED
         DISPOSITION OR (III) PURSUANT TO ANOTHER SPECIFIC EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF
         FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE COMPANY, OR
         OTHER COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY (WHO MAY BE AN
         EMPLOYEE OF THE HOLDER), TO THE EFFECT THAT THE PROPOSED DISPOSITION IS
         EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                  (c) The restrictions imposed by this Section 8 upon the
transferability of Warrants and Warrant Shares shall apply as to the Warrants
and any Warrant Shares until (i) such securities shall have been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering such securities, or (ii) such time as, in the
reasonable opinion of counsel for the Company, or upon the written opinion of
counsel for the Holder thereof reasonably acceptable to the Company, such
restrictions are not required in order to comply with the Securities Act.
Whenever such restrictions shall terminate as to any Warrants or Warrant Shares,
the Holder shall be entitled to receive from the Company, without expense, new
certificates of like tenor not bearing the restrictive legends set forth in
Section 8(a) or 8(b), as applicable.



                                      -12-


                  9. PREEMPTIVE RIGHTS. In the event that the Company seeks to
sell newly issued Common Stock Equivalents ("NEW ISSUANCE SECURITIES"), each
holder of Warrants shall be entitled to acquire, at the proposed offering price
of such New Issuance Securities, that number of New Issuance Securities equal to
the aggregate number of New Issuance Securities proposed to be so offered
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock into which the Warrants held by such holder shall yield upon
exercise if such Warrants were exercised on the issue date of such New Issuance
Securities and the denominator of which shall be the aggregate number of Fully
Diluted Shares of Common Stock issued and outstanding of the Company on the
issue date of such New Issuance Securities. In connection with any proposed
issuance of such New Issuance Securities, the Company shall give to each holder
of Warrants the same information about the Company, its business and such
issuance and the same notice of its intention to effect such issuance (but in no
event less than 10 Business Days notice) as given to the other prospective
purchasers in such transaction specifying in such notice the number of New
Issuance Securities to be sold, and the proposed offering price per New Issuance
Securities. Each holder shall have the right, exercisable concurrently with
purchases by other purchasers, to elect to purchase up to the maximum number of
New Issuance Securities to which such holder is entitled to acquire hereunder
with such purchase being effected by such holder's payment to the Company by
wire transfer of immediately available funds, an amount equal to the number of
New Issuance Securities to be purchased by such holder, multiplied by the
offering price per New Issuance Security against delivery of certificates
evidencing the number of New Issuance Securities so acquired, which will be
issued in the name of such holder. To the extent any New Issuance Securities
proposed to be sold shall not have been subscribed to by an existing holder, the
Company shall be free thereafter to sell such New Issuance Securities by way of
a private placement, or similar offering, at an offering price per New Issuance
Security not less than that set forth in the notice to the holders. The
preemptive rights established by this Section 9 shall have no application to any
of the following New Issuance Securities: (i) Common Stock Equivalents or shares
of Common Stock issued upon exercise of any Common Stock Equivalents issued to
employees, officers or directors of, or consultants or advisors to the Company
or any of its subsidiaries, pursuant to stock purchase or stock option plans or
other arrangements that are approved by the board of directors of the Company
for the purpose of compensation or similar payment in connection with employment
or services rendered to the Company or its Subsidiaries; (ii) Shares of Common
Stock issued upon exercise of any Common Stock Equivalents outstanding on the
date hereof; (iii) any New Issuance Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination approved by the board of directors of the Company; (iv) Common Stock
or Common Stock Equivalents issued in connection with any stock split, stock
dividend or recapitalization by the Company; (v) any New Issuance Securities
that are issued by the Company pursuant to an underwritten public offering; and
(vi) any New Issuance Securities sold or granted to any Person other than for
money or for any purpose other than the raising of capital for the Company and
its Subsidiaries.

                  10. DEFINITIONS. As used in this Warrant Certificate, unless
the context otherwise requires, the following terms have the following
respective meanings:

                  AFFILIATE: shall mean with respect to any specified Person:
         (i) any other Person directly or indirectly controlling or controlled
         by or under direct or indirect common control with such specified
         Person; (ii) any other Person that owns, directly or indirectly,



                                      -13-


         5% or more of such specified Person's capital stock or any officer or
         director of any such specified Person or other Person or, with respect
         to any natural Person, any person having a relationship with such
         Person by blood, marriage or adoption no more remote than first cousin;
         or (iii) any other Person 5% or more of the voting stock of which is
         beneficially owned or held directly or indirectly by such specified
         Person. For the purposes of this definition, "control" when used with
         respect to any specified Person means the power to direct the
         management and policies of such Person, directly or indirectly, whether
         through ownership of voting securities, by contract or otherwise; and
         the terms "controlling" and "controlled" have meanings correlative to
         the foregoing.

                  AGGREGATE NUMBER: shall have the meaning as set forth in the
         fourth paragraph of this Warrant Certificate.

                  AUTHORIZED WARRANT SHARES: shall mean the Warrant Shares and
         all shares of Common Stock (and any other or additional shares,
         securities or property issued upon exercise of any other Authorized
         Warrants) issued upon exercise of any other Authorized Warrants.

                  AUTHORIZED WARRANTS: shall have the meaning as set forth in
         the second paragraph of this Warrant Certificate.

                  BUSINESS DAY:  shall mean any day other than a Legal Holiday.

                  CAPITAL STOCK: shall mean, (i) with respect to any Person that
         is a corporation, any and all shares, interests, participations or
         other equivalents (however designated and whether or not voting) of
         corporate stock, including each class of common stock and preferred
         stock of such Person; (ii) with respect to any Person that is not a
         corporation, any and all partnership, membership or other equity
         interests of such Person; and (iii) any rights, warrants or options
         exchangeable for or convertible into any of the foregoing.

                  CASHLESS EXERCISE RATIO: shall mean an amount equal a
         fraction, the numerator of which is the excess of the Current Market
         Value of one share of Common Stock on the date of exercise over the
         Exercise Price per share as of the date of exercise and the denominator
         of which is the Current Market Value of one share of Common Stock on
         the date of exercise.

                  CLOSING BID PRICE: shall mean for any Security on each trading
         day (A) if such Security is listed or admitted to trading on any
         securities exchange, the closing price, regular way, on such day on the
         principal exchange on which such Security is traded, or if no sale
         takes place on such day, the average of the closing bid and asked
         prices on such day, (B) if such Security is not then listed or admitted
         to trading on any securities exchange, the last reported sale price on
         such day, or if there is no such last reported sale price on such day,
         the average of the closing bid and the asked prices on such day, as
         reported by a reputable quotation source designated by the Company or
         (C) if neither clause (A) nor (B) is applicable, the average of the
         reported high bid and low asked prices on such day, as reported by a
         reputable quotation service, or a newspaper of general circulation in
         the Borough of Manhattan, City of New York, customarily published on




                                      -14-


         each trading day designated by the Company. If there are no such prices
         on a trading day, then the market price shall not be determinable for
         such trading day.

                  CLOSING DATE: shall mean December 31, 2004.

                  COMMISSION: shall mean the United States Securities and
         Exchange Commission and any other similar or successor agency of the
         United States federal government administering the Securities Act or
         the Exchange Act.

                  COMMON STOCK: shall mean the shares of Common Stock, par value
         $.001 per share, of the Company, currently provided for in the
         Certificate of Incorporation of the Company, and including, for all
         purposes hereunder, any other capital stock of the Company into which
         such shares of Common Stock may be converted or reclassified or that
         may be issued in respect of, in exchange for, or in substitution of,
         such Common Stock by reason of any stock splits, stock dividends,
         distributions, mergers, consolidations or like events.

                  COMMON STOCK EQUIVALENTS: shall mean (a) an outstanding share
         of Common Stock, which shall be deemed to equal one Common Stock
         Equivalent, (b) an outstanding security that is, at the time in
         question, convertible by its terms into Common Stock, with such
         security to be deemed to equal to number of Common Stock Equivalents
         that equal the amount of shares of Common Stock into which it is then
         so convertible, (c) an outstanding option, warrant or right to acquire
         Common Stock that is, at the time in question, exercisable by its terms
         for Common Stock, with such option, warrant or right to be deemed to be
         equal to the number of Common Stock Equivalents that equals the number
         of shares of common stock for which it is then so exercisable and (d)
         an outstanding option, warrant or right that is, at the time in
         question, exercisable by its terms for a security that, at the time in
         question, is convertible by its terms in to Common Stock, with such
         option, warrant or right to be deemed to be equal to the number of
         Common Stock Equivalents that equals the number of shares of Common
         Stock for which the convertible securities for which they are then
         exercisable would then be convertible.

                  COMPANY: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  COMPUTATION AMOUNT: shall have the meaning as set forth in
         Section 14(i).

                  CURRENT MARKET VALUE: per share of Common Stock or of any
         other security (herein collectively referred to as a "SECURITY") at any
         date shall be:

                           (1) if the Security is not registered under the
                  Securities Exchange Act of 1934, as amended (the "EXCHANGE
                  ACT"), the value of the Security determined by an Independent
                  Financial Expert, or

                           (2) if the Security is registered under the Exchange
                  Act, the average of the daily closing bid prices of such
                  Security for the 20 consecutive trading days preceding such
                  date, but only if such Security shall have been listed on a
                  national



                                      -15-


                  securities exchange or the Nasdaq National Market or traded
                  through an automated quotation system during such entire 20
                  trading day period. If such Security shall have not been so
                  listed or traded for such entire 20 trading day period, the
                  Current Market Value of such Security shall be determined as
                  if the Security was not registered under the Exchange Act.

                  EFFECTIVENESS DEADLINE: shall have the meaning as set forth in
         Section 14(a).

                  EFFECTIVENESS PERIOD: shall have the meaning as set forth in
         Section 14(b).

                  EXERCISE PRICE: shall have the meaning as set forth in the
         first paragraph of this Warrant Certificate.

                  EXERCISE RATE: shall have the meaning as set forth in Section
         4(a).

                  EXCHANGE ACT: shall mean the Securities Exchange Act of 1934,
         as amended.

                  EXPIRATION DATE: shall mean the later of (i) December 31, 2011
         and (ii) the date that the Company's obligations under the Loan
         Agreement are paid in full and the Loan Agreement is terminated.

                  FULLY DILUTED SHARES: shall have the meaning as set forth in
         Section 4(b).

                  HOLDER: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  INDEPENDENT: shall mean any Person who (i) is in fact
         independent, (ii) does not have any direct financial interest or any
         material indirect financial interest in the Company or any of its
         subsidiaries, or in any Affiliate of the Company or any of its
         subsidiaries (other than as a result of holding securities of the
         Company in trading accounts) and (iii) is not an officer, employee,
         promoter, trustee, partner, director or Person performing similar
         functions for the Company or any of its subsidiaries or any Affiliate
         of the Company or any of its subsidiaries.

                  INDEPENDENT FINANCIAL EXPERT: shall mean a reputable
         accounting, appraisal or investment banking firm that is, in the
         reasonable judgment of the board of directors of the Company, qualified
         to perform the task for which such firm has been engaged hereunder, is
         nationally recognized and disinterested and Independent with respect to
         the Company and its Affiliates and is reasonably acceptable to the
         Required Holders.

                  LOAN AGREEMENT: shall mean the Loan Agreement dated December
         31, 2004 among the Company and lenders named therein pursuant to which
         the Authorized Warrants were issued.

                  NEW ISSUANCE SECURITIES: shall have the meaning as set forth
         in Section 9.

                  NONEFFECTIVE PERIOD: shall have the meaning as set forth in
         Section 14(i).



                                      -16-


                  NOTES: shall mean the notes of the Company issued pursuant to
         the Loan Agreement.

                  PERIODIC AMOUNT: shall have the meaning as set forth in
         Section 14(i).

                  PERSON: shall mean any individual, corporation, limited
         liability company, partnership, joint venture, association, joint-stock
         company, trust, unincorporated organization or government or any agency
         or political subdivision thereof.

                  REGISTRATION STATEMENT: shall have the meaning as set forth in
         Section 14(a).

                  REORGANIZATION: shall have the meaning as set forth in Section
         4(e).

                  REQUIRED HOLDERS: shall mean any registered holder or holders
         holding in the aggregate more than 50% of the outstanding Authorized
         Warrants (including the Warrants) and Authorized Warrant Shares.

                  SECURITIES ACT: shall mean the Securities Act of 1933, as
         amended.

                  SELLING HOLDERS: shall mean, with respect to a specified
         registration under Section 14 hereof, holders of Authorized Warrants
         (including the Warrants) and the holders of Authorized Warrant Shares
         (including the Warrant Shares) whose securities are included in such
         registration.

                  TIME OF DETERMINATION: shall have the meaning as set forth in
         Section 4(b).

                  WARRANTS: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  WARRANT SHARES: shall have the meaning as set forth in the
         first paragraph of this Warrant Certificate.

                  11. WARRANTS TRANSFERABLE. This Warrant Certificate is issued
as a Warrant Certificate for which there is a register maintained by the
Company. Subject to the provisions of Section 8, the transfer of the Warrants
represented by this Warrant Certificate and all rights hereunder, in whole or in
part, is registerable at the office or agency of the Company referred to in
Section 1 hereof by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant Certificate with a properly completed Form of
Assignment in the form annexed hereto as SCHEDULE 2. The Holder, by taking or
holding the same, consents and agrees that this Warrant Certificate, when
endorsed in blank, shall be deemed negotiable, and that the holder hereof, when
this Warrant Certificate shall have been so endorsed, may be treated by the
Company and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights of a "Holder" represented by this Warrant Certificate, or to the
registration of transfer hereof on the books of the Company; and until due
presentment for registration of transfer on such books, the Company may treat
the Holder thereof as the owner for all purposes, and the Company shall not be
affected by notice to the contrary. Any transfer tax relating to a transfer of
this Warrant Certificate shall be paid by the Holder who transfers such Warrant
Certificate.



                                      -17-


                  12. WARRANT CERTIFICATES EXCHANGEABLE FOR DIFFERENT
DENOMINATIONS. Subject to the provisions of Section 8, this Warrant Certificate
is exchangeable, upon the surrender hereof by the Holder hereof at such office
or agency of the Company, for new Warrant Certificates of like tenor
representing in the aggregate the number of Warrants represented hereby, each of
such new Warrant Certificates to represent the number of Warrants as shall be
designated by said Holder at the time of such surrender.

                  13. REPLACEMENT OF WARRANT CERTIFICATES. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant Certificate and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity bond (or, in the case of the
original Holder hereof or any substantial financial institution to which any
Warrants represented by this Warrant Certificate may be transferred, an
unsecured indemnity agreement) reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant Certificate, the Company will execute and deliver, subject to
the provisions of Section 8, in lieu thereof, a new Warrant Certificate of like
tenor to the Holder of such Warrant, at such Holder's expense.

                  14. REGISTRATION RIGHTS. The Company hereby agrees with the
Selling Holders that:

                  (a) The Company shall use its commercially reasonable efforts
to file or cause to be filed a registration statement (the "REGISTRATION
STATEMENT") under the Securities Act, to permit the resale from time to time by
the holders of the Authorized Warrants and the Authorized Warrant Shares and to
have such registration statement declared effective no later than 180 days
following the Closing Date (the "EFFECTIVENESS DEADLINE").

                  (b) The Company shall use its commercially reasonable efforts
to cause such Registration Statement to remain effective until the earlier to
occur of (A) the expiration of the time period referred to in Rule 144(k) under
the Securities Act (provided that all Authorized Warrants and Authorized Warrant
Shares are then available for immediate sale to the public under such rule) and
(B) such time as all Authorized Warrants and Authorized Warrant Shares covered
by the Registration Statement have been sold or are otherwise freely tradable
without registration under the Securities Act (the "EFFECTIVENESS PERIOD").

                  (c) In connection with the foregoing, the Company will:

                  (1) Prepare and file with the Commission a Registration
         Statement with respect to the Authorized Warrants and the Authorized
         Warrant Shares and use its commercially reasonable efforts to cause
         such Registration Statement to become effective.

                  (2) Prepare and file with the Commission such amendments and
         supplements to such Registration Statement and the prospectus used in
         connection therewith as may be necessary to keep such Registration
         Statement effective and to comply with the provisions of the Securities
         Act and rules thereunder with respect to the sale or other disposition
         of all securities covered by such Registration Statement whenever the
         holder of such securities shall desire to sell the same.



                                      -18-


                  (3) Furnish to the Selling Holders, without charge, such
         number of copies of the Registration Statement, any pre-effective or
         post-effective amendment thereto, the prospectus (including a
         preliminary prospectus), and any amendment or supplement thereof, in
         each case in conformity with the requirements of the Securities Act,
         and such other documents, as the Selling Holders may reasonably request
         in order to facilitate the sale of securities covered by such
         Registration Statement owned by the Selling Holders.

                  (4) Use its commercially reasonable efforts (i) to register
         and qualify, or qualify for exemption from registration for, the
         securities covered by such Registration Statement under applicable blue
         sky laws, and do such other reasonable acts and things as may be
         required in jurisdictions to which such blue sky laws apply and (ii) to
         obtain the withdrawal of any order suspending the effectiveness of the
         Registration Statement or the lifting of any suspension from
         qualification (or exemption from qualification) of the offer and
         transfer of any such securities in any jurisdiction, at the earliest
         possible time; 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.

                  (5) Promptly notify the Selling Holders of any stop order
         issued or threatened to be issued by the Commission in connection
         therewith and take all reasonable actions required to prevent the entry
         of such stop order or to remove it if entered.

                  (6) Provide and cause to be maintained a transfer agent and
         registrar for all Authorized Warrant Shares covered by such
         Registration Statement from and after a date not later than the
         effective date of such Registration Statement.

                  (7) Use its commercially reasonable efforts to cause the
         Authorized Warrant Shares to be listed on the American Stock Exchange
         or such other principal national securities exchange on which the
         shares of Common Stock are then listed or if the shares are not so
         listed, on The NASDAQ Stock Market, if the shares are then listed on
         such market.

                  (8) Furnish at the request of the Selling Holders, on the date
         that the Registration Statement with respect to the Authorized Warrants
         and the Authorized Warrant Shares becomes effective, an opinion, dated
         as of such date, of the independent counsel representing the Company
         for the purposes of such registration, addressed to the Selling Holders
         and in customary form and covering such matters of the type customarily
         covered by such letter and stating, among other things, that such
         Registration Statement has become effective under the Securities Act
         and that to the best knowledge of such counsel, no stop order
         suspending the effectiveness thereof has been issued and no proceedings
         for that purpose have been instituted or are pending or contemplated
         under the Securities Act.

                  (d) All of the expenses incurred in complying with the
foregoing, including, without limitation, all registration, filing and
qualification fees (including all expenses incident to filing with the NASD),
printing expenses, fees and disbursements of counsel and accountants for the
Company, expenses of any special audits incident to or required by any such
registration,



                                      -19-


expenses of complying with the securities or blue sky laws or any jurisdictions
shall be paid by the Company.

                  (e) The Selling Holders shall furnish to the Company such
information regarding itself, the Authorized Warrants and the Authorized Warrant
Shares beneficially owned by it and the intended method of disposition of the
Authorized Warrants and the Authorized Warrant Shares beneficially owned by it
as shall be reasonably required to effect the registration of the Authorized
Warrants and the Authorized Warrant Shares and shall execute such documents in
connection with such registration as the Company may reasonably request.

                  (f) In the event of any offer of the Authorized Warrants or
the Authorized Warrant Shares pursuant to the Registration Statement or any
amendment thereof hereof, the Company agrees to indemnify and hold harmless the
Selling Holders, each underwriter, if any, of the Authorized Warrants and the
Authorized Warrant Shares, and each other person, if any, who controls any
Selling Holder or any such underwriter within the meaning of the Securities Act,
from and against any and all losses, claims, damages or liabilities (or actions
in respect thereof) which arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement under which the Authorized Warrants and the Authorized Warrant Shares
were registered and offered under the Securities Act or any prospectus contained
therein, or arise out of or are based upon 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, and will reimburse the Selling Holders,
each such underwriter, and each such controlling person for any legal or any
other expenses reasonably incurred by the Selling Holders, such underwriter or
controlling person in connection with the investigation or defense of any such
loss, claim, damage, liability or action, PROVIDED, HOWEVER, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or such prospectus in reliance upon, and in conformity
with, written information furnished to the Company by the Selling Holders, such
underwriter or such controlling person, specifically for use in preparation
thereof, provided further, that the Company shall not file any such Registration
Statement or prospectus containing information relating to the Selling Holders
without providing the Selling Holders with an opportunity to review and, to the
extent incorrect, correct such information.

                  (g) In the event of any offer of the Authorized Warrants and
the Authorized Warrant Shares pursuant to the Registration Statement or any
amendment thereof, and to the extent permitted by applicable law, the Selling
Holders and each other person, if any, who controls any Selling Holder within
the meaning of the Securities Act, severally but not jointly, agrees to
indemnify and hold harmless the Company, each person who controls the Company
within the meaning of the Securities Act, and each officer and director of the
Company from and against any losses, claims, damages or liabilities, joint or
several, to which the Company, such controlling person or any such officer or
director may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such post-effective amendment or other
Registration Statement under which the Authorized Warrants and the Authorized
Warrant Shares were offered or any prospectus contained therein, or arise out of
or are based upon the omission or alleged omission to state



                                      -20-


therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon, and
in conformity with, written information furnished to the Company by such Selling
Holder or such controlling person specifically for use in connection with the
preparation thereof (provided that the Company shall have afforded such Selling
Holder with an opportunity to review, and to the extent incorrect, correct such
information prior to the filing thereof), and to reimburse the Company, each
such controlling person and each such officer or director for any legal or any
other expenses reasonably incurred by them in connection with investigating, or
defending any such loss, claim, damage, liability or action; provided, however,
that any such indemnification obligation shall be limited to an aggregate
maximum dollar amount not to exceed the aggregate dollar amount of the proceeds
received by such Selling Holder in any such offering.

                  (h) Promptly after receipt by an indemnified party of notice
of the commencement of any action or the assertion of a claim that may be
subject to indemnification hereunder, such indemnified party, if a claim in
respect thereof is to be made against an indemnifying party, will give written
notice to such indemnifying party of the commencement or assertion thereof.
Indemnification provided for under this Section 6 shall not be available to the
indemnified party if it shall fail to give such notice to the indemnifying party
(if the indemnifying party was not aware of the action) to the extent the
indemnifying party was prejudiced by failure to receive such notice, but the
omission to give such notice shall not relieve the indemnifying party from any
liability it otherwise may have to the indemnified party. In case any such
action is brought or such assertion is made against any indemnified party, and
it notifies any indemnifying party of such commencement or assertion, the
indemnifying party will be entitled to participate in and, to the extent that it
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof, other than the reasonable cost of investigation.

                  (i) If the Registration Statement covering the securities
required to be filed by the Company pursuant to Section 14 hereof is not
declared effective by the Commission by the Effectiveness Deadline, or the
Registration Statement shall cease to be effective at any time after the
Effectiveness Deadline but prior to the termination of the Effectiveness Period
(a "NONEFFECTIVE PERIOD"), then the Company shall make the payments to the
Selling Holders as provided in the next sentence as additional damages and not
as a penalty; PROVIDED HOWEVER, that if after a Registration Statement is
declared effective the Board of Directors of the Company reasonably determines
in good faith that the continued effectiveness of the filing of such
Registration Statement at such time would be materially detrimental to the
Company and it is therefore necessary to suspend the filing of such Registration
Statement the Company may suspend the effectiveness of such Registration
Statement for a period of time not to exceed 90 days in any 12 month period
without incurring any payments pursuant to this subsection (i) for such
Noneffective Period. The amount to be paid by the Company to the Selling Holders
shall be determined as of each Computation Date (as defined below), and such
amount shall be equal to $7,500 for the period from the Effectiveness Deadline
or the commencement of a Noneffective Period, as applicable, to the first
Computation Date, and for each 30-day period of



                                      -21-


any subsequent Computation Dates thereafter, calculated on a pro rata basis to
the date on which the Registration Statement is declared effective by the
Commission (the "PERIODIC AMOUNT"). The full Periodic Amount shall be paid by
the Company to the Holder by wire transfer of immediately available funds within
three days after each Computation Date. As used in this subsection (i),
"COMPUTATION DATE" means the date which is 30 days after the Effectiveness
Deadline or the commencement of a Noneffective Period, as applicable, and, if
the Registration Statement to be filed by the Company pursuant to this Section
14 has not theretofore been declared effective by the Commission, each date
which is 30 days after the previous Computation Date until such Registration
Statement is so declared effective.

                  (j) The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder (or, if it ceases to
be required to file such reports, it will, upon the request of the Holder, make
publicly available other information that fulfills the information requirements
set forth in Rule 144 (c) (2)), and it will take such further action as the
Holder may reasonably request, all to the extent required from time to time to
enable the Holder to sell the Warrants and the Warrant Shares without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of the Holder, the Company will deliver to it a
written statement as to whether the Company has complied with such information
disclosure and other requirements.

                  15. CERTIFICATE RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF
WARRANTS. The rights and obligations of the Company contained in this Warrant
Certificate shall survive the exercise or repurchase of the Warrants represented
by this Warrant Certificate to the extent that such survival is necessary to
give effect to a provision hereof.

                  16. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered to the Holder of this Warrant
Certificate shall be in writing, and shall be delivered, or shall be sent by
first-class mail, postage prepaid, and addressed, to such Holder at the address
shown on this Warrant Certificate, or at such other address as shall have been
furnished to the Company by notice from such Holder. All notices, requests and
other communications required or permitted to be given or delivered to the
Company shall be in writing, and shall be delivered, or shall be sent by
first-class mail, postage prepaid, and addressed to the office of the Company
(return receipt requested) at 2601 S. Bayshore Drive, Miami, FL 33133,
Attention: Chief Financial Officer, with a copy to: Greenberg Traurig at 1221
Brickell Avenue, 21st Floor, Miami, FL 33133, Attention: Paul Berkowitz. Any
such notice, request or other communication may be sent by facsimile, but shall
in such case be subsequently confirmed by a writing delivered or sent by
first-class mail, postage prepaid, as provided above. All notices shall be
deemed to have been given either at the time of the delivery thereof to (or the
transmission thereof, in the case of a facsimile) any officer or employee of the
person entitled to receive such notice at the address of such person for
purposes of this Section 16, or, if mailed, at the completion of the third full
day following the time of such mailing thereof to such address, as the case may
be, in each case addressed and given as aforesaid.



                                      -22-


                  17. AMENDMENTS. Neither this Warrant Certificate nor any term
or provision hereof may be amended, supplemented, changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the Company
and the Holder.

                  18. REMEDIES. The Holder may seek to enforce the terms of this
Warrant Certificate by seeking a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of the
terms hereof or otherwise. If any default under the terms of this Warrant
Certificate shall occur and be continuing, the Holder may proceed to protect and
enforce its rights under this Warrant Certificate by exercising such remedies as
are available to such Holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Warrant Certificate or in aid
of the exercise of any power granted in this Warrant Certificate. No remedy
conferred in this Warrant Certificate upon the Holder is intended to be
exclusive of any other remedy available to such Holder, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or by statute
or otherwise.

                  19. GOVERNING LAW. THIS WARRANT CERTIFICATE HAS BEEN EXECUTED
AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW YORK.
THIS WARRANT CERTIFICATE AND THE RIGHTS GRANTED HEREIN SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED UNDER THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW RULES OR PRINCIPLES). ANY JUDICIAL PROCEEDING
BROUGHT BY OR AGAINST THE COMPANY WITH RESPECT TO THIS WARRANT CERTIFICATE OR
ANY RELATED AGREEMENT SHALL BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS WARRANT CERTIFICATE, THE COMPANY ACCEPTS THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS WARRANT. IF ANY
ACTION IS COMMENCED IN ANY OTHER JURISDICTION THE PARTIES HERETO HEREBY CONSENT
TO THE REMOVAL OF SUCH ACTION TO THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE HOLDERS OF THIS WARRANT OR THE WARRANT
SHARES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR COMMENCE LEGAL
PROCEEDINGS IN OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.

                  20. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER OF THIS
WARRANT CERTIFICATE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT CERTIFICATE
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS WARRANT
CERTIFICATE AND THE TRANSACTIONS



                                      -23-


CONTEMPLATED HEREBY AND THE RELATIONSHIP THAT IS BEING ESTABLISHED HEREUNDER.
THE COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE ALSO WAIVE ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF THE OTHER PARTIES. 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 WARRANT CERTIFICATE, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND THE HOLDER OF THIS WARRANT
CERTIFICATE ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS WARRANT CERTIFICATE AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND THE HOLDER OF THIS WARRANT
CERTIFICATE FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT EACH 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 THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS WARRANT CERTIFICATE OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

                            [signature page follows]



                                      -24-



                  IN WITNESS HEREOF, the Company has caused this Warrant to be
signed on its behalf, in its corporate name, by its duly authorized officer, all
as of the day and year first above written.

                                       TERREMARK WORLDWIDE, INC.


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:



                                      -25-


                                                                      SCHEDULE 1

                                  EXERCISE FORM


                 [TO BE EXECUTED ONLY UPON EXERCISE OF WARRANTS]


To:      [                           ]

                  The undersigned irrevocably exercises _______________ of the
Warrants for the purchase of one share (subject to adjustment) of Common Stock,
par value $.001 per share, of TERREMARK WORLDWIDE, INC. (the "Company") for each
Warrant represented by the within Warrant Certificate and herewith makes payment
of $____ (such payment being (a) in cash or by check or bank draft in New York
Clearing House funds payable to the order of the Company, (b) by the surrender
of the applicable Warrant or Warrants, and without the payment of the Exercise
Price in cash, for such number of Warrant Shares equal to the product of (1) the
number of Warrants Shares for which such Warrant or Warrants are exercisable
with payment in cash of the Exercise Price as of the date of exercise and (2)
the Cashless Exercise Ratio, (c) by tendering Notes having an aggregate
principal amount, plus accrued and unpaid interest, if any, thereon to the date
of exercise, equal to the Exercise Price or (d) by any combination of (a), (b)
and (c) above, all at the exercise price and on the terms and conditions
specified in the within Warrant Certificate, surrenders the within Warrant
Certificate and all right, title and interest therein (except as to any
unexercised Warrants) to the Company and directs that the Warrant Shares
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.

Date: ___________________                           ____________________________




                                      -26-

                                                                      SCHEDULE 2

                               FORM OF ASSIGNMENT


                  FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the rights of the undersigned under the within
Warrant Certificate with respect to the number of Warrants set forth below:





                                                            Social Security or Other
          Names of                                            Identifying Number of             Number of
          Assignees                     Address                    Assignee(s)                  Warrants
          ---------                     -------             ------------------------            --------

                                                                                       








and does hereby irrevocably constitute and appoint ___________ the undersigned's
attorney to make such transfer on the books of [ ] maintained for that purpose,
with full power of substitution in the premises.

Dated:  ___________________

                                          _____________________________________1
                                          (Signature of Owner)

                                          --------------------------------------
                                          (Street Address)

                                          --------------------------------------
                                          (City)     (State)     (Zip Code)




- -------------------
1        The signature must correspond with the name as written upon the face of
         the within Warrant Certificate in every particular, without alteration
         or enlargement or any change whatever.

EX-10.28

                                                                   EXHIBIT 10.28

================================================================================

                               PURCHASE AGREEMENT

                                      among

                      TERREMARK WORLDWIDE, INC., as Issuer,

                          The Guarantors named herein,

                             The Agent named herein

                                       and

                           The Purchasers named herein

                          Dated as of December 31,2004


                                  Relating to:



                    $30,000,000 Aggregate Principal Amount of
                          Senior Secured Notes due 2009

                3,060,444 Shares of Common Stock, $.001 Par Value

                 Warrants for 15,000,000 (Subject to Adjustment)
                     Shares of Common Stock, $.001 Par Value



================================================================================




                                TABLE OF CONTENTS




                                                                                                               PAGE
                                                                                                               ----
                                                                                                          

                                    SECTION 1

                        DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.           Definitions..............................................................................2
SECTION 1.02.           Computation of Time Periods.............................................................27
SECTION 1.03.           Accounting Terms........................................................................27

                                    SECTION 2

                 AUTHORIZATION, ISSUANCE AND SALE OF SECURITIES

SECTION 2.01.           Authorization of Issue..................................................................27
SECTION 2.02.           Sale....................................................................................27
SECTION 2.03.           Closing.................................................................................27

                                    SECTION 3

                              CONDITIONS TO CLOSING

SECTION 3.01.           Representations and Warranties..........................................................28
SECTION 3.02.           Performance; No Default Under Other Agreements..........................................28
SECTION 3.03.           Compliance Certificates.................................................................28
SECTION 3.04.           Opinions of Counsel.....................................................................29
SECTION 3.05.           Changes in Corporate Structure..........................................................29
SECTION 3.06.           No Adverse Events.......................................................................29
SECTION 3.07.           Financial Information; Capital Structure................................................29
SECTION 3.08.           Proceedings and Documents...............................................................29
SECTION 3.09.           Purchase Permitted by Applicable Law, etc...............................................30
SECTION 3.10.           Transaction Documents in Force and Effect; Information..................................30
SECTION 3.11.           No Violation; No Legal Constraints; Consents, Authorizations and
                           Filings, etc.........................................................................30
SECTION 3.12.           Consummation of the Transactions........................................................31
SECTION 3.13.           Fees....................................................................................31
SECTION 3.14.           Private Placement Numbers...............................................................31
SECTION 3.15.           Simultaneous Purchase...................................................................31
SECTION 3.16.           Delivery of Documents...................................................................31
SECTION 3.17.           Personal Property Requirements..........................................................31
SECTION 3.18.           Insurance...............................................................................32


                                      -i-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                          

                                    SECTION 4

                  REPRESENTATIONS AND WARRANTIES OF THE ISSUERS

SECTION 4.01.           Due Incorporation; Power and Authority..................................................33
SECTION 4.02.           Capitalization..........................................................................33
SECTION 4.03.           Equity Interests and Subsidiaries.......................................................34
SECTION 4.04.           Due Authorization, Execution and Delivery...............................................34
SECTION 4.05.           Non-Contravention; Authorizations and Approvals.........................................35
SECTION 4.06.           Company Financial Statements; Company Reports...........................................36
SECTION 4.07.           Absence of Undisclosed Liabilities or Events............................................37
SECTION 4.08.           No Actions or Proceedings...............................................................37
SECTION 4.09.           Properties..............................................................................38
SECTION 4.10.           Intellectual Property...................................................................39
SECTION 4.11.           Taxes...................................................................................39
SECTION 4.12.           Employee Benefit Plans..................................................................41
SECTION 4.13.           Private Offering; No Integration or General Solicitation................................42
SECTION 4.14.           Eligibility for Resale Under Rule 144A..................................................42
SECTION 4.15.           Status Under Certain Statutes...........................................................42
SECTION 4.16.           Insurance...............................................................................42
SECTION 4.17.           Use of Proceeds; Margin Regulations.....................................................43
SECTION 4.18.           Existing Indebtedness; Future Liens.....................................................43
SECTION 4.19.           Compliance with Laws; Permits; Environmental Matters....................................43
SECTION 4.20.           Solvency................................................................................44
SECTION 4.21.           Affiliate Transactions..................................................................44
SECTION 4.22.           Material Contracts......................................................................44
SECTION 4.23.           No Changes to Applicable Law............................................................45
SECTION 4.24.           Indebtedness............................................................................45
SECTION 4.25.           Fees....................................................................................45
SECTION 4.26.           Brokerage Fees..........................................................................45
SECTION 4.27.           Documents and Procedures................................................................45
SECTION 4.28.           Absence of Labor Dispute................................................................45
SECTION 4.29.           No Unrelated Liabilities................................................................45
SECTION 4.30.           Full Disclosure.........................................................................45
SECTION 4.31.           Assets Control Regulations and Anti-Money Laundering....................................46
SECTION 4.32.           Certain Other Representations and Warranties; Consummation of
                           Transactions.........................................................................46
SECTION 4.33.           Security Documents......................................................................47
SECTION 4.34.           Real Property Holding Corporation.......................................................47
SECTION 4.35.           Activities of Certain Subsidiaries......................................................48

                                    SECTION 5

                        REPRESENTATIONS OF THE PURCHASERS

SECTION 5.01.           Purchase for Investment.................................................................48


                                      -ii-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                          

                                    SECTION 6

                        COVENANTS TO PROVIDE INFORMATION

SECTION 6.01.           Future Reports to Holders...............................................................49

                                    SECTION 7

                           OTHER AFFIRMATIVE COVENANTS

SECTION 7.01.           Payment of Principal, Premium and Interest..............................................54
SECTION 7.02.           Preservation of Corporate Existence and Franchises......................................54
SECTION 7.03.           Maintenance of Properties...............................................................55
SECTION 7.04.           Taxes...................................................................................55
SECTION 7.05.           Books, Records and Access...............................................................55
SECTION 7.06.           Compliance with Law.....................................................................56
SECTION 7.07.           Insurance...............................................................................56
SECTION 7.08.           Offer to Repurchase upon Change of Control..............................................57
SECTION 7.09.           Offer to Purchase by Application of Excess Proceeds.....................................59
SECTION 7.10.           Affirmative Covenants with Respect to Leases............................................60
SECTION 7.11.           [RESERVED]..............................................................................60
SECTION 7.12.           Further Assurances......................................................................60
SECTION 7.13.           Additional Collateral; Additional Guarantors............................................60
SECTION 7.14.           Security Interests; Further Assurances..................................................62
SECTION 7.15.           Information Regarding Collateral........................................................62
SECTION 7.16.           Designations of Unrestricted Subsidiaries...............................................63
SECTION 7.17.           Post-Closing Collateral Matters.........................................................64
SECTION 7.18.           Casualty Event..........................................................................67
SECTION 7.19.           NAP Madrid Post Closing Matters.........................................................67
SECTION 7.20.           Receivables Account.....................................................................67

                                    SECTION 8

                               NEGATIVE COVENANTS

SECTION 8.01.           Stay, Extension and Usury Laws..........................................................68
SECTION 8.02.           Restricted Payments.....................................................................68
SECTION 8.03.           Dividend and Other Payment Restrictions Affecting Subsidiaries..........................69
SECTION 8.04.           Incurrence of Indebtedness and Issuance of Preferred Stock..............................70
SECTION 8.05.           Asset Sales.............................................................................73
SECTION 8.06.           Transactions with Affiliates............................................................74
SECTION 8.07.           Limitation on Liens.....................................................................75
SECTION 8.08.           Limitation on Issuances and Sales of Capital Stock of Subsidiaries......................78
SECTION 8.09.           Payments for Consents...................................................................78



                                     -iii-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                          
SECTION 8.10.           Merger, Consolidation, or Sale of Assets................................................78
SECTION 8.11.           Conduct of Business.....................................................................79
SECTION 8.12.           Limitation on Tax Consolidation.........................................................79
SECTION 8.13.           Public Disclosures......................................................................79
SECTION 8.14.           Limitation on Repurchases and other Repayments of Notes.................................80
SECTION 8.15.           Limitation on Activities................................................................80
SECTION 8.16.           Limitation on Accounting Changes........................................................80
SECTION 8.17.           Fiscal Year.............................................................................80
SECTION 8.18.           Amendments or Waivers of Certain Documents..............................................80
SECTION 8.19.           Amendments to Charter Documents.........................................................80
SECTION 8.20.           No Integration..........................................................................80

                                    SECTION 9

                                    THE NOTES

SECTION 9.01.           Form and Execution......................................................................81
SECTION 9.02.           Terms of the Notes......................................................................81
SECTION 9.03.           Denominations...........................................................................81
SECTION 9.04.           Form of Legend for the Notes............................................................81
SECTION 9.05.           Payments and Computations...............................................................82
SECTION 9.06.           Registration; Registration of Transfer and Exchange.....................................82
SECTION 9.07.           Transfer Restrictions...................................................................83
SECTION 9.08.           Mutilated, Destroyed, Lost and Stolen Notes.............................................84
SECTION 9.09.           Persons Deemed Owners...................................................................85
SECTION 9.10.           Cancellation............................................................................85
SECTION 9.11.           Home Office Payment.....................................................................85

                                   SECTION 10

                                EVENTS OF DEFAULT

SECTION 10.01.          Events of Default.......................................................................86
SECTION 10.02.          Remedies................................................................................88
SECTION 10.03.          Waiver of Past Defaults.................................................................89

                                   SECTION 11

                                   REDEMPTION

SECTION 11.01.          Right of Redemption.....................................................................90
SECTION 11.02.          Partial Redemptions.....................................................................90
SECTION 11.03.          Notice of Redemption....................................................................90


                                      -iv-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                          
SECTION 11.04.          Notes Payable on Redemption Date........................................................91
SECTION 11.05.          Notes Redeemed in Part..................................................................91

                                   SECTION 12

                              SUBSIDIARY GUARANTEES

SECTION 12.01.          Subsidiary Guarantees...................................................................91
SECTION 12.02.          Execution and Delivery of Subsidiary Guarantees.........................................92
SECTION 12.03.          Guarantors May Consolidate, Etc. on Certain Terms.......................................93
SECTION 12.04.          Releases of Subsidiary Guarantees.......................................................93
SECTION 12.05.          Limitation on Guarantor Liability.......................................................94

                                   SECTION 13

                            EXPENSES, INDEMNIFICATION AND CONTRIBUTION, AND TERMINATION

SECTION 13.01.          Expenses................................................................................94
SECTION 13.02.          Indemnification.........................................................................95
SECTION 13.03.          Contribution............................................................................96
SECTION 13.04.          Survival................................................................................97
SECTION 13.05.          Termination.............................................................................97

                                   SECTION 14

                                      AGENT

SECTION 14.01.          Appointment.............................................................................98
SECTION 14.02.          Nature of Duties........................................................................98
SECTION 14.03.          Rights, Exculpation, Etc................................................................98
SECTION 14.04.          Reliance................................................................................99
SECTION 14.05.          Indemnification.........................................................................99
SECTION 14.06.          FMP Agency Services, LLC Individually..................................................100
SECTION 14.07.          Successor Agent........................................................................100
SECTION 14.08.          Collateral Matters.....................................................................100
SECTION 14.09.          Agency for Perfection..................................................................101
SECTION 14.10.          Notice of Default......................................................................102
SECTION 14.11.          Noteholder Actions Against Collateral..................................................102
SECTION 14.12.          Setoff and Sharing of Payments.........................................................102

                                   SECTION 15

                                  MISCELLANEOUS

SECTION 15.01.          Notices................................................................................103
SECTION 15.02.          Benefit of Agreement; Assignments and Participations...................................103
SECTION 15.03.          No Waiver; Remedies Cumulative.........................................................104
SECTION 15.04.          Amendments, Waivers and Consents.......................................................104
SECTION 15.05.          Counterparts...........................................................................105
SECTION 15.06.          Reproduction...........................................................................105



                                      -v-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                          

SECTION 15.07.          Headings...............................................................................105
SECTION 15.08.          Governing Law; Submission to Jurisdiction; Venue.......................................105
SECTION 15.09.          Severability...........................................................................106
SECTION 15.10.          Entirety...............................................................................106
SECTION 15.11.          Survival of Representations and Warranties.............................................107
SECTION 15.12.          Incorporation..........................................................................107
SECTION 15.13.          Certain Rights and Obligations Among Noteholders.......................................107




                                      -vi-




EXHIBITS

Exhibit A             -    Form of Note
Exhibit B             -    Form of Subsidiary Guarantee
Exhibit C             -    Form of Supplemental Agreement
Exhibit D             -    Form of Warrant Certificate
Exhibit E             -    Form of Registration Rights
Exhibit F             -    Form of Compliance Certificate
Exhibit G             -    Form of Intercompany Note
Exhibit H             -    Form of Landlord Access Agreement(1)
Exhibit I             -    Form of Management Rights Letter
Exhibit J             -    Form of Mortgage
Exhibit K-1           -    Form of Perfection Certificate
Exhibit K-2           -    Form of Perfection Certificate Supplement
Exhibit L             -    Form of Security Agreement
Exhibit M             -    Form of Confidentiality Agreement
Exhibit N             -    Subordination Provisions
Exhibit 3.03(a)       -    Form of Officers' Certificate
Exhibit 3.03(b)       -    Form of Secretary's Certificate
Exhibit 3.04(a)(i)    -    Form of Company Counsel Opinion
Exhibit 3.04(a)(ii)   -    Form of Local Counsel Opinion



SCHEDULES

Schedule A            -    Information Relating to Purchasers
Schedule B            -    Assets to be Transferred to NAP Madrid
Schedule 3.04         -    Local Counsel
Schedule 3.06         -    Adverse Events
Schedule 4.02         -    Capitalization
Schedule 4.03(a)      -    Equity Interests
Schedule 4.03(b)      -    Consents
Schedule 4.05         -    Authorizations and Approvals
Schedule 4.06         -    Financial Statements
Schedule 4.07(a)      -    Liabilities
Schedule 4.07(b)      -    Changes in Business
Schedule 4.08         -    Legal and Governmental Actions
Schedule 4.09(c)      -    Special Flood Hazards
Schedule 4.10(a)      -    Intellectual Property-- Claims
Schedule 4.10(c)      -    Intellectual Property-- Violations
Schedule 4.11         -    Taxes


- ---------
(1)  If there is a leasehold mortgage, use landlord lien waiver, access
     agreement and consent.


                                     -vii-



Schedule 4.12         -    Retiree Health and Life Benefits
Schedule 4.18         -    Indebtedness
Schedule 4.19         -    Compliance with Laws; Permits; Environmental Matters
Schedule 4.21(a)      -    Affiliate Transactions
Schedule 4.22         -    Material Contracts
Schedule 4.25         -    Transaction Fees
Schedule 4.26         -    Brokerage Fees
Schedule 4.27         -    Documents and Procedures
Schedule 4.28         -    Labor Disputes
Schedule 7.17(a)      -    Mortgaged Properties
Schedule 7.17(a)(3)   -    Fair Market Value of Fixtures
Schedule 7.17(b)      -    Locations-- Landlord Access Agreements/Bailee Letters
Schedule 8.07(c)      -    Liens


                                     -viii-





                               PURCHASE AGREEMENT


                  PURCHASE AGREEMENT, dated as of December 31, 2004, by and
among TERREMARK WORLDWIDE, INC., a Delaware corporation (the "COMPANY"), the
guarantors listed on the signature pages hereto (each a "GUARANTOR" and,
collectively, the "GUARANTORS," and together with the Company, the "ISSUERS"),
Agent (defined below) and each of the purchasers listed on SCHEDULE A hereto
(each a "PURCHASER" and, collectively, the "PURCHASERS").

                                    RECITALS

                  WHEREAS the Company and LA Ref II Telecom Miami, LLC, LA Ref
III Telecom Miami, LLC, LA Parallel II Telecom Miami, LLC, LA Parallel III
Telecom Miami, LLC, LA Capital II Telecom Miami, LLC LA Equity III Telecom
Miami, LLC, Barrow Street Tecota, LP and MHLP, LLC (formerly known as Calor
Development, Ltd) (collectively, "SELLER") have entered into an Acquisition
Agreement (the "ACQUISITION AGREEMENT") pursuant to which the Company or a
Subsidiary (as hereinafter defined) shall acquire (the "ACQUISITION") all of the
outstanding Capital Stock of Technology Center of the Americas, LLC (the "SPV")
not currently owned by the Company or any of its Subsidiaries for an aggregate
purchase price of $39,664,000 (subject to adjustment as set forth therein);

                  WHEREAS, in connection with the Acquisition, the SPV will
enter into a financing agreement, dated as of the date hereof (the "SPV
FINANCING AGREEMENT"), by and among the SPV and Citigroup Global Markets Realty
Corp. ("CITIGROUP"), as administrative agent for the lenders named therein, and
the lenders named therein, which will provide for a mortgage loan to the Company
of $49.0 million;

                  WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, the Company has agreed to sell to the Purchasers, and
the Purchasers, acting severally and not jointly, have agreed to purchase from
the Company, an aggregate of (i) $30.0 million aggregate principal amount of the
Company's Senior Secured Notes due 2009 in the form of EXHIBIT A hereto (the
"NOTES"), (ii) 3,060,444 shares (the "SHARES") of the Company's Common Stock,
$.001 par value per share, and (iii) 15 million stock purchase warrants (the
"WARRANTS") evidencing rights to purchase initially 15 million shares of the
Company's Common Stock, $.001 par value per share (the "COMMON STOCK"), which
Warrants shall be in four different classes in the forms of EXHIBIT D hereto;

                  WHEREAS the obligations of the Company under this Agreement
and the Notes will be guaranteed (the "SUBSIDIARY GUARANTEES") by the
Guarantors, such Subsidiary Guarantees to be in the form of EXHIBIT B hereto;

                  WHEREAS the Company desires to secure all of its obligations
under the Basic Documents (as hereinafter defined) by granting to Agent, for the
benefit of Agent and the Noteholders, a security interest in and lien upon
substantially all of its personal and real property (including a pledge of all
of the Capital Stock (as hereinafter defined) of its Subsidiaries (as
hereinafter defined)) other than the Excluded Property (as defined in the
Security Agreement);





                  WHEREAS each of the Guarantors (which excludes the SPV) is
willing to grant to Agent, for the benefit of Agent and the Noteholders, a
security interest in and lien upon substantially all of its personal and real
property to secure such guaranty other than the Excluded Property (as defined in
the Security Agreement);

                  WHEREAS the holders of Shares and Warrants from time to time
will be entitled to the benefits of the Registration Rights Agreement, dated the
date hereof (the "REGISTRATION RIGHTS AGREEMENT"), by and among the Company and
the Purchasers in the form of EXHIBIT E hereto;

                  WHEREAS the Issuers have duly authorized the creation and
issuance of the Notes, the Subsidiary Guarantees, the Shares and the Warrants,
as applicable, and the execution and delivery of this Agreement and the other
Transaction Documents; and

                  WHEREAS all things necessary to make this Agreement, the Notes
(when issued and delivered hereunder), the Subsidiary Guarantees (when validly
endorsed on the Notes), the Warrants and each other Basic Document valid and
binding obligations of each applicable Issuer in accordance with their
respective terms have been done;

                  NOW, THEREFORE, the parties hereto agree as follows:

                                   SECTION 1

                        DEFINITIONS AND ACCOUNTING TERMS


                  SECTION 1.01. DEFINITIONS. As used herein, the following terms
shall have the meanings specified herein unless the context otherwise requires:

                  "ACCREDITED INVESTOR" means any Person that is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act.

                  "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i)
assumed in connection with an Asset Acquisition from such Person or (ii)
existing at the time such Person becomes a Subsidiary of any other Person (other
than any Indebtedness incurred in connection with, or in contemplation of, such
Asset Acquisition or such Person becoming such a Subsidiary). Acquired
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Subsidiary, as the case may be.

                  "ACQUISITION" has the meaning specified in the first recital
to this Agreement.

                  "ACQUISITION AGREEMENT" has the meaning specified in the first
recital to this Agreement.

                  "AFFILIATE" means with respect to any specified Person: (i)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person; (ii) any other
Person that owns, directly or indirectly, 5% or more of such specified Person's


                                      -2-


Capital Stock or any officer or director of any such specified Person or other
Person or, with respect to any natural Person, any person having a relationship
with such Person by blood, marriage or adoption no more remote than first
cousin; or (iii) any other Person 5% or more of the Voting Stock of which is
beneficially owned or held directly or indirectly by such specified Person. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

                  "AGENT" means FMP Agency Services, LLC in its capacity as
Agent for the Noteholders or its successor appointed pursuant to Section 14.07.

                  "AGREEMENT" is defined in Section 15.04.

                  "APPLICABLE LAW" means all applicable laws, statutes,
treaties, rules, codes (including building codes), ordinances, regulations,
certificates, orders and licenses of, and interpretations by, any Governmental
Authority and judgments, decrees, injunctions, writs, permits, orders or like
governmental action of any Governmental Authority (including any Environmental
Law and any laws pertaining to health or safety) applicable to the Company, any
of its Subsidiaries or any of their property or operations.

                  "APPLICABLE PREMIUM" means, as of any date indicated below, a
premium to principal amount based on the percentage of the principal amount of
Notes to be redeemed as follows:

                        PERIOD COMMENCING:           APPLICABLE PREMIUM:
                        -----------------            ------------------
              Closing Time                                  13.5%
              December 31, 2005                   13.5% (except as set forth
                                                            below)
              December 31, 2006                              7.5%
              June 30, 2007                                  5.0%
              December 31, 2007                             2.25%
              June 30, 2008                                  0.0%

                  Notwithstanding the foregoing, if a Change of Control Payment
Date occurs during the period commencing December 31, 2005 and ending December
31, 2006 and if as a result of the announcement of such Change of Control the
closing price of the Company's Common Stock on the date of the consummation of
the Change of Control shall exceed $1.00 (after giving effect to any stock
splits, reverse stock splits, stock dividends or similar events) then the
Applicable Premium for such period shall be 10.0%.

                  "APPLICABLE RATE" is defined in EXHIBIT A.

                  "ASSET ACQUISITION" means (i) an Investment by the Company or
any Subsidiary in any other Person pursuant to which such Person will become a
Subsidiary or will be merged or consolidated with or into the Company or any
Subsidiary or (ii) the acquisition by the Company or any Subsidiary of the


                                      -3-

Company or any Subsidiary of the assets of any Person which constitute
substantially all of the assets of any Person which constitute substantially all
of the assets of such Person, or any division or line of business of such
Person, or which is otherwise outside of the ordinary course of business.

                  "ASSET SALE" means any sale, issuance, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger,
consolidation or Sale and Lease-back Transaction) (collectively, a "TRANSFER"),
directly or indirectly, in one or a series of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (a) that is governed by the provisions described under
Section 8.10; PROVIDED, HOWEVER, that any transaction consummated in compliance
with Section 8.10 involving a transfer of less than all of the properties or
assets of the Company shall be deemed to be an Asset Sale with respect to the
properties or assets of the Company that are not so transferred in such
transaction, (b) that is by the Company to any Wholly Owned Subsidiary that is a
Guarantor, or by any Subsidiary to the Company or any Wholly Owned Subsidiary
that is a Guarantor in accordance with the terms of this Agreement, (c) that is
of obsolete equipment in the ordinary course of business, (d) the Fair Market
Value of which in the aggregate does not exceed $1,000,000 or (e) with respect
to the sale of 8,652,016 shares of the Company's Capital Stock owned by NAP
Madrid, to the extent such proceeds are used as set forth in Section 7.19.

                  "ASSET SALE OFFER" is defined in Section 7.09(a).

                  "ASSET SALE OFFER PAYMENT DATE" is defined in Section 7.09(b).

                  "AUDIT DATE" is defined in Section 4.06(b).

                  "AVERAGE LIFE TO STATED MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.

                  "BAILEE LETTER" shall have the meaning assigned thereto in the
Security Agreement.

                  "BANKRUPTCY LAW" means Title 11 of the United States Code or
any similar federal, state or foreign bankruptcy, insolvency, reorganization or
other law for the relief of debtors.

                  "BASIC DOCUMENTS" means, collectively, this Agreement, the
Notes, the Guarantees, the Security Documents, the Warrants, the Intercreditor


                                      -4-


Agreement, the Registration Rights Agreement, the Management Rights Letter and
all certificates, instruments, financial and other statements and other
documents made or delivered in connection herewith and therewith.

                  "BOARD OF DIRECTORS" means the Board of Directors of the
Company or a Subsidiary of the Company, as the case may be, or any authorized
committee of such Board of Directors.

                  "BUSINESS DAY" means any day other than a Legal Holiday.

                  "CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person; (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person; and (iii) any rights, warrants or options
exchangeable for or convertible into any of the foregoing.

                  "CAPITALIZED LEASE OBLIGATION" means any obligation under a
lease of (or other agreement conveying the right to use) any property (whether
real, personal or mixed) that is required to be classified and accounted for as
a capital lease obligation under GAAP, and, for the purpose of this Agreement,
the amount of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP consistently applied.

                  "CASH EQUIVALENTS" means, at any time, (i) any evidence of
Indebtedness with a maturity of not more than one year issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of not more than one year of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (iii)
commercial paper with a maturity of not more than one year issued by a
corporation that is not an Affiliate of the Company organized under the laws of
any state of the United States or the District of Columbia and rated at least
A-1 by Standard & Poor's Corporation or at least P-1 by Moody's Investors
Service, Inc.; and (iv) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (i) and
(ii) above entered into with any financial institution meeting the
qualifications specified in clause (ii) above.

                  "CASUALTY EVENT" shall mean any loss of title or any loss of
or damage to or destruction of, or any condemnation or other taking (including
by any Governmental Authority) of, any property of the Company or any of its
Subsidiaries. "Casualty Event" shall include but not be limited to any taking of
all or any part of any Real Property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Requirement of
Law, or by reason of the temporary requisition of the use or occupancy of all or
any part of any Real Property of any person or any part thereof by any
Governmental Authority, civil or military, or any settlement in lieu thereof.

                  "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, 42 U.S.C.
ss. 9601 ET SEQ.

                                      -5-


                  "CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.

                  "CHANGE OF CONTROL" means the occurrence of any of the
following events (whether or not approved by the Board of Directors of the
Company): (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of 33-1/3% or more of the total voting or economic power
of the Voting Stock of the Company; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
board or whose nomination for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any corporation consolidates with or merges into or
with the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding Voting Stock of the Company is not changed or exchanged at all
(except to the extent necessary solely to reflect a change in the jurisdiction
of incorporation of the Company or where (A) no "person" or "group," other than
Permitted Holders, owns immediately after such transaction, directly or
indirectly, 33-1/3% or more of the total voting or economic power of the Voting
Stock of the surviving corporation and (B) the holders of the Voting Stock of
the Company immediately prior to such transaction own, directly or indirectly,
not less than a majority of the total voting and economic power of the Voting
Stock of the surviving or transferee corporation immediately after such
transaction); or (iv) any order, judgment or decree shall be entered against the
Company decreeing the dissolution or split up of the Company and such order
shall remain undischarged or unstayed for a period in excess of sixty days.

                  "CHANGE OF CONTROL OFFER" is defined in Section 7.08(a).

                  "CHANGE OF CONTROL PAYMENT" is defined in Section 7.08(a).

                  "CHANGE OF CONTROL PAYMENT DATE" is defined in Section
7.08(b)(ii).

                  "CLOSING TIME" is defined in Section 2.03.

                  "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time.

                  "COLLATERAL" shall mean, collectively, all of the Security
Agreement Collateral, the Mortgaged Property and all other property of whatever
kind and nature subject or purported to be subject from time to time to a Lien
under any Security Document.



                                      -6-


                  "COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this Agreement such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, the body
performing such duties at such time.

                  "COMMON STOCK" has the meaning specified in the third recital
to this Agreement.

                  "COMPANY" shall have the meaning assigned to such term in the
preamble to this Agreement and its successors and permitted assigns.

                  "COMPANY FINANCIAL STATEMENTS" is defined in Section 4.06(a).

                  "COMPANY PARTY" is defined in Section 4.04(e).

                  "COMPANY REPORTS" is defined in Section 4.06(b).

                  "COMPLIANCE CERTIFICATE" is defined in Section 6.01(f).

                  "CONSOLIDATED" or "CONSOLIDATED" (including the correlative
term "CONSOLIDATING") or on a "CONSOLIDATED BASIS," when used with reference to
any financial term in this Agreement (but not when used with respect to any Tax
Return or Tax liability), means the aggregate for two or more Persons of the
amounts signified by such term for all such Persons, with intercompany items
eliminated and, with respect to net income or earnings, after eliminating the
portion of net income or earnings properly attributable to minority interests,
if any, in the capital stock of any such Person or attributable to shares of
preferred stock of any such Person not owned by any other such Person, in
accordance with GAAP.

                  "CONSOLIDATED EBITDA" means, for any period, (i) the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, of (a) Consolidated Net Income, (b) to the extent reducing Consolidated
Net Income, Consolidated Non-cash Charges, (c) to the extent reducing
Consolidated Net Income, Consolidated Interest Expense, and (d) to the extent
reducing Consolidated Net Income, Consolidated Income Tax Expense less (ii)
other non-cash items increasing Consolidated Net Income for such period.

                  "CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the
provision for federal, state, local and foreign income taxes payable by the
Company and the Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.

                  "CONSOLIDATED INTEREST EXPENSE" means, for any period, without
duplication, the sum of (a) the interest expense of the Company and the
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (i) any amortization of debt discount
attributable to such period, (ii) the net cost under or otherwise associated
with Hedging Obligations (in each case, including any amortization of


                                      -7-


discounts), (iii) the interest portion of any deferred payment obligation, (iv)
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and (v) all capitalized
interest and all accrued interest, and (b) all but the principal component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and the Subsidiaries during such period and as determined
on a consolidated basis. Consolidated Interest Expense shall be calculated on a
Pro Forma Basis to give effect to any Indebtedness incurred, assumed or
permanently repaid or extinguished during the relevant Test Period in connection
with the Acquisition, any Asset Acquisitions and Asset Sales as if such
incurrence, assumption, repayment or extinguishing had been effected on the
first day of such period.

                  "CONSOLIDATED NET INCOME" means, for any period, the
consolidated net income (or loss) of the Company and its Subsidiaries for such
period on a consolidated basis, adjusted, to the extent included in calculating
such net income (or loss), by excluding, without duplication, (i) all
extraordinary gains or losses (net of all fees and expenses relating thereto),
(ii) the portion of net income (or loss) of the Company and its Subsidiaries on
a consolidated basis allocable to minority interests in unconsolidated Persons,
except to the extent that cash dividends or distributions are actually received
by the Company or a Subsidiary, (iii) income of the Company and the Subsidiaries
derived from or in respect of Investments in Persons other than Subsidiaries,
except to the extent that cash dividends or distributions are actually received
by the Company or a Subsidiary, (iv) net income (or loss) of any Person combined
with the Company or any of the Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (v) any gain or
loss realized upon the termination of any employee pension benefit plan, (vi)
gains (but not losses), net of all fees and expenses relating thereto, in
respect of any Asset Sales by the Company or a Subsidiary, (vii) the net income
of any Subsidiary to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (viii) any
restoration to income of any contingency reserve except to the extent provision
for such reserve was made out of income accrued at any time following the
Closing Time, (ix) any gain, arising from the acquisition of any securities, or
the extinguishment, under GAAP, of any Indebtedness of the Company and (x) the
net gain resulting from any prepayment or redemption premiums incurred with
respect to Indebtedness repaid with the proceeds of the issuance of the Notes in
accordance with this Agreement.

                  "CONSOLIDATED NON-CASH CHARGES" means, for any period, the
aggregate depreciation, amortization and other non-cash expenses of the Company
and the Subsidiaries reducing Consolidated Net Income for such period (other
than any non-cash item requiring an accrual or reserve for cash disbursements in
any future period), determined on a consolidated basis.

                  "CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with
respect to any Permitted Lien of the type described in clauses (a), (b), (e) and
(f) of Section 8.07, the following conditions:

                  (a) the Company shall cause any proceeding instituted
         contesting such Lien to stay the sale or forfeiture of any portion of
         the Collateral on account of such Lien;

                  (b) at the option and at the request of the Agent or the
         Required Holders, to the extent such Lien is in an amount in excess of
         $500,000, the appropriate Issuer shall maintain cash reserves in an


                                      -8-


         amount sufficient to pay and discharge such Lien or obtain a bond over
         such Lien and, in either case, the Issuer's reasonable estimate of all
         interest and penalties related thereto; and

                  (c) such Lien shall in all respects be subject and subordinate
         in priority to the Lien and security interest created and evidenced by
         the Security Documents, except if and to the extent that the
         Requirement of Law creating, permitting or authorizing such Lien
         provides that such Lien is or must be superior to the Lien and security
         interest created and evidenced by the Security Documents.

                  "CONTRACT" is defined in Section 4.05.

                  "CONTROL AGREEMENT" shall have the meaning assigned to such
term in the Security Agreement.

                  "CONTROLLING PERSON" is defined in Section 13.02(a).

                  "CUSTODIAN" is defined in Section 10.01.

                  "DEFAULT" means any event, act or condition that is, or with
the giving of notice, lapse of time or both would constitute an Event of
Default.

                  "DESIGNATION" has the meaning assigned to such term in Section
7.16.

                  "DESIGNATION AMOUNT" has the meaning assigned to such term in
Section 7.16.

                  "DISCLOSURE SCHEDULE" means all numbered Schedules to this
Agreement.

                  "DISINTERESTED DIRECTOR" means, with respect to any
transaction or series of related transactions, a member of the Board of
Directors of the Company who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of related
transactions.

                  "ENFORCEABILITY EXCEPTIONS" means, with respect to any
specified obligation, any limitations on the enforceability of such obligation
due to bankruptcy, insolvency, reorganization, moratorium, and other similar
laws of general applicability relating to or affecting creditors' rights or
general equity principles (other than, in any such case, any Federal or state
laws relating to fraudulent transfers).

                  "ENVIRONMENT" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, natural resources, the workplace or as otherwise
defined in any Environmental Law.

                  "ENVIRONMENTAL ACTION" means (a) any action, suit, written
demand, written claim, written notice of non-compliance or violation, written
notice of liability or potential liability, investigation, proceeding, consent
order or consent agreement relating to any Environmental Law, any Permit or
Hazardous Material, including, without limitation, (i) by any Governmental
Authority for enforcement, cleanup, removal, response, remedial or other actions


                                      -9-


or damages and (ii) by any Governmental Authority or third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
and (b) any investigation, monitoring, removal or remediation activities
undertaken by or on behalf of the Company or any of its Subsidiaries, whether or
not such activities are carried out voluntarily.

                  "ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or written agency interpretation, policy or
guidance that has the force and effect of law relating to pollution or
protection of the environment, public health and safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 U.S.C.ss. 1251 ET SEQ.; the Toxic Substances Control
Act, 15 U.S.C.ss. 2601 ET SEQ.; the Clean Air Act, 42 U.S.C.ss. 7401 ET SEQ.;
the Safe Drinking Water Act, 42 U.S.C.ss. 3803 ET SEQ.; the Oil Pollution Act of
1990, 33 U.S.C.ss. 2701 ET SEQ.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C.ss. 11001 ET SEQ.; the Hazardous Material
Transportation Act, 49 U.S.C.ss. 1801 ET SEQ.; and the Occupational Safety and
Health Act, 29 U.S.C.ss. 651 ET SEQ.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.

                  "ERISA" is defined in Section 4.12(a).

                  "ERISA AFFILIATE" is defined in Section 4.12(b).

                  "EVENT OF DEFAULT" is defined in Section 10.01.

                  "EXCESS PROCEEDS" is defined in Section 8.05(b).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.

                  "EXISTING CONVERTIBLE NOTES" means the convertible debt
securities of the Company which are outstanding at the Closing Time.

                  "EXISTING LIEN" is defined in Section 8.07(c).

                  "FACILITY" means the 750,000 square foot telecommunications
building in which NAP of the Americas, Inc., a Wholly Owned Subsidiary, is
housed as one of the tenants in Miami, Florida.

                  "FAIR MARKET VALUE" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length transaction,
for cash, between an informed and willing seller under no compulsion to sell and
an informed and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the Board of Directors of the Company or the applicable
Subsidiary of the Company acting in good faith evidenced by a board resolution
thereof delivered to the Noteholders.


                                      -10-



                  "FISCAL YEAR" means the Fiscal Year of the Company and its
Subsidiaries ending on March 31 of each calendar year, except with respect to
NAP Madrid and Terremark Latin America (Brasil) Ltda., for which "Fiscal Year"
means the Fiscal Year ending on December 31 of each calendar year unless and
until such Subsidiary adopts March 31 of each calendar year as its Fiscal Year.

                  "FOREIGN SUBSIDIARY" means, with respect to any Person, any
Restricted Subsidiary of such Person that is not organized or existing under the
laws of the United States, any state thereof, the District of Columbia, or any
territory thereof.

                  "GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at the
date of determination and which are consistently applied for all applicable
periods.

                  "GOVERNMENTAL AUTHORITY" means (a) the government of the
United States or any State or other political subdivision thereof, (b) any
government or political subdivision of any other jurisdiction in which the
Company or any Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any Subsidiary or (c)
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to, any such government.

                  "GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall
mean any Requirement of Law of any Governmental Authority requiring notification
of the buyer, lessee, mortgagee, assignee or other transferee of any Real
Property, facility, establishment or business, or notification, registration or
filing to or with any Governmental Authority, in connection with the sale,
lease, mortgage, assignment or other transfer (including any transfer of
control) of any Real Property, facility, establishment or business, of the
actual or threatened presence or Release in or into the Environment, or the use,
disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.

                  "GUARANTEE" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.

                  "GUARANTORS" means the Subsidiaries listed on the signature
pages hereto as guarantors to this Agreement and any other Subsidiary which is a
guarantor of the Notes, including any Person that executes or is required after
the Closing Time to execute a guarantee of the Notes pursuant to the covenant
described under Section 7.13 until a successor replaces such party pursuant to
the applicable provisions of this Agreement and, thereafter, shall mean such
successor.

                                      -11-


                  "HAZARDOUS MATERIALS" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or is reasonably
expected to become friable, urea formaldehyde foam insulation, dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous waste," "hazardous materials," "extremely
hazardous substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority under Environmental Laws.

                  "HEDGING OBLIGATIONS" means, with respect to any Person, the
net payment obligations of such Person under (a) Interest Rate Agreements and
(b) other agreements or arrangements entered into in order to protect such
Person against fluctuations in commodity prices, interest rates or currency
exchange rates.

                  "HOLDER" means any Noteholder, any Shareholder or any
Warrantholder.

                  "INCUR" is defined in Section 8.04(a).

                  "INCURRENCE RATIO" means, with respect to any Person, the
ratio of

                  (x) the sum of the aggregate outstanding amount of
         Indebtedness and liquidation value of Preferred Stock of such Person
         and its Subsidiaries as of the date of calculation (the "TRANSACTION
         Date") on a Consolidated basis to

                  (y) such Person's Consolidated EBITDA for the two full fiscal
         quarters (the "APPLICABLE PERIOD") ending on or prior to the date of
         determination for which financial statements are available multiplied
         by two (2).

                  For purposes of this definition, clauses (x) and (y) above
will be calculated after giving effect on a Pro Forma Basis to

                  1. the incurrence or repayment of any Indebtedness or
         Preferred Stock of such Person or any of its Subsidiaries (and the
         application of the proceeds thereof) giving rise to the need to make
         such calculation and any incurrence or repayment of other Indebtedness
         or Preferred Stock (and the application of the proceeds thereof), other
         than the incurrence or repayment of Indebtedness in the ordinary course
         of business for working capital purposes pursuant to working capital
         facilities, occurring during the Applicable Period or at any time
         subsequent to the last day of the Applicable Period and on or prior to
         the Transaction Date, as if such incurrence or repayment or issuance or
         redemption or other repayment, as the case may be (and the application
         of the proceeds thereof), occurred on the first day of the Applicable
         Period; and

                  2. any Asset Sales or Asset Acquisitions (including, without
         limitation, any Asset Acquisition giving rise to the need to make such
         calculation as a result of such Person or one of its Subsidiaries
         (including any Person who becomes a Subsidiary as a result of the Asset
         Acquisition) incurring, assuming or otherwise being liable for Acquired
         Indebtedness and also including any Consolidated EBITDA (PROVIDED that
         such Consolidated EBITDA will be included only to the extent that
         Consolidated Net Income would be includable pursuant to the definition
         of "Consolidated Net Income") (including any PRO FORMA expense and cost


                                      -12-


         reductions calculated on a basis consistent with Regulation S-X of the
         Exchange Act) attributable to the assets which are the subject of the
         Asset Acquisition or Asset Sale during the Applicable Period) occurring
         during the Applicable Period or at any time subsequent to the last day
         of the Applicable Period and on or prior to the Transaction Date, as if
         such Asset Sale or Asset Acquisition (including the incurrence,
         assumption or liability for any such Acquired Indebtedness) occurred on
         the first day of the Applicable Period.

If such Person or any of its Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence will give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary
or such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.

                  "INDEBTEDNESS" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities incurred or arising in the ordinary course
of business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit, bankers
acceptance or other similar credit transaction and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Capital Stock of such Person, or any warrants, rights or options to acquire
such Capital Stock, now or hereafter outstanding, (ii) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments, (iii)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capitalized Lease Obligations of such Person, (v) all Indebtedness referred to
in clauses (i) through (iv) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vi) all
guarantees of Indebtedness by such Person, (vii) all Redeemable Capital Stock
issued by such Person (valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends), (viii) all
Hedging obligations of such Person, and (ix) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability of the types referred to in clauses (i) through (viii) above. For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Agreement, and if such price is based upon, or
measured by, the Fair Market Value of such Redeemable Capital Stock, such Fair
Market Value to be determined in good faith by the Board of Directors of the
issuer of such Redeemable Capital Stock.


                                      -13-


                  "INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal
or investment banking firm which is nationally recognized within the United
States of America (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company or any of its Subsidiaries or Affiliates and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.

                  "INSTITUTIONAL INVESTOR" means (a) any original Purchaser of a
Note and any transferee that is an Affiliate of any original Purchaser, (b) any
holder of a Note holding more than 25% of the aggregate principal amount of the
Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company or investment fund, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless of legal form
organized under the laws of the United States or a State thereof, with capital
and surplus in excess of $50,000,000.

                  "INSURANCE POLICIES" means the insurance policies and
coverages required to be maintained by each Issuer which is an owner of
Mortgaged Property with respect to the applicable Mortgaged Property pursuant to
Section 7.07 and all renewals and extensions thereof.

                  "INSURANCE REQUIREMENTS" means, collectively, all provisions
of the Insurance Policies, all requirements of the issuer of any of the
Insurance Policies and all orders, rules, regulations and any other requirements
of the National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Issuer which is an owner of Mortgaged Property and
applicable to the Mortgaged Property or any use or condition thereof.

                  "INTELLECTUAL PROPERTY" means (a) all inventions and
discoveries (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, (c) all copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, (d) all broadcast rights, (e) all mask works and all
applications, registrations and renewals in connection therewith, (f) all
know-how, trade secrets and confidential business information, whether
patentable or unpatentable and whether or not reduced to practice (including
ideas, research and development, know-how, formulas, compositions and
manufacturing and production process and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals), (g) all computer
software (including data and related documentation), (h) all other proprietary
rights, (i) all copies and tangible embodiments thereof (in whatever form or
medium) and (j) all licenses and agreements in connection therewith.

                  "INTERCOMPANY NOTE" means a promissory note substantially in
the form of EXHIBIT G.

                  "INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of the date hereof by and between Citigroup and Agent.



                                      -14-


                  "INTEREST PAYMENT DATE" is defined in EXHIBIT A.

                  "INTEREST RATE AGREEMENTS" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a floating or a fixed rate
of interest on a stated notional amount in exchange for periodic payments made
by such Person calculated by applying a fixed or a floating rate of interest on
the same notional amount or any other arrangement involving payments by or to
such Person based upon fluctuations in interest rates (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
and/or other types of interest rate hedging agreements from time to time.

                  "INVESTMENT" means, with respect to any Person, any direct or
indirect advance, loan or other extension of credit (including by means of a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others or otherwise), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other Person and all other items that would be
classified as investments on a balance sheet prepared in accordance with GAAP.
Investments shall exclude extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices. In addition to the foregoing,
any Hedging Obligation or similar agreement shall constitute an Investment. If
the Company or any Subsidiary of the Company sells or otherwise disposes of any
Capital Stock of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
directly or indirectly, 100% of the outstanding Capital Stock of such
Subsidiary, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the Fair Market Value of the Capital
Stock of such Subsidiary not sold or disposed of.

                  "ISSUERS" shall have the meaning assigned to such term in the
preamble of this Agreement and their successors and assigns.

                  "LANDLORD ACCESS AGREEMENT" shall mean a Landlord Access
Agreement, substantially in the form of EXHIBIT H, or such other form as may
reasonably be acceptable to the Agent and the Required Holders.

                  "LEASES" shall mean any and all leases, subleases, tenancies,
options, concession agreements, rental agreements, occupancy agreements,
franchise agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

                  "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If any
payment date in respect of the Notes is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.



                                      -15-


                  "LIEN" means any mortgage or deed of trust, charge, pledge,
lien (statutory or other), privilege, security interest, hypothecation,
cessation and transfer, lease of real property, assignment for security, claim,
deposit arrangement, or preference or priority or other encumbrance upon or with
respect to any property of any kind (including any conditional sale, capital
lease or other title retention agreement, any leases in the nature thereof, and
any agreement to give any security interest), whether real, personal or mixed,
movable or immovable, now owned or hereafter acquired. A Person shall be deemed
to own subject to a Lien any property which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement.

                  "MANAGEMENT RIGHTS LETTER" means the Management Rights Letter
dated as of the date hereof among Falcon Mezzanine Partners, LP and the Company
substantially in the form of EXHIBIT I hereto.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, management, operations, affairs, condition (financial or
otherwise), assets, property, prospects or results of operations of the Company
and its Subsidiaries taken as a whole, (b) the ability of the Company or any
Subsidiary to perform any of its material obligations under any of the
Transaction Documents, or (c) the validity or enforceability of any Transaction
Document.

                  "MATERIAL CONTRACTS" means any agreements, contracts or
arrangements between the Company or its Subsidiaries, on the one hand, and any
third parties, on the other, that are material to the business, management,
operations, affairs, condition (financial or otherwise), properties, assets,
prospects or results of operations of the Company and its Subsidiaries, taken as
a whole.

                  "MATURITY," when used with respect to any Note, means the date
on which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise (including in connection with any offer to purchase
that this Agreement requires the Company to make).

                  "MORTGAGE" shall mean an agreement, including, but not limited
to, a mortgage, deed of trust or any other document, creating and evidencing a
Lien on a Mortgaged Property, which shall be substantially in the form of
EXHIBIT J or other form reasonably satisfactory to the Agent and the Required
Holders, in each case, with such schedules and including such provisions as
shall be necessary to conform such document to applicable local or foreign law
or as shall be customary under applicable local or foreign law.

                  "MORTGAGED PROPERTY" shall mean (a) each Real Property
identified as a Mortgaged Property on SCHEDULE 8(A) to the Perfection
Certificate dated the Closing Time to the extent that such landlord consents to
such Mortgage and (b) each Real Property, if any, which shall be subject to a
Mortgage delivered after the Closing Time pursuant to Section 7.13(c) and
Section 7.17.

                  "MULTIEMPLOYER PLAN" means a "multiemployer plan" within the
meaning of Section 3(37) of ERISA.

                                      -16-


                  "NAP MADRID" means NAP de las Americas Madrid S.A.

                  "NET CASH PROCEEDS" means

                  (a) with respect to any Asset Sale by any Person, the proceeds
         thereof (without duplication in respect of all Asset Sales) in the form
         of cash or Cash Equivalents including payments in respect of deferred
         payment obligations when received in the form of cash or Cash
         Equivalents (except to the extent that such obligations are financed or
         sold with recourse to the Company or any Subsidiary) net of (i)
         brokerage commissions and other reasonable fees and expenses (including
         fees and expenses of legal counsel and investment bankers) related to
         such Asset Sale, (ii) provisions for all taxes payable as a result of
         such Asset Sale, (iii) payments made to retire Indebtedness where
         payment of such Indebtedness is secured by the assets or properties the
         subject of such Asset Sale, (iv) amounts required to be paid to any
         Person (other than the Company or any Subsidiary) owning a beneficial
         interest in or having a Lien on the assets subject to the Asset Sale
         and (v) appropriate amounts to be provided by the Company or any
         Subsidiary, as the case may be, as a reserve, in accordance with GAAP,
         against any liabilities associated with such Asset Sale and retained by
         the Company or any Subsidiary, as the case may be, after such Asset
         Sale, including, without limitation, pension and other postemployment
         benefit liabilities, liabilities related to environmental matters and
         liabilities under any indemnification obligations associated with such
         Asset Sale (PROVIDED that the amount of any such reserves shall be
         deemed to constitute Net Cash Proceeds at the time such reserves shall
         have been released or are not otherwise required to be retained as a
         reserve); and

                  (b) with respect to any Casualty Event, the cash insurance
         proceeds, condemnation awards and other compensation received in
         respect thereof, net of all reasonable costs, expenses and taxes
         incurred in connection with the collection of such proceeds, awards or
         other compensation in respect of such Casualty Event.

                  "NOTEHOLDER" means a Person in whose name a Note is registered
on the Security Register from time to time.

                  "NOTES" has the meaning specified in the third recital to this
Agreement.

                  "NPL" means the National Priorities List under CERCLA.

                  "OBLIGATIONS" means (i) any principal, premium and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) all other monetary obligations, including fees, costs, expenses
and indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Company and the other
Issuers under this Agreement and the other Basic Documents pertaining to the
Notes, Subsidiary Guarantees or Security Documents and other documents related


                                      -17-


thereto executed in connection therewith and (iii) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Company and the other Issuers under or pursuant to this Agreement and the other
Basic Documents pertaining to the Notes, Subsidiary Guarantees or Security
Documents and other documents related thereto executed in connection therewith.

                  "OFFER AMOUNT" is defined in Section 7.09(b)(ii).

                  "OFFERING EXCESS PROCEEDS ACCOUNT" is defined in Section 4.17.

                  "OFFICER" means, with respect to any Person, the President,
Chief Executive Officer or the Chief Financial Officer of such Person.

                  "OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Officers of such Person; PROVIDED, HOWEVER, that every
Officers' Certificate with respect to compliance with a covenant or condition
provided for in this Agreement shall include (i) a statement that the Officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto and
(ii) a statement at to whether, in the opinion of the signers, such condition
has been complied with.

                  "OPERATING LEASE" means all leases other than Capitalized
Lease Obligations.

                  "OUTSTANDING," when used with respect to the Notes, means, as
of the date of determination, all Notes theretofore executed and delivered under
this Agreement, EXCEPT:

                  (i) Notes theretofore cancelled by the Company or delivered to
         the Company for cancellation;

                  (ii) Notes for whose payment or redemption money in the
         necessary amount has been theretofore set aside by the Company with a
         third party in trust for the holders of such Notes; PROVIDED that if
         such Notes are to be redeemed, notice of such redemption has been duly
         given as provided in this Agreement; and

                 (iii) Notes which have been paid pursuant to Section 9.08 or in
         exchange for or in lieu of which other Notes have been executed and
         delivered pursuant to this Agreement, other than any such Notes in
         respect of which there shall have been presented to the Company proof
         satisfactory to it that such Notes are held by a bona fide purchaser in
         whose hands such Notes are valid obligations of the Company;

PROVIDED, HOWEVER, that in determining whether the Noteholders of the requisite
principal amount of the outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be outstanding.
Notes so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Required
Holders the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.

                                      -18-


                  "PATRIOT ACT" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, P.L. 107-56, as amended.

                  "PAYMENT DEFAULT" is defined in Section 10.01(f).

                  "PENSION PLAN" is defined in Section 4.12(b).

                  "PERFECTION CERTIFICATE" shall mean a certificate in the form
of EXHIBIT K-1 or any other form approved by the Agent and the Required Holders,
as the same shall be supplemented from time to time by a Perfection Certificate
Supplement or otherwise.

                  "PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of EXHIBIT K-2 or any other form approved by the Agent
and the Required Holders.

                  "PERMITS" means all licenses, permits, certificates of need,
approvals and authorizations from all Governmental Authorities required to
lawfully conduct a business as presently conducted.

                  "PERMITTED COLLATERAL LIENS" means (i) Contested Liens (as
defined in the Security Agreement), (ii) the Liens described in clauses (a),
(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p) and
(q) of Section 8.07 and (iii) in the case of Mortgaged Property, "Permitted
Collateral Liens" shall mean the Liens described in clauses (a), (b), (d), (e),
(g) and (l) of Section 8.07; PROVIDED, HOWEVER, on the Closing Time or upon the
date of delivery of each additional Mortgage under Section 7.13 or 7.14,
Permitted Collateral Liens shall mean only those Liens set forth in SCHEDULE B
to the applicable Mortgage.

                  "PERMITTED HOLDER" means (i) Manuel D. Medina, (ii) Francis
Lee and (iii) any "controlled" (as such term is defined in the definition of
Affiliate) Affiliate of Manuel D. Medina and/or Francis Lee.

                  "PERMITTED INVESTMENTS" means (a) any Investment by the
Company or any Subsidiary of the Company in the Company, a Wholly Owned
Subsidiary that is a Guarantor or, to the extent no Default or Event of Default
shall have occurred and be continuing at such time and after giving effect to
such Investment, Terremark Latin America (Brasil) Ltda. or any future Wholly
Owned Subsidiary that is a Foreign Subsidiary; (b) any Investment in cash and
Cash Equivalents; (c) subject to the proviso in clause (a) above, any Investment
by the Company or any Subsidiary of the Company in a Person, if as a result of
such Investment (i) such Person becomes a Wholly Owned Subsidiary and a
Guarantor or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Subsidiary that is a Guarantor;
(d) any Investment made as a result of the receipt of non-cash consideration


                                      -19-


from an Asset Sale that was made pursuant to and in compliance with the
provisions of Section 8.05 hereof; (e) other Investments in any Person (other
than a Wholly Owned Subsidiary that is a Guarantor or, to the extent no Default
or Event of Default shall have occurred and be continuing at such time and after
giving effect to such Investment, Terremark Latin America (Brasil) Ltda. or any
future Wholly Owned Subsidiary that is a Foreign Subsidiary) having an aggregate
Fair Market Value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (e) that are at the time
outstanding, not to exceed $10.0 million excluding the Fair Market Value of any
Common Stock used as consideration for such Investments; PROVIDED that to the
extent such Investments are made in a non-Wholly Owned Subsidiary or
Unrestricted Subsidiary of the Company, the Capital Stock of such non-Wholly
Owned Subsidiary or Unrestricted Subsidiary owned directly or indirectly by the
Company shall become Collateral contemporaneously with the Investment in
accordance with the requirements of Section 7.13(b) to the extent required by
Section 7.13(b); (f) investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (g) Investments
represented by Hedging Obligations; PROVIDED that such Hedging Obligations are
otherwise incurred in compliance with the terms of this Agreement; (h)
Investments existing at the Closing Time after giving effect to the Transaction;
and (i) the transfer by TerreNAP Data Centers, Inc. of the assets listed on
Schedule B to NAP Madrid in exchange for Preferred Stock of NAP Madrid in
accordance with Section 7.19.

                  "PERMITTED LIENS" is defined in Section 8.07.

                  "PERMITTED PAYMENT" is defined in Section 8.02(b).

                  "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "PLAN" is defined in Section 4.12(a).

                  "PREDECESSOR NOTE" of any particular Note means every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note.

                  "PREFERRED STOCK" means, with respect to any Person, Capital
Stock of any class or classes (however designated) of such Person which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Capital Stock of any other class of such
Person.

                  "PRINCIPAL AMOUNT" means, when used with respect to any
particular Note, the principal amount of such Note at its Stated Maturity.

                  "PRO FORMA BASIS" shall mean on a basis in accordance with
GAAP and Regulation S-X.

                  "PRO RATA SHARE" means with respect to all payments,
computations and other matters, the percentage obtained by dividing (a) the
aggregate principal amount of the Notes held by that Noteholder by (b) the
aggregate outstanding principal amount of all Notes held by the Noteholders.

                  "PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.

                                      -20-


                  "PROPERTY MATERIAL ADVERSE EFFECT" shall have the meaning
assigned thereto in the Mortgage.

                  "PUHCA" is defined in Section 4.15(a).

                  "PURCHASE MONEY OBLIGATION" means Indebtedness of a Person
incurred in the normal course of business of such Person for the purpose of
financing all or any part of the purchase price, or the cost of installation,
construction or improvement of any property.

                  "PURCHASE PRICE" is defined in Section 2.02.

                  "PURCHASED SECURITY" means, individually, any of the Notes,
Subsidiary Guarantees, Shares or Warrants; "PURCHASED SECURITIES" means,
collectively, the Notes, Subsidiary Guarantees, Shares and Warrants.

                  "PURCHASER INDEMNIFIED PERSON" is defined in Section 13.02(a).

                  "PURCHASERS" is defined in the preamble to this Agreement.

                  "QUALIFIED CAPITAL STOCK" of any Person means any and all
Capital Stock of such Person other than Redeemable Capital Stock.

                  "QUALIFIED INSTITUTIONAL BUYER" means any Person that is a
"qualified institutional buyer" within the meaning of Rule 144A.

                  "REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold, mineral or other estate) in and to any and
all parcels of or interests in real property owned, leased or operated by any
person, whether by lease, license or other means, together with, in each case,
all easements, hereditaments and appurtenances relating thereto, all
improvements and appurtenant fixtures and equipment, all general intangibles and
contract rights and other property and rights incidental to the ownership, lease
or operation thereof.

                  "REDEEMABLE CAPITAL STOCK" means any class or series of
Capital Stock to the extent that, either by its terms, by the terms of any
security into which it is convertible or exchangeable, or by contract or
otherwise, is or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Notes or is redeemable at the option of the holder thereof at any time prior to
such Stated Maturity, or is convertible into or exchangeable for debt securities
at any time prior to such Stated Maturity.

                  "REDEMPTION DATE," when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Agreement.

                  "REDEMPTION PRICE," when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Agreement.

                  "REDUCED RATE" is defined in EXHIBIT A.

                  "REFINANCING" is defined in Section 8.04(a)(ix).


                                      -21-


                  "REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
the seventh recital to this Agreement.

                  "REGULAR RECORD DATE" is defined in Section 9.05.
                   -------------------

                  "REGULATION S" means Regulation S under the Securities Act (or
any successor provision), as it may be amended from time to time.

                  "RELEASE" shall mean any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing, dispersing, emanating or migrating of any
Hazardous Material in, into or through the Environment.

                  "REQUIRED HOLDERS" means Noteholders holding more than 50% of
the aggregate principal amount of outstanding Notes.

                  "REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
judgments, orders, decrees, ordinances, rules, regulations, statutes or case
law.

                  "RESTRICTED PAYMENTS" is defined in Section 8.02(a).

                  "REVOCATION" has the meaning assigned to such term in Section
7.16.

                  "RIGHT OF FIRST OFFER NOTICE" is defined in Section
8.04(c)(i).

                  "RULE 144" means Rule 144 under the Securities Act (or any
successor provision), as it may be amended from time to time.

                  "RULE 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.

                  "SALE" is defined in Section 9.07(a).

                  "SALE AND LEASE-BACK TRANSACTION" means any arrangement with
any Person providing for the leasing by the Company or any Restricted Subsidiary
of the Company of any real or tangible personal property, which property has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.

                  "SECURED OBLIGATIONS" shall mean the Obligations.

                  "SECURED PARTIES" shall mean, collectively, the Agent and the
Noteholders.

                  "SECURITIES ACT" mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the Commission thereunder.

                  "SECURITIES COLLATERAL" shall have the meaning assigned to
such term in the Security Agreement.

                                      -22-


                  "SECURITY" means any of the Notes, the Warrants or the Warrant
Shares.

                  "SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of EXHIBIT L among the Issuers and Agent for the
benefit of the Secured Parties.

                  "SECURITY AGREEMENT COLLATERAL" shall mean all property
pledged or granted as collateral pursuant to the Security Agreement delivered
(a) on the Closing Time or (b) thereafter pursuant to Section 7.13.

                  "SECURITY DOCUMENTS" shall mean the Security Agreement, the
Mortgages and each other security document or pledge agreement delivered in
accordance with applicable local or foreign law to grant a valid, perfected
security interest in any property as collateral for the Secured Obligations, and
all UCC or other financing statements or instruments of perfection required by
this Agreement, the Security Agreement, any Mortgage or any other such security
document or pledge agreement to be filed with respect to the security interests
in property and fixtures created pursuant to the Security Agreement or any
Mortgage and any other document or instrument utilized to pledge or grant or
purport to pledge or grant a security interest or lien on any property as
collateral for the Secured Obligations.

                  "SECURITY REGISTER" has the meaning given to such term in
Section 9.06(a).

                  "SELLER" has the meaning specified in the first recital to
this Agreement.

                  "SHARES" has the meaning specified in the third recital to
this Agreement.

                  "SHAREHOLDER" means a Person in whose name a Share is
registered.

                  "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

                  "SOLVENT" means, with respect to any Person as of the date of
any determination, that on such date (a) the fair value of such Person's assets
is greater than the amount of its liabilities (including contingent and
unliquidated liabilities), (b) the present fair saleable value of such Person's
assets is not less than the amount that will be required to pay the probable
liability on such Person's debts as they become absolute and matured, (c) such
Person is able to pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (d) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to current and anticipated future capital requirements and current
and anticipated future business conduct and the prevailing practice in the
industry in which such Person is engaged. In computing the amount of contingent
liabilities at any time, such liabilities shall be computed as the amount which,
in light of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

                                      -23-


                  "SPV" has the meaning specified in the first recital to this
Agreement.

                  "SPV FINANCING AGREEMENT" means the SPV Financing Agreement as
defined in the second recital to this Agreement, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, restated, renewed,
refunded, replaced or refinanced from time to time.

                  "STANDARD RATE" is defined in EXHIBIT A.

                  "STATED MATURITY" means, with respect to any Note or any
installment of interest thereon, the dates specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness or any installment of interest is
due and payable.

                  "SUBORDINATED INDEBTEDNESS" means, with respect to the
Company, Indebtedness of the Company which is expressly subordinated in right of
payment to the Notes or, with respect to any Guarantor, Indebtedness of such
Guarantor which is expressly subordinated in right of payment to the Subsidiary
Guarantee of such Guarantor and which is subject to a subordination agreement
which contains subordination provisions substantially similar to those set forth
in EXHIBIT N.

                  "SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which the outstanding shares of Voting Stock having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of the shares of Voting Stock are at the
time, directly or indirectly, owned by such first named Person. For purposes of
this Agreement, an "Unrestricted Subsidiary" of the Company shall be deemed not
to be a "Subsidiary" of the Company.

                  "SUBSIDIARY GUARANTEES" is defined in the fourth recital to
this Agreement.

                  "SURVEY" shall mean a survey of any Mortgaged Property (and
all improvements thereon) which is (a) (i) prepared by a surveyor or engineer
licensed to perform surveys in the jurisdiction where such Mortgaged Property is
located, (ii) dated (or redated) not earlier than six months prior to the date
of delivery thereof unless there shall have occurred within six months prior to
such date of delivery any exterior construction on the site of such Mortgaged
Property or any easement, right of way or other interest in the Mortgaged
Property has been granted or become effective through operation of law or
otherwise with respect to such Mortgaged Property which, in either case, can be
depicted on a survey, in which events, as applicable, such survey shall be dated
(or redated) after the completion of such construction or if such construction
shall not have been completed as of such date of delivery, not earlier than 20
days prior to such date of delivery, or after the grant or effectiveness of any
such easement, right of way or other interest in the Mortgaged Property, (iii)
certified by the surveyor (in a manner reasonably acceptable to the Agent) to
the Agent and the Title Company, (iv) complying in all respects with the minimum


                                      -24-


detail requirements of the American Land Title Association as such requirements
are in effect on the date of preparation of such survey and (v) sufficient for
the Title Company to remove all standard survey exceptions from the title
insurance policy (or commitment) relating to such Mortgaged Property and issue
the endorsements of the type required by Section 3.19(c) or (b) otherwise
acceptable to the Agent.

                  "TAX RETURNS" means all original, amended and estimated
reports, returns, information statements and related documentation required to
be filed with respect to the Taxes of the Company or its Subsidiaries including,
without limitation, consolidated federal income tax returns of the Company and
its Subsidiaries.

                  "TAXES" means (i) all federal, state, local or foreign income,
gross receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, employment, withholding, estimated or other taxes
imposed on the income, properties or operations of the Company and its
Subsidiaries, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties and (ii) all
transferee, successor, joint and several (including pursuant to Treasury
Regulation Section 1.1502-6 or any similar provision of state, local or foreign
law), contractual or other liability for any item described in clause (i) above.

                  "TITLE COMPANY" shall mean any title insurance company as
shall be retained by the Company and reasonably acceptable to the Agent and the
Required Holders.

                  "TITLE POLICY" shall have the meaning assigned to such term in
Section 3.19(c).

                  "TOTAL LEVERAGE RATIO" means, with respect to any Person, the
ratio of

                  (x) the aggregate outstanding amount of Indebtedness (other
         than the Existing Convertible Notes) less cash on hand of such Person
         and its Subsidiaries as of the date of calculation (the "TRANSACTION
         DATE") on a Consolidated basis to

                  (y) such Person's Consolidated EBITDA for the two full fiscal
         quarters (the "APPLICABLE PERIOD") ending on or prior to the date of
         determination for which financial statements are available multiplied
         by two (2).

                  For purposes of this definition, clauses (x) and (y) above
will be calculated after giving effect on a Pro Forma Basis to

                  1. the incurrence or repayment of any Indebtedness of such
         Person or any of its Subsidiaries (and the application of the proceeds
         thereof) giving rise to the need to make such calculation and any
         incurrence or repayment of other Indebtedness (and the application of
         the proceeds thereof), other than the incurrence or repayment of
         Indebtedness in the ordinary course of business for working capital
         purposes pursuant to working capital facilities, occurring during the
         Applicable Period or at any time subsequent to the last day of the
         Applicable Period and on or prior to the Transaction Date, as if such
         incurrence or repayment, as the case may be (and the application of the
         proceeds thereof), occurred on the first day of the Applicable Period;
         and



                                      -25-


                  2. any Asset Sales or Asset Acquisitions (including, without
         limitation, any Asset Acquisition giving rise to the need to make such
         calculation as a result of such Person or one of its Subsidiaries
         (including any Person who becomes a Subsidiary as a result of the Asset
         Acquisition) incurring, assuming or otherwise being liable for Acquired
         Indebtedness and also including any Consolidated EBITDA (PROVIDED that
         such Consolidated EBITDA will be included only to the extent that
         Consolidated Net Income would be includable pursuant to the definition
         of "Consolidated Net Income") (including any PRO FORMA expense and cost
         reductions calculated on a basis consistent with Regulation S-X of the
         Exchange Act) attributable to the assets which are the subject of the
         Asset Acquisition or Asset Sale during the Applicable Period) occurring
         during the Applicable Period or at any time subsequent to the last day
         of the Applicable Period and on or prior to the Transaction Date, as if
         such Asset Sale or Asset Acquisition (including the incurrence,
         assumption or liability for any such Acquired Indebtedness) occurred on
         the first day of the Applicable Period.

If such Person or any of its Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence will give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary
or such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.

                  "TRANSACTION DOCUMENTS" means collectively (a) the Basic
Documents, (b) the Acquisition Agreement and (c) the SPV Financing Agreement and
all certificates, instruments, financial and other statements and other
documents made or delivered in connection therewith.

                  "TRANSACTIONS" means the transactions provided for in, or
contemplated by, the Transaction Documents.

                  "UNITED STATES" shall have the meaning assigned to such term
in Regulation S.

                  "UNRESTRICTED SUBSIDIARY" means each Subsidiary of the Company
designated as such pursuant to and in compliance with Section 7.16. Any such
designation may be revoked by a resolution of the Board of Directors of the
Company delivered to the Noteholders, subject to the provisions of such Section
7.16.

                  "VOTING STOCK" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors,
managers or trustees of any Person (irrespective of whether or not, at the time,
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).

                  "WARRANT SHARES" means a share of the Common Stock of the
Company issuable upon exercise of a Warrant.

                  "WARRANTHOLDER" means a Person in whose name a Warrant or
Warrant Share is registered.

                  "WARRANTS" has the meaning specified in the third recital to
this Agreement.



                                      -26-


                  "WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which 100%
of the outstanding Capital Stock is owned by the Company and/or another Wholly
Owned Subsidiary. For purposes of this definition, any directors' qualifying
shares shall be disregarded in determining the ownership of a Subsidiary.

                  SECTION 1.02. COMPUTATION OF TIME PERIODS. For purposes of
computation of periods of time hereunder, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding."

                  SECTION 1.03. ACCOUNTING TERMS. Accounting terms used but not
otherwise defined herein shall have the meanings provided by, and be construed
in accordance with, GAAP.

                                   SECTION 2

                 AUTHORIZATION, ISSUANCE AND SALE OF SECURITIES


                  SECTION 2.01. AUTHORIZATION OF ISSUE. The Company has
authorized the issue and sale of (i) $30.0 million aggregate principal amount of
the Notes, each Note to be in the form of EXHIBIT A hereto, (ii) 3,060,444
Shares and (iii) 15 million Warrants to purchase initially 15 million shares of
Common Stock, each Warrant to be in the form of EXHIBIT D hereto. Each Guarantor
has authorized the issue of its Subsidiary Guarantee of the Notes, each such
Subsidiary Guarantee to be in the form of EXHIBIT B hereto.

                  SECTION 2.02. SALE. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Purchaser, and each Purchaser, acting
severally and not jointly, agrees to purchase from the Company, the aggregate
principal amount of Notes, the aggregate number of Shares and the aggregate
number of Warrants, in each case, set forth in SCHEDULE A opposite the name of
such Purchaser (i) at 100% of the principal amount thereof in the case of the
Notes, (ii) at $0.6535 per Share in the case of the Shares and (iii) at no
additional consideration in the case of the Warrants (the "PURCHASE PRICE").


                                      -27-


Unless otherwise required by Applicable Law, the parties shall not take any
position inconsistent with the foregoing allocation for any income tax purposes.

                  SECTION 2.03. CLOSING. The purchase and sale of the Purchased
Securities pursuant to this Agreement shall occur at the offices of Cahill
Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005-1702, at 9:00
a.m., New York City time, on December 31, 2004, or such other time as shall be
agreed upon by the Purchasers and the Company (such time and date of payment and
delivery being herein called the "CLOSING Time"). At the Closing Time, the
Company will deliver to each Purchaser certificates for the Purchased Securities
to be purchased by such Purchaser at the Closing Time, in such denominations (in
the case of the Notes any integral multiple of $1,000 principal amount) as such
Purchaser may request at least two Business Days prior to the Closing Time,
dated the Closing Time and registered in such Purchaser's name, against payment
by such Purchaser to the Company or to its order by wire transfer of immediately
available funds in the amount of the Purchase Price to be paid by such Purchaser
therefor to such bank account or accounts as the Company may request in writing
at least two Business Days prior to the Closing Time.

                                   SECTION 3

                              CONDITIONS TO CLOSING


                  Each Purchaser's several obligation to purchase and pay for
the Purchased Securities to be purchased by it at the Closing Time is subject to
the satisfaction or waiver by each Purchaser prior to or at the Closing Time of
each of the conditions specified below in this Section 3:

                  SECTION 3.01. REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Issuers in this Agreement and in each of
the other Transaction Documents shall be true and correct in all material
respects (except that any representations and warranties that are qualified as
to "materiality" or "Material Adverse Effect" shall be true and correct) when
made and at and as of the Closing Time as if made at and as of the Closing Time
(unless expressly stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects (except that any representations and warranties that are qualified as
to "materiality" or "Material Adverse Effect" shall be true and correct) as of
such earlier date).

                  SECTION 3.02. PERFORMANCE; NO DEFAULT UNDER OTHER AGREEMENTS.
The Issuers and each of their respective Subsidiaries, to the extent parties
hereto or thereto, shall have performed and complied in all material respects
with all agreements and conditions contained in this Agreement and each of the
other Transaction Documents required to be performed or complied with by any of
them prior to or at the Closing Time and, after giving effect to the issue and
sale of the Purchased Securities and the other Transactions (and the application
of the proceeds thereof as contemplated by Section 4.17 hereof and the other
Transaction Documents), no Default or Event of Default shall have occurred and
be continuing and no default or event of default shall have occurred and be
continuing under any of the other Transaction Documents.

                  SECTION 3.03. COMPLIANCE CERTIFICATES.

                  (a) OFFICERS' CERTIFICATE. Each of the Issuers shall have
delivered to the Purchasers an Officers' Certificate, dated the Closing Time, in
the form of EXHIBIT 3.03(A) hereto, certifying that the conditions specified in
Sections 3.01, 3.02, 3.05, 3.06 and 3.07 have been fulfilled.

                  (b) SECRETARY'S CERTIFICATE. Each of the Issuers shall have
delivered to the Purchasers a certificate in the form of EXHIBIT 3.03(B) hereto
certifying as to such Issuer's certificate of incorporation, bylaws and
resolutions attached thereto, the incumbency and signatures of certain officers
of such Issuer, and other corporate proceedings of such Issuer relating to the
authorization, execution and delivery of the Purchased Securities, as applicable
to such Issuer, this Agreement and the other Transaction Documents to which such
Issuer is a party.



                                      -28-


                  SECTION 3.04. OPINIONS OF COUNSEL. Such Purchaser shall have
received the favorable opinions in form and substance satisfactory to it, dated
the Closing Time, from Greenberg Traurig LLP, counsel for the Issuers,
substantially in the form set forth in EXHIBIT 3.04(A)(I) and as to such other
matters as such Purchaser may reasonably request.

                  SECTION 3.05. CHANGES IN CORPORATE STRUCTURE. None of the
Issuers nor any of their respective Subsidiaries shall have changed their
respective jurisdiction of incorporation or been a party to any merger or
consolidation or succeeded to all or any substantial part of the liabilities of
any other Person at any time following the Audit Date and there shall have
occurred no event which constitutes a Change of Control of the Company and the
Company shall not have entered into any agreement or understanding which, if
consummated, would constitute a Change of Control of the Company.

                  SECTION 3.06. NO ADVERSE EVENTS. (i) None of the Issuers nor
any of their respective Subsidiaries shall have sustained since the Audit Date
any loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, and (ii) except as set forth in
the Company Reports or in SCHEDULE 3.06, since the Audit Date there shall not
have been any change in the capital stock or long-term debt of any Issuer or any
of their Subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, management, operations, affairs, condition
(financial or otherwise), assets, property, prospects or results of operations
of the Company and its Subsidiaries, in the case of clauses (i) and (ii) above,
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.

                  SECTION 3.07. FINANCIAL INFORMATION; CAPITAL STRUCTURE. Such
Purchaser shall have received (i) a PRO FORMA consolidated balance sheet for the
Company and its Subsidiaries as of the Closing Time after giving effect to the
Transactions, including the issuance of the Purchased Securities and the use of
the proceeds thereof, which have been certified by the Chief Financial Officer
of the Company and which are in form and substance satisfactory to such
Purchaser and (ii) each of the consolidated financial projections (including an
operating budget and a cash flow budget) of the Company pursuant to Section
4.06, each of which is in form and substance satisfactory to such Purchaser. The
PRO FORMA consolidated capital structure of the Company, after giving effect to
the Transactions (including all adjustments permitted by Regulation S-X under
the Securities Act), shall be consistent in all material respects with the
projections provided to such Purchaser prior to the Closing Time and the capital
structure contemplated herein, except as to the value of the Warrants issued to
the Purchasers and the lenders under the SPV Financing Agreement.

                  SECTION 3.08. PROCEEDINGS AND DOCUMENTS. All corporate and
other proceedings in connection with the Transactions and the other transactions
contemplated by this Agreement and the other Transaction Documents, and all
documents and instruments incident to such transactions and the terms thereof,
shall be reasonably satisfactory to such Purchaser and the Purchaser's special
counsel, and such Purchaser and the Purchaser's special counsel shall have
received all such counterpart originals or certified or other copies of such


                                      -29-


documents (other than those that are not required to be delivered by the Closing
Time pursuant to Section 7.17) as it or they may reasonably request.

                  SECTION 3.09. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. At
the Closing Time, such Purchaser's purchase of the Purchased Securities shall
(a) be permitted by the laws and regulations of each jurisdiction to which it is
subject, (b) not violate any Applicable Law (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any tax, penalty or liability under or
pursuant to any Applicable Law, which Applicable Law was not in effect on the
date hereof.

                  SECTION 3.10. TRANSACTION DOCUMENTS IN FORCE AND EFFECT;
INFORMATION.

                  (a) TRANSACTION DOCUMENTS. The Purchasers shall have received
true and correct copies of all Transaction Documents (other than those that are
not required to be delivered by the Closing Time pursuant to Section 7.17) and
(i) such documents (A) shall have been duly executed and delivered by the
parties thereto, (B) shall be in form and substance reasonably satisfactory to
the Purchasers and (C) shall be valid and legally binding obligations of the
parties thereto enforceable against each of them in accordance with its
respective terms, subject to the Enforceability Exceptions, and (ii) there shall
have been no material amendments, alterations, modifications or waivers of any
provision thereof since the date of this Agreement.

                  (b) ACCURACY OF INFORMATION. All written information (other
than projections) furnished by the Issuers and their respective representatives
to the Purchasers on or prior to the Closing Time with respect to the business,
management, operations, affairs, condition (financial or otherwise), assets,
property, prospects or results of operations of the Issuers and their respective
Subsidiaries shall be accurate and complete in all material respects.

                  SECTION 3.11. NO VIOLATION; NO LEGAL CONSTRAINTS; CONSENTS,
AUTHORIZATIONS AND FILINGS, ETC.

                  (a) The consummation by the Issuers and their respective
Subsidiaries of the Transactions shall not contravene, violate or conflict with
any Applicable Law, except for violations which, individually or in the
aggregate, do not and would not have a Material Adverse Effect.

                  (b) All consents, authorizations and filings, if any, required
in connection with the execution, delivery and performance by each of the
Issuers and their respective Subsidiaries of the Transaction Documents (other
than those that are not required to be delivered by the Closing Time pursuant to
Section 7.17) to which it is a party shall have been obtained or made and shall
be in full force and effect, except for such consents, authorizations and
filings the failure of which to obtain or make, individually or in the
aggregate, does not and would not have a Material Adverse Effect.

                  (c) There shall be no inquiry, injunction, restraining order,
action, suit or proceeding pending or entered or any statute or rule proposed,
enacted or promulgated by any Governmental Authority or any other Person which,
in the opinion of the Purchasers, (i) individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse Effect or which seeks


                                      -30-


to enjoin or seek damages against any Issuer or any of its Subsidiaries or any
of the Purchasers as a result of the Transactions, including the issuance of the
Notes, or (ii) relates to any of the Transactions and has or will have a
material adverse effect on any Purchaser or (iii) alleges liability on the part
of any Purchaser in connection with this Agreement, any other Transaction
Documents or the Transactions or any of the other transactions contemplated
hereby or thereby or (iv) would bar the issuance of the Purchased Securities or
the use of the proceeds thereof in accordance with the terms of this Agreement
and the other Transaction Documents.

                  SECTION 3.12. CONSUMMATION OF THE TRANSACTIONS.

                  (a) Prior to or at the Closing Time, a mortgage loan in an
aggregate principal amount of $49.0 million shall be provided to the Company
pursuant to the SPV Financing Agreement.

                  (b) The Transactions shall be consummated concurrently with
the issuance and sale by the Company of the Purchased Securities hereunder, in
each case in accordance with the terms of the applicable Transaction Documents
(without any amendment thereto or waiver thereunder unless consented to by each
Purchaser).

                  SECTION 3.13. FEES. The Company shall have paid all fees,
costs and expenses (including, without limitation, legal fees and expenses and
the fees and expenses of appraisers, consultants and other advisors) and other
compensation due and payable to each Purchaser at the Closing Time.

                  SECTION 3.14. PRIVATE PLACEMENT NUMBERS. At or prior to the
Closing Time, the Company shall have requested and received from S&P a private
placement number for each of the Notes and Warrants.

                  SECTION 3.15. SIMULTANEOUS PURCHASE. Each of the Purchasers
shall have simultaneously purchased the Purchased Securities to be purchased by
such Purchaser.

                  SECTION 3.16. DELIVERY OF DOCUMENTS. The Company shall have
delivered to each Purchaser such other certificates, documents and agreements as
the Purchasers may reasonably request.

                  SECTION 3.17. PERSONAL PROPERTY REQUIREMENTS. The Agent shall
have received:

                  (a) all certificates, agreements or instruments representing
         or evidencing the Securities Collateral (other than those that are not
         required to be delivered by the Closing Time pursuant to Section 7.17)
         accompanied by instruments of transfer and stock powers undated and
         endorsed in blank;

                  (b) the Intercompany Note executed by and among the Company
         and each of its Subsidiaries (except the SPV), accompanied by
         instruments of transfer undated and endorsed in blank;



                                      -31-


                  (c) all other certificates, agreements, including control
         agreements, or instruments necessary to perfect the Agent's security
         interest in all Chattel Paper, all Instruments, all Deposit Accounts
         and all Investment Property of each Issuer (as each such term is
         defined in the Security Agreement and to the extent required by the
         Security Agreement);

                  (d) UCC financing statements in appropriate form for filing
         under the UCC, filings in appropriate form for filing with the United
         States Patent and Trademark Office and United States Copyright Office
         and such other documents under applicable Requirements of Law in each
         jurisdiction as may be necessary or appropriate or, in the opinion of
         the Agent, desirable to perfect the Liens created, or purported to be
         created, by the Security Documents (other than those that are not
         required to be delivered by the Closing Time pursuant to Section 7.17);

                  (e) certified copies of UCC, United States Patent and
         Trademark Office and United States Copyright Office, tax and judgment
         lien searches, bankruptcy and pending lawsuit searches or equivalent
         reports or searches, each of a recent date listing all effective
         financing statements, lien notices or comparable documents that name
         any Issuer as debtor and that are filed in those state and county
         jurisdictions in which any property of any Issuer is located and the
         state and county jurisdictions in which any Issuer is organized or
         maintains its principal place of business and such other searches that
         the Agent or the Required Holders deem necessary or appropriate, none
         of which encumber the Collateral covered or intended to be covered by
         the Security Documents (other than Permitted Collateral Liens or any
         other Liens acceptable to the Agent); and

                  (f) evidence acceptable to the Agent of payment or
         arrangements for payment by the Issuers of all applicable recording
         taxes, fees, charges, costs and expenses required for the recording of
         the Security Documents (other than those that are not required to be
         delivered by the Closing Time pursuant to Section 7.17).

                  SECTION 3.18. INSURANCE. The Agent shall have received a copy
of, or a certificate as to coverage under, the insurance policies required by
Section 7.07 and the applicable provisions of the Security Documents (other than
those that are not required to be delivered by the Closing Time pursuant to
Section 7.17), each of which shall be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable or mortgagee endorsement (as
applicable) and shall name the Agent, on behalf of the Secured Parties, as
additional insured, in form and substance satisfactory to the Agent and the
Required Holders.

                                   SECTION 4

                  REPRESENTATIONS AND WARRANTIES OF THE ISSUERS


                  Each Issuer, acting jointly and severally, represents and
warrants to each Purchaser as of the date hereof and as of the Closing Time
that:



                                      -32-


                  SECTION 4.01. DUE INCORPORATION; POWER AND AUTHORITY. Each of
the Company and each of its Subsidiaries (a) is a corporation or limited
liability company duly incorporated or formed, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, other than any
failures to so qualify or to be in good standing which, individually or in the
aggregate, have not had and would not have a Material Adverse Effect, (c) has
all requisite corporate power and authority to own, lease and operate its
properties and to conduct its businesses as they are currently conducted, and
(d) has all requisite corporate power and authority to enter into and perform
its obligations under each of the Transaction Documents to which it is a party.

                  SECTION 4.02. CAPITALIZATION. As of the date of this Agreement
the authorized Capital Stock of the Company consists solely of 600,000,000
shares of its Common Stock, of which 351,394,737 shares were issued and
outstanding, 20 shares of its Series G Preferred Stock, all of which were issued
and outstanding, 5,882 shares of its Series H Preferred Stock, all of which were
issued and outstanding, and 600 shares of its Series I Preferred Stock, all of
which were issued and outstanding. Except as provided on SCHEDULE 4.02, no
shares of the Common Stock of the Company were held by the Company in its
treasury or by the Company's Subsidiaries. Except as set forth on SCHEDULE 4.02,
since the Audit Date, the Company (i) has not issued any shares of any class of
its Capital Stock and (ii) has not split, combined or reclassified any of its
shares of any class of its Capital Stock. All the issued and outstanding shares
of Common Stock (including the Shares and all shares of Common Stock to be
issued upon exercise of the Warrants) have been duly authorized and are (or in
the case of the Shares and Common Stock issued upon exercise of the Warrants,
will be) validly issued, fully paid and nonassessable and are (or in the case of
the Shares and Common Stock issued upon exercise of the Warrants, will be) free
of preemptive rights. The Company has duly reserved for issuance a sufficient
number of shares of Common Stock for issuance upon exercise of the Warrants at
the initial exercise rate thereof. Except as set forth on SCHEDULE 4.02, there
are no securities of the Company or any of its Subsidiaries that are convertible
into or exchangeable for shares of any Capital Stock of the Company or any of
its Subsidiaries, and no options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments which obligate the
Company or any of its Subsidiaries to issue, transfer or sell any shares of
Capital Stock of, or other interests in, the Company or any of its Subsidiaries.
Except as set forth on SCHEDULE 4.02, there are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of Capital Stock of the Company or any of its Subsidiaries
and neither the Company nor any of its Subsidiaries has any awards or options
outstanding under any stock option plans or agreements or any other outstanding
stock-related awards. Except as set forth on SCHEDULE 4.02, after the Closing
Time, neither the Company nor any of its Subsidiaries will have any obligation
to issue, transfer or sell any shares of Capital Stock of the Company or its
Subsidiaries. Except as set forth on SCHEDULE 4.02, there are no voting trusts
or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the holding, voting or disposing of
Capital Stock of the Company or any of its Subsidiaries. Except as set forth on
SCHEDULE 4.02, as of the date hereof, neither the Company nor any of its
Subsidiaries has any outstanding bonds, debentures, notes or other obligations
or other securities (other than the Common Stock) that entitle the holders


                                      -33-


thereof to vote with the stockholders of the Company or any of its Subsidiaries
on any matter or which are convertible into or exercisable for securities having
such a right to vote.

                  SECTION 4.03. EQUITY INTERESTS AND SUBSIDIARIES.

                  (a) EQUITY INTERESTS. SCHEDULES 1(A) and 10(A) to the
Perfection Certificate dated the Closing Time set forth a list of (i) all the
Subsidiaries of the Company and their jurisdictions of organization as of the
Closing Time and (ii) the number of each class of its Capital Stock authorized,
and the number outstanding, at the Closing Time and the number of shares covered
by all outstanding options, warrants, rights of conversion or purchase and
similar rights at the Closing Time. Except as set forth on SCHEDULE 4.03(A), all
outstanding shares of Capital Stock of each Subsidiary of the Company are duly
and validly issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through Wholly Owned Subsidiaries. Except as set
forth on SCHEDULE 4.03(A), each Issuer is the record and beneficial owner of,
and has good and marketable title to, the Capital Stock pledged by it under the
Security Agreement, free of any and all Liens, rights or claims of other
persons, except the security interest created by the Security Agreement, and
there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any
such Capital Stock.

                  (b) NO CONSENT OF THIRD PARTIES REQUIRED. Except as set forth
on SCHEDULE 4.03(B), no consent of any person including any other general or
limited partner, any other member of a limited liability company, any other
shareholder or any other trust beneficiary is necessary (from the perspective of
a secured party) in connection with the creation, perfection or first priority
status of the security interest of the Agent in any Capital Stock pledged to the
Agent for the benefit of the Secured Parties under the Security Agreement or the
exercise by the Agent of the voting or other rights provided for in the Security
Agreement or the exercise of remedies in respect thereof.

                  SECTION 4.04. DUE AUTHORIZATION, EXECUTION AND DELIVERY.

                  (a) AGREEMENT. This Agreement has been duly authorized,
executed and delivered by each Issuer and constitutes a valid and legally
binding obligation of each Issuer, enforceable against such Issuer in accordance
with its terms, subject to the Enforceability Exceptions.

                  (b) NOTES AND SUBSIDIARY GUARANTEES. The Notes to be purchased
by the Purchasers from the Company are in the form contemplated by this
Agreement, have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company at the Closing Time as
provided herein, will have been duly executed, issued and delivered by the
Company, and will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions. The Subsidiary Guarantees endorsed on the
Notes are in the form contemplated by this Agreement, have each been duly
authorized for issuance pursuant to this Agreement by each of the Guarantors
and, when the Notes are executed by the Company, and delivered to the Purchasers
as provided for herein, will have been duly executed, issued and delivered and
will constitute valid and legally binding obligations of the Guarantors,


                                      -34-


enforceable against the Guarantors in accordance with their terms, subject to
the Enforceability Exceptions.

                  (c) WARRANTS. The Warrants to be purchased by the Purchasers
from the Company are in the form contemplated by this Agreement, have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company at the Closing Time as provided herein, will have been
duly executed, issued and delivered by the Company, and will constitute valid
and legally binding obligations of the Company, enforceable against the Company
it in accordance with their terms, subject to the Enforceability Exceptions.

                  (d) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to the Enforceability
Exceptions.

                  (e) OTHER TRANSACTION DOCUMENTS. Each Transaction Document
(other than those referred to in paragraphs (a) through (d) of this Section 4.04
and other than those that are not required to be delivered by the Closing Time
pursuant to Section 7.17) to which any Issuer or any of its respective
Subsidiaries is a party (each such party, a "COMPANY PARTY") (i) has been duly
authorized, executed and delivered by each Company Party and (ii) constitutes a
valid and legally binding obligation of each Company Party, enforceable against
such Company Party in accordance with its terms, subject to the Enforceability
Exceptions.

                  SECTION 4.05. NON-CONTRAVENTION; AUTHORIZATIONS AND APPROVALS.
Except as set forth on SCHEDULE 4.05, neither the Company nor any of its
Subsidiaries is (i) in violation of its certificate of incorporation or bylaws
(or comparable constituent or governing documents) or (ii) in default (or, with
the giving of notice, lapse of time or both, would be in default) under any
note, bond, mortgage, indenture, deed of trust, loan or credit agreement,
license, franchise, Permit, lease, contract or other agreement, instrument,
commitment or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of its
properties or assets is bound (including, without limitation, the SPV Financing
Agreement), or under which the Company or any of its Subsidiaries or any of its
properties or assets is entitled to a benefit (each, a "Contract"), except for
any such defaults that, individually or in the aggregate, have not had and would
not have a Material Adverse Effect. Except as set forth on SCHEDULE 4.05, none
of (a) the execution and delivery by the Company or any of its Subsidiaries of
any of the Transaction Documents to which it is a party, (b) the performance by
any of them of their respective obligations thereunder, (c) the consummation of
the transactions contemplated thereby or (d) the issuance and delivery of the
Purchased Securities hereunder will: (i) violate, conflict with or result in a
breach of any provisions of the certificate of incorporation or bylaws (or
comparable constituent or governing documents) of the Company or any of its
Subsidiaries; (ii) violate, conflict with, result in a breach of any provision
of, constitute a default (or an event which, with notice, lapse of time or both,
would constitute a default) under, result in the termination or in a right of
termination of, accelerate the performance required by or benefit obtainable
under, result in the triggering of any payment or other obligations (including
any repurchase or repayment obligations) pursuant to, result in the creation of
any Lien upon any of the properties of the Company or any of its Subsidiaries
under, or result in their being declared void, voidable, subject to withdrawal,
or without further binding effect, any of the terms, conditions or provisions of
any Contract, except for any such violations, conflicts, breaches, defaults,
accelerations, terminations or other matters which, individually or in the


                                      -35-


aggregate, have not had and would not have a Material Adverse Effect; (iii)
require any consent, approval or authorization of, or declaration, filing or
registration with, any Governmental Authority, except for those consents,
approvals, authorizations, declarations, filings or registrations which have
been obtained or made or the failure of which to obtain or make, individually or
in the aggregate, have not had and would not have a Material Adverse Effect; or
(iv) violate any Applicable Laws applicable to the Company, any of its
Subsidiaries or any of their respective properties or assets, except for
violations which, individually or in the aggregate, have not had and would not
have a Material Adverse Effect.

                  SECTION 4.06. COMPANY FINANCIAL STATEMENTS; COMPANY REPORTS.

                  (a) COMPANY FINANCIAL STATEMENTS. The Company has delivered to
the Purchasers (collectively, the "COMPANY FINANCIAL STATEMENTS") (i) complete
and correct copies of the audited consolidated balance sheets of the Company and
its Subsidiaries as of March 31, 2004, 2003 and 2002 and the related audited
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended, including the footnotes thereto, certified by the
Company's independent certified public accountants, (ii) complete and correct
copies of the unaudited consolidated balance sheets of the Company and its
Subsidiaries as of June 30, 2004 and September 30, 2004 and the related
unaudited consolidated statements of operations, stockholders' equity and cash
flows for the quarter then ended, and (iii) complete and correct copies of the
unaudited consolidated PRO FORMA balance sheet of the Company and its
Subsidiaries as of September 30, 2004, and the unaudited PRO FORMA consolidated
statements of operations for the year ended March 31, 2004 and the six months
ended September 30, 2004. Each of the consolidated balance sheets contained in
the Company Financial Statements fairly presents the consolidated financial
position of the Company and its Subsidiaries as of its date and each of the
consolidated statements of operations, stockholders' equity and cash flows
included in the Company Financial Statements fairly presents the consolidated
results of operations and income, retained earnings and stockholders' equity or
cash flows, as the case may be, of the Company and its Subsidiaries for the
periods to which they relate (subject, in the case of any unaudited interim
financial statements, to normal year-end adjustments that will not be material
in amount or effect), in each case in accordance with GAAP applied on a
consistent basis during the periods involved, except as noted therein. The PRO
FORMA financial statements of the Company and its Subsidiaries contained in the
Company Financial Statements have been prepared in accordance with the
Commission's rules and guidelines with respect to PRO FORMA financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the Transactions. All projections
provided by the Company to the Purchasers in connection with the Transactions
have been prepared in good faith based on assumptions believed by management of
the Company to be reasonable and subject to the reservations stated therein.
Attached hereto as SCHEDULE 4.06 are true, correct and complete copies of the
Company Financial Statements and all projections delivered to the Purchasers at
or prior to the Closing Time.



                                      -36-


                  (b) COMPANY REPORTS. The Company has made available (including
being made available on EDGAR) to the Purchasers each registration statement,
report or information statement prepared by the Company since March 31, 2004
(the "AUDIT DATE"), including (i) the Company's Annual Report on Form 10-K for
the year ended March 31, 2004, (ii) the Company's Quarterly Reports on Form 10-Q
for the quarters ended June 30, 2004 and September 30, 2004, and (iii) the
Registration Statement on Form S-1 declared effective on December 21, 2004, each
in the form (including exhibits, annexes and any amendments thereto) filed with
the Commission (collectively, including any such reports filed subsequent to the
date hereof and as amended, the "COMPANY REPORTS"). As of their respective dates
(or, if amended, as of the date of such amendment) the Company Reports did not,
and any Company Reports filed with the Commission subsequent to the date hereof
will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made, not
misleading. Each of the consolidated balance sheets included in or incorporated
by reference into the Company Reports (including the related notes and
schedules) fairly presents, or will fairly present, the consolidated financial
position of the Company and its Subsidiaries as of its date and each of the
consolidated statements of operations, stockholders' equity or cash flows
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents, or will fairly present, the
results of operations and income, retained earnings and stockholders' equity or
cash flows, as the case may be, of the Company and its Subsidiaries for the
periods to which they relate (subject, in the case of unaudited statements, to
normal year-end audit adjustments that will not be material in amount or
effect), in each case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein.

                  SECTION 4.07. ABSENCE OF UNDISCLOSED LIABILITIES OR EVENTS.

                  (a) Except as set forth in SCHEDULE 4.07(A), neither the
Company nor any of its Subsidiaries has any liabilities or obligations, whether
accrued, contingent or otherwise, except for (i) liabilities and obligations in
the respective amounts reflected or reserved against in the consolidated balance
sheet as of the Audit Date included in the Company Financial Statements or
liabilities and obligations not required to be disclosed in the consolidated
balance sheet in accordance with GAAP, (ii) the Existing Convertible Notes or
(iii) liabilities and obligations incurred in the ordinary course of business
since the Audit Date which, individually or in the aggregate, have not had and
would not have a Material Adverse Effect.

                  (b) Except as set forth in SCHEDULE 4.07(B), (i) since the
Audit Date there has been no change in the business, management, operations,
affairs, condition (financial or otherwise), assets, property, prospects or
results of operations of the Company or its Subsidiaries except for changes
that, individually or in the aggregate, have not had or would not have a
Material Adverse Effect and (ii) there are no facts known to the Company that
have had or would have a Material Adverse Effect that have not been set forth
herein or in the Disclosure Schedule.

                  SECTION 4.08. NO ACTIONS OR PROCEEDINGS. Except as set forth
in SCHEDULE 4.08, there are no legal or governmental actions, suits or
proceedings pending or, to the best of each Issuer's knowledge, threatened
against or affecting the Company, any of its Subsidiaries, any of their


                                      -37-


respective directors or officers (in their capacities as such) or any of their
respective properties or assets which, individually or in the aggregate, have
had or would have a Material Adverse Effect or prohibit, delay or materially
restrict the consummation of any of the Transactions or the other transactions
contemplated by this Agreement and the other Transaction Documents. To the
knowledge of each Issuer, no Governmental Authority has notified the Company or
any of its Subsidiaries of an intention to conduct any audit, investigation or
other review with respect to the Company or any of its Subsidiaries, except for
those investigations or reviews which, individually or in the aggregate, have
not had or would not have a Material Adverse Effect.

                  SECTION 4.09. PROPERTIES.

                  (a) GENERALLY. Each of the Company and its Subsidiaries has
good title to, or valid leasehold interests in, all its property material to its
business, free and clear of all Liens except for, in the case of Collateral,
Permitted Collateral Liens and, in the case of all other material property,
Permitted Liens and minor irregularities or deficiencies in title that,
individually or in the aggregate, do not interfere with its ability to conduct
its business as currently conducted or to utilize such property for its intended
purpose. The property of the Company and its Subsidiaries, taken as a whole, (i)
is in good operating order, condition and repair (ordinary wear and tear
excepted) and (ii) constitutes all the property which is required for the
business and operations of the Company and its Subsidiaries as presently
conducted.(a)

                  (b) REAL PROPERTY. SCHEDULES 8(A) and 8(B) to the Perfection
Certificate dated the Closing Time contain a true and complete list of each
interest in Real Property (i) owned by the Company or any of its Subsidiaries
(except the SPV) as of the date hereof and describe the type of interest therein
held by the Company or such Subsidiary and whether owned Real Property is leased
and if leased whether the underlying Lease contains any option to purchase all
or any portion of such Real Property or any interest therein or contains any
right of first refusal relating to any sale of such Real Property or any portion
thereof or interest therein and (ii) leased, subleased or otherwise occupied or
utilized by the Company or such Subsidiary, as lessee, sublessee, franchisee or
licensee, as of the date hereof and describe the type of interest therein held
by the Company or such Subsidiary and whether any Lease requires the consent of
the landlord or tenant thereunder, or other party thereto, to the Transactions.

                  (c) NO CASUALTY EVENT. Neither the Company nor any of its
Subsidiaries has received any notice of, nor has any knowledge of, the
occurrence or pendency or contemplation of any Casualty Event affecting all or
any portion of its property. Except as noted on SCHEDULE 4.09(C), no Mortgage
encumbers improved Real Property that is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards within the meaning of the National Flood Insurance Act of
1968 unless flood insurance available under such Act has been obtained in
accordance with Section 7.07.

                  (d) COLLATERAL. The Company and each of its Subsidiaries owns
or has rights to use all of the Collateral and all rights with respect to any of
the foregoing used in, necessary for or material to the Company's or such
Subsidiary's business as currently conducted. The use by the Company and each of
its Subsidiaries of such Collateral and all such rights with respect to the


                                      -38-


foregoing do not infringe on the rights of any Person other than such
infringement which could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. No claim has been made and
remains outstanding that the Company's or any Subsidiary's use of any Collateral
does or may violate the rights of any third party that could, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

                  SECTION 4.10. INTELLECTUAL PROPERTY.

                  (a) OWNERSHIP/NO CLAIMS. Each of the Company and its
Subsidiaries owns, or is licensed to use, all patents, patent applications,
trademarks, trade names, servicemarks, copyrights, technology, trade secrets,
proprietary information, domain names, know-how and processes necessary for the
conduct of its business as currently conducted (the "INTELLECTUAL PROPERTY"),
except for those the failure to own or license which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Except as set forth on SCHEDULE 4.10(A), no claim has been asserted and
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Company or any of the other Issuers know of any valid
basis for any such claim. The use of such Intellectual Property by the Company
or any of its Subsidiaries does not to the knowledge of the Company and its
Subsidiaries infringe the rights of any Person, except for such claims and
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

                  (b) REGISTRATIONS. Except pursuant to licenses and other user
agreements entered into by the Company or any of its Subsidiaries in the
ordinary course of business that are listed in SCHEDULE 12(A) or 12(B) to the
Perfection Certificate, on and as of the date hereof (i) each of the Company and
its Subsidiaries owns and possesses the right to use, and has done nothing to
authorize or enable any other person to use, any copyright, patent or trademark
(as such terms are defined in the Security Agreement) listed in SCHEDULE 12(A)
or 12(B) to the Perfection Certificate and (ii) all registrations listed in
SCHEDULE 12(A) or 12(B) to the Perfection Certificate are valid and in full
force and effect.

                  (c) NO VIOLATIONS OR PROCEEDINGS. To each of the Issuers'
knowledge, on and as of the date hereof, there is no material violation by
others of any right of the Company or any of its Subsidiaries with respect to
any copyright, patent or trademark listed in SCHEDULE 12(A) or 12(B) to the
Perfection Certificate, pledged by it under the name of such Issuer except as
may be set forth on SCHEDULE 4.10(C).

                  SECTION 4.11. TAXES. Except as set forth in SCHEDULE 4.11:

                  (a) all Tax Returns that are required to be filed at or before
         the Closing Time by or with respect to the Company or any of its
         Subsidiaries, have been or will be timely filed at or before the
         Closing Time, and all such Tax Returns are or will be true and complete
         in all material respects;

                  (b) all Taxes shown to be due on the Tax Returns referred to
         in clause (a) and all other material Taxes due and payable through the
         Closing Time have been or will be timely paid in full;



                                      -39-


                  (c) adequate provision has been made (or prior to the Closing
         Time will be made) for the payment of Taxes for which the Company or
         any of its Subsidiaries may be liable that are due and payable after
         the Closing Time and which relate to periods (or portions thereof)
         ending prior to the Closing Time;

                  (d) no examination or audit of any Tax Return is ongoing. No
         legal proceeding relating to such Tax Returns is pending or, to the
         knowledge of the Company, is being threatened by any relevant taxing
         authority against the Company or any Subsidiary in respect of any
         material Tax. There are no material unsatisfied liabilities for Taxes
         with respect to any notice of deficiency or similar document received
         by the Company or any Subsidiary with respect to any material Tax
         (other than liabilities for Taxes asserted under any such notice of
         deficiency or similar documents which are being contested in good faith
         and with respect to which adequate reserves for payment have been
         established in accordance with GAAP);

                  (e) no waivers of statutes of limitation have been given by or
         requested with respect to any Taxes of the Company or any of its
         Subsidiaries;

                  (f) none of the Company or any of its Subsidiaries will be
         required, as a result of (i) a change in accounting method to include
         any adjustment under Section 481 of the Code (or any similar provision
         of state, local or foreign law) in taxable income for any Tax period
         ending at or after the Closing Time, (ii) any "closing agreement" as
         described in Section 7121 of the Code (or any similar provision of
         state, local or foreign Tax law) or (iii) any installment sale, receipt
         of prepaid income or open transaction, to include any item of income in
         or exclude any item of deduction from any Tax period ending at or after
         the Closing Time;

                  (g) there are no Liens on any of the assets of the Company or
         any of its Subsidiaries that arose in connection with any failure (or
         alleged failure) to pay any Tax;

                  (h) neither the Company nor any of its Subsidiaries has ever
         been a member of an affiliated, combined, consolidated or unitary Tax
         group for purposes of filing any Tax Return, other than a group of
         which the Company or one of its Subsidiaries is or was the common
         parent;

                  (i) no closing agreements, private letter rulings, technical
         advance memoranda or similar agreement or rulings have been entered
         into or issued by any taxing authority with respect to the Company or
         any of its Subsidiaries;

                  (j) neither the Company nor any of its Subsidiaries or any
         predecessors to any of such entities has made any consent under Section
         341 of the Code with respect to such Issuer or any such Subsidiary;

                  (k) the Company and each of its Subsidiaries has complied in
         all material respects with its withholding obligations in respect of
         Taxes; and



                                      -40-


                  (l) neither the Company nor any of its Subsidiaries has
         participated in any "reportable transaction" within the meaning of
         Treasury Regulation Section 1.6011-4 (or any predecessor regulation) or
         any "confidential corporate tax shelter" within the meaning of Treasury
         Regulation Section 301.6111-2 (or any predecessor regulation).

                  SECTION 4.12. EMPLOYEE BENEFIT PLANS. Except as set forth on
SCHEDULE 4.12,

                  (a) there has been no failure by any employee benefit plan,
         within the meaning of Section 3(3) of the Employee Retirement Income
         Security Act of 1974, as amended ("ERISA"), which is maintained by the
         Company or any of its Subsidiaries or to which the Company or any of
         its Subsidiaries contributes (each a "PLAN") to comply with the
         applicable requirements of ERISA and the Code other than any such
         failures that, individually or in the aggregate, have not had and would
         not have a Material Adverse Effect. There is no material pending or, to
         the knowledge of any Issuer threatened, litigation relating to the
         Plans. Neither the Company nor any of its Subsidiaries has engaged in a
         transaction with respect to any Plan that, assuming the taxable period
         of such transaction expired as of the date hereof, could subject the
         Company or any of its Subsidiaries to a tax or penalty imposed by
         either Section 4975 of the Code or Section 502(i) of ERISA other than
         those that, individually or in the aggregate, have not had and would
         not have a Material Adverse Effect;

                  (b) no liability under Subtitle C or D of Title IV of ERISA
         has been or is expected to be incurred by the Company or any of its
         Subsidiaries with respect to any ongoing, frozen or terminated
         "single-employer plan," within the meaning of Section 4001 (a)(15) of
         ERISA, currently or formerly maintained by any of them, or the
         single-employer plan of any entity which is considered one employer
         with the Company under Section 4001 of ERISA or Section 414 of the Code
         (an "ERISA AFFILIATE"). Neither the Company, any of its Subsidiaries
         nor an ERISA Affiliate has contributed to a Multiemployer Plan, at any
         time on or after September 26, 1980. No notice of a "reportable event,"
         within the meaning of Section 4043 of ERISA for which the 30-day
         reporting requirement has not been waived, has been required to be
         filed for any Plan which is an "employee pension benefit plan" within
         the meaning of Section 3(2) of ERISA ("PENSION PLAN") or by any ERISA
         Affiliate within the 12-month period ending on the date hereof;

                  (c) neither any Pension Plan nor any single-employer plan of
         an ERISA Affiliate has an "accumulated funding deficiency" (whether or
         not waived) within the meaning of Section 412 of the Code or Section
         302 of ERISA and no ERISA Affiliate has an outstanding funding waiver.
         Neither the Company nor any of its Subsidiaries has provided, or is
         required to provide, security to any Pension Plan or to any
         single-employer plan of an ERISA Affiliate pursuant to Section
         401(a)(29) of the Code;

                  (d) under each Pension Plan which is a single-employer plan,
         as of the last day of the most recent plan year ended prior to the date
         hereof, the actuarially determined present value of all "benefit
         liabilities," within the meaning of Section 4001(a)(16) of ERISA (as


                                      -41-


         determined on the basis of the actuarial assumptions contained in the
         Plan's most recent actuarial valuation), did not exceed the then
         current value of the assets of such Plan, and there has been no
         material change in the financial condition of such Plan since the last
         day of the most recent plan year; and

                  (e) neither the Company nor any of its Subsidiaries has any
         obligations for retiree health and life benefits under any Plan, except
         as required by applicable law. The Company or the Subsidiaries, as
         applicable, may amend or terminate any such Plan at any time without
         incurring any liability thereunder.

        SECTION 4.13. PRIVATE OFFERING; NO INTEGRATION OR GENERAL SOLICITATION.

                  (a) Subject to compliance by the Purchasers with the
         representations and warranties set forth in Section 5 hereof, it is not
         necessary in connection with the offer, sale and delivery of the
         Purchased Securities to the Purchasers in the manner contemplated by
         this Agreement to register the Securities under the Securities Act.

                  (b) No Issuer has, directly or indirectly, offered, sold or
         solicited any offer to buy, and no Issuer will, directly or indirectly,
         offer, sell or solicit any offer to buy, any security of a type or in a
         manner which would be integrated with the sale of the Securities and
         require the Securities to be registered under the Securities Act. None
         of the Company, its Affiliates or any person acting on its or any of
         their behalf (other than the Purchasers, as to whom the Issuers make no
         representation or warranty) has engaged or will engage in any form of
         general solicitation or general advertising (within the meaning of Rule
         502(c) under the Securities Act) in connection with the offering of the
         Purchased Securities.

                  SECTION 4.14. ELIGIBILITY FOR RESALE UNDER RULE 144A. The
Notes are eligible for resale pursuant to Rule 144A and will not, at the Closing
Time, be of the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted on a U.S.
automated interdealer quotation system.

                  SECTION 4.15. STATUS UNDER CERTAIN STATUTES. Neither the
Company nor any of its Subsidiaries is or, after receipt of payment for the
Securities and the consummation of the other transactions contemplated by the
Transaction Documents, will be (a) subject to regulation under the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"), the Federal Power Act
or the Interstate Commerce Act, each as amended, (b) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company, or (c) a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company," within the
meaning of PUHCA.

                  SECTION 4.16. INSURANCE. Each of the Company and its
Subsidiaries is insured by financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate for their businesses including, but not limited to, policies
covering real and personal property owned or leased by the Company and its
Subsidiaries against theft, damage, destruction and acts of vandalism.



                                      -42-


                  SECTION 4.17. USE OF PROCEEDS; MARGIN REGULATIONS. The Company
will apply approximately $30.4 million of proceeds from the sale of the
Purchased Securities to the purchase price for the Acquisition, approximately
$1.6 million to pay fees and expenses relating to the Transactions and will at
the Closing Time deposit approximately $9.5 million into an account for which a
Control Agreement (as defined in the Security Agreement) has been delivered to
the Agent in accordance with the Security Agreement which funds will be
available for general working capital purposes. No part of the proceeds from the
sale of the Purchased Securities hereunder will be used, directly or indirectly,
for the purpose of buying or carrying any margin stock within the meaning of
Regulation U, or for the purpose of buying or carrying or trading in any
securities. Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company has no
present intention that margin stock will constitute more than 5% of the value of
such assets. As used in this Section, the terms "margin stock" and "purpose of
buying or carrying" shall have the meanings assigned to them in Regulation U.

                  SECTION 4.18. EXISTING INDEBTEDNESS; FUTURE LIENS. SCHEDULE
4.18 sets forth a complete and correct list of all Indebtedness of the Company
and its Subsidiaries that will be outstanding immediately after the consummation
of the Transactions except for any such Indebtedness not so scheduled which, in
the aggregate, does not exceed $50,000. Neither the Company nor any Subsidiary
of the Company is in default, and no waiver of default is currently in effect,
in the payment of the principal of or interest on any Indebtedness of the
Company or such Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary of the Company that would permit
(or that with notice, lapse of time or both, would permit) any Person to cause
such Indebtedness to become due and payable before its Stated Maturity or before
its regularly scheduled dates of payment. Neither the Company nor any of its
Subsidiaries has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property or assets, whether
now owned or hereafter acquired, to be subject to a Lien that would be
prohibited by this Agreement if incurred after the first issuance of Notes.

                  SECTION 4.19. COMPLIANCE WITH LAWS; PERMITS; ENVIRONMENTAL
MATTERS. Except as provided in SCHEDULE 4.19, (a) each of the Company and each
of its Subsidiaries has complied, and is in compliance, in all material respects
with all Applicable Laws and has all Permits material to, and necessary in, the
conduct of its business as currently conducted and all such Permits are in full
force and effect, (b) no violations have been recorded in respect of any such
Permits, and no proceeding is pending or, to the best knowledge of the Issuers,
threatened to revoke or limit any Permit, except for violations and proceedings
which, individually or in the aggregate, have not and would not have a Material
Adverse Effect, (c) all past Environmental Actions against the Company or any of
its Subsidiaries or any of their properties have been resolved without ongoing
obligations or costs, and no circumstances exist that could (i) form the basis
of an Environmental Action against the Company or any of its Subsidiaries or any
of their properties or (ii) cause any such properties to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law, (d) (i) none of the properties currently or, to the knowledge
of the Issuers without inquiry, formerly owned or operated by the Company or any
of its Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any such
property, (ii) there are no and, to the knowledge of the Issuers without
inquiry, never have been any underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being or have been treated, stored or disposed of on any property


                                      -43-


currently owned or operated by the Company or any of its Subsidiaries or, to the
best knowledge of the Issuers without inquiry, on any property formerly owned or
operated by the Company or any of its Subsidiaries, (iii) to the best knowledge
of the Issuers without inquiry, there is no asbestos or asbestos-containing
material on any property currently owned or operated by the Company or any of
its Subsidiaries, and (iv) Hazardous Materials have not been released,
discharged or disposed of on any property currently or, to the best knowledge of
the Issuers without inquiry, formerly owned or operated by the Company or any of
its Subsidiaries, and (e) all Hazardous Materials transported to or from any
property currently or, to the best knowledge of the Issuers without inquiry,
formerly owned or operated by the Company or any of its Subsidiaries have been
disposed of in a manner not expected to result in any liability to the Company
or any of its Subsidiaries. SCHEDULE 4.19 sets forth a list of all such Permits
and the expiration dates thereof.

                  SECTION 4.20. SOLVENCY. The Company and its Subsidiaries are,
and after giving effect to the Transactions will be, Solvent.

                  SECTION 4.21. AFFILIATE TRANSACTIONS. Except as disclosed in
SCHEDULE 4.21(A) or, with respect to transactions occurring at or after the
Closing Time, as permitted by Section 8.06 hereof: (a) there is no Indebtedness
between the Company or any of its Subsidiaries, on the one hand, and any
officer, stockholder, director or Affiliate (other than the Company or any of
its Subsidiaries) of the Company, on the other, (b) no such officer,
stockholder, director or Affiliate provides or causes to be provided any assets,
services or facilities to the Company or any of its Subsidiaries which,
individually or in the aggregate, are material to the business, management,
operations, affairs, condition (financial or otherwise), assets, property,
prospects or results of operations of the Company and its Subsidiaries, (c)
neither the Company nor any of its Subsidiaries provides or causes to be
provided any assets, services, or facilities to any such officer, stockholder,
director or Affiliate which, individually or in the aggregate, are material to
the business, management, operations, affairs, condition (financial or
otherwise), assets, property, prospects or results of operations of the Company
and its Subsidiaries, (d) neither the Company nor any Subsidiary beneficially
owns, directly or indirectly, any investment in or issued by any such officer,
director or Affiliate, and (e) no such officer, stockholder, director or
Affiliate has any direct or indirect ownership interest in any Person with which
the Company or any of its Subsidiaries competes or has a business relationship.

                  SECTION 4.22. MATERIAL CONTRACTS. SCHEDULE 4.22 contains a
true, correct and complete list of all Material Contracts in effect at the
Closing Time. Except as described on SCHEDULE 4.22, as of the Closing Time (a)
each Material Contract is in full force and effect and no material defaults
enforceable against the Company or any of its Subsidiaries currently exist
thereunder and (b) neither the Company nor any of its Subsidiaries has received
any written notice or other communication regarding any actual or possible
violation or breach of, or default under, any Material Contract. To the best
knowledge of the Company and its Subsidiaries, no party to any Material Contract
is currently in default under, or intends to terminate, such Material Contract.



                                      -44-


                  SECTION 4.23. NO CHANGES TO APPLICABLE LAW. To the best
knowledge of the Issuers, no changes to Applicable Law affecting the Company or
any of its Subsidiaries have occurred since the Audit Date or are currently
pending or threatened, in each case other than those which have not had and
would not reasonably be expected to have a Material Adverse Effect and other
than the currently proposed changes to GAAP for accounting of employee stock
option consideration.

                  SECTION 4.24. INDEBTEDNESS. At the Closing Time, after
consummation of the Transactions, the consolidated Indebtedness of the Company
and its Subsidiaries will not exceed $140.0 million.

                  SECTION 4.25. FEES. All fees and other expenses payable in
connection with the consummation of the Transactions by the Company or any of
its Subsidiaries are disclosed in SCHEDULE 4.25.

                  SECTION 4.26. BROKERAGE FEES. Except as disclosed in SCHEDULE
4.26, neither the Company nor any of its Subsidiaries has paid, or is obligated
to pay, to any Person any brokerage or finder's fees in connection with the
transactions contemplated hereby or by any other Transaction Documents.

                  SECTION 4.27. DOCUMENTS AND PROCEDURES. Except as disclosed on
SCHEDULE 4.27, the agreements, instruments and documents used and the procedures
followed by the Company and its Subsidiaries in the conduct of their business
are sufficient to effect the transactions purported to be effected by such
agreements, instruments and documents and to perfect the Liens or security
interests purported to be created by such agreements, instruments and documents,
except for failures to effect such transactions or perfect such security
interests which, individually or in the aggregate, would not have a Material
Adverse Effect.

                  SECTION 4.28. ABSENCE OF LABOR DISPUTE. Except as disclosed on
SCHEDULE 4.28, no labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the best knowledge of the Issuers, is imminent, and
no Issuer is aware of any existing or imminent labor disturbance by the
employees, principal suppliers, manufacturers, customers or contractors of the
Company or any of its Subsidiaries, which, in any case, would have a Material
Adverse Effect.

                  SECTION 4.29. NO UNRELATED LIABILITIES. As of the Closing
Time, neither the Company nor any of its Subsidiaries will have any liability
unrelated to the business or operations conducted by the Company and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has made, or will prior
to the Closing Time make, any payment with respect to any such liability.

                  SECTION 4.30. FULL DISCLOSURE. Each Issuer has disclosed to
the Purchasers all agreements, instruments and corporate or other restrictions
to which it is subject, and all other matters known to it, that, individually or
in the aggregate, could result in a Material Adverse Effect. None of the
representations or warranties made by any Issuer or any of its Affiliates in any
Transaction Document, and none of the statements contained in each exhibit,
report, statement, certificate or other information furnished by or on behalf of
any Issuer or any of its Affiliates to the Purchasers in connection with the


                                      -45-


purchase by the Purchasers of the Purchased Securities (including, without
limitation, any offering and disclosure materials delivered by or on behalf of
any Issuer to any Purchaser prior to the Closing Time) or delivered hereunder
(as modified or supplemented by other information so furnished) contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.

                  SECTION 4.31. ASSETS CONTROL REGULATIONS AND ANTI-MONEY
LAUNDERING.

                  (a) OFAC. None of the Company or any of its Subsidiaries (i)
         is a person whose property or interest in property is blocked or
         subject to blocking pursuant to Section 1 of Executive Order 13224 of
         September 23, 2001 Blocking Property and Prohibiting Transactions With
         Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
         Reg. 49079 (2001)), (ii) engages in any dealings or transactions
         prohibited by Section 2 of such executive order, or is otherwise
         associated with any such person in any manner violative of Section 2,
         or (iii) is a person on the list of Specially Designated Nationals and
         Blocked Persons or subject to the limitations or prohibitions under any
         other U.S. Department of Treasury's Office of Foreign Assets Control
         regulation or executive order.

                  (b) PATRIOT ACT; FOREIGN CORRUPT PRACTICES ACT. The Company
         and each of its Subsidiaries is in compliance, in all material
         respects, with the Patriot Act. No part of the proceeds of the Notes
         will be used, directly or indirectly, for any payments to any
         governmental official or employee, political party, official of a
         political party, candidate for political office, or anyone else acting
         in an official capacity, in order to obtain, retain or direct business
         or obtain any improper advantage, in violation of the United States
         Foreign Corrupt Practices Act of 1977, as amended.

                  SECTION 4.32. CERTAIN OTHER REPRESENTATIONS AND WARRANTIES;
CONSUMMATION OF TRANSACTIONS.

                  (a) (i) Each of the representations and warranties contained
         in each of the other Transaction Documents made by the Issuers and
         their respective Affiliates is true and correct in all material
         respects (except that any representations and warranties that are
         qualified as to "materiality" or "Material Adverse Effect" shall be
         true and correct) when made and at and as of the Closing Time as if
         made at and as of the Closing Time (unless expressly stated to relate
         to a specific earlier date, in which case such representations and
         warranties shall be true and correct in all material respects (except
         that any representations and warranties that are qualified as to
         "materiality" or "Material Adverse Effect" shall be true and correct)
         as of such earlier date) and (ii) to the knowledge of the Issuers
         without obligation for inquiry, each of the representations and
         warranties contained in the other Transaction Agreements made by
         Persons other than the Issuers and their Affiliates is true and correct
         in all material respects (except that any representations and
         warranties that are qualified as to "materiality" or "Material Adverse
         Effect" shall be true and correct). The Issuers agree that, by this
         reference, such representations and warranties contained in the other
         Transaction Documents delivered by any Issuer, without limiting any of
         the representations and warranties otherwise contained herein, hereby
         are incorporated herein, MUTATIS MUTANDIS, for the benefit of the
         Purchasers.



                                      -46-


                  (b) All conditions precedent to the other Transaction
         Documents other than those that are not required to be delivered by the
         Closing Time pursuant to Section 7.17 (other than conditions related to
         this Agreement) have been fulfilled or (with the prior written consent
         of the Purchasers) waived, the other Transaction Documents have not
         been amended or otherwise modified from the executed copies (or latest
         drafts received by the Purchasers in the case of draft documents), and
         there has been no breach of any material term or condition of the other
         Transaction Documents.

        SECTION 4.33. SECURITY DOCUMENTS.

                  (a) SECURITY AGREEMENT. The Security Agreement is effective to
         create in favor of the Agent for the benefit of the Secured Parties,
         legal, valid and enforceable Liens on, and security interests in, the
         Security Agreement Collateral and, when (i) financing statements and
         other filings in appropriate form are filed in the offices specified on
         SCHEDULE 7 to the Perfection Certificate and (ii) upon the taking of
         possession or control by the Agent of the Security Agreement Collateral
         with respect to which a security interest may be perfected only by
         possession or control (which possession or control shall be given to
         the Agent to the extent possession or control by the Agent is required
         by each Security Agreement), the Liens created by the Security
         Agreement shall constitute fully perfected Liens on, and security
         interests in, all right, title and interest of the grantors thereunder
         in the Security Agreement Collateral (other than such Security
         Agreement Collateral in which a security interest cannot be perfected
         under the UCC as in effect at the relevant time in the relevant
         jurisdiction), in each case subject to no Liens other than Permitted
         Collateral Liens.

                  (b) COPYRIGHT OFFICE FILING. When the Security Agreement or a
         short form thereof is filed in the United States Copyright Office, the
         Liens created by such Security Agreement shall constitute fully
         perfected Liens on, and security interests in, all right, title and
         interest of the grantors thereunder in the Registered Copyrights and
         Registered Copyright Licenses (each as defined in such Security
         Agreement), in each case subject to no Liens other than Permitted
         Collateral Liens.

                  (c) VALID LIENS. Each Security Document delivered pursuant to
         Sections 7.13 and 7.14 will, upon execution and delivery thereof, be
         effective to create in favor of the Agent, for the benefit of the
         Secured Parties, legal, valid and enforceable Liens on, and security
         interests in, all of the Issuers' right, title and interest in and to
         the Collateral thereunder, and when all appropriate filings or
         recordings are made in the appropriate offices as may be required under
         applicable law, such Security Document will constitute fully perfected
         Liens on, and security interests in, all right, title and interest of
         the Issuers in such Collateral, in each case subject to no Liens other
         than the applicable Permitted Collateral Liens.

                  SECTION 4.34. REAL PROPERTY HOLDING CORPORATION. The Company
is not and after giving effect to the application of the proceeds from the sale
of the Purchased Securities and the Transactions will not be a United States
Real Property Holding Corporation (a "USRPHC") within the meaning of Section
897(c)(2) the Code, and does not currently expect to become a USRPHC for the
foreseeable future.



                                      -47-


                  SECTION 4.35. ACTIVITIES OF CERTAIN SUBSIDIARIES. None of
Terremark Asia Company, Ltd., Terremark Latin America de Mexico or Terremark
Latin America de Argentina, SA is engaged in any business or business activity
other than the activities related to its existence. None of Terremark Asia
Company, Ltd., Terremark Latin America de Mexico or Terremark Latin America de
Argentina, SA has any assets, liabilities or obligations (other than the
liabilities imposed by law, including Tax and other liabilities related to its
existence).

                                   SECTION 5

                        REPRESENTATIONS OF THE PURCHASERS


                  Each Purchaser severally and not jointly represents and
warrants to the Issuers as of the date hereof and as of the Closing Time as
follows:

        SECTION 5.01. PURCHASE FOR INVESTMENT.

                  (a) Such Purchaser is acquiring the Securities for its own
         account, for investment and not with a view to any distribution thereof
         within the meaning of the Securities Act.

                  (b) Such Purchaser understands that (i) the Securities have
         not been registered under the Securities Act and are being issued by
         the Company in transactions exempt from the registration requirements
         of the Securities Act and (ii) the Securities may not be offered or
         sold except pursuant to an effective registration statement under the
         Securities Act or pursuant to an applicable exemption from registration
         under the Securities Act.

                  (c) Such Purchaser further understands that the exemption from
         registration afforded by Rule 144 promulgated under the Securities Act
         depends on the satisfaction of various conditions, and that, if
         applicable, Rule 144 may afford the basis for sales only in limited
         amounts.

                  (d) Such Purchaser did not employ any broker or finder in
         connection with the transactions contemplated in this Agreement.

                  (e) Such Purchaser is an Accredited Investor.

                  (f) Such Purchaser has been given the opportunity to ask
         questions of and receive answers from the Company concerning the terms
         and conditions of the Purchased Securities, and has been given the
         opportunity to obtain additional information necessary to verify the
         accuracy of the information contained in the Company Reports or such
         other information as it desired in order to evaluate its investment.




                                      -48-


                                   SECTION 6

                        COVENANTS TO PROVIDE INFORMATION


                  Each Issuer covenants and agrees with each Holder that until
the principal amount of (and premium, if any, on) all the Notes, and all
interest and other obligations hereunder in respect thereof, shall have been
paid in full, and while any Warrants shall remain outstanding:

        SECTION 6.01. FUTURE REPORTS TO HOLDERS.

                  (a) MONTHLY STATEMENTS. As soon as available but in any event
         within thirty (30) days after the end of each month (except for any
         month that ends a quarter, in which case, the Company will have
         forty-five (45) days after the end of such month), the Company shall
         deliver to each Noteholder and holder of Warrants (unless with respect
         to any Noteholder or holder of Warrants such Noteholder or holder of
         Warrants has requested that it not receive) duplicate copies of:

                           (i) consolidated and consolidating balance sheets of
                  the Company and its Subsidiaries as at the end of such month,
                  and

                           (ii) consolidated and consolidating statement of
                  income, consolidated statements of stockholders' equity and
                  cash flows and consolidating schedule of investment activities
                  for purchases of property and equipment of the Company and its
                  Subsidiaries for such month and for the portion of the Fiscal
                  Year ending with such month,

         in each case setting forth in comparative form the figures for the
         corresponding periods in the prior Fiscal Year and the corresponding
         figures for the consolidated plan and financial forecast to the current
         Fiscal Year delivered pursuant to Section 6.01(d), all in reasonable
         detail, prepared in accordance with GAAP (except with respect to the
         related footnotes), and fairly presenting, in all material respects,
         the financial position of the Persons being reported on and their
         results of operations and cash flows, subject to changes resulting from
         normal year-end adjustments that will not be material in amount or
         effect, and accompanied by a certificate of the Chief Financial Officer
         of the Company to the foregoing effect.

                  (b) QUARTERLY STATEMENTS. As soon as available, but in any
         event within forty-five (45) days after the end of each quarter, the
         Company shall deliver to each Noteholder and holder of Warrants
         duplicate copies of:

                           (i) consolidated and consolidating balance sheets of
                  the Company and its Subsidiaries as at the end of such
                  quarter, and

                           (ii) consolidated and consolidating statement of
                  income, consolidated statements of stockholders' equity and
                  cash flows and consolidating schedule of investment activities
                  for purchases of property and equipment of the Company and its


                                      -49-


                  Subsidiaries, for such quarter and for the portion of the
                  Fiscal Year ending with such quarter,

         in each case setting forth in comparative form the figures for the
         corresponding periods in the prior Fiscal Year and the corresponding
         figures for the consolidated plan and financial forecast for the
         current Fiscal Year delivered pursuant to Section 6.01(d), all in
         reasonable detail, prepared in accordance with GAAP applicable to
         periodic financial statements generally, and fairly presenting, in all
         material respects, the financial position of the Persons being reported
         on and their results of operations and cash flows, subject to changes
         resulting from normal year-end adjustments that will not be material in
         amount or effect, and accompanied by (x) a certificate of the Chief
         Financial Officer of the Company to the foregoing effect and (y) a
         narrative report (in the form of management's discussion and analysis
         of such operations which would comply with the disclosure requirements
         of the Exchange Act with respect to management's discussion and
         analysis set forth in quarterly reports on Form 10-Q) describing in
         reasonable detail the operations, cash flows and financial condition of
         the Company and its Subsidiaries prepared for such quarter and for the
         period from the beginning of the then current Fiscal Year to the end of
         such quarter; PROVIDED, HOWEVER, that if the Company is then subject to
         the reporting requirements under Section 13 or Section 15(d) of the
         Exchange Act, the delivery by the Company to such Purchaser and such
         Holder of a Quarterly Report on Form 10-Q or any successor form within
         the time periods above described shall satisfy the requirements of this
         Section 6.01(b). The consolidating balance sheet and statements of
         income, stockholders' equity and cash flows and consolidating schedule
         of investment activities for purchases of property and equipment
         required by this paragraph may be in the form contained in the notes to
         the financial statements included in the Company's Form 10-Q.

                  (c) ANNUAL STATEMENTS. As soon as available, but in any event
         within ninety (90) days after the end of each Fiscal Year of the
         Company, the Company shall deliver to each Noteholder and holder of
         Warrants duplicate copies of:

                           (i) consolidated and consolidating balance sheets of
                  the Company and its Subsidiaries as at the end of such year,
                  and

                           (ii) consolidated and consolidating statement of
                  income, consolidated statements of stockholders' equity and
                  cash flows and consolidating schedule of investment activities
                  for purchases of property and equipment of the Company and its
                  Subsidiaries for such year,

         in each case setting forth in comparative form the figures for the
         prior Fiscal Year and, commencing with Fiscal Year 2005, the
         corresponding figures from the consolidated plan and financial forecast
         for the current Fiscal Year delivered pursuant to Section 6.01(d), all
         in reasonable detail, prepared in accordance with GAAP, fairly
         presenting, in all material respects, the financial position of the
         Persons being reported on and their results of operations and cash
         flows, and accompanied by:

                           (A) an opinion thereon of independent certified
                  public accountants of recognized national standing, which
                  opinion (i) shall state that such financial statements (other
                  than consolidating statements) present fairly, in all material


                                      -50-


                  respects, the financial position of the Persons being reported
                  upon and their results of operations and cash flows and have
                  been prepared in conformity with GAAP, and that the
                  examination of such accountants in connection with such
                  financial statements (other than consolidating statements) has
                  been made in accordance with generally accepted auditing
                  standards in the United States, and that such audit provides a
                  reasonable basis for such opinion in the circumstances, and
                  (ii) shall not at any time following the second anniversary of
                  the Closing Time contain a "going concern" or like
                  qualification, or any exception or other qualification arising
                  out of the scope of the audit,

                           (B) a certificate of the Chief Financial Officer of
                  the Company stating that such financial statements have been
                  prepared in accordance with GAAP applicable to periodic
                  financial statements generally and fairly present, in all
                  material respects, the financial position of the Persons being
                  reported on and their results of operations and cash flows,
                  and

                           (C) a narrative report (in the form of management's
                  discussion and analysis of such operations which would comply
                  with the disclosure requirements of the Exchange Act with
                  respect to management's discussion and analysis set forth in
                  quarterly reports on Form 10-Q) describing in reasonable
                  detail the operations, cash flows and financial condition of
                  the Company and its Subsidiaries prepared for such Fiscal
                  Year,

PROVIDED, HOWEVER, that if the Company is then subject to the reporting
requirements under Section 13 or Section 15(d) of the Exchange Act, the delivery
by the Company to such Purchaser and such Holder of an Annual Report on Form
10-K or any successor form within the time periods above described shall satisfy
the requirements of this Section 6.01(c). The consolidating balance sheet and
statements of income, stockholders' equity and cash flows and consolidating
schedule of investment activities for purchases of property and equipment
required by this paragraph may be in the form contained in the notes to the
financial statements included in Company's Form 10-K.

                  If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by clauses (b) and (c) above will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company; PROVIDED HOWEVER that it is expressly understood that in order to
comply with the requirements of this paragraph the Company need only provide a
supplemental schedule to such Purchaser or Holder, as applicable, with this
information and need not actually include such information in any form filed
with the Commission.

                  (d) FORECASTS. As soon as practicable but in any event no
later than the last day of each Fiscal Year a forecast for each of the next
succeeding twelve months of the consolidated balance sheet and the consolidated
statements of income, cash flows and stockholders' equity of the Company and its
Subsidiaries and the consolidating balance sheet and the consolidating


                                      -51-


statements of income and cash flows of each of the Company and its Subsidiaries,
together with an outline of the major assumptions upon which the forecast is
based.

                  (e) TELEPHONIC CONFERENCE. Within five Business Days after the
delivery of the financial statements referred to in paragraphs (a), (b), (c) and
(d) above, the Chief Financial Officer of the Company shall participate in a
telephonic conference upon the request of either (x) Noteholders holding not
less than 25% of the then outstanding Notes or (y) Warrantholders holding not
less than 25% of the then outstanding Warrants.

                  (f) CHIEF FINANCIAL OFFICER CERTIFICATES. Concurrently with
the delivery of the financial statements referred to in subsections (a) through
(c) of this Section 6.01, the Company shall deliver to each Noteholder and
holder of Warrants a compliance certificate ("COMPLIANCE CERTIFICATE") in the
form of EXHIBIT E hereto and signed by the Chief Financial Officer of the
Company stating that, to the best of such Chief Financial Officer's knowledge
after due inquiry, each of the Company and its Subsidiaries has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Transaction Documents to be
observed, performed or satisfied by it, and in the case of the certificate
delivered to the Noteholders, that such Chief Financial Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
Compliance Certificate.

                  (g) AUDITORS' REPORTS. Promptly upon receipt thereof, the
Company shall deliver to each Noteholder and holder of Warrants copies of all
final reports submitted to the Company or to any of its Subsidiaries by
independent certified public accountants in connection with each annual, interim
or special audit of the books of the Company or any of its Subsidiaries made by
such accountants, including, without limitation, any final comment letter
submitted by such accountants to management in connection with their annual
audit.

                  (h) OTHER INFORMATION. Promptly upon their becoming available,
the Company shall deliver or make available to each Noteholder and holder of
Warrants (including by being made available on EDGAR; PROVIDED that the Company
gives prompt notice of such filing with EDGAR to each such Noteholders and
holders of Warrants) copies of all financial statements, reports, notices and
proxy statements sent to its securityholders or made available generally by the
Company or any of its Subsidiaries and all regular and periodic reports and all
registration statements and final prospectuses, if any, filed by the Company or
any of its Subsidiaries with any securities exchange or with the Commission or
any Governmental Authority succeeding to any of its functions and, promptly upon
request, such additional financial and other information as any Noteholder and
holder of Warrants may from time to time reasonably request. For the benefit of
Noteholders, holders of Warrants and beneficial owners from time to time of any
Note or Warrant, the Issuers shall, upon the request of any such Noteholder or
holder of Warrants, furnish, at the Issuers' expense, to Noteholders, holders of
Warrants and beneficial owners of any Note or Warrant and prospective purchasers
of such securities information satisfying the requirements of subsection (d)(4)
of Rule 144A under the Securities Act.

                  (i) NOTICE OF DEFAULT OR EVENT OF DEFAULT. Promptly, but in
any event within three (3) Business Days, after any officer of the Company
becomes aware of the existence of any Default or Event of Default or that any
Person has given any notice or taken any other action with respect to a claimed


                                      -52-


Default or Event of Default, the Company shall deliver a written notice thereof
to the Noteholders specifying the nature and existence thereof and what action
the Company is taking or proposes to take with respect thereto.

                  (j) ADDITIONAL INFORMATION TO HOLDERS OF OTHER INDEBTEDNESS.
Simultaneously with the furnishing of such information to any other holder of
Indebtedness of the Company or any of its Subsidiaries, the Company shall
deliver to each Noteholder (i) copies of all other financial statements, reports
or projections with respect to the Company or its Subsidiaries which are broader
in scope or on a more frequent basis than the Company is required to provide
under this Agreement and (ii) copies of all studies, reviews, reports or
assessments relating to environmental matters that reveal circumstances, events
or other matters that would reasonably be expected to have a Material Adverse
Effect.

                  (k) CHANGES TO INDEBTEDNESS. At least 10 days prior thereto,
written notice to the Noteholders of any proposed extension, renewal,
refinancing or modification of any indebtedness exceeding $500,000 of the
Company or any of its Subsidiaries.

                  (l) ERISA MATTERS. (a) As soon as possible and in any event
within ten (10) days after any Issuer or any ERISA Affiliate thereof knows or
has reason to know that (A) any Reportable Event with respect to any Employee
Plan has occurred, (B) any other termination event with respect to any Employee
Plan has occurred, or (C) an accumulated funding deficiency has been incurred or
an application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to an Employee Plan, an Officers' Certificate of the Company setting
forth the details of such occurrence and the action, if any, which such Issuer
or such ERISA Affiliate proposes to take with respect thereto, (b) promptly and
in any event within three (3) Business Days after receipt thereof by any Issuer
or any ERISA Affiliate thereof from the PBGC, copies of each notice received by
any Issuer or any ERISA Affiliate thereof of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any Plan, (c) promptly and
in any event within 10 days after any Issuer or any ERISA Affiliate thereof
knows or has reason to know that a required installment within the meaning of
Section 412 of the Code has not been made when due with respect to an Employee
Benefit Plan, (d) promptly and in any event within three (3) Business Days after
receipt thereof by any Issuer or any ERISA Affiliate thereof from a sponsor of a
Multiemployer Plan or from the PBGC, a copy of each notice received by any
Issuer or any ERISA Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of ERISA,
and (e) promptly and in any event within 10 days after any Issuer sends notice
of a plant closing or mass layoff (as defined in WARN) to employees, copies of
each such notice sent by such Issuer.

                  (m) MANAGEMENT REPORT. Promptly upon receipt thereof, each
Issuer shall deliver to each Noteholder and holder of Warrants copies of all
detailed financial and management reports submitted to the Company or any of its
Subsidiaries by independent auditors in connection with each annual or interim
audit made by such auditors of the books of the Company or such Subsidiary.

                                      -53-


                  (n) LITIGATION AND OTHER MATERIAL EVENTS. Promptly after the
commencement thereof, the Company shall deliver to each Noteholder and holder of
Warrants notice of (i) all actions, suits, investigations, litigation,
arbitrations and proceedings known to the Issuers against or affecting the
Company or any of its Subsidiaries or any of the property or assets thereof in
any court or before any arbitrator or by or before any Governmental Authority or
court of any kind not previously disclosed by the Company or any of its
Subsidiaries that either individually or in the aggregate, would have a Material
Adverse Effect, (ii) the occurrence of a Casualty Event; and (iii) (x) the
incurrence of any material Lien (other than Permitted Collateral Liens) on, or
claim asserted against any of the Collateral or (y) the occurrence of any other
event which could materially affect the value of the Collateral.

                  (o) ORIGINAL ISSUE DISCOUNT INFORMATION. The Company shall
deliver to each Noteholder all original issue discount information and other tax
reporting information relating to the Notes as may be required by Applicable
Law.

                                   SECTION 7

                           OTHER AFFIRMATIVE COVENANTS


                  Each Issuer further covenants and agrees with each Purchaser
and each Noteholder that until the principal amount of (and premium, if any, on)
all the Notes, and all interest and other obligations (other than contingent
indemnification obligations to the extent no claim has been asserted) hereunder
in respect thereof, shall have been paid in full.

                  SECTION 7.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company shall duly and punctually pay the principal of (and premium, if any, on)
and all interest on the Notes in accordance with the terms of the Notes and this
Agreement.

                  The Company shall pay interest on overdue principal (including
post-petition interest on a proceeding under any Bankruptcy Law), and interest
on overdue interest, to the extent lawful, at the rate specified in the Notes.

                  SECTION 7.02. PRESERVATION OF CORPORATE EXISTENCE AND
FRANCHISES. Subject to Section 8.05 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (a) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (b) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries if (i) the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and (ii) the loss thereof would not result in a Material
Adverse Effect.



                                      -54-



                  SECTION 7.03. MAINTENANCE OF PROPERTIES. The Company shall
cause all properties used or useful in the conduct of its business or the
business of any of its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED, HOWEVER, that the foregoing
shall not prevent the Company from discontinuing the operation or maintenance of
any of such properties if (i) the Board of Directors determines that such
discontinuance is desirable in the conduct of its business or the business of
any Subsidiary and (ii) such discontinuance would not result in a Material
Adverse Effect and would not be adverse in any material respect to any
Noteholder.

                  SECTION 7.04. TAXES.

                  (a) PAYMENT OF TAXES. The Company shall pay or discharge or
         cause to be paid or discharged, before the same shall become
         delinquent, (i) all taxes, assessments and governmental charges levied
         or imposed upon the Company or any of its Subsidiaries or upon the
         income, profits or property of the Company or any of its Subsidiaries,
         and (ii) all lawful claims for labor, materials and supplies which, if
         unpaid, might by law become a lien upon the property of the Company or
         any of its Subsidiaries; PROVIDED, HOWEVER, that the Company shall not
         be required to pay or discharge or cause to be paid or discharged any
         such tax, assessment, charge or claim whose amount, applicability or
         validity is being contested in good faith by appropriate proceedings
         provided that appropriate reserves therefor are established in the
         Company's consolidated financial statements in accordance with GAAP.

                  (b) TAX RETURNS. The Company and its Subsidiaries shall timely
         file or cause to be filed when due all Tax Returns that are required to
         be filed by or with respect to the Company for taxable years ending
         after the Closing Time and shall pay any Taxes due in respect of such
         Tax Returns.

                  (c) CONTEST PROVISIONS. The Company shall promptly notify the
         Noteholders in writing upon receipt by the Company or any of its
         Subsidiaries or any of their Affiliates of notice of any pending or
         threatened federal, state, local or foreign income or franchise tax
         audits or assessments which may materially affect the tax liabilities
         of the Company.

                  SECTION 7.05. BOOKS, RECORDS AND ACCESS. The Company, both
with respect to itself and with respect to the Company and its Subsidiaries on a
consolidated basis, and each Subsidiary shall keep complete and accurate books
and records of their transactions in accordance with good accounting practices
on the basis of GAAP applied on a consistent basis (including the establishment
and maintenance of appropriate reserves); PROVIDED that with respect to any
Foreign Subsidiary, the immediately preceding reference to GAAP shall be deemed
to be to generally accepted accounting principles in effect in such Foreign
Subsidiary's jurisdiction. To the extent reasonably required in connection with
any resale of any of the Securities and upon reasonable notice, the Company
shall, and shall cause its Subsidiaries to, subject to compliance with
Applicable Laws, the execution of a confidentiality agreement substantially in
the form set forth in EXHIBIT M or as otherwise mutually acceptable to the
Company and each such Noteholder and confidentiality obligations to third
parties, give each Noteholder that is not a competitor of the Company or any of
its Subsidiaries in any material respect (and, in each case, any sales or
placement agent or underwriter participating in such resale) and their
authorized representatives reasonable access during normal business hours to all
contracts, books, records, personnel, offices and other facilities and
properties of the Company and its Subsidiaries and their legal advisors,


                                      -55-


accountants and, to the extent available to the Company after the Company uses
reasonable efforts to obtain them, the accountants' work papers, permit each
Purchaser and such Noteholder (and any such sales or placement agent or
underwriter) to make such copies and inspections thereof as such Noteholder may
reasonably request and furnish such Noteholder (and any such sales or placement
agent or underwriter) with such financial and operating data and other
information with respect to the business and properties of the Company and its
Subsidiaries as such Noteholder (and any such sales or placement agent or
underwriter) may from time to time reasonably request. Any such visits will be
at the expense of such Noteholder.

                  SECTION 7.06. COMPLIANCE WITH LAW. The Company shall, and
shall cause each of its Subsidiaries to, comply with all Applicable Laws and
shall obtain and maintain, and shall cause each of its Subsidiaries to obtain
and maintain, all Permits necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that any such non-compliance with Applicable Law or
any failure to obtain or maintain such Permits, individually or in the
aggregate, would not have a Material Adverse Effect.

                  SECTION 7.07. INSURANCE.

                  (a) GENERALLY. The Company shall, and shall cause its
         Subsidiaries to, keep its insurable property adequately insured at all
         times by financially sound and reputable insurers; maintain such other
         insurance, to such extent and against such risks as is customary with
         companies in the same or similar businesses operating in the same or
         similar locations, including insurance with respect to Mortgaged
         Properties and other properties material to the business of the Company
         and its Subsidiaries against such casualties and contingencies and of
         such types and in such amounts with such deductibles as is customary in
         the case of similar businesses operating in the same or similar
         locations, including (i) physical hazard insurance on an "all risk"
         basis, (ii) commercial general liability against claims for bodily
         injury, death or property damage covering any and all insurable claims,
         (iii) explosion insurance in respect of any boilers, machinery or
         similar apparatus constituting Collateral, (iv) business interruption
         insurance, (v) worker's compensation insurance and such other insurance
         as may be required by any Requirement of Law and (vi) such other
         insurance against risks as the Noteholders may from time to time
         require (such policies to be in such form and amounts and having such
         coverage as may be reasonably satisfactory to the Required Holders and
         the Agent); PROVIDED that with respect to physical hazard insurance,
         neither the Agent nor the Company or such Subsidiary shall agree to the
         adjustment of any claim thereunder without the consent of the other
         (such consent not to be unreasonably withheld or delayed); PROVIDED,
         FURTHER, that no consent of the Company or any Subsidiary shall be
         required during an Event of Default.

                  (b) REQUIREMENTS OF INSURANCE. All such insurance in the name
         of any Issuer shall (i) provide that no cancellation, material
         reduction in amount or material change in coverage thereof shall be


                                      -56-


         effective until at least 30 days after receipt by the Agent of written
         notice thereof, (ii) name the Agent as mortgagee (in the case of
         property insurance for Mortgaged Property) or additional insured on
         behalf of the Secured Parties (in the case of liability insurance) or
         loss payee (in the case of property insurance for Mortgaged Property),
         as applicable, (iii) if reasonably requested by the Agent, include a
         breach of warranty clause and (iv) be reasonably satisfactory in all
         other respects to the Agent.

                  (c) NOTICE TO AGENTS. The Company shall notify the Noteholders
         and the Agent immediately whenever any separate insurance concurrent in
         form or contributing in the event of loss with that required to be
         maintained under this Section 7.07 is taken out by the Company or any
         of its subsidiaries; and promptly deliver to the Noteholders and the
         Agent a duplicate original copy of such policy or policies.

                  (d) FLOOD INSURANCE. The Company shall, and shall cause its
         Subsidiaries to, with respect to each Mortgaged Property, obtain flood
         insurance in such total amount as the Required Holders may from time to
         time require, if at any time the area in which any improvements located
         on any Mortgaged Property is designated a "flood hazard area" in any
         Flood Insurance Rate Map published by the Federal Emergency Management
         Agency (or any successor agency), and otherwise comply with the
         National Flood Insurance Program as set forth in the Flood Disaster
         Protection Act of 1973, as amended from time to time.

                  (e) BROKER'S REPORT. The Company shall deliver to the Agent
         and the Noteholders a report of a reputable insurance broker with
         respect to such insurance and such supplemental reports with respect
         thereto as the Required Holders or the Agent may from time to time
         reasonably request.

                  (f) MORTGAGED PROPERTIES. No Issuer that is an owner of
         Mortgaged Property shall take any action that is reasonably likely to
         be the basis for termination, revocation or denial of any insurance
         coverage required to be maintained under such Issuer's respective
         Mortgage or that could be the basis for a defense to any claim under
         any Insurance Policy maintained in respect of the Premises, and each
         Issuer shall otherwise comply in all material respects with all
         Insurance Requirements in respect of the Premises; PROVIDED, HOWEVER,
         that each Issuer may, at its own expense and after written notice to
         the Noteholders, (i) contest the applicability or enforceability of any
         such Insurance Requirements by appropriate legal proceedings, the
         prosecution of which does not constitute a basis for cancellation or
         revocation of any insurance coverage required under this Section 7.07
         or (ii) cause the Insurance Policy containing any such Insurance
         Requirement to be replaced by a new policy complying with the
         provisions of this Section 7.07.

                  SECTION 7.08. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

                  (a) Upon the occurrence of a Change of Control, the Company
         shall make an offer (a "CHANGE OF CONTROL Offer") to each Noteholder to
         repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of each Noteholder's Notes at an offer price in cash equal to
         100% of the principal amount thereof as of the Change of Control
         Payment Date plus the Applicable Premium, plus accrued and unpaid
         interest, if any, thereon to the Change of Control Payment Date (the
         "CHANGE OF CONTROL PAYMENT"). The Company shall comply with the


                                      -57-


         requirements of Rule 14e-1 under the Exchange Act and any other
         securities laws and regulations thereunder to the extent such laws and
         regulations are applicable in connection with the repurchase of the
         Notes as a result of a Change of Control, and the Company shall not be
         in violation of this Agreement by reason of any act required by such
         rule or other Applicable Law.

                  (b) Within five (5) Business Days following any Change of
         Control, the Company shall send, by first-class mail, a notice to each
         Noteholder stating:

                           (i) that the Change of Control Offer is being made
                  pursuant to this Section 7.08 and that all Notes tendered will
                  be accepted for payment;

                           (ii) the purchase price and the purchase date, the
                  latter of which shall be at least 30 but no more than 45 days
                  from the date on which the Company mails notice of the Change
                  of Control (the "CHANGE OF CONTROL PAYMENT DATE");

                           (iii) that any Notes not tendered will continue to
                  accrue interest;

                           (iv) that, unless the Company defaults in the payment
                  of the Change of Control Payment, all Notes accepted for
                  payment pursuant to the Change of Control Offer shall cease to
                  accrue interest after the Change of Control Payment Date;

                           (v) that Noteholders electing to have any Notes
                  purchased pursuant to a Change of Control Offer shall be
                  required to surrender the Notes, with the form entitled
                  "Option of Holder to Elect Purchase" on the reverse of the
                  Notes completed, to the Company or its designated agent for
                  such purpose at the address specified in the notice prior to
                  5:00 p.m. Eastern Time on the third Business Day preceding the
                  Change of Control Payment Date;

                           (vi) that Noteholders will be entitled to withdraw
                  their election if the Company or its designated agent for such
                  purpose receives, not later than 5:00 p.m. Eastern Time on the
                  second Business Day preceding the Change of Control Payment
                  Date, a telegram, telex, facsimile transmission or letter
                  setting forth the name of the Noteholder, the principal amount
                  of Notes delivered for purchase, and a statement that such
                  Noteholder is withdrawing his election to have the Notes
                  purchased; and

                           (vii) that Noteholders whose Notes are being
                  purchased only in part will be issued new Notes equal in
                  principal amount to the unpurchased portion of the Notes
                  surrendered, which unpurchased portion must be equal to $1,000
                  in principal amount or an integral multiple thereof.

                  (c) On the Change of Control Payment Date, the Company shall,
         to the extent lawful, (i) accept for payment all Notes or portions
         thereof properly tendered pursuant to the Change of Control Offer, (ii)
         mail to each Noteholder so tendered the Change of Control Payment for
         such Notes plus all accrued and unpaid interest to the Change of
         Control Payment Date, and (iii) execute and mail to each Noteholder a
         new Note equal in principal amount to any unpurchased portion of the
         Notes surrendered, if any; PROVIDED, HOWEVER, that each such new Note


                                      -58-


         shall be in a principal amount of $1,000 or an integral multiple
         thereof. The Company shall inform the Noteholders in writing of the
         results of the Change of Control Offer on or as soon as practicable
         after the Change of Control Payment Date.

        SECTION 7.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.

                  (a) In the event that, pursuant to Section 8.05 hereof, the
         Company shall be required to commence an offer to all Noteholders to
         purchase Notes (an "ASSET SALE OFFER"), it shall follow the procedures
         specified in this Section 7.09. The Company shall comply with the
         requirements of Rule 14e-1 under the Exchange Act and any other
         securities laws and regulations thereunder to the extent such laws and
         regulations are applicable in connection with the repurchase of the
         Notes pursuant to an Asset Sale Offer, and the Company shall not be in
         violation of this Agreement by reason of any act required by such rule
         or other Applicable Law.

                  (b) Within five (5) Business Days following each date on which
         the Company's obligation to make an Asset Sale Offer is triggered, the
         Company shall send, by first-class mail, a notice to each Noteholder
         stating:

                           (i) that the Asset Sale Offer is being made pursuant
                  to this Section 7.09 and Section 8.05;

                           (ii) that the Company shall purchase the principal
                  amount of Notes required to be purchased pursuant to Section
                  8.05 (the "OFFER AMOUNT"), the purchase price per Note and the
                  purchase date, which shall be at least 30 but no more than 45
                  days from the date on which the Company mails notice of the
                  Asset Sale Offer (the "ASSET SALE OFFER PAYMENT DATE");

                           (iii) that any Notes not tendered will continue to
                  accrue interest;

                           (iv) that, unless the Company defaults in payment of
                  the Offer Amount on the Asset Sale Offer Payment Date, all
                  Notes accepted for payment pursuant to the Asset Sale Offer
                  shall cease to accrue interest after the Asset Sale Offer
                  Payment Date;

                           (v) that Noteholders electing to have any Notes
                  purchased pursuant to an Asset Sale Offer shall be required to
                  surrender the Notes, with the form entitled "Option of Holder
                  to Elect Purchase" on the reverse of the Notes completed, to
                  the Company or its designated agent for such purpose at the
                  address specified in the notice prior to 5:00 p.m. Eastern
                  Time on the third Business Day preceding the Asset Sale Offer
                  Payment Date;

                           (vi) that Noteholders will be entitled to withdraw
                  their election if the Company or its designated agent for such
                  purpose receives, not later than 5:00 p.m. Eastern Time on the
                  second Business Day preceding the Asset Sale Offer Payment
                  Date, a telegram, telex, facsimile transmission or letter
                  setting forth the name of the Noteholder, the principal amount
                  of Notes delivered for purchase, and a statement that such
                  Noteholder is withdrawing his election to have the Notes
                  purchased;



                                      -59-


                           (vii) that, if the aggregate principal amount of
                  Notes surrendered by Noteholders exceeds the Offer Amount, the
                  Company shall select the Notes to be purchased on a PRO RATA
                  basis (with such adjustments as may be deemed appropriate by
                  the Company so that only Notes in denominations of $1,000, or
                  integral multiples thereof, shall be purchased); and

                           (viii) that Noteholders whose Notes are being
                  purchased only in part will be issued new Notes equal in
                  principal amount to the unpurchased portion of the Notes
                  surrendered, which unpurchased portion must be equal to $1,000
                  in principal amount or an integral multiple thereof.

                  On the Asset Sale Offer Payment Date, the Company shall, to
the extent lawful, (i) accept for payment, on a PRO RATA basis to the extent
necessary, all Notes or portions thereof properly tendered pursuant to the Asset
Sale Offer up to the principal amount of Notes equal to the Offer Amount, or, if
less than the Offer Amount has been tendered, all Notes tendered, (ii) mail to
each holder of a Note so tendered the purchase price for such Notes, plus all
accrued and unpaid interest to the Asset Sale Offer Payment Date, (iii) execute
and mail to each Noteholder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any, and (iv) deliver to the
Noteholders an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section 7.09. The Company shall inform the Noteholders in writing of the results
of the Asset Sale Offer on or as soon as practicable after the Asset Sale Offer
Payment Date.

                  SECTION 7.10. AFFIRMATIVE COVENANTS WITH RESPECT TO LEASES.
With respect to each Lease entered into by an Issuer relating to Real Property
owned in fee by such Issuer, the respective Issuer shall perform all the
obligations imposed upon the landlord under such Lease and enforce all of the
tenant's obligations thereunder, except where the failure to so perform or
enforce could not reasonably be expected to result in a Property Material
Adverse Effect.

                  SECTION 7.11. [RESERVED]

                  SECTION 7.12. FURTHER ASSURANCES. The Company shall, upon the
request of any Holder, execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the provisions of this Agreement.

                  SECTION 7.13. ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.

                  (a) Subject to this Section 7.13 and Section 7.16, with
         respect to any property acquired after the Closing Time by any Issuer
         that is intended to be subject to the Lien created by any of the
         Security Documents but is not so subject, such Issuer shall promptly
         (and in any event within 30 Business Days after the acquisition
         thereof) (i) execute and deliver to the Noteholders and the Agent such
         amendments or supplements to the relevant Security Documents or such
         other documents as the Required Holders or the Agent shall deem


                                      -60-


         necessary or advisable to grant to the Agent, for its benefit and for
         the benefit of the other Secured Parties, a Lien on such property
         subject to no Liens other than Permitted Collateral Liens, and (ii)
         take all actions necessary to cause such Lien to be duly perfected to
         the extent required by such Security Document in accordance with all
         applicable Requirements of Law, including the filing of financing
         statements in such jurisdictions as may be reasonably requested by the
         Required Holders. Borrower shall otherwise take such actions and
         execute and/or deliver to the Agent such documents as the Required
         Holders or the Agent shall require to confirm the validity, perfection
         and priority of the Lien of the Security Documents against such
         after-acquired properties.

                  (b) With respect to any person that is or becomes a Wholly
         Owned Subsidiary after the Closing Time (and in any event within 30
         Business Days after such person becomes a Wholly Owned Subsidiary), the
         Company shall and shall cause its Subsidiaries to promptly (i) deliver
         to the Agent the certificates, if any, representing all of the Capital
         Stock of such Subsidiary, together with undated stock powers or other
         appropriate instruments of transfer executed and delivered in blank by
         a duly authorized officer of the holder(s) of such Capital Stock, and
         all intercompany notes owing from such Subsidiary to any Issuer
         together with instruments of transfer executed and delivered in blank
         by a duly authorized officer of such Issuer and (ii) cause such new
         Subsidiary (A) to execute and deliver to the Noteholders a Subsidiary
         Guarantee of the Notes in the form of EXHIBIT B hereto and a
         supplemental agreement substantially in the form of EXHIBIT C hereto
         pursuant to which such Subsidiary shall unconditionally guarantee all
         of the Company's obligations under the Notes on the terms set forth in
         such supplemental agreement and a joinder agreement to the applicable
         Security Agreement, substantially in the form annexed thereto, or, in
         the case of a Foreign Subsidiary, execute a security agreement
         compatible with the laws of such Foreign Subsidiary's jurisdiction in
         form and substance reasonably satisfactory to the Agent, and (B) to
         take all actions necessary or advisable in the opinion of the Required
         Holders or the Agent to cause the Lien created by the applicable
         Security Agreement to be duly perfected to the extent required by such
         agreement in accordance with all applicable Requirements of Law,
         including the filing of financing statements in such jurisdictions as
         may be reasonably requested by the Required Holders or the Agent.

                  (c) Each Issuer shall use its commercially reasonable efforts
         to promptly grant to the Agent, within 60 days of the acquisition
         thereof, a security interest in and Mortgage on (i) each Real Property
         owned in fee by such Issuer as is acquired by such Issuer after the
         Closing Time and that, together with any improvements thereon,
         individually has a fair market value based on the good faith estimate
         of the Company of at least $500,000, and (ii) unless the Required
         Holders otherwise consent, each leased Real Property of such Issuer
         which lease individually has a fair market value based on the good
         faith estimate of the Company of at least $500,000,(2) in each case, as
         additional security for the Secured Obligations (unless the subject
         property is already mortgaged to a third party to the extent permitted
         by Section 8.07). Such Mortgages shall be granted pursuant to
         documentation reasonably satisfactory in form and substance to the
         Required Holders and the Agent and shall constitute valid and




- ---------
(2)  If a leasehold mortgage is obtained, must use form of landlord lien waiver,
     access agreement and consent, rather than landlord access agreement.



                                      -61-


         enforceable perfected Liens subject only to Permitted Collateral Liens
         or other Liens acceptable to the Agent. The Mortgages or instruments
         related thereto shall be duly recorded or filed in such manner and in
         such places as are required by law to establish, perfect, preserve and
         protect the Liens in favor of the Agent required to be granted pursuant
         to the Mortgages and all taxes, fees and other charges payable in
         connection therewith shall be paid in full. Such Issuer shall otherwise
         use its commercially reasonable efforts to take such actions and
         execute and/or deliver to the Agent such documents as the Required
         Holders or the Agent shall require to confirm the validity, perfection
         and priority of the Lien of any existing Mortgage or new Mortgage
         against such after-acquired Real Property (including a Title Policy, a
         Survey and local counsel opinion (in form and substance reasonably
         satisfactory to the Required Holders and the Agent) in respect of such
         Mortgage).

                  SECTION 7.14. SECURITY INTERESTS; FURTHER ASSURANCES(a) .
Promptly, upon the reasonable request of the Agent or any Required Holders, at
the Company's expense, execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an appropriate governmental
office, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by the Required Holders or the Agent
reasonably necessary or desirable for the continued validity, perfection and
priority of the Liens on the Collateral covered thereby subject to no other
Liens except as permitted by the applicable Security Document, or obtain any
consents or waivers as may be necessary or appropriate in connection therewith.
Deliver or cause to be delivered to the Noteholders and the Agent from time to
time such other documentation, consents, authorizations, approvals and orders in
form and substance reasonably satisfactory to the Required Holders and the Agent
as the Required Holders and the Agent shall reasonably deem necessary to perfect
or maintain the Liens on the Collateral pursuant to the Security Documents. Upon
the exercise by the Agent or any Holder of any power, right, privilege or remedy
pursuant to any Basic Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority
execute and deliver all applications, certifications, instruments and other
documents and papers that the Agent or such Holder may require. If the Agent or
the Required Holders determine that they are required by a Requirement of Law to
have appraisals prepared in respect of the Real Property of any Issuer
constituting Collateral, the Company shall provide to the Agent appraisals that
satisfy the applicable requirements of the Real Estate Appraisal Reform
Amendments of FIRREA and are otherwise in form and substance satisfactory to the
Required Holders and the Agent.

                  SECTION 7.15. INFORMATION REGARDING COLLATERAL.

                  (a) The Company shall not and shall not permit any of its
         Subsidiaries to effect any change (i) in any Issuer's legal name, (ii)
         in the location of any Issuer's chief executive office, (iii) in any
         Issuer's identity or organizational structure, (iv) in any Issuer's
         Federal Taxpayer Identification Number or organizational identification
         number, if any, or (v) in any Issuer's jurisdiction of organization (in
         each case, including by merging with or into any other entity,
         reorganizing, dissolving, liquidating, reorganizing or organizing in
         any other jurisdiction), until (A) it shall have given the Agent and
         the Holders not less than 30 days' prior written notice (in the form of
         an Officers' Certificate), or such lesser notice period agreed to by
         the Agent, of its intention so to do, clearly describing such change
         and providing such other information in connection therewith as the
         Agent or the Required Holders may reasonably request and (B) it shall
         have taken all action reasonably satisfactory to the Agent to maintain
         the perfection and priority of the security interest of the Agent for
         the benefit of the Secured Parties in the Collateral, if applicable.


                                      -62-


         Each Issuer agrees to promptly provide the Agent with certified
         Organizational Documents reflecting any of the changes described in the
         preceding sentence. Each Issuer also agrees to promptly notify the
         Agent of any change in the location of any office in which it maintains
         books or records relating to Collateral owned by it or any office or
         facility at which Collateral is located (including the establishment of
         any such new office or facility), other than changes in location to a
         Mortgaged Property or a leased property subject to a Landlord Access
         Agreement.

                  (b) Concurrently with the delivery of financial statements
         pursuant to Section 6.01(c), deliver to the Noteholders and the Agent a
         Perfection Certificate Supplement.

         SECTION 7.16. DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES. The Company
may designate after the Closing Time any Subsidiary created or acquired after
the Closing Time (other than a Guarantor) as an "Unrestricted Subsidiary" under
this Agreement (a "DESIGNATION") only if

                  (i) no Default or Event of Default shall have occurred and be
         continuing at the time of or after giving effect to such Designation;
         and

                  (ii) the Company would be permitted to make an Investment at
         the time of Designation (assuming the effectiveness of such
         Designation) pursuant to clause (e) of the definition of "Permitted
         Investments" in an amount (the "DESIGNATION AMOUNT") equal to the Fair
         Market Value of the Company's interest in such Subsidiary on such date.

                  The Company shall not, and shall not cause or permit any
Subsidiary to, at any time (x) provide credit support (other than any such
support which is Subordinated Indebtedness and not prohibited under the terms of
this Agreement (including without limitation Section 8.04(a)(ii))) for or
subject any of its property or assets (other than the Capital Stock of any
Unrestricted Subsidiary) to the satisfaction of any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness), (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly
liable for any Indebtedness which provides that the holder thereof may (upon
notice, lapse of time or both) declare a default thereon or cause the payment
thereof to be accelerated or payable prior to its final scheduled maturity upon
the occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary (including any right to take enforcement action against such
Unrestricted Subsidiary). All Subsidiaries of Unrestricted Subsidiaries shall
automatically be deemed to be Unrestricted Subsidiaries.

                  The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "REVOCATION") if

                  (iii) no Default or Event of Default shall have occurred and
         be continuing at the time of and after giving effect to such
         Revocation;

                                      -63-


                  (iv) all Liens and Indebtedness of such Unrestricted
         Subsidiary outstanding immediately following such Revocation would, if
         incurred at such time, have been permitted to be incurred for all
         purposes of this Agreement; and

                  (v) any transaction (or series of related transactions)
         between such Subsidiary and any of its Affiliates that is still
         outstanding, or otherwise could have a future adverse effect on such
         Subsidiary, at the time of Revocation, would be permitted by Section
         8.06 hereof as if such transaction (or series of related transactions)
         had occurred at the time of such Revocation.

                  All Designations and Revocations must be evidenced by
resolutions of the Board of Directors of the Company delivered to each
Noteholder certifying compliance with the foregoing provisions.

                  Notwithstanding anything to the contrary herein, the Company
may not designate any given Subsidiary as an Unrestricted Subsidiary more than
once.

        SECTION 7.17. POST-CLOSING COLLATERAL MATTERS.

                  (a) The Company shall use its commercially reasonable efforts
to obtain and deliver to the Agent, within the time periods set forth below
(unless waived or extended by the Agent in its discretion), to the extent such
items have not been delivered as of the Closing Time, or delivery has not been
waived by the Agent in its discretion, the following:

                  (i) the property owners' consent to leasehold mortgage
         financing, on terms and conditions reasonably satisfactory to the
         Agent, with respect to the Mortgaged Property set forth on SCHEDULE
         7.17(A) within sixty (60) days after the Closing Time, and if such
         consent is obtained, the applicable Issuer(s) will deliver to the
         Agent, within ninety (90) days after the Closing Time, the following:

                           (1) a Mortgage encumbering the Mortgaged Property in
                  favor of the Agent, for the benefit of the Secured Parties,
                  duly executed and acknowledged by the Issuer that is the owner
                  of or holder of any interest in such Mortgaged Property, and
                  otherwise in form for recording in the recording office of the
                  applicable political subdivision where such Mortgaged Property
                  is situated, together with such certificates, affidavits,
                  questionnaires or returns as shall be required in connection
                  with the recording or filing thereof to create a lien under
                  applicable Requirements of Law, and such financing statements
                  and any other instruments necessary to grant a mortgage lien
                  under the laws of any applicable jurisdiction, all of which
                  shall be in form and substance reasonably satisfactory to
                  Agent and the Required Holders;

                           (2) with respect to the Mortgaged Property, such
                  consents, approvals, amendments, supplements, estoppels and
                  tenant subordination agreements in order for the owner or
                  holder of the leasehold interest constituting such Mortgaged
                  Property to grant the Lien contemplated by the Mortgage with
                  respect to such Mortgaged Property;



                                      -64-


                           (3) with respect to the Mortgaged Property, a policy
                  of title insurance (or marked up title insurance commitment
                  having the effect of a policy of title insurance) insuring the
                  Lien of such Mortgage as a valid first mortgage Lien on the
                  Mortgaged Property and the applicable Issuer(s) right, title
                  and interest in fixtures described therein in the amount equal
                  to not less than 115% of the fair market value of such
                  Mortgaged Property and the applicable Issuer(s) right, title
                  and interest in such fixtures, which fair market value based
                  on the good faith estimate of the Company is set forth on
                  SCHEDULE 7.17(A)(3), which policy (or such marked-up
                  commitment) (each, a "TITLE POLICY") shall (A) be issued by
                  the Title Company, (B) to the extent necessary, include such
                  reinsurance arrangements (with provisions for direct access,
                  if necessary) as shall be reasonably acceptable to the Agent,
                  (C) contain a "tie-in" or "cluster" endorsement, if available
                  under Applicable Law (I.E., policies which insure against
                  losses regardless of location or allocated value of the
                  insured property up to a stated maximum coverage amount), (D)
                  have been supplemented by such endorsements (or where such
                  endorsements are not available, opinions of special counsel,
                  architects or other professionals reasonably acceptable to the
                  Agent and the Required Holders) as shall be reasonably
                  requested by the Agent or the Required Holders (including
                  endorsements on matters relating to usury, first loss, last
                  dollar, zoning, contiguity, revolving credit, doing business,
                  non-imputation, public road access, survey, variable rate,
                  environmental lien, subdivision, mortgage recording tax,
                  separate tax lot, and so-called comprehensive coverage over
                  covenants and restrictions to the extent applicable to such
                  Mortgaged Property and available in the subject jurisdiction),
                  and (E) contain no exceptions to title other than exceptions
                  acceptable to the Agent and the Required Holders;

                           (4) with respect to the Mortgaged Property, such
                  affidavits, certificates, information (including financial
                  data) and instruments of indemnification (including a
                  so-called "gap" indemnification) as shall be required to
                  induce the Title Company to issue the Title Policy and
                  endorsements contemplated above;

                           (5) evidence reasonably acceptable to the Agent and
                  the Required Holders of payment by the Company of all Title
                  Policy premiums, search and examination charges, escrow
                  charges and related charges, mortgage recording taxes, fees,
                  charges, costs and expenses required for the recording of the
                  Mortgage and issuance of the Title Policy referred to above;

                           (6) with respect to each Real Property or Mortgaged
                  Property, copies of all Leases in which the Company or any
                  Subsidiary holds the lessor's interest or other agreements
                  relating to possessory interests, if any. To the extent any of
                  the foregoing affect any Mortgaged Property, the applicable
                  Issuer(s) shall use their commercially reasonable efforts to
                  cause such agreement to be subordinate to the Lien of the
                  Mortgage to be recorded against such Mortgaged Property,
                  either expressly by its terms or pursuant to a subordination,
                  non-disturbance and attornment agreement, and shall otherwise
                  be acceptable to the Agent and the Required Holders;



                                      -65-


                           (7) with respect to the Mortgaged Property, the
                  Company shall have made all notifications, registrations and
                  filings, to the extent required by, and in accordance with,
                  all Governmental Real Property Disclosure Requirements
                  applicable to such Mortgaged Property;

                           (8) Surveys with respect to the Mortgaged Property;

                           (9) a completed Federal Emergency Management Agency
                  Standard Flood Hazard Determination with respect to the
                  Mortgaged Property; and

                           (10) a favorable written opinion of local counsel in
                  the state in which such Mortgaged Property is located, as
                  required by Section 3.04(ii); and

                  (ii) with respect to each location set forth on SCHEDULE
         7.17(B), a Landlord Access Agreement within sixty (60) days after the
         Closing Time; PROVIDED that no such Landlord Access Agreement shall be
         required with respect to any Real Property that could not be obtained
         after the Issuer that is the lessee shall have used its commercially
         reasonable efforts to do so; and

                  (b) The Company shall obtain and deliver to the Agent, within
thirty (30) days after the Closing Time (unless waived or extended by the Agent
in its discretion) and provided further that Agent delivers all instruments that
Agent must provide to accomplish the following at least ten (10) days prior to
the expiration of the thirty (30) day period or such period shall be deemed
extended until ten (10) days following Agent's delivery thereof, to the extent
such items have not been delivered as of the Closing Time, or delivery has not
been waived by the Agent in its discretion, the following:

                  (i) (A) Pledge of Shares Deed providing for the pledge of 100%
         of the outstanding shares of NAP Madrid owned by the Company or any of
         its Subsidiaries as of the Closing Time (the "Spanish Pledge") and
         opinion of Spanish counsel to the Company relating to the Spanish
         Pledge, each in form and substance reasonably satisfactory to the
         Agent, (B) evidence satisfactory to the Agent that the certificate
         evidencing 100% of the outstanding shares of NAP Madrid owned by the
         Company or any of its Subsidiaries as of the Closing Time has been
         delivered to the notary attesting the Spanish Pledge and that such
         certificate has been amended to reflect the Spanish Pledge, (C)
         evidence that the Spanish Pledge has been registered with the Shares
         Registry Book of NAP Madrid, (D) Pledge of Stock providing for the
         pledge of 100% of the outstanding shares of Terremark Latin America
         (Brasil) Ltda. and Terremark do Brasil Ltda. (the "Brazilian Pledge")
         and opinion of Brazilian counsel to the Company relating to the
         Brazilian Pledge, each in form and substance reasonably satisfactory to
         the Agent, and (E) evidence satisfactory to the Agent that the by-laws
         of each of Terremark Latin America (Brasil) Ltda. and Terremark do
         Brasil Ltda. have been amended to reflect the Brazilian Pledge (the
         "By-Laws Amendment"), that the Brazilian Pledge has been registered


                                      -66-


         with the Registry Office in Brazil and that the By-Laws Amendment has
         been register with Sao Paulo Board of Trade's registry in Brazil; and

                  (ii) for each of Terremark Latin America (Brasil) Ltda. and
         Terremark do Brasil Ltda., (A) a Subsidiary Guarantee of the Notes in
         the form of EXHIBIT B hereto and a supplemental agreement substantially
         in the form of EXHIBIT C hereto, in each case as may be modified to the
         extent necessary to be compatible with the laws of such Subsidiary's
         jurisdiction, pursuant to which such Subsidiary shall unconditionally
         guarantee all of the Company's obligations under the Notes on the terms
         set forth in such supplemental agreement and (B) a security agreement
         compatible with the laws of such Subsidiary's jurisdiction in form and
         substance reasonably satisfactory to the Agent, and to take all actions
         necessary or advisable in the opinion of the Required Holders or the
         Agent to cause the Lien created by the applicable Security Agreement to
         be duly perfected to the extent required by such agreement in
         accordance with all applicable Requirements of Law, including the
         filing of financing statements in such jurisdictions as may be
         reasonably requested by the Required Holders or the Agent

                  SECTION 7.18. CASUALTY EVENT. Upon receipt by the Company or
any of its Subsidiaries of any Net Cash Proceeds from a Casualty Event, the
Company or such Subsidiary shall apply such Net Cash Proceeds as if they were
Net Cash Proceeds from an Asset Sale in accordance with Section 8.05(b).

                  SECTION 7.19. NAP MADRID POST CLOSING MATTERS.

                  (a) If TerreNAP Data Centers, Inc. transfers to NAP Madrid the
assets listed on Schedule B it shall receive NAP Madrid's Preferred Stock issued
to the Company or a Guarantor in exchange therefor;

                  (b) The Company shall guarantee the obligations under the
lease listed on Schedule B to be transferred to NAP Madrid; and

                  (c) To the extent NAP Madrid sells 8,652,016 shares of the
Company's Common Stock held by it, the proceeds of such sale shall be used (i)
first, to repay all of NAP Madrid's outstanding loan to Banco Paster in the
aggregate principal amount of (Euro)3,500,000; (ii) second, to redeem the shares
of Preferred Stock issued to the Company or a Guarantor as set forth in clause
(a) above; and (iii) third, to the extent of any remaining proceeds, for NAP
Madrid's working capital purposes.

                  SECTION 7.20. RECEIVABLES ACCOUNT. The Company shall cause all
payments made under, and proceeds of, agreements entered with any subtenants or
licensees of the Company or any Guarantor with respect to the Facility to be
deposited in an account for which a Control Agreement (as defined in the
Security Agreement) has been delivered to the Agent in accordance with the
Security Agreement; PROVIDED that the Agent shall at all times have "control"
(within the meaning of section 9-104 of the Uniform Commercial Code as in effect
in the State of New York) over such account(s); PROVIDED, FURTHER that such
payments or proceeds shall not be kept in more than thirty (30) such accounts.



                                      -67-


                                   SECTION 8

                               NEGATIVE COVENANTS


                  Each Issuer hereby covenants and agrees with each Purchaser
and each Noteholder that until the principal amount of (and premium, if any, on)
all the Notes, and all interest and other obligations (other than contingent
indemnification obligations to the extent no claim has been asserted) hereunder
in respect thereof, shall have been paid in full:

                  SECTION 8.01. STAY, EXTENSION AND USURY LAWS. Each Issuer
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of its obligations under the Notes, the Subsidiary Guarantees or
this Agreement, and each Issuer hereby expressly waives all benefit or advantage
of any such law and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Noteholders, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

                  SECTION 8.02. RESTRICTED PAYMENTS.

                  (a) The Company shall not, and shall not cause or permit any
of its Subsidiaries to, directly or indirectly:

                  (i) declare or pay any dividend or make any other distribution
         or payment on or in respect of Capital Stock of the Company or any
         payment to the direct or indirect holders (in their capacities as such)
         of Capital Stock of the Company (other than dividends or distributions
         payable solely in shares of Qualified Capital Stock of the Company or
         in options, warrants or other rights to acquire shares of such
         Qualified Capital Stock);

                  (ii) purchase, redeem, defease or otherwise acquire or retire
         for value, directly or indirectly, the Company's Capital Stock or any
         Capital Stock of any Affiliate of the Company (other than any such
         Capital Stock owned by the Company or any Guarantor or as otherwise
         required by the organizational documents of NAP Madrid) or options,
         warrants or other rights to acquire such Capital Stock;

                  (iii) make any principal payment on, or purchase, repurchase,
         redeem, defease, retire or otherwise acquire for value, prior to any
         scheduled maturity, scheduled repayment, scheduled sinking fund payment
         or other Stated Maturity, any Subordinated Indebtedness (other than any
         Subordinated Indebtedness owed to and held by the Company or a
         Guarantor); or

                                      -68-


                  (iv) make any Investment (other than any Permitted
         Investments) in any Person

(any of the foregoing actions described in clauses (i) through (iv),
collectively, "RESTRICTED PAYMENTS").

                  (b) Notwithstanding the foregoing, and, so long as no Default
or Event of Default shall have occurred and be continuing or would arise
therefrom, the foregoing provisions shall not prohibit dividend payments in cash
on the Series I Preferred Stock of the Company, so long as the aggregate of such
cash dividends, together with outstanding Investments permitted by clause (e) of
the definition of Permitted Investments, does not exceed $10.0 million (a
"PERMITTED PAYMENT").

                  (c) The amount of all Restricted Payments (other than cash)
shall be the Fair Market Value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Noteholders) on
the date of the Restricted Payment of the asset(s) proposed to be transferred by
the Company or such Subsidiary or on the date the obligation to pay such
Restricted Payment was incurred, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Noteholders an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 8.02 were computed, which calculations
may, to the extent applicable, be based upon the Company's latest available
financial statements.

                  SECTION 8.03. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. The Company shall not, and shall not cause or permit any
of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective or enter into any agreement with any Person
that would cause to become effective, any consensual encumbrance or restriction
of any kind, on the ability of any Subsidiary of the Company to (a)(i) pay
dividends, in cash or otherwise, or make any other distributions to the Company
or any of its Subsidiaries (A) on or in respect of its Capital Stock or (B) with
respect to any other interest or participation in, or measured by, its profits,
or (ii) pay any Indebtedness owed to the Company or any of its Subsidiaries, (b)
make any Investment in the Company or any of its Subsidiaries or (c) transfer
any of its properties or assets to the Company or any of its Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (i)
any encumbrance or restriction existing under any agreement in effect on the
date of this Agreement, (ii) the SPV Financing Agreement as in effect as of the
date of this Agreement, and any amendments, modifications, restatements,
renewals, supplements, refundings, replacements or refinancings thereof;
PROVIDED, HOWEVER, that such amendments, modifications, restatements, renewals,
supplements, refundings, replacement or refinancings are no more restrictive
with respect to such dividend and other payment restrictions than those


                                      -69-


contained in the SPV Financing Agreement as in effect on the date of this
Agreement, (iii) this Agreement, the Notes and the Subsidiary Guarantees, (iv)
customary nonassignment provisions in leases, licenses and other agreements
entered into in the ordinary course of business and consistent with past
practices, (v) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(c) above on the property so acquired, (vi) any encumbrance or restriction, with
respect to a Subsidiary that is not a Subsidiary of the Company on the date of
this Agreement, in existence at the time such Person becomes a Subsidiary of the
Company and not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary; PROVIDED, HOWEVER, that such encumbrances and
restrictions are not applicable to the Company or any other Subsidiary, or the
properties or assets of the Company or any other Subsidiary, (vii) customary
restrictions with respect to a Subsidiary of the Company pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary; PROVIDED,
HOWEVER, that any such restriction relates only to the Capital Stock or assets
being sold pursuant to such agreement, and (viii) any encumbrance or restriction
existing under any agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the foregoing clauses
(i) through (vii), or in this clause (viii), PROVIDED that the terms and
conditions of any such encumbrances or restrictions are no more restrictive than
those under or pursuant to the agreement so extended, renewed, refinanced or
replaced.

                  SECTION 8.04. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK.

                  (a) The Company shall not, and shall not cause or permit any
of the Subsidiaries to, directly or indirectly, create, incur, assume, issue,
guarantee or in any manner become liable for or with respect to, contingently or
otherwise (in each case, to "INCUR"), the payment of, any Indebtedness
(including any Acquired Indebtedness) or issue any Preferred Stock, PROVIDED,
HOWEVER, that the Company and, to the extent specifically set forth below, the
Guarantors and the Subsidiaries may incur each and all of the following
(collectively, "PERMITTED Indebtedness"):

                  (i) Indebtedness of the Company or the SPV under the SPV
         Financing Agreement in an aggregate principal amount at any one time
         outstanding not to exceed $49.0 million, less (x) any mandatory
         prepayment made thereunder or scheduled payments made thereunder and
         (y) the amount of any such Indebtedness repaid with the Net Cash
         Proceeds of any Asset Sale or Casualty Event;

                  (ii) Subordinated Indebtedness or Preferred Stock of the
         Company or any Guarantor in an aggregate principal amount or
         liquidation value at any one time outstanding not to exceed
         $10,000,000; PROVIDED, HOWEVER, that if after giving effect to the
         incurrence of any such Indebtedness or Preferred Stock the Company's
         Incurrence Ratio would exceed 2.25 to 1.0 then prior to the incurrence
         of any such Indebtedness or the issuance of any such Preferred Stock,
         the Company or such Guarantor, as the case may be, shall have first
         complied with the right of first offer provisions of clause (c) below;

                  (iii) Indebtedness of the Company pursuant to the Notes and
         Indebtedness of any Guarantor pursuant to a Subsidiary Guarantee of the
         Notes;

                  (iv) Indebtedness of the Company or any Subsidiary outstanding
         at the Closing Time, except Indebtedness to be repaid in connection
         with the Transactions;

                  (v) Indebtedness of the Company owing to a Wholly Owned
         Subsidiary for so long as such Indebtedness is owing to a Wholly Owned
         Subsidiary; PROVIDED that any Indebtedness of the Company to any Wholly


                                      -70-


         Owned Subsidiary is Subordinated Indebtedness, pursuant to a written
         agreement, to the Company's obligations under this Agreement and the
         Notes; PROVIDED, FURTHER, that disposition, pledge or transfer of any
         such Indebtedness to a Person (other than a disposition, pledge or
         transfer to a Wholly Owned Subsidiary) shall be deemed to be an
         incurrence of such Indebtedness by the Company not permitted by this
         clause (v);

                  (vi) Indebtedness of a Wholly Owned Subsidiary owing to and
         held by the Company or another Wholly Owned Subsidiary which is
         unsecured; PROVIDED that (a) any disposition, pledge or transfer of any
         such Indebtedness to a Person (other than the Company or a Wholly Owned
         Subsidiary) shall be deemed to be an incurrence of such Indebtedness by
         the obligor not permitted by this clause (vi), and (b) any transaction
         pursuant to which any Wholly Owned Subsidiary, which has Indebtedness
         owing to the Company or any other Wholly Owned Subsidiary, ceases to be
         a Wholly Owned Subsidiary shall be deemed to be the incurrence of
         Indebtedness by such Wholly Owned Subsidiary that is not permitted by
         this clause (vi); PROVIDED, FURTHER, that if such Indebtedness is
         incurred by a non-Guarantor (other than Terremark Latin America
         (Brasil) Ltda. or any future Wholly Owned Subsidiary that is a Foreign
         Subsidiary) then such incurrence must also comply with clause (e) of
         the definition of "Permitted Investments";

                  (vii) the incurrence by the Company or any Subsidiary of the
         Company of Hedging Obligations that are incurred in the ordinary course
         of business of the Company or such Subsidiary or the SPV Financing
         Agreement as in effect on the date hereof and not for speculative
         purposes; PROVIDED that, in the case of any Hedging Obligation that
         relates to (i) interest rate risk, the notional principal amount of
         such Hedging Obligation does not exceed the principal amount of the
         Indebtedness to which such Hedging Obligation related and (ii) currency
         risk, such Hedging Obligation does not increase the Indebtedness of the
         Company and its Subsidiaries outstanding other than as a result of
         fluctuations in foreign currency exchange rates or by reason of fees,
         indemnities and compensation payable thereunder;

                  (viii) Indebtedness of the Company or any Subsidiary
         represented by Capitalized Lease Obligations or Purchase Money
         Obligations or other Indebtedness incurred or assumed in connection
         with the acquisition or development of real or personal movable or
         immovable property in each case incurred for the purpose of financing
         or refinancing all or any part of the purchase price or cost of
         construction or improvement of property used in the business of the
         Company or such Subsidiary, in an aggregate principal amount pursuant
         to this clause (viii) not to exceed $20.0 million at any one time
         outstanding; PROVIDED that no more than $2.5 million of such
         Indebtedness may be at any one time outstanding at Subsidiaries that
         are not Guarantors; PROVIDED that the principal amount of any
         Indebtedness permitted under this clause (viii) did not in each case at
         the time of incurrence exceed the Fair Market Value, as determined by
         the Company or such Subsidiary in good faith, of the property to which
         it relates; PROVIDED, FURTHER, that any such Indebtedness permitted
         under this clause (viii) is either (A) Subordinated Indebtedness or (B)


                                      -71-


         with respect to any real or personal property other than the specific
         property being financed or refinanced, secured by a Lien which is
         junior to the Liens granted pursuant to the Security Documents;

                  (ix) letters of credit to support workers compensation
         obligations and bankers acceptances and performance bonds, surety bonds
         and performance guarantees of the Company or any Guarantor, in each
         case, in the ordinary course of business consistent with past practice,
         not to exceed $2.5 million in the aggregate at any time outstanding;

                  (x) Preferred Stock of NAP Madrid issued to the Company or any
         Guarantor in consideration for the transfer of assets set forth on
         Schedule B to NAP Madrid in accordance with Section 7.19; PROVIDED that
         all shares of such Preferred Stock that are required to be pledged
         pursuant to Section 7.13(b) shall have been pledged as Collateral;

                  (xi) the Company's guarantee, in an amount not to
         exceed (Euro)475,000, of the lease to be transferred by TerreNAP Data
         Centers, Inc. to NAP Madrid in accordance with Section 7.19; and

                  (xii) any renewals, extensions, substitutions, refundings,
         refinancings or replacements (collectively, a "REFINANCING") of any
         Indebtedness described in clauses (i), (ii), (iii) and (iv) above,
         including any successive refinancings so long as the aggregate
         principal amount of Indebtedness represented thereby is not increased
         by such refinancing plus the lesser of (I) the stated amount of any
         premium or other payment required to be paid in connection with such a
         refinancing pursuant to the terms of the Indebtedness being refinanced
         or (II) the amount of premium or other payment actually paid at such
         time to refinance the Indebtedness, plus, in either case, the amount of
         expenses of the Company or a Subsidiary of the Company incurred in
         connection with such refinancing and (A) in the case of any refinancing
         of Indebtedness that is Subordinated Indebtedness, such new
         Indebtedness is subordinated to the Notes at least to the same extent
         as the Indebtedness being refinanced and (B) such refinancing does not
         reduce the Average Life to Stated Maturity or the Stated Maturity of
         such Indebtedness.

                  (b) For purposes of determining compliance with this Section
8.04, in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Indebtedness described in clauses (i) through (x) of
the immediately preceding paragraph (a), the Company shall, in its sole
discretion, classify such item of Indebtedness in any manner that complies with
this Section 8.04 and will only be required to include the amount and type of
such Indebtedness in one of such clauses. Accrual of interest, accretion of
accreted value and the payment of interest through the issuance of securities
paid-in-kind shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 8.04.

                  (c) If in accordance with clause (a)(ii) above, this clause
(c) shall be applicable, the Company or the applicable Guarantor shall comply
with the following provisions:

                  (i) If the Company or any Guarantor proposes to incur any
         Indebtedness and/or issue any Preferred Stock pursuant to clause (a)(i)
         above then prior to any such incurrence or issuance the Company or the
         applicable Guarantor will deliver by fax or hand delivery a notice
         ("RIGHT OF FIRST OFFER NOTICE") to each Noteholder stating (i) its bona


                                      -72-


         fide intention to incur such Indebtedness and/or issue such Preferred
         Stock, (ii) the principal amount of the Indebtedness or the number of
         shares of Preferred Stock to be offered and (iii) the terms upon which
         it proposes to incur such Indebtedness or issue such Preferred Stock.

                  (ii) By written notification received by the Company, within
         fifteen (15) days after the Company gives the Right of First Offer
         Notice, each Noteholder may elect to purchase, upon the same terms as
         the proposed purchaser(s) propose(s) to purchase such Indebtedness
         and/or Preferred Stock, up to that portion of such Indebtedness and/or
         Preferred Stock which equals the percentage of all outstanding Notes
         held by such Noteholder; PROVIDED HOWEVER that if one or more
         Noteholders do not purchase the entire amount of Indebtedness or
         Preferred Stock offered to them then each remaining Noteholder shall
         have the right to purchase such additional amounts as it may desire (on
         a proportionate basis to the extent necessary). If all of the
         Indebtedness and/or Preferred Stock that the Company or such Guarantor
         proposes to offer pursuant to this clause (c) is not elected to be
         purchased by the Noteholders as provided herein, the Noteholders may,
         during the ten (10) day period following the expiration of the fifteen
         (15) day period provided in the first sentence of this subclause (ii),
         find a third-party investor to buy the remaining unsubscribed portion
         of such Indebtedness and/or Preferred Stock. If all of the Indebtedness
         and/or Preferred Stock that the Company or such Guarantor proposes to
         offer pursuant to this clause (c) is not elected to be purchased by the
         Noteholders and such third party, the Company or the applicable
         Guarantor may, during the sixty (60) day period following the
         expiration of the ten (10) day period provided in the immediately
         preceding sentence, sell all of such Indebtedness and/or Preferred
         Stock to third-party investors pursuant to subclause (i) above upon
         terms that are not materially different from those made available to
         the Noteholders. If the Company does not, within such sixty (60) day
         period, consummate such sale to such third-party investors or if such
         sale is not on terms that are not materially different from those
         offered to the Noteholders, then prior to any subsequent sale of such
         Indebtedness and/or Preferred Stock the Company or such applicable
         Guarantor must comply with the provisions of this clause (c).

        SECTION 8.05. ASSET SALES.

                  (a) The Company shall not, and shall not cause or permit any
Subsidiary of the Company to, directly or indirectly, consummate an Asset Sale;
unless (i) at least 85% of the consideration from such Asset Sale is received in
cash and (ii) the Company or such Subsidiary receives consideration at the time
of such Asset Sale at least equal to the Fair Market Value of the shares or
assets subject to such Asset Sale; PROVIDED, HOWEVER, that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet) of the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Guarantee
thereof) that are assumed by the transferee of any such assets pursuant to any
arrangement releasing the Company or such Subsidiary from further liability and
(y) any notes or other obligations received by the Company or any such
Subsidiary from such transferee that are immediately converted by the Company or
such Subsidiary into cash (to the extent of the cash received), shall be deemed
to be cash for purposes of this provision.



                                      -73-


                  (b) Within 270 days after the receipt of any Net Cash Proceeds
from an Asset Sale, the Company may apply such Net Cash Proceeds (i) in the case
of any Asset Sale of property or assets of the SPV only, to permanently reduce
Indebtedness under the SPV Financing Agreement (and to correspondingly reduce
commitments with respect thereto) or (ii) to fund the acquisition of a
controlling interest in another business, the making of a capital expenditure or
the acquisition of other long term assets, in each case, in the same or a
similar, related or ancillary line of business as the Company was engaged in on
the date of this Agreement. Any Net Cash Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph shall be
deemed to constitute "EXCESS PROCEEDS." When the aggregate amount of Excess
Proceeds exceeds $500,000, the Company shall make an Asset Sale Offer pursuant
to Section 7.09 hereof to purchase the maximum principal amount of Notes, that
may be purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof, plus the Applicable
Premium, plus accrued and unpaid interest thereon to the date of purchase, in
accordance with the procedures set forth in Section 7.09 hereof. To the extent
that the aggregate principal amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. Subject to the terms of the
Intercreditor Agreement, any Net Cash Proceeds from an Asset Sale involving
Collateral shall, pending their application in accordance with the terms hereof,
be deposited in a collateral account with the Agent in which the Agent shall be
granted a perfected first priority security interest, and the terms of which
shall be satisfactory to the Agent and the Required Holders. Any property or
assets acquired with the Net Cash Proceeds of an Asset Sale involving Collateral
shall constitute Collateral under this Agreement and the Security Documents. If
the aggregate principal amount of Notes surrendered by Noteholders thereof
exceeds the amount of Excess Proceeds, the Company shall select the Notes to be
purchased on a PRO RATA basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.

                  SECTION 8.06. TRANSACTIONS WITH AFFILIATES. The Company shall
not, and shall not cause or permit any of its Subsidiaries to, directly or
indirectly, conduct any business or enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with, or
for the benefit of, any Affiliate of the Company or of a Subsidiary (other than
the Company or a Wholly Owned Subsidiary) or any beneficial holder of 10% or
more of any class of Capital Stock of the Company or any officer, director or
employee of the Company or any Subsidiary unless such transaction or series of
related transactions is entered into in good faith and in writing and (a) such
transaction is on terms that are no less favorable to the Company or such
Subsidiary, as the case may be, than those that would be available in a
comparable transaction in arm's-length dealings with an unrelated third party,
(b) with respect to any transaction or series of related transactions involving
aggregate value in excess of $1.0 million, the Company delivers to each
Noteholder an Officers' Certificate describing such transaction or transactions,
certifying that such transaction or transactions have been approved by a
majority of the Board of Directors of the Company as well as a majority of the
Disinterested Directors of the Company, or in the event there is only one
Disinterested Director, by such Disinterested Director, and certifying that such
transaction or transactions complies with clause (a) above and (c) with respect
to any transaction or series of related transactions involving aggregate
payments in excess of $5.0 million, the Company delivers to each Noteholder a
written opinion of an Independent Financial Advisor stating that the transaction
or series of related transactions is fair to the Company or such Subsidiary from


                                      -74-


a financial point of view; PROVIDED, HOWEVER, that this provision shall not
apply to (i) any transaction with an officer or director of the Company (acting
in such capacity) entered into in the ordinary course of business (including
compensation and employee benefit arrangements with any officer, director or
employee of the Company, including under any stock option or stock incentive
plans); PROVIDED that such transaction has been approved in the manner described
in clause (b) above, and (ii) any Permitted Payment otherwise permitted by the
terms of this Agreement and (iii) indemnification agreements for the benefit of
officers, directors and employees entered into in the ordinary course of
business.

                  SECTION 8.07. LIMITATION ON LIENS. The Company shall not, and
shall not cause or permit any Subsidiary of the Company to create, incur, assume
or permit to exist, directly or indirectly, any Lien on any property now owned
or hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except the following (collectively, the "PERMITTED LIENS"):

                  (a) inchoate Liens for taxes, assessments or governmental
         charges or levies not yet due and payable or delinquent and Liens for
         taxes, assessments or governmental charges or levies, which (i) are
         being contested in good faith by appropriate proceedings which
         proceedings (or orders entered in connection with such proceedings)
         have the effect of preventing the forfeiture or sale of the property
         subject to any such Lien (and for which adequate reserves have been
         established in accordance with GAAP), or (ii) in the case of any such
         charge or claim which has or may become a Lien against any of the
         Collateral, such Lien and the contest thereof shall satisfy the
         Contested Collateral Lien Conditions;

                  (b) Liens in respect of property of the Company or any of its
         Subsidiaries imposed by Requirements of Law, which were incurred in the
         ordinary course of business and do not secure Indebtedness for borrowed
         money, such as carriers', warehousemen's, materialmen's, landlords',
         workmen's, suppliers', repairmen's and mechanics' Liens and other
         similar Liens arising in the ordinary course of business, and (i) which
         do not in the aggregate materially detract from the value of the
         property of the Company and its Subsidiaries, taken as a whole, and do
         not materially impair the use thereof in the operation of the business
         of the Company and its Subsidiaries, taken as a whole, (ii) which, if
         they secure obligations that are then due and unpaid, are being
         contested in good faith by appropriate proceedings for which adequate
         reserves have been established in accordance with GAAP, which
         proceedings (or orders entered in connection with such proceedings)
         have the effect of preventing the forfeiture or sale of the property
         subject to any such Lien, and (iii) in the case of any such Lien which
         has or may become a Lien against any of the Collateral, such Lien and
         the contest thereof shall satisfy the Contested Collateral Lien
         Conditions;

                  (c) any Lien in existence on the Closing Time and set forth on
         SCHEDULE 8.07(C) and any Lien granted as a replacement or substitute
         therefor; PROVIDED that any such replacement or substitute Lien (i)


                                      -75-


         does not secure an aggregate amount of Indebtedness, if any, greater
         than that secured on the Closing Time and (ii) does not encumber any
         property other than the property subject thereto on the Closing Time
         (any such Lien, an "EXISTING LIEN");

                  (d) easements, rights-of-way, restrictions (including zoning
         restrictions), covenants, licenses, encroachments, protrusions and
         other similar charges or encumbrances, and minor title deficiencies on
         or with respect to any Real Property, in each case whether now or
         hereafter in existence, not (i) securing Indebtedness, (ii)
         individually or in the aggregate materially impairing the value or
         marketability of such Real Property or (iii) individually or in the
         aggregate materially interfering with the ordinary conduct of the
         business of the Company and its Subsidiaries at such Real Property;

                  (e) Liens arising out of judgments, attachments or awards not
         resulting in a Default and in respect of which the Company or such
         Subsidiary shall in good faith be prosecuting an appeal or proceedings
         for review in respect of which there shall be secured a subsisting stay
         of execution pending such appeal or proceedings and, in the case of any
         such Lien which has or may become a Lien against any of the Collateral,
         such Lien and the contest thereof shall satisfy the Contested
         Collateral Lien Conditions;

                  (f) Liens (other than any Lien imposed by ERISA) (x) imposed
         by Requirements of Law or deposits made in connection therewith in the
         ordinary course of business in connection with workers' compensation,
         unemployment insurance and other types of social security legislation,
         (y) incurred in the ordinary course of business to secure the
         performance of tenders, statutory obligations (other than excise
         taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
         leases, government contracts, trade contracts, performance and return
         of money bonds and other similar obligations (exclusive of obligations
         for the payment of borrowed money) or (z) arising by virtue of deposits
         made in the ordinary course of business to secure liability for
         premiums to insurance carriers; PROVIDED that (i) with respect to
         clauses (x), (y) and (z) of this paragraph (f), such Liens are for
         amounts not yet due and payable or delinquent or, to the extent such
         amounts are so due and payable, such amounts are being contested in
         good faith by appropriate proceedings for which adequate reserves have
         been established in accordance with GAAP, which proceedings for orders
         entered in connection with such proceedings have the effect of
         preventing the forfeiture or sale of the property subject to any such
         Lien, (ii) to the extent such Liens are not imposed by Requirements of
         Law, such Liens shall in no event encumber any property other than cash
         and Cash Equivalents, (iii) in the case of any such Lien against any of
         the Collateral, such Lien and the contest thereof shall satisfy the
         Contested Collateral Lien Conditions and (iv) the aggregate amount of
         deposits at any time pursuant to clause (y) and clause (z) of this
         paragraph (f) shall not exceed $250,000 in the aggregate;

                  (g) Leases of the properties of the Company or any of its
         Subsidiaries, in each case entered into in the ordinary course of the
         Company's or such Subsidiary's business and do not, individually or in
         the aggregate, (i) interfere in any material respect with the ordinary


                                      -76-


         conduct of the business of the Company or any of its Subsidiaries, or
         (ii) materially impair the use (for its intended purposes) or the value
         of the property subject thereto;

                  (h) Liens arising out of conditional sale, title retention,
         consignment or similar arrangements for the sale of goods entered into
         by the Company or any of its Subsidiaries in the ordinary course of
         business;

                  (i) bankers' Liens, rights of setoff and other similar Liens
         existing solely with respect to cash and Cash Equivalents on deposit in
         one or more accounts maintained by the Company or any of its
         Subsidiaries, in each case granted in the ordinary course of business
         in favor of the bank or banks with which such accounts are maintained,
         securing amounts owing to such bank with respect to cash management and
         operating account arrangements, including those involving pooled
         accounts and netting arrangements; PROVIDED that, unless such Liens are
         non-consensual and arise by operation of law, in no case shall any such
         Liens secure (either directly or indirectly) the repayment of any
         Indebtedness;

                  (j) Liens on property of a person existing at the time such
         person is acquired or merged with or into or consolidated with the
         Company or any of its Subsidiaries to the extent permitted hereunder
         (and not created in anticipation or contemplation thereof); PROVIDED
         that such Liens do not extend to property not subject to such Liens at
         the time of acquisition (other than improvements thereon) and are no
         more favorable to the lienholders than such existing Lien;

                  (k) Liens granted pursuant to the Security Documents to secure
         the Secured Obligations;

                  (l) licenses of Intellectual Property granted by the Company
         or any of its Subsidiaries in the ordinary course of business and not
         interfering in any material respect with the ordinary conduct of
         business of the Company or any of its Subsidiaries;

                  (m) the filing of UCC financing statements solely as a
         precautionary measure in connection with operating leases or
         consignment of goods;

                  (n) Liens on property of the SPV or agreed to by Agent
         pursuant to the Intercreditor Agreement granted to secure the
         obligations under the SPV Financing Agreement as contemplated therein;
         PROVIDED, there shall have been no material amendments, alterations,
         modifications or waivers of any provision thereof since the date of
         this Agreement without the prior written consent of the Agent;
         PROVIDED, FURTHER, that any increase in the scope of the collateral to
         which the Liens attach will be deemed material;

                  (o) Liens securing Subordinated Indebtedness permitted by
         Section 8.04(a)(ii), so long as such Liens are junior to the Liens
         granted pursuant to the Security Documents;

                                      -77-


                  (p) Liens securing Indebtedness not to exceed (Euro)475,000
         and permitted by Section 8.04(a)(xi); and

                  (q) Liens securing Indebtedness incurred in accordance with
         Section 8.04(a)(viii), so long as such Liens, to the extent covering
         any Collateral other than the specific property being financed or
         refinanced, are junior to the Liens granted pursuant to the Security
         Documents;

PROVIDED, HOWEVER, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents and Liens granted pursuant to the SPV
Financing Agreement at the Closing Time.

                  SECTION 8.08. LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF SUBSIDIARIES. The Company (a) shall not, and shall not cause or permit
any Subsidiary of the Company to, transfer, convey, sell, lease, pledge or
otherwise dispose of any Capital Stock of any Subsidiary of the Company to any
Person (other than the Company or a Wholly Owned Subsidiary), unless (i) such
transfer, conveyance, sale, lease, pledge or other disposition is of all the
Capital Stock of such Subsidiary and (ii) the Net Cash Proceeds from such
transfer, conveyance, sale, lease, pledge or other disposition are applied in
accordance with the provisions of Section 8.05 hereof; PROVIDED, HOWEVER, that
this clause (a) shall not apply to the pledge of Capital Stock of the SPV
securing Indebtedness under the SPV Financing Agreement, and (b) shall not cause
or permit any Subsidiary of the Company to issue any of its Capital Stock (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares to the extent required by applicable law) to any Person other
than to the Company or a Wholly Owned Subsidiary.

                  SECTION 8.09. PAYMENTS FOR CONSENTS. Neither the Company nor
any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any
Noteholder in consideration for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Agreement or the Notes
unless such consideration is concurrently offered to be paid or is concurrently
paid to all Noteholders that consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
agreement.

                  SECTION 8.10. MERGER, CONSOLIDATION, OR SALE OF ASSETS. The
Company shall not, and shall not permit any of its Subsidiaries to, alter the
corporate, capital or legal structure of the Company or any of its Subsidiaries,
or enter into any transaction of merger or consolidation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sublease (as lessor or sublessor), transfer or otherwise dispose of, in
one transaction or a series of transactions, all or any part of its business,
property or assets (including its notes or receivables and Capital Stock of a
Subsidiary, whether newly issued or outstanding), whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of the Company's or any of its Subsidiaries'
business) except:



                                      -78-


                  (i) any Subsidiary of the Company may be merged with or into
         the Company or any wholly owned Guarantor, or be liquidated, wound up
         or dissolved, or all or any part of its business, property or assets
         may be conveyed, sold, leased, transferred or otherwise disposed of, in
         one transaction or a series of transactions, to the Company or any
         wholly owned Guarantor; PROVIDED that (i) in the case of such a merger,
         the Company or such wholly owned Guarantor shall be the continuing or
         surviving Person and (ii) in the case of such a liquidation, winding-up
         or dissolution, all of the assets of such wholly owned Guarantor are
         transferred to the Company or a Guarantor that is wholly owned,
         directly or indirectly, by the Company or as otherwise expressly
         permitted under this Agreement;

                  (ii) the Company and its Subsidiaries may sell or otherwise
         dispose of assets in transactions that do not constitute Asset Sales;
         PROVIDED that the consideration received for such assets shall be in an
         amount at least equal to the Fair Market Value thereof;

                  (iii) the Company and its Subsidiaries may consummate one or
         more Asset Sales; PROVIDED that the Company or the applicable
         Subsidiary complies with the other applicable provisions of this
         Agreement; and

                  (iv) the Company and its Subsidiaries may make Permitted
         Investments.

                  SECTION 8.11. CONDUCT OF BUSINESS. The Company and its
Subsidiaries shall not engage in any businesses which are not the same, similar,
related or ancillary to the businesses in which the Company and its Subsidiaries
are engaged in at the Closing Time after giving effect to the Transactions.

                  SECTION 8.12. LIMITATION ON TAX CONSOLIDATION. The Company
shall not and shall not permit any of its Subsidiaries to become a party to a
consolidated Federal income tax return with any Person other than the Company
and its Subsidiaries if as a result thereof, as of any date, the aggregate
amount of Federal income taxes which the Company and its Subsidiaries have then
or theretofore paid or become obligated to pay (determined on a cumulative
basis, taking into account net benefits received by the Company and its
Subsidiaries and also giving effect to amounts payable under any applicable
indemnity agreement from any other party to such consolidated returns) or will
become obligated to pay in the future exceeds (or will exceed) the amount which
the Company and its Subsidiaries would have been required to pay pursuant to a
consolidated tax return solely of the Company and its Subsidiaries.

                  SECTION 8.13. PUBLIC DISCLOSURES. The Company shall not, and
shall not permit any of its Subsidiaries to, disclose the name or identity of
any Holder as an investor in the Company in any press release or other public
announcement or in any document or material filed with any governmental entity,
unless such disclosure is required by Applicable Law or governmental regulations
or by order of a court of competent jurisdiction, in which case prior to making
such disclosure the Company shall give written notice to such Holder describing
in reasonable detail the proposed content of such disclosure and shall permit
such Holder to review and comment upon the form and substance of such
disclosure; PROVIDED, HOWEVER, that each Holder hereby expressly agrees to the
filing of any Transaction Document as an exhibit to the Company's filings with
the Commission and any description of the terms thereof in any such filings.



                                      -79-


                  SECTION 8.14. LIMITATION ON REPURCHASES AND OTHER REPAYMENTS
OF NOTES. The Company shall not, and shall not permit any of its Subsidiaries
to, prepay, repurchase, redeem or otherwise acquire or retire in whole or in
part, directly or in-directly, any Notes held by any Noteholder unless the
Company or such Subsidiary shall have offered to prepay, repurchase, redeem or
otherwise acquire or retire, as the case may be, the same proportion of the
aggregate principal amount of the Notes held by each other Noteholder at the
time outstanding upon the same terms and conditions.

                  SECTION 8.15. LIMITATION ON ACTIVITIES.

                  (a) The SPV will not engage in any business or business
activity other than the activities related to the ownership and operation of the
Facility and its existence. The SPV will not own or acquire any assets (other
than the Facility) or incur any liabilities or obligations (other than the
liabilities imposed by law, including Tax and other liabilities related to its
existence) or issue any Capital Stock other than to the Company or a Wholly
Owned Subsidiary that is a Guarantor.

                  (b) If at any time after the Closing Time any of Terremark
Asia Company, Ltd., Terremark Latin America de Mexico or Terremark Latin America
de Argentina, SA (i) engages in any business or business activity other than the
activities related to its existence or (ii) owns or acquires any assets or
incurs any liabilities or obligations (other than the liabilities imposed by
law, including Tax and other liabilities related to its existence) or issues any
Capital Stock other than to the Company or a Wholly Owned Subsidiary that is a
Guarantor, such entity shall comply with the requirements of Section 7.13(b).

                  SECTION 8.16. LIMITATION ON ACCOUNTING CHANGES. The Company
shall not and shall not permit any of its Subsidiaries to make any change in
financial or Tax accounting policies or reporting practices, without the consent
of the Required Holders, which consent shall not be unreasonably withheld,
except changes that are required by GAAP or applicable Tax laws.

                  SECTION 8.17. FISCAL YEAR. The Company shall not and shall not
permit any of its Subsidiaries to change its Fiscal Year-end to a date other
than March 31.

                  SECTION 8.18. AMENDMENTS OR WAIVERS OF CERTAIN DOCUMENTS. The
Company shall not, and shall not cause or permit any of its Subsidiaries to,
amend or otherwise modify, or waive any rights, or suffer to occur any amendment
or other modification or waiver, under (i) any Transaction Document or (ii) any
provisions of any agreement, instrument or document evidencing or securing any
Subordinated Indebtedness, in each case, other than amendments, modifications
and waivers not materially adverse to the interests of the Noteholders as
determined by the Required Holders in their reasonable judgment.

                  SECTION 8.19. AMENDMENTS TO CHARTER DOCUMENTS. The Company
shall not, nor shall it cause or permit any of its Subsidiaries to, amend its
certificate of incorporation or bylaws in any respect which could be materially
adverse to the interests of the Noteholders.

                  SECTION 8.20. NO INTEGRATION. The Company shall not and (to
the extent within its control) it shall cause its Affiliates not to make any
offer or sale of securities of any class of the Company if, as a result of the


                                      -80-


doctrine of "integration" referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid (for the purpose of the sale of the
Securities by the Company to the Purchasers) any applicable exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or Regulation S thereunder or otherwise.

                                   SECTION 9

                                    THE NOTES


                  SECTION 9.01. FORM AND EXECUTION. The Notes shall be in the
form of EXHIBIT A hereto. The Notes shall be executed on behalf of the Company
by its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Notes may be manual
or facsimile.

                  Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.

                  SECTION 9.02. TERMS OF THE NOTES. The terms of the Notes shall
be as set forth in EXHIBIT A. Without limiting the foregoing:

                  (a) STATED MATURITY. The Stated Maturity of the principal of
         Notes shall be as provided in EXHIBIT A.

                  (b) INTEREST. The Notes will bear interest on their principal
         amount and overdue interest as provided in EXHIBIT A.

                  SECTION 9.03. DENOMINATIONS. The Notes shall be issuable only
in registered form without coupons and only in denominations of U.S.$1,000 and
any integral multiple thereof.

                  SECTION 9.04. FORM OF LEGEND FOR THE NOTES. Unless otherwise
permitted by Section 9.07, every Note issued and delivered hereunder shall bear
a legend in substantially the following form:

         THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED,
         SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS
         IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER
         THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF
         THIS SECURITY IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT, DATED
         AS OF DECEMBER 31, 2004 (THE "PURCHASE AGREEMENT"), AMONG TERREMARK


                                      -81-


         WORLDWIDE, INC. (THE "COMPANY"), THE GUARANTORS NAMED THEREIN, THE
         AGENT NAMED THEREIN AND THE PURCHASERS NAMED THEREIN. A COPY OF SUCH
         PURCHASE AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.

         FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
         CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER,
         THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000
         PRINCIPAL AMOUNT OF THIS NOTE, (1) THE ISSUE PRICE IS $939.36; (2) THE
         AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS $224.07; (3) THE ISSUE DATE IS
         DECEMBER 31, 2004; AND (4) THE YIELD TO MATURITY IS 14.42% (COMPOUNDED
         QUARTERLY).

                  SECTION 9.05. PAYMENTS AND COMPUTATIONS. All payments of
interest on the Notes shall be paid to the persons in whose names such Notes are
registered on the Security Register at the close of business on the date fifteen
calendar days prior to the related Interest Payment Date (the "REGULAR RECORD
DATE") and all payments of principal on the Notes shall be paid to the persons
in whose names such Notes are registered on the applicable Redemption Date or at
Maturity, as applicable. Notwithstanding the foregoing, if a Note is issued
after a Regular Record Date and prior to an Interest Payment Date, the record
date for such Interest Payment Date shall be the original issue date. Principal
and premium on any Note shall be payable only against surrender therefor, while
payments of interest on Notes shall be made, in accordance with this Agreement
and subject to applicable laws and regulations, by check mailed on or before the
due date for such payment to the person entitled thereto at such person's
address appearing on the Security Register or, by wire transfer to such account
as any Noteholder shall designate by written instructions received by the
Company no less than 15 days prior to any applicable Interest Payment Date,
which wire instruction shall continue in effect until such time as the
Noteholder otherwise notifies the Company or such Noteholder no longer is the
registered owner of such Note or Notes.

                  SECTION 9.06. REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE.

                  (a) SECURITY REGISTER. The Company shall maintain a register
(the "SECURITY REGISTER") for the registration or transfer of the Notes. The
name and address of the Noteholder of each Note, records of any transfers of the
Notes and the name and address of any transferee of a Note shall be entered in
the Security Register and the Company shall, promptly upon receipt thereof,
update the Security Register to reflect all information received from a
Noteholder. There shall be no more than one Noteholder for each Note, including
all beneficial interests therein.

                  (b) REGISTRATION OF TRANSFER. Upon surrender for registration
of transfer of any Note properly endorsed for transfer at the office or agency
of the Company, the Company shall execute and deliver, in the name of the


                                      -82-


designated transferee or transferees, one or more new Notes, of any authorized
denominations and like aggregate principal amount.

                  (c) EXCHANGE. At the option of the Noteholder, Notes may be
exchanged for other Notes, of any authorized denominations and of like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Company shall
execute and deliver the Notes which the Holder making the exchange is entitled
to receive.

                  (d) EFFECT OF REGISTRATION OF TRANSFER OR EXCHANGE. All Notes
issued upon any registration of transfer or exchange of Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Agreement, as the Notes surrendered upon such registration
of transfer or exchange.

                  (e) REQUIREMENTS; CHARGES. Every Note presented or surrendered
for registration of transfer or for exchange shall (if so required by the
Company) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company duly executed, by the Noteholder thereof or
his attorney duly authorized in writing. No service charge shall be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any Tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 8.10 not involving any transfer.

                  (f) CERTAIN LIMITATIONS. If the Notes are to be redeemed in
part, the Company shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
Business Days before the day of the mailing of a notice of redemption of any
such Notes selected for redemption under Section 11.02 and ending at the close
of business on the Business Day of such mailing, or (ii) to register the
transfer of or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.

                  SECTION 9.07. TRANSFER RESTRICTIONS.

                  (a) No Note may be sold, transferred or otherwise disposed of
(any such sale, transfer or other disposition is herein referred to as a
"SALE"), except in compliance with this Section 9.07.

                  (b) A Noteholder may sell Notes to a transferee that is an
Accredited Investor or a Qualified Institutional Buyer; PROVIDED, HOWEVER, that
each of the following conditions is satisfied:

                  (i) such Noteholder or transferee represents that it is
         acquiring the Note or Notes for its own account and that it is not
         acquiring such Note or Notes with a view to, or for offer or sale in
         connection with, any distribution thereof (within the meaning of the
         Securities Act) that would be in violation of the securities laws of
         the United States or any state thereof, but subject, nevertheless, to
         the disposition of its property being at all times within its control;
         and



                                      -83-


                  (ii) such transferee agrees to be bound by the provisions of
         this Section 9.07 with respect to any resale of the Notes.

                  (c) A Noteholder may sell its Notes to a transferee in
accordance with Regulation S under the Securities Act; PROVIDED, HOWEVER, that
each of the following conditions is satisfied:

                  (i) the offer of Notes is not made to a person in the United
         States;

                  (ii) either:

                  (A) at the time the buy order is originated, the transferee is
         outside the United States or the Noteholder and any person acting on
         its behalf reasonably believes that the transferee is outside the
         United States, or

                  (B) the transaction is executed in, on or through the
         facilities of a designated offshore securities market and neither the
         Noteholder nor any person acting on its behalf knows that the
         transaction was pre-arranged with a buyer in the United States;

                  (iii) no directed selling efforts are made in contravention of
         the requirements of Rule 903(b) or 904(b) of Regulation S under the
         Securities Act, as applicable; and

                  (iv) the transaction is not part of a plan or scheme to evade
         the registration requirements of the Securities Act.

                  (d) In the event of a proposed exercise or sale that does not
qualify under either Section 9.07(b) or 9.07(c) above, a Noteholder may sell its
Notes only if:

                  (i) such Noteholder gives written notice to the Company of its
         intention to exercise or effect such sale, which notice (A) shall
         describe the manner and circumstances of the proposed transaction in
         reasonable detail and (B) shall designate the counsel for such
         Noteholder, which counsel shall be reasonably satisfactory to the
         Company;

                  (ii) counsel for the Noteholder shall render an opinion to the
         effect that such proposed sale may be effected without registration
         under the Securities Act; and

                  (iii) such Noteholder or transferee complies with Sections
         9.07(b)(i) and 9.07(b)(ii).

                  SECTION 9.08. MUTILATED, DESTROYED, LOST AND STOLEN NOTES. If
any mutilated Note is surrendered to the Company, the Company shall execute and
deliver in exchange therefor a new Note of the same principal amount and bearing
a number not contemporaneously outstanding.

                  If there shall be delivered to the Company (a) evidence to its
satisfaction of the destruction, loss or theft of any Note and (b) such security
or indemnity as may be required by the Company to save each of it and any agent
harmless, then, in the absence of notice that such Note has been acquired by a


                                      -84-


bona fide purchaser, the Company shall execute and deliver, in lieu of any such
destroyed, lost or stolen Note, a new Note of a like principal amount and
bearing a number not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.

                  Upon the issuance of any new Note pursuant to this Section,
the Company may require the payment of a sum sufficient to cover any Tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.

                  Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Notes duly issued hereunder.

                  The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.

                  SECTION 9.09. PERSONS DEEMED OWNERS. Prior to due presentment
of a Note for registration of transfer, the Company and any agent of the Company
shall treat the Person in whose name such Note is registered as the owner of
such Note for the purpose of receiving payment of principal of and interest on
such Note and for all other purposes whatsoever, whether or not such Note be
overdue and neither the Company nor any agent of the Company shall be affected
by notice to the contrary.

                  SECTION 9.10. CANCELLATION. All Notes surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Company, be delivered to the Company and shall be promptly
canceled by it. The Company shall cancel any Notes previously issued and
delivered hereunder which the Company may have reacquired.

                  SECTION 9.11. HOME OFFICE PAYMENT. So long as any Purchaser or
its nominee shall be the holder of any Note, and notwithstanding anything
contained in this Agreement or such Note to the contrary, the Company will pay
all sums becoming due on such Note for principal, premium, if any, and interest
by such method and at such address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation reasonably promptly after
any such request, to the Company at its principal executive office. Prior to any
sale or other disposition of any Note held by such Purchaser or its nominee such


                                      -85-


Purchaser will, at its election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 9.06. The Company will afford the benefits of this Section 9.11 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased by such Purchaser under this Agreement and that has made the same
agreement relating to such Note as such Purchaser made in this Section 9.11.

                                   SECTION 10

                                EVENTS OF DEFAULT


                  SECTION 10.01. EVENTS OF DEFAULT. An Event of Default shall
exist upon the occurrence of any of the following specified events (each an
"EVENT OF DEFAULT"):

                  (a) the Company defaults in the payment when due of interest
         on the Notes and such default continues for a period of three (3)
         Business Days;

                  (b) the Company defaults in the payment when due of principal
         of or premium, if any, on the Notes when the same becomes due and
         payable at its Maturity;

                  (c) the Company or any Subsidiary fails to comply with any of
         the provisions of Section 7.08, 7.09, 8.02, 8.04, 8.05, 8.06, 8.08,
         8.10, 8.11, 8.12, 8.13, 8.14 or 8.15;

                  (d) the Company or any Subsidiary fails to observe or perform
         any other covenant, or other agreement in this Agreement, the Notes or
         the Guarantees and such failure continues for a period of 30 days after
         the earlier of (x) the Company becoming aware of such failure and (y)
         the Company receiving a notice of such failure from any Noteholder,
         which notice must specify the failure, demand that it be remedied and
         state that the notice is a "Notice of Default";

                  (e) any representation, warranty, certification or statement
         made or deemed to have been made by or on behalf of any Issuer or by
         any officer of any Issuer in respect of any Transaction Document or in
         any statement or certificate at any time given by or on behalf of any
         Issuer or by any officer of any Issuer in writing pursuant hereto or in
         connection herewith or therewith shall be false in any material respect
         on the date as of which made;

                  (f) a default occurs under any mortgage, indenture or
         instrument under which there may be issued or by which there may be
         secured or evidenced any Indebtedness of the Company or any of its
         Subsidiaries (or payment of which is guaranteed by the Company or any
         of its Subsidiaries), whether such Indebtedness or guarantee now exists
         or is created after the date of this Agreement, which default (i)
         constitutes a failure to pay any portion of the principal of or
         premium, if any, or interest on such Indebtedness when due and payable
         after the expiration of any applicable grace period provided in such
         Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (ii)
         shall have resulted in such Indebtedness being ---------------
         accelerated or otherwise becoming or being declared due and payable
         prior to its stated maturity and, in each case, the principal amount of
         any such Indebtedness, together with the principal amount of any other


                                      -86-


         such Indebtedness under which there has been a Payment Default or the
         maturity of which has been so accelerated, aggregates $1,000,000 or
         more;

                  (g) a final judgment or final judgments for the payment of
         money are entered by a court or courts of competent jurisdiction
         against the Company or any of its Subsidiaries and such judgment or
         judgments remain unpaid and undischarged for a period (during which
         execution shall not be effectively stayed) of 60 days, PROVIDED that
         the aggregate of all such undischarged judgments exceeds $1,000,000;

                  (h) the Company or any of its Significant Subsidiaries or any
         group of Subsidiaries that, taken as a whole, would constitute a
         Significant Subsidiary pursuant to or within the meaning of Bankruptcy
         Law:

                           (i) commences a voluntary case or proceeding,

                           (ii) consents to the entry of a decree or order for
                  relief against it in an involuntary case or proceeding or to
                  the commencement of any case or proceeding against it,

                           (iii) consents to the filing of a petition or to the
                  appointment of or taking possession by a Custodian of it or
                  for all or any substantial part of its property,

                           (iv) makes or consents to the making of a general
                  assignment for the benefit of its creditors or

                           (v) generally is not paying, or admits in writing
                  that it is not able to pay, its debts as they become due;

                  (i) a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that:

                           (A) is for relief against the Company or any of its
                  Significant Subsidiaries or any group of Subsidiaries that,
                  taken as a whole, would constitute a Significant Subsidiary,
                  in an involuntary case or proceeding;

                           (B) appoints a Custodian of the Company or any of its
                  Significant Subsidiaries or any group of Subsidiaries that,
                  taken as a whole, would constitute a Significant Subsidiary,
                  or for all or any substantial part of the property of the
                  Company or any of its Significant Subsidiaries or any group of
                  Subsidiaries that, taken as a whole, would constitute a
                  Significant Subsidiary, or approves as properly filed a
                  petition seeking reorganization, arrangement, adjustment or
                  composition of or in respect of any of the foregoing; or

                           (C) orders the winding up or liquidation of the
                  Company or any of its Significant Subsidiaries or any group of


                                      -87-


                  Subsidiaries that, taken as a whole, would constitute a
                  Significant Subsidiary, or adjudges any of them a bankrupt or
                  insolvent;

         and any such order or decree remains unstayed and in effect for 60
         consecutive days;

                  (j) any Subsidiary Guarantee of a Significant Subsidiary
         ceases to be in full force and effect or any Subsidiary Guarantee of a
         Subsidiary is declared to be null and void and unenforceable or any
         Subsidiary Guarantee of a Subsidiary is found to be invalid or any
         Guarantor denies its liability under its Subsidiary Guarantee (other
         than by reason of release of a Guarantor in accordance with the terms
         of this Agreement);

                  (k) any security interest and Lien purported to be created by
         any Security Document shall cease to be in full force and effect, or
         shall cease to give the Agent, for the benefit of the Secured Parties,
         the Liens, rights, powers and privileges purported to be created and
         granted under such Security Document (including a perfected first
         priority security interest in and Lien on all of the Collateral
         thereunder (except as otherwise expressly provided in this Agreement or
         such Security Document)) in favor of the Agent, or shall be asserted by
         Company or any other Issuer not to be a valid, perfected, first
         priority (except as otherwise expressly provided in this Agreement or
         such Security Document) security interest in or Lien on the Collateral
         covered thereby and such defect in such security interest or Lien
         continues for a period of 30 days after the earlier of (x) the Company
         becoming aware of such failure and (y) the Company receiving a notice
         of such defect from the Agent or any Noteholder, which notice must
         specify the defect, demand that it be remedied and state that the
         notice is a "Notice of Default";

                  (l) any Basic Document or any material provisions thereof
         shall at any time and for any reason be declared by a court of
         competent jurisdiction to be null and void, or a proceeding shall be
         commenced by any Issuer or any other person, or by any Governmental
         Authority, seeking to establish the invalidity or unenforceability
         thereof (exclusive of questions of interpretation of any provision
         thereof), or any Issuer shall repudiate or deny any portion of its
         liability or obligation for the Obligations; or

                  (m) any agent or lender under the SPV Financing Agreement
         shall at any time seek to enforce the guaranty of the Company provided
         under the SPV Financing Agreement or the guaranty agreement between the
         Company and Citigroup dated the date hereof unless the Company shall
         cause a proceeding instituted contesting such enforcement to stay the
         enforcement of such guaranty.

                  The term "CUSTODIAN" means any custodian, receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

                  SECTION 10.02. REMEDIES. If an Event of Default (other than an
Event of Default specified in Section 10.01(h) or 10.01(i)) occurs and is
continuing, then and in every such case the Noteholders of 25% or more in
principal amount of the then outstanding Notes may declare the principal amount
of all the Notes to be due and payable immediately, by a notice in writing to
the Company, and upon any such declaration such principal amount and any accrued
interest shall become immediately due and payable. For the avoidance of doubt,
if any Payment Default or acceleration that constitutes an Event of Default
under Section 10.01(f) shall have occurred and prior to any acceleration under


                                      -88-


this Section 10.02 such Payment Default shall have been cured or waived or such
acceleration shall have been rescinded, then from and after such cure, waiver or
rescission, such Event of Default shall no longer be deemed to be continuing. If
an Event of Default specified in Section 10.01(h) or 10.01(i) occurs and is
continuing, the principal amount of and any accrued interest on the outstanding
Notes shall automatically, and without any declaration or other action on the
part of any Noteholder, become immediately due and payable. Notwithstanding the
foregoing, the right of any Noteholder to receive payment of principal of,
premium, if any, or interest of any Note held by such Noteholder on or after the
respective dates expressed in such Note, or to bring suit for the enforcement of
any such repayment on or after such respective date, is absolute and
unconditional and shall not be impaired or affected without the consent of such
Noteholder.

                  If an Event of Default occurs by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Company or any of its
Subsidiaries with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then had elected to optionally
redeem the Notes pursuant to Paragraph 3 of the Notes, then, upon acceleration
of the Notes, the Applicable Premium shall also become and be immediately due
and payable, to the extent permitted by Applicable Law, anything in this
Agreement or in the Notes to the contrary notwithstanding.

                  At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained, the Required Holders, by written notice to the Company, may rescind
and annul such declaration and its consequences if:

                  (a) the Company has paid a sum sufficient to pay:

                           (i) all overdue interest on all Notes;

                           (ii) the principal of (and premium, if any, on) any
                  Notes which have become due otherwise than by such declaration
                  of acceleration (including any Notes required to have been
                  purchased pursuant to an offer to purchase that the Company is
                  required to make hereunder) and any interest thereon at the
                  rate borne by the Notes; and

                           (iii) to the extent that payment of such interest is
                  lawful, interest upon overdue interest at the rate provided
                  therefor in the Notes; and

                  (b) all Events of Default, other than the nonpayment of the
         principal amount of Notes and interest thereon which have become due
         solely by such declaration of acceleration, have been cured or waived
         as provided in Section 10.03.

         SECTION 10.03. WAIVER OF PAST DEFAULTS. The Required Holders may on
behalf of the Noteholders of all the Notes waive any past default hereunder and
its consequences, except a default:



                                      -89-


                  (a) in the payment of the principal (or premium, if any) or
         interest on any Note (including any Note which is required to have been
         purchased pursuant to an offer to purchase that the Company is required
         to make hereunder), or

                  (b) in respect of a covenant or provision hereof which under
         Section 15.04 cannot be modified or amended without the consent of the
         Noteholder of each outstanding Note affected.

                  Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Agreement; PROVIDED, HOWEVER, no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.

                                   SECTION 11

                                   REDEMPTION


                  SECTION 11.01. RIGHT OF REDEMPTION. The Notes may be redeemed
at the election of the Company at such times, in such amounts and at the
Redemption Prices (together with any applicable accrued interest to the
Redemption Date) specified in the form of Note attached as EXHIBIT A hereto.

                  SECTION 11.02. PARTIAL REDEMPTIONS. In case the Company elects
to redeem less than all of the Notes, the Company shall redeem the Notes PRO
RATA from each Noteholder. For all purposes of this Agreement, unless the
context otherwise requires, all provisions relating to the redemption of Notes
shall relate, in the case of any Note redeemed or to be redeemed only in part,
to the portion of the principal amount of such Note which has been or is to be
redeemed.

                  SECTION 11.03. NOTICE OF REDEMPTION. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 30 nor
more than 45 days prior to the Redemption Date, to each Noteholder to be
redeemed, at its address appearing in the Security Register.

                  All notices of redemption shall state:

                  (a) the Redemption Date,

                  (b) the Redemption Price,

                  (c) if less than all the outstanding Notes are to be redeemed,
         the portion of each Note to be redeemed,

                  (d) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Note to be redeemed and that
         interest thereon will cease to accrue on and after said date, and



                                      -90-


                  (e) the place or places where such Notes are to be surrendered
         for payment of the Redemption Price.

                  Notice of redemption of Notes to be redeemed at the election
of the Company shall be given by the Company and at the expense of the Company.

                  SECTION 11.04. NOTES PAYABLE ON REDEMPTION DATE. If notice of
redemption shall have been given as provided above, the Notes to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and any applicable accrued
interest) such Notes shall not bear interest. Upon surrender of any such Note
for redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with any applicable accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Noteholders of such Notes, or one or more Predecessor Notes, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of this Agreement.

                  If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Note.

                  SECTION 11.05. NOTES REDEEMED IN PART. Any Note which is to be
redeemed only in part shall be surrendered at the principal offices of the
Company (with, if the Company so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company duly executed by, the
Noteholder thereof or his attorney duly authorized in writing), and the Company
shall execute and deliver to the Noteholder of such Note without service charge,
a new Note or Notes, of any authorized denomination as requested by such
Noteholder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.

                                   SECTION 12

                              SUBSIDIARY GUARANTEES


                  SECTION 12.01. SUBSIDIARY GUARANTEES. Each of the Guarantors
hereby, jointly and severally, unconditionally guarantees to each Noteholder,
irrespective of the validity and enforceability of this Agreement, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and premium and interest on the Notes shall be promptly paid in full when
due, whether at Stated Maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of (and any premium) and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Noteholders hereunder or thereunder shall be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same shall be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.


                                      -91-


The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Agreement, the absence of any action to enforce the same, any
waiver or consent by any Noteholder with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Agreement.

                  If any Noteholder is required by any court or otherwise to
return to the Company or Guarantors, or any Custodian, trustee, liquidator or
other similar official acting in relation to either the Company or Guarantors,
any amount paid by such Noteholder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Noteholders in respect of any obligations guaranteed hereby
until payment in full of all obligations guaranteed hereby. Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the
Noteholders, on the other hand, (a) the Maturity of the obligations guaranteed
hereby may be accelerated as provided in Section 10 for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby and
(b) in the event of any declaration of acceleration of such obligations as
provided in Section 10, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Noteholders under the Subsidiary Guarantees.

                  SECTION 12.02. EXECUTION AND DELIVERY OF SUBSIDIARY
GUARANTEES. To evidence its Subsidiary Guarantee set forth in Section 12.01,
each Guarantor hereby agrees that this Agreement and a Subsidiary Guarantee in
the form of EXHIBIT B hereto shall be executed on behalf of such Guarantor by
its President or one of its Vice Presidents and, to the extent not a party to
this Agreement on the date hereof, each Guarantor shall execute and deliver to
the Noteholders a Subsidiary Guarantee in the form of EXHIBIT B hereto and a
supplemental agreement substantially in the form of EXHIBIT C hereto, pursuant
to which such Subsidiary shall become a Guarantor under this Section 12 and
shall guarantee the Obligations of the Company under this Agreement and the
Notes. Concurrently with the execution and delivery of such Subsidiary Guarantee
and such supplemental agreement, such Guarantor shall deliver to the Noteholders
an opinion of counsel reasonably acceptable to the Purchasers that the foregoing
have been duly authorized, executed and delivered by such Guarantor and that
such Guarantor's Subsidiary Guarantee is a valid and legally binding obligation
of such Guarantor, enforceable against such Guarantor in accordance with its
terms.

                                      -92-


                  If an officer whose signature is on this Agreement or on a
Subsidiary Guarantee no longer holds that office at the time the Company
executes and delivers the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless. The execution and delivery of
any Note by the Company shall constitute due delivery of the Subsidiary
Guarantee set forth in this Agreement on behalf of the Guarantors. Each
Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 12.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Subsidiary Guarantee.

                  SECTION 12.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS. No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or entity
(other than the Company or another Guarantor) unless:

                  (a) subject to the provisions of Section 12.04 hereof, the
         Person formed by or surviving any such consolidation or merger (if
         other than such Guarantor) unconditionally assumes all the obligations
         of such Guarantor under the Notes and this Agreement pursuant to a
         supplemental agreement, in the form of EXHIBIT C hereto; and

                  (b) immediately after giving effect to such transaction, no
         Default or Event of Default exists.

                  Notwithstanding the foregoing, no Guarantor shall be permitted
to consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person), another corporation, Person or entity pursuant to the
preceding sentence if such consolidation or merger would not be permitted by
Section 8.10 hereof.

                  In case of any such consolidation or merger and upon the
assumption by the successor corporation, by supplemental agreement, executed and
delivered to the Noteholders and satisfactory in form to the Noteholders, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Agreement to be
performed by the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Agreement
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.

                  Except as set forth in Section 8 hereof, nothing contained in
this Agreement or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into the Company, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety to
the Company.

                  SECTION 12.04. RELEASES OF SUBSIDIARY GUARANTEES. In the event
of (i) a sale or other disposition of all of the assets of any Guarantor, by way
of merger, consolidation or otherwise or (ii) a sale or other disposition of all
of the Capital Stock of any Guarantor, such Guarantor (in the event of a sale or


                                      -93-


other disposition, by way of such a merger, consolidation, distribution or
otherwise, of all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all of
the assets of such Guarantor) will be released and relieved of any obligations
under its Subsidiary Guarantee; PROVIDED that the net proceeds of such sale or
other disposition shall be applied in accordance with the provisions of Section
8.05 hereof. Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Agreement as provided in this Section 12.

                  SECTION 12.05. LIMITATION ON GUARANTOR LIABILITY. Each
Guarantor, and by its acceptance of the Notes, each Noteholder, hereby confirms
that it is the intention of all such parties that the Subsidiary Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Subsidiary Guarantee. To effectuate the foregoing intention, the Noteholders and
the Guarantors hereby irrevocably agree that the obligations of such Guarantor
under its Subsidiary Guarantee and this Section 12 shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Section 12, result
in the obligations of such Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.

                                   SECTION 13

           EXPENSES, INDEMNIFICATION AND CONTRIBUTION, AND TERMINATION


                  SECTION 13.01. EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Issuers will pay all costs and expenses
(including reasonable attorneys', accountants', advisors', appraisers' and
consultants' fees and disbursements) incurred by the Purchasers, the Agent or
any Holder in connection with the Transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement, the other
Transaction Documents or the Securities (whether or not such amendment, waiver
or consent becomes effective), including, without limitation: (a) the
Purchasers' reasonable out-of-pocket expenses in connection with the Purchasers'
examinations and appraisals of the Issuers' properties, books and records, (b)
the Purchasers' reasonable out-of-pocket expenses in connection with the
preparation, review, negotiation, execution and delivery of the Transaction
Documents and the consummation of the Transactions, (c) the costs and expenses
incurred in enforcing, defending or declaring (or determining whether or how to
enforce, defend or declare) any rights or remedies under this Agreement, the


                                      -94-


Transaction Documents or the Securities or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement, the other Transaction Documents or the Securities, or by reason
of being a holder of any Securities, and (d) the costs and expenses, including
reasonable and documented consultants' and advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Subsidiary of
the Company or in connection with any work-out or restructuring of the
transactions contemplated hereby, by the other Transaction Documents or by the
Securities. The Company will pay, and will save the Purchasers, the Agent and
each other holder of a Purchased Security harmless from, all claims in respect
of any fees, costs or expenses if any, of brokers and finders in relation to the
Transactions.

                  SECTION 13.02. INDEMNIFICATION.

                  (a) INDEMNIFICATION BY THE ISSUERS. Each Issuer, jointly and
severally, agrees to indemnify and hold harmless (i) each Purchaser, (ii) the
Agent, (iii) each Person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) any such Person
referred to in clause (i) (any of the Persons referred to in this clause (iii)
being referred to herein as a "CONTROLLING PERSON") and (iv) the respective
officers, directors, managing directors, stockholders, partners, employees,
representatives, trustees, fiduciaries, and agents of any Person referred to in
clause (i) or any such Controlling Person (any such Person referred to in clause
(i), (ii), (iii) or (iv), a "PURCHASER INDEMNIFIED PERSON") against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser
Indemnified Person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) in whole or in part upon any
inaccuracy in any of the representations and warranties of the Issuers contained
herein, (ii) in whole or in part upon any failure of any Issuer to perform its
obligations hereunder or under Applicable Law, or (iii) any change in the
financial condition, operations, business, properties or prospects of the
Company and its Subsidiaries during the period from the Audit Date to the
Closing Time, inclusive, that, individually or in the aggregate, has had or
would have a Material Adverse Effect that has not been disclosed in writing to
the Purchasers, and will reimburse each such Purchaser Indemnified Person for
any legal and other expenses incurred by such Purchaser Indemnified Person in
connection with investigating or defending any such action or claims as such
expenses are incurred. The indemnity agreement set forth in this Section
13.02(a) shall be in addition to any liabilities that the Issuers may otherwise
have.

                  (b) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by a Purchaser Indemnified Person of notice of the
commencement of any action, such Purchaser Indemnified Person shall, if a claim
in respect thereof is to be made against an indemnifying party under Section
13.02(a), notify such indemnifying party in writing of the commencement thereof,
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any Purchaser Indemnified Person otherwise
than under Section 13.02(a), or to the extent it is not materially prejudiced as
a proximate result of such failure. In case any such action is brought against
any Purchaser Indemnified Person and it shall notify an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect within 30 days after receiving
any such notification, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
Purchaser Indemnified Person, and, after notice from the indemnifying party to
such Purchaser Indemnified Person of its election so to assume the defense


                                      -95-


thereof, the indemnifying party shall not be liable to such Purchaser
Indemnified Person under such paragraph for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such Purchaser
Indemnified Person, in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, any Purchaser Indemnified
Person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Purchaser Indemnified Person unless (i) the
Purchaser Indemnified Person shall have been advised by counsel that
representation of the Purchaser Indemnified Person by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the Purchaser Indemnified Person,
including situations in which there are one or more legal defenses available to
the Purchaser Indemnified Person that are different from or additional to those
available to the indemnifying party, (ii) the indemnifying party shall have
authorized in writing the employment of counsel for the Purchaser Indemnified
Person at the expense of the indemnifying party or (iii) the indemnifying party
shall have failed to assume the defense or retain counsel reasonably
satisfactory to the Purchaser Indemnified Person; PROVIDED, HOWEVER, that the
indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings arising
out of the same general allegations, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all Purchaser Indemnified
Persons, except to the extent that local counsel, in addition to their regular
counsel, is required in order to effectively defend against such action or
proceeding. No indemnifying party shall, without the written consent of the
Purchaser Indemnified Person, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the Purchaser Indemnified Person is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the Purchaser Indemnified
Person from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any Purchaser Indemnified Person.

                  SECTION 13.03. CONTRIBUTION. If the indemnification provided
for in Section 13.02 is unavailable to or insufficient to hold harmless a
Purchaser Indemnified Person under paragraph (a) or (b) of Section 13.02 in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such Purchaser Indemnified Person as a result of
such losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the (i) relative benefits received
by the Issuers on the one hand and the Purchasers on the other hand from the
issuance and sale of the Securities; or (ii) if the allocation provided in
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the related benefits referred to in clause (i)
above but also the relative fault of the indemnifying party on the one hand and
the Purchaser Indemnified Person on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable


                                      -96-


considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers on the other hand in connection with the sale of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Issuers and the total fees received by the Purchasers, bear to the aggregate
initial sale price of the Securities. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party on the one hand or the
Purchaser Indemnified Person on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if contributions pursuant to this Section 13.03 were determined by PRO RATA
allocation (even if the Purchaser Indemnified Persons were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 13.03.

                  The obligations of the Issuers under this Section 13.03 shall
be in addition to any liability which the Issuers may otherwise have.

                  SECTION 13.04. SURVIVAL. The obligations of the Issuers under
this Section 13 will survive the payment or transfer of any Purchased Security,
the enforcement, amendment or waiver of any provision of this Agreement and the
termination of this Agreement.

                  SECTION 13.05. TERMINATION.

                  (a) The Purchasers may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the Audit Date, any
material adverse change in the business, management, operations, affairs,
condition (financial or otherwise) assets, property, prospects or results of
operations of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions which, in each case, in the judgment of the Purchasers,
could reasonably be expected to materially and adversely affect or impair the
ability to sell or place securities such as the Securities, or (iii) if trading
in any securities of the Company has been suspended or materially limited by the
Commission or the American Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.

                  (b) LIABILITIES. If this Agreement is terminated pursuant to
this Section 13.05, such termination shall be without liability of any party to
any other party except as provided in Section 13.01 hereof, PROVIDED that
Sections 1, 13.02, 13.03, 13.04, 14.08 and 14.12 shall survive such termination
and remain in full force and effect.

                                      -97-


                                   SECTION 14

                                      AGENT


                  SECTION 14.01. APPOINTMENT. Each Noteholder hereby designates
and appoints FMP Agency Services, LLC as its agent under this Agreement and the
other Basic Documents, and each Noteholder hereby irrevocably authorizes Agent
to execute and deliver the Security Documents, the Intercreditor Agreement, any
post-closing agreements and all other intercreditor agreements as Agent deems
appropriate and to take such action or to refrain from taking such action on its
behalf under the provisions of such agreements, this Agreement and the other
Basic Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto. Each
Holder agrees to be bound by the terms and conditions of each Basic Document
entered into by Agent on behalf of such Holder. Agent is authorized and
empowered to amend, modify or waive any provisions of this Agreement or the
other Basic Documents on behalf of the Noteholders subject to the requirement
that certain of the Noteholders' consent be obtained in certain instances as
provided in this Section 14.01 and Section 15.04. The provisions of this Section
14.01 are solely for the benefit of Agent and the Noteholders and neither the
Company nor any other Issuer shall have any rights as a third-party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement, Agent shall act solely as agent of the Noteholders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Company or any other Issuer.
Agent may perform any of its duties hereunder, or under the Basic Documents, by
or through its agents or employees.

                  SECTION 14.02. NATURE OF DUTIES. The duties of Agent shall be
mechanical and administrative in nature. Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Noteholder. Nothing in this
Agreement or any of the Basic Documents, express or implied, is intended to or
shall be construed to impose upon Agent any obligations in respect of this
Agreement or any of the Basic Documents except as expressly set forth herein or
therein. Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Noteholder with any credit or other information
with respect to the Issuers (other than as expressly required herein). If Agent
seeks the consent or approval of any Noteholders to the taking or refraining
from taking of any action hereunder, then Agent shall send notice thereof to
each Noteholder. Agent shall promptly notify each Noteholder any time that the
Required Holders have instructed Agent to act or refrain from acting pursuant
hereto.

                  SECTION 14.03. RIGHTS, EXCULPATION, ETC. Neither Agent nor any
of its officers, directors, employees or agents shall be liable to any
Noteholder for any action taken or omitted by it hereunder or under any of the
Basic Documents, or in connection herewith or therewith, except that Agent shall
be liable to the extent of its own gross negligence or willful misconduct as
determined by a final non-appealable order by a court of competent jurisdiction.
Agent shall not be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Noteholder to whom payment was due but not made shall be to recover from other
Noteholders any payment in excess of the amount to which they are determined to
be entitled (and such other Noteholders hereby agree to return to such
Noteholder any such erroneous payments received by them). In no event shall


                                      -98-


Agent be liable for punitive, special, consequential, incidental, exemplary or
other similar damages. In performing its functions and duties hereunder, Agent
shall exercise the same care which it would in dealing with transactions for its
own account, but neither Agent nor any of its agents or representatives shall be
responsible to any Noteholder for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any of the
Basic Documents or the transactions contemplated thereby, or for the financial
condition of any Issuer. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Basic Documents or the financial
condition of any Issuer, or the existence or possible existence of any Default
or Event of Default. Agent may at any time request instructions from the
Required Holders or all affected Noteholders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Basic Documents
Agent is permitted or required to take or to grant. If such instructions are
promptly requested, Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Basic Documents until it shall have received such
instructions from the Required Holders or such other portion of the Noteholders
as shall be prescribed by this Agreement. Without limiting the foregoing, no
Noteholder shall have any right of action whatsoever against Agent as a result
of Agent acting or refraining from acting under this Agreement or any of the
other Basic Documents in accordance with the instructions of the Required
Holders or all affected Noteholders, as applicable; and, notwithstanding the
instructions of Required Holders or all affected Noteholders, as applicable,
Agent shall have no obligation to take any action if it believes, in good faith,
that such action is deemed to be illegal by Agent or exposes Agent to any
liability for which it has not received satisfactory indemnification in
accordance with Section 14.05.

                  SECTION 14.04. RELIANCE. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any written or oral notices,
statements, certificates, orders or other documents or any telephone message or
other communication (including any writing, telex, fax or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or made
by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Basic Documents and its duties hereunder or thereunder,
Agent shall be entitled to rely upon the advice of legal counsel, independent
accountants and other experts selected by Agent in its sole discretion.

                  SECTION 14.05. INDEMNIFICATION. The Noteholders will reimburse
and indemnify Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, attorneys' fees and expenses), advances or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any of the Basic Documents or any action taken or omitted by Agent
under this Agreement or any of the Basic Documents, in proportion to each
Noteholder's Pro Rata Share, but only to the extent that any of the foregoing is
not reimbursed by the Company; PROVIDED, HOWEVER, that no Noteholder shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
to the extent resulting from Agent's gross negligence or willful misconduct as


                                      -99-


determined by a final non-appealable order by a court of competent jurisdiction.
If any indemnity furnished to Agent for any purpose shall, in the opinion of
Agent, be insufficient or become impaired, Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against even if
so directed by the Required Holders or such other portion of the Noteholders as
shall be prescribed by this Agreement until such additional indemnity is
furnished. The obligations of the Noteholders under this Section 14.05 shall
survive the payment in full of the Obligations and the termination of this
Agreement.

                  SECTION 14.06. FMP AGENCY SERVICES, LLC INDIVIDUALLY. With
respect to its purchase of the Purchased Securities hereunder, Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Noteholder. The terms "Noteholders," "Required Holders" or any similar terms
shall, unless the context clearly otherwise indicates, include FMP Agency
Services, LLC in its individual capacity as a Noteholder or one of the Required
Holders. Agent, either directly or through strategic affiliations, may lend
money to, acquire equity or other ownership interests in, provide advisory
services to and generally engage in any kind of banking, trust or other business
with any Issuer as if it were not acting as Agent pursuant hereto and without
any duty to account therefor to Noteholders. Agent, either directly or through
strategic affiliations, may accept fees and other consideration from any Issuer
for services in connection with this Agreement or otherwise without having to
account for the same to Noteholders.

                  SECTION 14.07. SUCCESSOR AGENT.

                  (a) RESIGNATION. Agent may resign from the performance of all
its agency functions and duties hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to the Company and the Noteholders.
Such resignation shall take effect upon the acceptance by a successor agent of
appointment pursuant to clause (ii) below or as otherwise provided in clause
(ii) below.

                  (b) APPOINTMENT OF SUCCESSOR. Upon any such notice of
resignation pursuant to clause (a) above, the Required Holders shall appoint a
successor agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to the Company. If a successor agent
shall not have been so appointed within the thirty (30) Business Day period
referred to in clause (a) above, the retiring agent, upon notice to the Company,
shall then appoint a successor agent who shall serve as agent until such time,
if any, as the Required Holders appoint a successor agent as provided above.

                  (c) SUCCESSOR AGENT. Upon the acceptance of any appointment as
agent under the Basic Documents by a successor agent, such successor agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring agent, and the retiring agent shall be discharged
from its duties and obligations under the Basic Documents. After any retiring
agent's resignation as agent, the provisions of this Section 14 shall continue
to inure to its benefit as to any actions taken or omitted to be taken by it in
its capacity as agent.

                  SECTION 14.08. COLLATERAL MATTERS.




                                     -100-


                  (a) RELEASE OF COLLATERAL. The Noteholders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any Collateral (x) upon payment and
satisfaction of all Obligations (other than contingent indemnification
obligations to the extent no claims giving rise thereto have been asserted), or
(y) constituting property being sold or disposed of if the Company certifies to
Agent that the sale or disposition is made in compliance with the provisions of
this Agreement (and Agent may rely in good faith conclusively on any such
certificate, without further inquiry).

                  (b) CONFIRMATION OF AUTHORITY; EXECUTION OF RELEASES. Without
in any manner limiting Agent's authority to act without any specific or further
authorization or consent by the Noteholders (as set forth in Section 14.08(a)),
each Noteholder agrees to confirm in writing, upon request by Agent or the
Company, the authority to release any Collateral conferred upon Agent under
clauses (x), (y) and (z) of Section 14.08(a). Upon receipt by Agent of any
required confirmation from the Required Holders of its authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days' prior written request by the Company, Agent shall (and is hereby
irrevocably authorized by the Noteholders to) execute such documents as may be
necessary to evidence the release of the Liens granted to Agent upon such
Collateral; PROVIDED, HOWEVER, that (x) Agent shall not be required to execute
any such document on terms which, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (y) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of any Issuer in respect of) all interests retained by any
Issuer, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.

                  (c) ABSENCE OF DUTY. Agent shall have no obligation whatsoever
to any Noteholder or any other Person to assure that the property covered by the
Security Documents exists or is owned by the Company or any other Issuer or is
cared for, protected or insured or has been encumbered or that the Liens granted
to Agent have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Agent in this Section 14.08(c) or in any of the Basic
Documents, it being understood and agreed that in respect of the property
covered by the Security Documents or any act, omission or event related thereto,
Agent may act in any manner it may deem appropriate, in its discretion, given
Agent's own interest in property covered by the Security Documents as one of the
Noteholders and that Agent shall have no duty or liability whatsoever to any of
the other Noteholders, provided that Agent shall exercise the same care which it
would in dealing with loans for its own account.

                  SECTION 14.09. AGENCY FOR PERFECTION. Agent and each
Noteholder hereby appoint each other Noteholder as agent for the purpose of
perfecting Agent's security interest in assets which, in accordance with the
Code in any applicable jurisdiction, can be perfected by possession or control.
Should any Noteholder (other than Agent) obtain possession or control of any
such assets, such Noteholder shall notify Agent thereof, and, promptly upon
Agent's request therefor, shall deliver such assets to Agent or in accordance
with Agent's instructions or transfer control to Agent in accordance with


                                     -101-


Agent's instructions. Each Noteholder agrees that it will not have any right
individually to enforce or seek to enforce any Security Document or to realize
upon any collateral security for the Notes and the Guarantees unless instructed
to do so by Agent in writing, it being understood and agreed that such rights
and remedies may be exercised only by Agent.

                  SECTION 14.10. NOTICE OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
except with respect to defaults in the payment of principal, interest and Fees
required to be paid to Agent for the account of the Noteholders, unless Agent
shall have received written notice from a Noteholder or the Company referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "Notice of Default." Agent will use reasonable efforts to
notify each Noteholder of its receipt of any such notice, unless such notice is
with respect to defaults in the payment of principal, interest and fees, in
which case Agent will notify each Noteholder of its receipt of such notice.
Agent shall take such action with respect to such Default or Event of Default as
may be requested by the Required Holders in accordance with Section 10. Unless
and until Agent has received any such request, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interests of Noteholders.

                  SECTION 14.11. NOTEHOLDER ACTIONS AGAINST COLLATERAL. Each
Noteholder agrees that it will not take any action, nor institute any actions or
proceedings, with respect to the Notes and the Guarantees, against the Company
or any Issuer hereunder or under the other Basic Documents or against any of the
Real Property encumbered by Mortgages without the consent of the Required
Holders. With respect to any action by Agent to enforce the rights and remedies
of Agent and the Noteholders under this Agreement and the other Basic Documents,
each Noteholder hereby consents to the jurisdiction of the court in which such
action is maintained, and agrees to deliver its Notes to Agent to the extent
necessary to enforce the rights and remedies of Agent for the benefit of the
Noteholders under the Mortgages in accordance with the provisions hereof.

                  SECTION 14.12. SETOFF AND SHARING OF PAYMENTS. In addition to
any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, during the continuance of any Event of Default,
each Noteholder is hereby authorized by the Company at any time or from time to
time, with reasonably prompt subsequent notice to the Company (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such Noteholder at any
of its offices for the account of the Company or any of its Subsidiaries
(regardless of whether such balances are then due to the Company or its
Subsidiaries), and (B) other property at any time held or owing by such
Noteholder to or for the credit or for the account of the Company or any of its
Subsidiaries, against and on account of any of the Obligations; except that no
Noteholder shall exercise any such right without the prior written consent of
Agent. Any Noteholder exercising a right to set off shall purchase for cash (and
the other Noteholders shall sell) interests in each of such other Noteholder's
Pro Rata Share of the Obligations as would be necessary to cause all Noteholders
to share the amount so set off with each other Noteholder in accordance with
their respective Pro Rata Shares. The Company agrees, to the fullest extent


                                     -102-


permitted by law, that any Noteholder may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and upon
doing so shall deliver such amount so set off to the Agent for the benefit of
all Noteholders in accordance with their Pro Rata Shares.

                                   SECTION 15

                                  MISCELLANEOUS


                  SECTION 15.01. NOTICES. Except as otherwise expressly provided
herein, all notices and other communications shall have been duly given and
shall be effective (a) when delivered, (b) when transmitted via telecopy (or
other facsimile device) to the number set out below if the sender on the same
day sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), (c) the Business Day following the day on which the
same has been delivered prepaid to a reputable national overnight air courier
service or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address set forth below, or at such other address as
such party may specify by written notice to the other party hereto:

                  (i) if to a Purchaser or its nominee, to the Purchaser or its
         nominee at the address specified for such communications in SCHEDULE A,
         with a copy to Cahill Gordon & Reindel LLP, 80 Pine Street, New York,
         New York 10005, attention: John Papachristos, Esq., or at such other
         address as the Purchaser or its nominee shall have specified to the
         Company in writing;

                  (ii) if to any other Holder, to such Holder at the address of
         such Holder appearing in the Security Register or such other address as
         such other Holder shall have specified to the Company in writing;

                  (iii) if the Agent, to the Agent at 60 Kendrick Street,
         Needham, Massachusetts, 02494, attention William J. Kennedy, Jr. with a
         copy to Falcon Mezzanine Partners, LP, attention: Sandeep Alva; or

                  (iv) if to an Issuer, to the Company at 2601 S. Bayshore
         Drive, Miami, FL 33133, Attention: Chief Financial Officer, with a copy
         to: Greenberg Traurig at 1221 Brickell Avenue, 21st Floor, Miami, FL
         33133, Attention: Paul Berkowitz, or at such other address as the
         Company shall have specified to such Holder in writing.

                  SECTION 15.02. BENEFIT OF AGREEMENT; ASSIGNMENTS AND
PARTICIPATIONS. Except as otherwise expressly provided herein, all covenants,
agreements and other provisions contained in this Agreement by or on behalf of
any of the parties hereto shall bind, inure to the benefit of and be enforceable
by their respective successors and registered assigns (including, without
limitation, any subsequent holder of a Purchased Security) whether so expressed
or not; PROVIDED, HOWEVER, that the Company may not assign and transfer any of
its rights or obligations without the prior written consent of the other parties
hereto and each such holder.



                                     -103-


                  Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person other than the parties hereto, their
successors and assigns and the holders from time to time of the Securities any
benefit or any legal or equitable right, remedy or claim under this Agreement.

                  SECTION 15.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any party hereto or any Holder in exercising any right,
power or privilege hereunder or under the Securities and no course of dealing
between any Issuer and any other party or Holder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under the Securities preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein and in the
Securities are cumulative and not exclusive of any rights or remedies which the
parties or Holders would otherwise have. No notice to or demand on any Issuer in
any case shall entitle any Issuer to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the other
parties hereto or the Holders to any other or further action in any
circumstances without notice or demand.

                  SECTION 15.04. AMENDMENTS, WAIVERS AND CONSENTS. This
Agreement may be amended, and the observance of any term hereof may be waived
(either retroactively or prospectively) with (and only with) the written consent
of the Company and the Required Holders (provided that any amendment or waiver
which relates to the Shares or the Warrants and/or Warrant Shares shall require
the written consent of the Company and the holders of a majority of the
outstanding Shares or Warrants and/or Warrant Shares (with Warrants counted on
an as-converted basis)) (or, if prior to the Closing Time, Purchasers who have
agreed to purchase a majority in aggregate principal amount of the Notes, a
majority of the Shares and a majority of the Warrants); PROVIDED, HOWEVER, that
no such amendment or waiver may, without the prior written consent of each
Noteholder affected thereby (or each Purchaser if prior to the Closing Time) (i)
subject any Noteholder to any additional obligation, (ii) reduce the principal
of (or premium, if any) or rate of interest on any Note, (iii) postpone the date
fixed for any payment of principal of (or premium, if any) or interest on any
Note, (iv) change the percentage of the aggregate principal amount of the Notes
the Noteholders of which shall be required to consent or take any other action
under this Section 15.04 or any other provision of this Agreement, (v) amend or
waive the provisions of (a) Section 7.08 following the occurrence of a Change of
Control or (b) Sections 7.09 or 8.05 following the maturity at the Company's
obligation to make an Asset Sale Offer and in the case of each of clauses (a)
and (b), any of the definitions used in such Sections, (vi) reduce the premium
payable upon any redemption of the Notes or change the time at which any Note
may be redeemed, (vii) impair the right of any Noteholder to receive payment of
principal, premium, if any, and interest on such Noteholder's Notes on or after
the due dates therefore or to institute suit for the enforcement of any payment
on or with respect to such Noteholder's Notes, (viii) adversely affect the
ranking of the Notes, (ix) change the currency in which amounts due under the


                                     -104-


Notes are payable, (x) release any Guarantor from its Guarantee of the Notes
other than in accordance with the terms of this Agreement or (xi) release all or
a substantial portion of the Collateral from the Liens of the Security Documents
or alter the relative priorities of the Secured Obligations entitled to the
Liens of the Security Documents, in each case without the written consent of
each Holder. No amendment or waiver of this Agreement will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or thereby impair any right consequent thereon. Without the
consent of any other person, the applicable Issuer or Issuers and the Agent may
(in its or their respective sole discretion, or shall, to the extent required by
any Basic Document) enter into any amendment or waiver of any Basic Document, or
enter into any new agreement or instrument, to effect the granting, perfection,
protection, expansion or enhancement of any security interest in any Collateral
or additional property to become Collateral for the benefit of the Secured
Parties, or as required by local law to give effect to, or protect any security
interest for the benefit of the Secured Parties, in any property or so that the
security interests therein comply with applicable Requirements of Law. As used
herein, the term this "AGREEMENT" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.

                  SECTION 15.05. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument.
It shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.

                  SECTION 15.06. REPRODUCTION. This Agreement, the other
Transaction Documents and all documents relating, hereto and thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by the Purchasers at the Closing Time
(except the Securities themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished in connection herewith,
may be reproduced by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and any original document so
reproduced may be destroyed. Each Issuer agrees and stipulates that, to the
extent permitted by Applicable Law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence. This Section 14.06 shall not prohibit any Issuer, any
other party hereto or any Holder from contesting any such reproduction to the
same extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction.

                  SECTION 15.07. HEADINGS. The headings of the sections and
subsections hereof are provided for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

                  SECTION 15.08. GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE.

                  (a) THIS AGREEMENT AND THE SECURITIES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.



                                     -105-


                  (b) If any action, proceeding or litigation shall be brought
by any Purchaser or any Holder in order to enforce any right or remedy under
this Agreement or any of the Securities, the Issuers hereby consent and will
submit, and will cause each of their Subsidiaries to submit, to the jurisdiction
of any state or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Agreement. The
Issuers hereby irrevocably waive any objection, including, but not limited to,
any objection to the laying of venue or based on the grounds of FORUM NON
CONVENIENS, which they may now or hereafter have to the bringing of any such
action, proceeding or litigation in such jurisdiction. The Issuers further agree
that they shall not, and shall cause their Subsidiaries not to, bring any
action, proceeding or litigation arising out of this Agreement, the Securities,
the Subsidiary Guarantees or any other Transaction Document in any state or
federal court other than any state or federal court of competent jurisdiction
sitting within the area comprising the Southern District of New York on the date
of this Agreement.

                  (c) The Issuers hereby irrevocably designate CT Corporation
System at an address in New York City designated at the Closing Time as the
designee, appointee and agent of the Issuers to receive, for and on behalf of
the Issuers, service of process in such jurisdiction in any action, proceeding
or litigation with respect to this Agreement, the Securities, the Subsidiary
Guarantees or any of the other Transaction Documents. It is understood that a
copy of such process served on such agent will be promptly forwarded by mail to
the applicable Issuers at its address set forth opposite its signature below,
but the failure of the applicable Issuers to have received such copy shall not
affect in any way the service of such process. The applicable Issuers further
irrevocably consent to the service of process of any of the aforementioned
courts in any such action, proceeding or litigation by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Company at its
said address, such service to become effective thirty (30) days after such
mailing.

                  (d) Nothing herein shall affect the right of any Holder to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Issuers in any other jurisdiction.
If service of process is made on a designated agent it should be made by either
(i) personal delivery or (ii) mailing a copy of summons and complaint to the
agent via registered or certified mail, return receipt requested.

                  (e) THE ISSUERS HEREBY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, ANY
OF THE SECURITIES OR THE SUBSIDIARY GUARANTEES.

                  SECTION 15.09. SEVERABILITY. If any provision of this
Agreement is determined to be illegal, invalid or unenforceable, such provision
shall be fully severable to the extent of such illegality, invalidity or
unenforceability and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

                  SECTION 15.10. ENTIRETY. This Agreement together with the
other Transaction Documents represents the entire agreement of the parties


                                     -106-


hereto and thereto, and supersedes all prior agreements and understandings, oral
or written, if any, relating to the Transaction Documents or the transactions
contemplated herein or therein.

                  SECTION 15.11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties and covenants and indemnities made by the Issuers
herein shall survive the execution and delivery of this Agreement, the issuance
and transfer of all or any portion of the Securities and the payment of
principal of the Notes, the expiration, exercise or other termination of the
Warrants and any other obligations hereunder, regardless of any investigation
made at any time by or on behalf of the Purchasers or any other holder that is
Affiliated with the Purchasers. All statements contained in any certificate
delivered by or on behalf of any Issuers pursuant to this Agreement shall be
deemed representations and warranties of the Issuers under this Agreement.

                  SECTION 15.12. INCORPORATION. All Exhibits and Schedules
attached hereto are incorporated as part of this Agreement as if fully set forth
herein.

                  SECTION 15.13. CERTAIN RIGHTS AND OBLIGATIONS AMONG
NOTEHOLDERS. If, at any time or times, a Noteholder shall not have received a
payment in respect of the Notes when due, then it shall notify the other
Noteholders of such fact, the amount of such nonpayment, the date or period to
which it relates and such other Noteholders which have received such payments
(whether by voluntary payment, setoff or otherwise) shall remit to the unpaid
Noteholder such amount as is necessary to allocate the aggregate amount of such
payments among all Noteholders in accordance with their Pro Rata Share. The
amount of any such remittance shall be credited on the Note of the Noteholder to
whom it is remitted, and shall not be credited on the Note of the remitting
Noteholder. The provisions of this Section are solely for the benefit of the
Noteholders, and neither the Issuers nor any other Person other than a
Noteholder shall have any rights with respect to or be entitled to enforce this
Section.




                                     -107-



                  IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.


                                  THE COMPANY:

                                  TERREMARK WORLDWIDE, INC.


                                  By:     /s/ JOSE SEGRERA
                                          -------------------------------------
                                         Name:
                                         Title:



                                  THE GUARANTORS:

                                  NAP OF THE AMERICAS, INC.
                                  NAP OF THE AMERICAS/WEST, INC.
                                  OPTICAL COMMUNICATIONS, INC.
                                  PARK WEST TELECOMMUNICATIONS INVESTORS, INC.
                                  SPECTRUM TELECOMMUNICATIONS CORP.
                                  TECOTA SERVICES CORP.
                                  TERREMARK FINANCIAL SERVICES, INC.
                                  TERREMARK FORTUNE HOUSE #1, INC.
                                  TERREMARK LATIN AMERICA, INC.
                                  TERREMARK MANAGEMENT SERVICES, INC.
                                  TERREMARK REALTY, INC.
                                  TERREMARK TECHNOLOGY CONTRACTORS, INC.
                                  TERRREMARK TRADEMARK HOLDINGS, INC.
                                  TERRENAP DATA CENTERS, INC.
                                  TERRENAP SERVICES, INC.


                                  By:    /s/ JOSE SEGRERA
                                         --------------------------------------
                                         Name:
                                         Title:





                                     -108-




                                     AGENT:

                                     FMP AGENCY SERVICES, LLC


                                     By:    /s/ RAFAEL FOGEL
                                            -----------------------------------
                                            Name:
                                            Title:






                                     -109-




                                    PURCHASERS:

                                    FALCON MEZZANINE PARTNERS, LP



                                    By:  Falcon Mezzanine Investments, LLC,
                                           its General Partner


                                    By:    /s/ RAFAEL FOGEL
                                           ------------------------------------
                                           Name:
                                           Title:






                                     -110-




                                STICHTING PENSIOENFONDS VOOR DE GEZOND-HEID,
                                     GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN,
                                Duly represented by
AlpInvest Partners, N.V.


                                By:    /s/ W. MILDERS
                                       ----------------------------------------
                                       Name: W. Milders
                                       Title: Legal Counsel




                                By:    /s/ E. THYSSEN
                                       ----------------------------------------
                                       Name: E.Thyssen
                                       Title: Managing Partner Co-Investments





                                STICHTING PENSIOENFONDS
                                ABP, Duly represented by
                                AlpInvest Partners N.V.


                                By:    /s/ W. MILDERS
                                       ----------------------------------------
                                       Name: W. Milders
                                       Title: Legal Counsel




                                By:    /s/ E. THYSSEN
                                       ----------------------------------------
                                       Name: E. Thyssen
                                       Title: Managing Partner Co-Investments




                                     -111-

EX-10.29

                                                                   EXHIBIT 10.29

================================================================================



                               SECURITY AGREEMENT


                                       By


                           TERREMARK WORLDWIDE, INC.,
                                    as Issuer

                                       and

                           THE GUARANTORS PARTY HERETO

                                       and

                            FMP AGENCY SERVICES, LLC,
                                    as Agent

                             ----------------------


                          Dated as of December 31, 2004



================================================================================




                                TABLE OF CONTENTS



                                                                                                               Page
                                                                                                               ----


                                                                                                              
PREAMBLE..........................................................................................................1

RECITALS..........................................................................................................1

AGREEMENT.........................................................................................................2


                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

SECTION 1.1.            Definitions...............................................................................2
SECTION 1.2.            Interpretation...........................................................................10
SECTION 1.3.            Resolution of Drafting Ambiguities.......................................................10
SECTION 1.4.            Perfection Certificate...................................................................10

                                   ARTICLE II

                   GRANT OF SECURITY AND SECURED OBLIGATIONS

SECTION 2.1.            Grant of Security Interest...............................................................10
SECTION 2.2.            Filings..................................................................................11

                                   ARTICLE III

                  PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
                            USE OF PLEDGED COLLATERAL

SECTION 3.1.            Delivery of Certificated Securities Collateral...........................................12
SECTION 3.2.            Perfection of Uncertificated Securities Collateral.......................................12
SECTION 3.3.            Financing Statements and Other Filings; Maintenance of Perfected Security
                           Interest..............................................................................13
SECTION 3.4.            Other Actions............................................................................13
SECTION 3.5.            Joinder of Additional Guarantors.........................................................18
SECTION 3.6.            Supplements; Further Assurances..........................................................18

                                   ARTICLE IV

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

SECTION 4.1.            Title....................................................................................19




                                      -i-





                                                                                                               Page
                                                                                                               ----
                                                                                                              
SECTION 4.2.            Validity of Security Interest............................................................19
SECTION 4.3.            Defense of Claims; Transferability of Pledged Collateral.................................20
SECTION 4.4.            Other Financing Statements...............................................................20
SECTION 4.5.            Chief Executive Office; Change of Name; Jurisdiction of Organization.....................20
SECTION 4.6.            Location of Inventory and Equipment......................................................21
SECTION 4.7.            Due Authorization and Issuance...........................................................21
SECTION 4.8.            Consents, etc............................................................................21
SECTION 4.9.            Pledged Collateral.......................................................................21
SECTION 4.10.           Insurance................................................................................21
SECTION 4.11.           Payment of Taxes; Compliance with Laws; Contesting Liens; Claims.........................22
SECTION 4.12.           Access to Pledged Collateral, Books and Records; Other Information.......................22

                                    ARTICLE V

               CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

SECTION 5.1.            Pledge of Additional Securities Collateral...............................................22
SECTION 5.2.            Voting Rights; Distributions; etc........................................................23
SECTION 5.3.            Defaults, etc............................................................................24
SECTION 5.4.            Certain Agreements of Pledgors As Issuers and Holders of Equity Interests................24

                                   ARTICLE VI

                   CERTAIN PROVISIONS CONCERNING INTELLECTUAL
                               PROPERTY COLLATERAL

SECTION 6.1.            Grant of License.........................................................................25
SECTION 6.2.            Protection of Agent's Security...........................................................25
SECTION 6.3.            After-Acquired Property..................................................................26
SECTION 6.4.            Litigation...............................................................................26

                                   ARTICLE VII

                     CERTAIN PROVISIONS CONCERNING ACCOUNTS

SECTION 7.1.            Maintenance of Records...................................................................27
SECTION 7.2.            Legend...................................................................................27
SECTION 7.3.            Modification of Terms, etc...............................................................27
SECTION 7.4.            Collection...............................................................................27




                                      -ii-



                                                                                                               Page
                                                                                                               ----
                                                                                                              
                                  ARTICLE VIII

                                    TRANSFERS

SECTION 8.1.            Transfers of Pledged Collateral..........................................................28

                                   ARTICLE IX

                                    REMEDIES

SECTION 9.1.            Remedies.................................................................................28
SECTION 9.2.            Notice of Sale...........................................................................30
SECTION 9.3.            Waiver of Notice and Claims..............................................................30
SECTION 9.4.            Certain Sales of Pledged Collateral......................................................30
SECTION 9.5.            No Waiver; Cumulative Remedies...........................................................32
SECTION 9.6.            Certain Additional Actions Regarding Intellectual Property...............................32

                                    ARTICLE X

                 PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS

SECTION 10.1.           Proceeds of Casualty Events and Collateral Dispositions..................................33
SECTION 10.2.           Application of Proceeds..................................................................33

                                   ARTICLE XI

                                  MISCELLANEOUS

SECTION 11.1.           Concerning Agent.........................................................................33
SECTION 11.2.           Agent May Perform; Agent Appointed Attorney-in-Fact......................................34
SECTION 11.3.           Continuing Security Interest; Assignment.................................................35
SECTION 11.4.           Termination; Release.....................................................................35
SECTION 11.5.           Modification in Writing..................................................................35
SECTION 11.6.           Notices..................................................................................35
SECTION 11.7.           Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury
                           Trial.................................................................................36
SECTION 11.8.           Severability of Provisions...............................................................36
SECTION 11.9.           Execution in Counterparts................................................................36
SECTION 11.10.          Business Days............................................................................36
SECTION 11.11.          No Credit for Payment of Taxes or Imposition.............................................36



                                     -iii-





                                                                                                               Page
                                                                                                               ----
                                                                                                              
SECTION 11.12.          No Claims Against Agent..................................................................36
SECTION 11.13.          No Release...............................................................................36
SECTION 11.14.          Obligations Absolute.....................................................................37

SIGNATURES......................................................................................................S-1




EXHIBIT 1            Form of Issuer's Acknowledgment
EXHIBIT 2            Form of Securities Pledge Amendment
EXHIBIT 3            Form of Joinder Agreement
EXHIBIT 4            Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5            Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6            Form of Copyright Security Agreement
EXHIBIT 7            Form of Patent Security Agreement
EXHIBIT 8            Form of Trademark Security Agreement



                                      -iv-

                               SECURITY AGREEMENT


                  SECURITY AGREEMENT dated as of December 31, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the "AGREEMENT") made by TERREMARK
WORLDWIDE, INC., a Delaware corporation (the "ISSUER") and THE GUARANTORS LISTED
ON THE SIGNATURE PAGES HERETO (the "ORIGINAL GUARANTORS") OR FROM TIME TO TIME
PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the "ADDITIONAL GUARANTORS,"
and together with the Original Guarantors, the "GUARANTORS"), as pledgors,
assignors and debtors (the Issuer, together with the Guarantors, in such
capacities and together with any successors in such capacities, the "PLEDGORS,"
and each, a "PLEDGOR"), in favor of FMP AGENCY SERVICES, LLC, a Delaware limited
liability company, in its capacity as collateral agent for the Secured Parties
(as hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the "AGENT").

                                R E C I T A L S :
                                - - - - - - - -

                  A. Pursuant to that certain Purchase Agreement dated as of the
date hereof by and among the purchasers listed on SCHEDULE A thereto (each
individually as a "PURCHASER" and collectively as the "PURCHASERS"), the
Pledgors and the Agent (including all annexes, exhibits and schedules thereto,
as from time to time amended, restated, supplemented or otherwise modified, the
"PURCHASE AGREEMENT"), the Purchasers have agreed to purchase the Purchased
Securities (as defined in the Purchase Agreement).

                  B. Each Original Guarantor has, pursuant to the Purchase
Agreement, unconditionally guaranteed the Obligations.

                  C. The Issuer and each Original Guarantor will receive
substantial benefits from the execution, delivery and performance of the
obligations under the Purchase Agreement and the other Basic Documents and each
is, therefore, willing to enter into this Agreement.

                  D. This Agreement is given by each Pledgor in favor of the
Agent for the benefit of the Secured Parties (as hereinafter defined) to secure
the payment and performance of all of the Obligations.

                  F. It is a condition to the obligations of the Purchaser to
purchase the Purchased Securities that each Pledgor execute and deliver the
applicable Basic Documents, including this Agreement.

                               A G R E E M E N T :
                               - - - - - - - - -

                  NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor and the Agent hereby agree as follows:




                                      -2-


                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION


                  SECTION 1.1. DEFINITIONS.

                  (a) Unless otherwise defined herein or in the Purchase
Agreement, capitalized terms used herein that are defined in the UCC shall have
the meanings assigned to them in the UCC.

                  (b) Terms used but not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given to them in the
Purchase Agreement.

                  (c) The following terms shall have the following meanings:

                  "ACQUISITION AGREEMENT RIGHTS" shall mean, with respect to
each Pledgor, collectively, all of such Pledgor's rights, title and interest in,
to and under the Acquisition Agreement, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
Agreement, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Agreement or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.

                  "ADDITIONAL GUARANTORS" shall have the meaning assigned to
such term in the Preamble hereof.

                  "ADDITIONAL PLEDGED INTERESTS" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional membership, partnership or other equity interests of whatever class
of any issuer of Initial Pledged Interests or any interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of any such issuer pertaining to such membership, partnership or other
equity interests, and the certificates, instruments and agreements representing
such membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other equity interests from time to time
acquired by such Pledgor in any manner and (ii) all membership, partnership or
other equity interests, as applicable, of each limited liability company,
partnership or other entity (other than a corporation) hereafter acquired or
formed by such Pledgor and all options, warrants, rights, agreements, additional
membership, partnership or other equity interests of whatever class of such
limited liability company, partnership or other entity, together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests or under any Organizational Document of any such issuer pertaining to
such membership, partnership or other equity




                                      -3-


interests, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.

                  "ADDITIONAL PLEDGED SHARES" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional shares of capital stock of whatever class of any issuer of the
Initial Pledged Shares or any other equity interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests issued by any such issuer under any Organizational Document of
any such issuer pertaining to such interests, and the certificates, instruments
and agreements representing such interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such interests, from time to time acquired by such Pledgor in any manner and
(ii) all the issued and outstanding shares of capital stock of each corporation
hereafter acquired or formed by such Pledgor and all options, warrants, rights,
agreements or additional shares of capital stock of whatever class of such
corporation, together with all rights, privileges, authority and powers of such
Pledgor relating to such shares or under any Organizational Document of such
corporation pertaining to such interests, and the certificates, instruments and
agreements representing such shares and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to such
shares, from time to time acquired by such Pledgor in any manner.

                  "AGENT" shall have the meaning assigned to such term in the
Preamble hereof.

                  "AGREEMENT" shall have the meaning assigned to such term in
the Preamble hereof.

                  "CLAIMS" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral.

                  "COMMODITY ACCOUNT CONTROL AGREEMENT" shall mean a commodity
account control agreement in a form that is reasonably satisfactory to the
Administrative Agent.

                  "CONTESTED LIENS" shall mean, collectively, any Liens incurred
in respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of SECTION 4.11 hereof; PROVIDED, HOWEVER, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.



                                      -4-


                  "CONTRACTS" shall mean, collectively, with respect to each
Pledgor, all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.

                  "CONTROL" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.

                  "CONTROL AGREEMENTS" shall mean, collectively, the Deposit
Account Control Agreement, the Securities Account Control Agreement and the
Commodity Account Control Agreement.

                  "COPYRIGHTS" shall mean, collectively, with respect to each
Pledgor, all copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.

                  "COPYRIGHT SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 6.

                  "DEPOSIT ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 5 or such other form that is
reasonably satisfactory to the Agent.

                  "DEPOSIT ACCOUNTS" shall mean, collectively, with respect to
each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and
(ii) all cash, funds, checks, notes and instruments from time to time on deposit
in any of the accounts described in clause (i) of this definition.

                  "DISTRIBUTIONS" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.



                                      -5-


                  "EXCLUDED ACCOUNTS" shall mean (i) account number 10144611828
of the Issuer maintained with Ocean Bank (or any replacement account) so long as
such account shall be pledged to Ocean Bank to secure the reimbursement
obligations under the stand by letter of credit issued to Rainbow Property
Management, LLC or any successor and the balance of such account shall not at
any time exceed $750,000 plus accrued interest, (ii) account number
00720541210000100250 of the Issuer maintained with Banco Pastor (or any
replacement account or accounts) so long as (x) such account or accounts shall
be pledged to secure (A) the lease obligations of NAP de las Americas - Madrid,
S.A. in connection with the lease of a facility located at Calle Yecora 4, Las
Mercedes, Madrid, Paraje Coto de Corralejos, Spain and (B) the loan obligations
of NAP de las Americas - Madrid, S.A to Banco de Pastor (or any successor) and
(y) the aggregate balance of such account or accounts shall not at any time
exceed Euro1,725,000 plus accrued interest and (iii) account number
7431079115687 of the Issuer maintained with Lehman Brothers, Inc. so long as the
balance of such account shall not at any time exceed $1,000.

                  "EXCLUDED PROPERTY" shall mean (a) all personal property and
fixtures of the Issuer or any Guarantor located at the Facility so long as such
property is pledged to secure the obligations under the SPV Financing Agreement
and (b) Special Property other than the following:

                  (i) the right to receive any payment of money (including
         Accounts, General Intangibles and Payment Intangibles) or any other
         rights referred to in Sections 9-406(d), 9-407(a) or 9-408(a) of the
         UCC to the extent that such sections of the UCC are effective to limit
         the prohibitions which make such property "Special Property"; and

                  (ii) any Proceeds, substitutions or replacements of any
         Special Property (unless such Proceeds, substitutions or replacements
         would constitute Special Property).

                  "GENERAL INTANGIBLES" shall mean, collectively, with respect
to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor and, in any event, shall include (i) all of such Pledgor's
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral, (iii) any and all other rights, claims, choses-in-action and causes
of action of such Pledgor against any other person and the benefits of any and
all collateral or other security given by any other person in connection
therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any
of the Pledged Collateral, (v) all lists, books, records, correspondence,
ledgers, printouts, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Pledged Collateral, including all customer or tenant lists, identification
of suppliers, data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded knowledge, surveys, studies, engineering reports, test
reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, field repair data, accounting information pertaining to such
Pledgor's operations or any of the Pledged Collateral and all media in which or
on which any of the information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances,



                                      -6-


certifications, authorizations and approvals, however characterized, of any
Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and
(vii) all rights to reserves, deferred payments, deposits, refunds,
indemnification of claims to the extent the foregoing relate to any Pledged
Collateral and claims for tax or other refunds against any Governmental
Authority relating to any Pledged Collateral.

                  "GOODWILL" shall mean, collectively, with respect to each
Pledgor, the goodwill connected with such Pledgor's business including all
goodwill connected with (i) the use of and symbolized by any Trademark or
Trademark License in which such Pledgor has any interest, (ii) all know-how,
trade secrets, customer and supplier lists, proprietary information, inventions,
methods, procedures, formulae, descriptions, compositions, technical data,
drawings, specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any person, pricing and cost
information, business and marketing plans and proposals, consulting agreements,
engineering contracts and such other assets which relate to such goodwill and
(iii) all product lines of such Pledgor's business.

                  "GUARANTORS" shall have the meaning assigned to such term in
the Preamble hereof.

                  "INITIAL PLEDGED INTERESTS" shall mean, with respect to each
Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in SCHEDULE 10 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under any Organizational
Document of each such issuer pertaining to such membership, partnership or other
interests, and the certificates, instruments and agreements representing such
membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other interests.

                  "INITIAL PLEDGED SHARES" shall mean, collectively, with
respect to each Pledgor, the issued and outstanding shares of capital stock of
each issuer described in SCHEDULE 10 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of each such issuer pertaining to the Initial Pledged Shares, and the
certificates, instruments and agreements representing such shares of capital
stock and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to the Initial Pledged Shares.

                  "INSTRUMENTS" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9, rather than
Article 3, of the UCC, and shall include all promissory notes, drafts, bills of
exchange or acceptances.



                                      -7-


                  "INTELLECTUAL PROPERTY COLLATERAL" shall mean, collectively,
the Patents, Trademarks, Copyrights, Licenses and Goodwill other than any
non-U.S. Intellectual Property Collateral.

                  "INTERCOMPANY NOTES" shall mean, with respect to each Pledgor,
all intercompany notes described in SCHEDULE 11 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.

                  "INVESTMENT PROPERTY" shall mean a security, whether
certificated or uncertificated, Security Entitlement, Securities Account,
Commodity Contract or Commodity Account, excluding, however, the Securities
Collateral.

                  "ISSUER" shall have the meaning assigned to such term in the
Preamble hereof.

                  "JOINDER AGREEMENT" shall mean an agreement substantially in
the form annexed hereto as EXHIBIT 3.

                  "LICENSES" shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements with, and covenants not to sue,
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.

                  "ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any
person, (i) in the case of any corporation, the certificate of incorporation and
by-laws (or similar documents) of such person, (ii) in the case of any limited
liability company, the certificate of formation and operating agreement (or
similar documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.

                  "ORIGINAL GUARANTORS" shall have the meaning assigned to such
term in the Preamble hereof.

                  "PATENTS" shall mean, collectively, with respect to each
Pledgor, all patents issued or assigned to and all patent applications and
registrations made by such Pledgor (whether



                                      -8-


established or registered or recorded in the United States or any other country
or any political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any patents, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof.

                  "PATENT SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 7.

                  "PERFECTION CERTIFICATE" shall mean that certain perfection
certificate dated as of the date hereof, executed and delivered by each Pledgor
in favor of the Agent for the benefit of the Secured Parties, and each other
Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Agent) executed and delivered by the applicable Guarantor in
favor of the Agent for the benefit of the Secured Parties contemporaneously with
the execution and delivery of each Joinder Agreement executed in accordance with
SECTION 3.5 hereof, in each case, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the Purchase Agreement or upon the request of the Agent.

                  "PLEDGE AMENDMENT" shall have the meaning assigned to such
term in SECTION 5.1 hereof.

                  "PLEDGED COLLATERAL" shall have the meaning assigned to such
term in SECTION 2.1 hereof.

                  "PLEDGED INTERESTS" shall mean, collectively, the Initial
Pledged Interests and the Additional Pledged Interests; PROVIDED, HOWEVER, that
to the extent applicable, Pledged Interests shall not include any interest which
is not required to be pledged pursuant to SECTION 7.13(B) of the Purchase
Agreement.

                  "PLEDGED SECURITIES" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests.

                  "PLEDGED SHARES" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares; PROVIDED, HOWEVER, that Pledged Shares
shall not include any shares which are not required to be pledged pursuant to
SECTION 7.13(B) of the Purchase Agreement.

                  "PLEDGOR" shall have the meaning assigned to such term in the
Preamble hereof.

                  "PURCHASE AGREEMENT" shall have the meaning assigned to such
term in RECITAL A hereof.

                  "SECURED PARTIES" shall mean, collectively, the Agent and the
Noteholders.



                                      -9-


                  "SECURITIES ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 4 or such other form that is
reasonably satisfactory to the Agent.

                  "SECURITIES COLLATERAL" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.

                  "SPECIAL PROPERTY" shall mean:

                  (a) any permit, lease or contract held by any Pledgor that
         prohibits the creation by such Pledgor of a security interest therein
         without the consent of any of the other parties thereto to the extent
         they are not Pledgors;

                  (b) any permit, lease or contract held by any Pledgor to the
         extent that any Requirement of Law applicable thereto prohibits the
         creation of a security interest therein without the consent of any of
         the other parties thereto to the extent they are not Pledgors;

                  (c) Equipment owned by any Pledgor on the date hereof or
         hereafter acquired that is subject to a Lien securing a Purchase Money
         Obligation or Capital Lease Obligation permitted to be incurred
         pursuant to the provisions of the Purchase Agreement if the contract or
         other agreement in which such Lien is granted (or the documentation
         providing for such Purchase Money Obligation or Capital Lease
         Obligation) validly prohibits the creation of any other Lien on such
         Equipment; and

                  (d) Excluded Accounts.

PROVIDED, HOWEVER, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute "Special Property" only to the
extent and for so long as such permit or lease or Requirement of Law applicable
thereto validly prohibits the creation of a Lien on such property in favor of
the Agent and, upon the termination of such prohibition (howsoever occurring),
such property shall cease to constitute "Special Property."

                  "SUCCESSOR INTERESTS" shall mean, collectively, with respect
to each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in SCHEDULE 1(A) annexed to the Perfection
Certificate is not the surviving entity; PROVIDED, HOWEVER, that to the extent
applicable, Successor Interest shall not include any shares or interests which
are not required to be pledged pursuant to SECTION 7.13(B) of the Purchase
Agreement.

                  "TRADEMARKS" shall mean, collectively, with respect to each
Pledgor, all trademarks (including service marks), slogans, logos, certification
marks, trade dress, uniform resource locations (URL's), domain names, corporate
names and trade names, whether registered or unregistered, owned by or assigned
to such Pledgor and all registrations and applications for



                                      -10-


the foregoing (whether statutory or common law and whether established or
registered in the United States or any other country or any political
subdivision thereof), together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of any
trademarks, (ii) reissues, continuations, extensions and renewals thereof, (iii)
income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present and future infringements thereof.

                  "TRADEMARK SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 8.

                  "UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; PROVIDED, HOWEVER, that if by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Agent's and the Secured Parties' security interest in any item
or portion of the Pledged Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.

                  SECTION 1.2. INTERPRETATION. The rules of interpretation
specified in the Purchase Agreement shall be applicable to this Agreement.

                  SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (I.E., the Agent) shall not be employed in the interpretation
hereof.

                  SECTION 1.4. PERFECTION CERTIFICATE. The Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.

                                   ARTICLE II

                    GRANT OF SECURITY AND SECURED OBLIGATIONS


                  SECTION 2.1. GRANT OF SECURITY INTEREST. As collateral
security for the payment and performance in full of all the Obligations, each
Pledgor hereby pledges and grants to the Agent for the benefit of the Secured
Parties, a lien on and security interest in and to all of the right, title and
interest of such Pledgor in, to and under the following property, wherever




                                      -11-


located, whether now existing or hereafter arising or acquired from time to time
(collectively, the "PLEDGED COLLATERAL"):

                  (i)      all Accounts;

                  (ii)     all Equipment, Goods, Inventory and Fixtures;

                  (iii)    all Documents, Instruments and Chattel Paper;

                  (iv)     all Letters of Credit and Letter-of-Credit Rights;

                  (v)      all Securities Collateral;

                  (vi)     all Investment Property;

                  (vii)    all Intellectual Property Collateral;

                  (viii)   the Commercial Tort Claims described on SCHEDULE 13
                           to the Perfection Certificate;

                  (ix)     all General Intangibles;

                  (x)      all Deposit Accounts;

                  (xi)     the Acquisition Agreement and Acquisition Agreement
                           Rights;

                  (xii)    all Supporting Obligations;

                  (xiii)   all books and records relating to the Pledged
                           Collateral; and

                  (xiv)    to the extent not covered by clauses (i) through
                           (xiv) of this sentence, all other personal property
                           of such Pledgor, whether tangible or intangible and
                           all Proceeds and products of each of the foregoing
                           and all accessions to, substitutions and replacements
                           for, and rents, profits and products of, each of the
                           foregoing, any and all Proceeds of any insurance,
                           indemnity, warranty or guaranty payable to such
                           Pledgor from time to time with respect to any of the
                           foregoing.

                  Notwithstanding anything to the contrary contained in clauses
(i) through (xv) above, no Pledgor shall be required to take any action outside
of the United States to perfect a security interest in any non-U.S. Intellectual
Property Collateral, the security interest created by this Agreement shall not
extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the request of the
Agent give written notice to the Agent identifying in reasonable detail the
Special Property (and stating in such notice that such Special Property
constitutes "Excluded Property") and shall provide to the Agent such other
information regarding the Special Property as the Agent may reasonably



                                      -12-


request and (ii) from and after the Closing Date, no Pledgor shall permit to
become effective in any document creating, governing or providing for any
permit, lease or license, a provision that would prohibit the creation of a Lien
on such permit, lease or license in favor of the Agent unless such Pledgor
believes, in its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.

                  In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.

                  SECTION 2.2. FILINGS. (a) Each Pledgor hereby irrevocably
authorizes the Agent at any time and from time to time to file in any relevant
jurisdiction any initial financing statements (including fixture filings) and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Pledged Collateral, including
(i) whether such Pledgor is an organization, the type of organization and any
organizational identification number issued to such Pledgor, (ii) any financing
or continuation statements or other documents without the signature of such
Pledgor where permitted by law, including the filing of a financing statement
describing the Pledged Collateral as "all assets in which the Pledgor now owns
or hereafter acquires rights" and (iii) in the case of a financing statement
filed as a fixture filing or covering Pledged Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Pledged Collateral relates. Each Pledgor agrees to
provide all information described in the immediately preceding sentence to the
Agent promptly upon request.

                  (b) Each Pledgor hereby ratifies its authorization for the
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto relating to the Pledged Collateral if filed prior to the date
hereof.

                  (c) Each Pledgor hereby further authorizes the Agent to file
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country), including this Agreement, the Copyright Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement, or other documents for
the purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest granted by such Pledgor hereunder, without the signature of
such Pledgor, and naming such Pledgor, as debtor, and the Agent, as secured
party.

                                  ARTICLE III

                  PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
                            USE OF PLEDGED COLLATERAL


                  SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL.
Each Pledgor represents and warrants that all certificates, agreements or
instruments representing or



                                      -13-


evidencing the Securities Collateral in existence on the date hereof have been
delivered to the Agent in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignment in blank and that the
Agent has a perfected first priority security interest therein. Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date hereof
shall immediately upon receipt thereof by such Pledgor be delivered to and held
by or on behalf of the Agent pursuant hereto. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Agent. The Agent shall have the right,
at any time upon the occurrence and during the continuance of any Event of
Default, to endorse, assign or otherwise transfer to or to register in the name
of the Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder. In addition, upon the occurrence and
during the continuance of an Event of Default, the Agent shall have the right at
any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.

                  SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES
COLLATERAL. Each Pledgor represents and warrants that the Agent has a perfected
first priority security interest in all uncertificated Pledged Securities
pledged by it hereunder that is in existence on the date hereof. Each Pledgor
hereby agrees that if any of the Pledged Securities are at any time not
evidenced by certificates of ownership, then each applicable Pledgor shall, to
the extent permitted by applicable law (i) if necessary or desirable to perfect
a security interest in such Pledged Securities, cause such pledge to be recorded
on the equityholder register or the books of the issuer, cause the issuer to
execute and deliver to the Agent an acknowledgment of the pledge of such Pledged
Securities substantially in the form of EXHIBIT 1 annexed hereto, execute any
customary pledge forms or other documents necessary or appropriate to complete
the pledge and give the Agent the right to transfer such Pledged Securities
under the terms hereof and, upon request, provide to the Agent an opinion of
counsel, in form and substance reasonably satisfactory to the Agent, confirming
such pledge and perfection thereof and (ii) use its commercially reasonable
efforts to cause such Pledged Securities to become certificated and delivered to
the Agent in accordance with the provisions of SECTION 3.1.

                  SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS;
MAINTENANCE OF PERFECTED SECURITY INTEREST. Each Pledgor represents and warrants
that all filings necessary to perfect the security interest granted by it to the
Agent in respect of the Pledged Collateral have been delivered to the Agent in
completed and, to the extent necessary or appropriate, duly executed form for
filing in each governmental, municipal or other office specified in SCHEDULE 7
annexed to the Perfection Certificate (to the extent required to be listed on
the schedules to the Perfection Certificate as of the date this representation
is made or deemed made). Each Pledgor agrees that at the sole cost and expense
of the Pledgors, (i) such Pledgor will maintain the security interest created by
this Agreement in the Pledged Collateral as a perfected first priority security
interest and shall defend such security interest against the claims and demands
of all persons except Permitted Collateral Liens, (ii) such Pledgor shall
furnish to the Agent from time



                                      -14-


to time statements and schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged Collateral as
the Agent may reasonably request, all in reasonable detail and (iii) at any time
and from time to time, upon the written request of the Agent, such Pledgor shall
promptly and duly execute and deliver, and file and have recorded, such further
instruments and documents and take such further action as the Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and the rights and powers herein granted, including the filing
of any financing statements, continuation statements and other documents
(including this Agreement) under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interest
created hereby and the execution and delivery of Control Agreements, all in form
reasonably satisfactory to the Agent and in such offices (including the United
States Patent and Trademark Office and the United States Copyright Office)
wherever required by law to perfect, continue and maintain a valid, enforceable,
first priority security interest in the Pledged Collateral as provided herein
and to preserve the other rights and interests granted to the Agent hereunder,
as against third parties, with respect to the Pledged Collateral.

                  SECTION 3.4. OTHER ACTIONS. In order to further insure the
attachment, perfection and priority of, and the ability of the Agent to enforce,
the Agent's security interest in the Pledged Collateral, each Pledgor represents
and warrants (as to itself) as follows and agrees, in each case at such
Pledgor's own expense, to take the following actions with respect to the
following Pledged Collateral:

                  (a) INSTRUMENTS AND TANGIBLE CHATTEL PAPER. (i) No amounts
         payable under or in connection with any of the Pledged Collateral are
         evidenced by any Instrument or Tangible Chattel Paper other than such
         Instruments and Tangible Chattel Paper listed in SCHEDULE 11 annexed to
         the Perfection Certificate (to the extent required to be listed on the
         schedules to the Perfection Certificate as of the date this
         representation is made or deemed made) and (ii) each Instrument and
         each item of Tangible Chattel Paper listed in SCHEDULE 11 annexed to
         the Perfection Certificate has been properly endorsed, assigned and
         delivered to the Agent, accompanied by instruments of transfer or
         assignment duly executed in blank. If any amount then payable under or
         in connection with any of the Pledged Collateral shall be evidenced by
         any Instrument or Tangible Chattel Paper, and such amount, together
         with all amounts payable evidenced by any Instrument or Tangible
         Chattel Paper not previously delivered to the Agent exceeds $500,000 in
         the aggregate for all Pledgors, the Pledgor acquiring such Instrument
         or Tangible Chattel Paper shall forthwith endorse, assign and deliver
         the same to the Agent, accompanied by such instruments of transfer or
         assignment duly executed in blank as the Agent may from time to time
         specify.

                  (b) DEPOSIT ACCOUNTS. (i) Each Pledgor has neither opened nor
         maintains any Deposit Accounts other than the accounts listed in
         SCHEDULE 14 annexed to the Perfection Certificate (to the extent
         required to be listed on the schedules to the Perfection Certificate as
         of the date this representation is made or deemed made) and (ii) the
         Agent has a perfected first priority security interest in each Deposit
         Account listed in SCHEDULE 14 annexed to the Perfection Certificate
         (other than the Excluded Accounts) by Control.



                                      -15-


         No Pledgor shall hereafter establish and maintain any Deposit Account
         unless (1) the applicable Pledgor shall have given the Agent 30 days'
         prior written notice of its intention to establish such new Deposit
         Account with a Bank, (2) such Bank shall be reasonably acceptable to
         the Agent and (3) such Bank and such Pledgor shall have duly executed
         and delivered to the Agent a Deposit Account Control Agreement with
         respect to such Deposit Account. Each Pledgor agrees that at the time
         it establishes any additional Deposit Accounts it shall enter into a
         duly authorized, executed and delivered Deposit Account Control
         Agreement with respect to such Deposit Account. The Agent agrees with
         each Pledgor that the Agent shall not give any instructions directing
         the disposition of funds from time to time credited to any Deposit
         Account or withhold any withdrawal rights from such Pledgor with
         respect to funds from time to time credited to any Deposit Account
         unless an Event of Default has occurred and is continuing. Except as
         set forth in the Intercreditor Agreement, no Pledgor shall grant
         Control of any Deposit Account (other than the Excluded Accounts) to
         any person other than the Agent.

                  (c) INVESTMENT PROPERTY. (i) Each Pledgor (1) has no
         Securities Accounts or Commodity Accounts other than those listed in
         SCHEDULE 14 annexed to the Perfection Certificate (to the extent
         required to be listed on the schedules to the Perfection Certificate as
         of the date this representation is made or deemed made) and the Agent
         has a perfected first priority security interest in such Securities
         Accounts (other than the Excluded Accounts) and Commodity Accounts by
         Control, (2) does not hold, own or have any interest in any
         certificated securities or uncertificated securities other than those
         constituting Pledged Securities and those maintained in Securities
         Accounts or Commodity Accounts listed in SCHEDULE 14 annexed to the
         Perfection Certificate (to the extent required to be listed on the
         schedules to the Perfection Certificate as of the date this
         representation is made or deemed made) and (3) as of the date hereof,
         has entered into a duly authorized, executed and delivered Securities
         Account Control Agreement or a Commodity Account Control Agreement with
         respect to each Securities Account or Commodity Account listed in
         SCHEDULE 14 annexed to the Perfection Certificate, as applicable.

                  (ii) If any Pledgor shall at any time hold or acquire any
         certificated securities constituting Investment Property, such Pledgor
         shall promptly (a) endorse, assign and deliver the same to the Agent,
         accompanied by such instruments of transfer or assignment duly executed
         in blank, all in form and substance reasonably satisfactory to the
         Agent or (b) deliver such securities into a Securities Account with
         respect to which a Control Agreement is in effect in favor of the
         Agent. If any securities now or hereafter acquired by any Pledgor
         constituting Investment Property are uncertificated and are issued to
         such Pledgor or its nominee directly by the issuer thereof, such
         Pledgor shall promptly notify the Agent thereof and pursuant to an
         agreement in form and substance satisfactory to the Agent, either (a)
         cause the issuer to agree to comply with instructions from the Agent as
         to such securities, without further consent of any Pledgor or such
         nominee, (b) cause a Security Entitlement with respect to such
         uncertificated security to be held in a Securities Account with respect
         to which the Agent has Control or (c) arrange for the Agent to



                                      -16-


         become the registered owner of the securities. Pledgor shall not
         hereafter establish and maintain any Securities Account or Commodity
         Account with any Securities Intermediary or Commodity Intermediary
         unless (1) the applicable Pledgor shall have given the Agent 30 days'
         prior written notice of its intention to establish such new Securities
         Account or Commodity Account with such Securities Intermediary or
         Commodity Intermediary, (2) such Securities Intermediary or Commodity
         Intermediary shall be reasonably acceptable to the Agent and (3) such
         Securities Intermediary or Commodity Intermediary, as the case may be,
         and such Pledgor shall have duly executed and delivered a Control
         Agreement with respect to such Securities Account or Commodity Account,
         as the case may be. Each Pledgor shall accept any cash and Investment
         Property in trust for the benefit of the Agent and within one (1)
         Business Day of actual receipt thereof, deposit any cash or Investment
         Property and any new securities, instruments, documents or other
         property by reason of ownership of the Investment Property (other than
         payments of a kind described in SECTION 7.4 hereof) received by it into
         a Controlled Account. The Agent agrees with each Pledgor that the Agent
         shall not give any Entitlement Orders or instructions or directions to
         any issuer of uncertificated securities, Securities Intermediary or
         Commodity Intermediary, and shall not withhold its consent to the
         exercise of any withdrawal or dealing rights by such Pledgor, unless an
         Event of Default has occurred and is continuing, or, after giving
         effect to any such investment and withdrawal rights would occur. The
         provisions of this SECTION 3.4(C) shall not apply to any Financial
         Assets credited to a Securities Account for which the Agent is the
         Securities Intermediary. No Pledgor shall grant control over any
         Investment Property to any person other than the Agent.

                  (iii) As between the Agent and the Pledgors, the Pledgors
         shall bear the investment risk with respect to the Investment Property
         and Pledged Securities, and the risk of loss of, damage to, or the
         destruction of the Investment Property and Pledged Securities, whether
         in the possession of, or maintained as a security entitlement or
         deposit by, or subject to the control of, the Agent, a Securities
         Intermediary, Commodity Intermediary, any Pledgor or any other person;
         PROVIDED, HOWEVER, that nothing contained in this SECTION 3.4(C) shall
         release or relieve any Securities Intermediary or Commodity
         Intermediary of its duties and obligations to the Pledgors or any other
         person under any Control Agreement or under applicable law. Each
         Pledgor shall promptly pay all Claims and fees of whatever kind or
         nature with respect to the Investment Property and Pledged Securities
         pledged by it under this Agreement. In the event any Pledgor shall fail
         to make such payment contemplated in the immediately preceding
         sentence, the Agent may do so for the account of such Pledgor and the
         Pledgors shall promptly reimburse and indemnify the Agent from all
         costs and expenses incurred by the Agent under this SECTION 3.4(C) in
         accordance with SECTION 13 of the Purchase Agreement.

                  (d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. No
         amount under or in connection with any of the Pledged Collateral is
         evidenced by any Electronic Chattel Paper or any "transferable record"
         (as that term is defined in Section 201 of the Federal Electronic
         Signatures in Global and National Commerce Act, or in Section 16 of the




                                      -17-


         Uniform Electronic Transactions Act as in effect in any relevant
         jurisdiction) other than such Electronic Chattel Paper and transferable
         records listed in SCHEDULE 11 annexed to the Perfection Certificate (to
         the extent required to be listed on the schedules to the Perfection
         Certificate as of the date this representation is made or deemed made).
         If any amount payable under or in connection with any of the Pledged
         Collateral shall be evidenced by any Electronic Chattel Paper or any
         transferable record, the Pledgor acquiring such Electronic Chattel
         Paper or transferable record shall promptly notify the Agent thereof
         and shall take such action as the Agent may reasonably request to vest
         in the Agent control under UCC Section 9-105 of such Electronic Chattel
         Paper or control under Section 201 of the Federal Electronic Signatures
         in Global and National Commerce Act or, as the case may be, Section 16
         of the Uniform Electronic Transactions Act, as so in effect in such
         jurisdiction, of such transferable record. The requirement in the
         preceding sentence shall apply to the extent that such amount, together
         with all amounts payable evidenced by Electronic Chattel Paper or any
         transferable record in which the Agent has not been vested control
         within the meaning of the statutes described in this sentence exceeds
         $500,000 in the aggregate for all Pledgors. The Agent agrees with such
         Pledgor that the Agent will arrange, pursuant to procedures
         satisfactory to the Agent and so long as such procedures will not
         result in the Agent's loss of control, for the Pledgor to make
         alterations to the Electronic Chattel Paper or transferable record
         permitted under UCC Section 9-105 or, as the case may be, Section 201
         of the Federal Electronic Signatures in Global and National Commerce
         Act or Section 16 of the Uniform Electronic Transactions Act for a
         party in control to allow without loss of control, unless an Event of
         Default has occurred and is continuing or would occur after taking into
         account any action by such Pledgor with respect to such Electronic
         Chattel Paper or transferable record.

                  (e) LETTER-OF-CREDIT RIGHTS. If any Pledgor is at any time a
         beneficiary under a Letter of Credit now or hereafter issued in favor
         of such Pledgor, such Pledgor shall promptly notify the Agent thereof
         and such Pledgor shall, at the request of the Agent, pursuant to an
         agreement in form and substance reasonably satisfactory to the Agent,
         either (i) arrange for the issuer and any confirmer of such Letter of
         Credit to consent to an assignment to the Agent of the proceeds of any
         drawing under the Letter of Credit or (ii) arrange for the Agent to
         become the transferee beneficiary of such Letter of Credit, with the
         Agent agreeing, in each case, that the proceeds of any drawing under
         the Letter of Credit are to be applied as provided in the Purchase
         Agreement. The actions in the preceding sentence shall be taken to the
         extent that the amount under such Letter of Credit, together with all
         amounts under Letters of Credit for which the actions described above
         in clause (i) and (ii) have not been taken, exceeds $500,000 in the
         aggregate for all Pledgors.

                  (f) COMMERCIAL TORT CLAIMS. As of the date hereof each Pledgor
         hereby represents and warrants that it holds no Commercial Tort Claims
         other than those listed in SCHEDULE 13 annexed to the Perfection
         Certificate (to the extent required to be listed on the schedules to
         the Perfection Certificate as of the date this representation is made
         or



                                      -18-


         deemed made). If any Pledgor shall at any time hold or acquire a
         Commercial Tort Claim having a value together with all other Commercial
         Tort Claims of all Pledgors in which the Agent does not have a security
         interest in excess of $500,000 in the aggregate, such Pledgor shall
         immediately notify the Agent in writing signed by such Pledgor of the
         brief details thereof and grant to the Agent in such writing a security
         interest therein and in the Proceeds thereof, all upon the terms of
         this Agreement, with such writing to be in form and substance
         reasonably satisfactory to the Agent.

                  (g) LANDLORD'S ACCESS AGREEMENTS. Each Pledgor shall use its
         commercially reasonable efforts to obtain a Landlord Access Agreement
         and/or, if required by the Purchase Agreement, landlord's lien waiver,
         as applicable, from all such landlords, as applicable, who from time to
         time after the date hereof have possession of Pledged Collateral (other
         than with respect to any location of Pledged Collateral maintained on
         the date hereof) in the ordinary course of such Pledgor's business and
         if reasonably requested by the Agent. A Landlord Access Agreement
         and/or landlord's lien waiver shall not be required if (i) the value of
         the Pledged Collateral held by such landlord is less than $100,000,
         provided that the aggregate value of the Pledged Collateral held by all
         landlords who have not delivered a Landlord Access Agreement and/or
         landlord's lien waiver is less than $500,000 in the aggregate or (ii)
         the Pledgor has delivered a leasehold mortgage with respect to such
         property.

                  (h) MOTOR VEHICLES. Upon the request of the Agent, each
         Pledgor shall deliver to the Agent originals of the certificates of
         title or ownership for the motor vehicles (and any other Equipment
         covered by Certificates of Title or ownership) owned by it with the
         Agent listed as lienholder therein. Such requirement shall apply to the
         Pledgors if any such motor vehicle (or any such other Equipment) is
         valued at over $50,000, provided that the value of all such motor
         vehicles (and such Equipment) as to which any Pledgor has not delivered
         a Certificate of Title or ownership is over $500,000.

                  SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS. The Pledgors
shall cause each new Subsidiary of the Issuer (other than a Foreign Subsidiary)
which, from time to time, after the date hereof shall be required to pledge any
assets to the Agent for the benefit of the Secured Parties pursuant to the
provisions of the Purchase Agreement, to execute and deliver to the Agent (i) a
Joinder Agreement substantially in the form of EXHIBIT 3 annexed hereto within
thirty (30) Business Days of the date on which it was acquired or created and
(ii) a Perfection Certificate, in each case, within thirty (30) Business Days of
the date on which it was acquired or created and, in each case, upon such
execution and delivery, such Subsidiary shall constitute a "Guarantor" and a
"Pledgor" for all purposes hereunder with the same force and effect as if
originally named as a Guarantor and Pledgor herein. The execution and delivery
of such Joinder Agreement shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Guarantor and
Pledgor as a party to this Agreement.

                  SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES. Each Pledgor
shall take such further actions, and to execute and deliver to the Agent such
additional assignments, agreements,



                                      -19-


supplements, powers and instruments, as the Agent may in its reasonable judgment
deem necessary or appropriate, wherever required by law, in order to perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm unto the Agent
the Pledged Collateral or permit the Agent to exercise and enforce its rights,
powers and remedies hereunder with respect to any Pledged Collateral. Without
limiting the generality of the foregoing, each Pledgor shall make, execute,
endorse, acknowledge, file or refile and/or deliver to the Agent from time to
time upon reasonable request such lists, descriptions and designations of the
Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments as the Agent
shall reasonably request. If an Event of Default has occurred and is continuing,
the Agent may institute and maintain, in its own name or in the name of any
Pledgor, such suits and proceedings as the Agent may be advised by counsel shall
be necessary or expedient to prevent any impairment of the security interest in
or the perfection thereof in the Pledged Collateral. All of the foregoing shall
be at the sole cost and expense of the Pledgors.

                                   ARTICLE IV

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

           EACH PLEDGOR REPRESENTS, WARRANTS AND COVENANTS AS FOLLOWS:

                  SECTION 4.1. TITLE. Except for the security interest granted
to the Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns and, as to Pledged Collateral
acquired by it from time to time after the date hereof, will own the rights in
each item of Pledged Collateral pledged by it hereunder free and clear of any
and all Liens or claims of others other than Permitted Collateral Liens. In
addition, no Liens or claims exist on the Securities Collateral, other than as
permitted by SECTION 8.07 of the Purchase Agreement. Such Pledgor has not filed,
nor authorized any third party to file a financing statement or other public
notice with respect to all or any part of the Pledged Collateral on file or of
record in any public office, except such as have been filed in favor of the
Agent pursuant to this Agreement, those filed by the holder of a Permitted
Collateral Lien relating to the Permitted Collateral Liens or as are permitted
by the Purchase Agreement or financing statements or public notices relating to
the termination statements listed on SCHEDULE 9 to the Perfection Certificate.
No person other than the Agent has control or possession of all or any part of
the Pledged Collateral, except as permitted by the Purchase Agreement.

                  SECTION 4.2. VALIDITY OF SECURITY INTEREST. The security
interest in and Lien on the Pledged Collateral granted to the Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the




                                      -20-


payment and performance of the Obligations, and (b) subject to the filings and
other actions described in SCHEDULE 7 annexed to the Perfection Certificate (to
the extent required to be listed on the schedules to the Perfection Certificate
as of the date this representation is made or deemed made), a perfected security
interest in all the Pledged Collateral. The security interest and Lien granted
to the Agent for the benefit of the Secured Parties pursuant to this Agreement
in and on the Pledged Collateral will at all times constitute a perfected,
continuing security interest therein, subject only to Permitted Collateral
Liens.

                  SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Agent and the priority thereof against all claims
and demands of all persons, at its own cost and expense, at any time claiming
any interest therein adverse to the Agent or any other Secured Party other than
Permitted Collateral Liens (other than Contested Liens). There is no agreement,
and no Pledgor shall enter into any agreement or take any other action, that
would restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgors' obligations or the rights of the Agent
hereunder, except as permitted herein or by the Purchase Agreement.

                  SECTION 4.4. OTHER FINANCING STATEMENTS. It has not filed, nor
authorized any third party to file (nor will there be any) valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Collateral Liens. So long as
any of the Obligations remain unpaid, no Pledgor shall execute, authorize or
permit to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other
statements and instruments filed or to be filed in respect of and covering the
security interests granted by such Pledgor to the holder of the Permitted
Collateral Liens.

                  SECTION 4.5. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME;
JURISDICTION OF ORGANIZATION. (a) It shall comply with the provisions of SECTION
7.15(A) of the Purchase Agreement.

                  (b) The Agent may rely on opinions of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in SECTION 7.15(A) of the Purchase
Agreement. If any Pledgor fails to provide information to the Agent about such
changes on a timely basis, the Agent shall not be liable or responsible to any
party for any failure to maintain a perfected security interest in such
Pledgor's property constituting Pledged Collateral, for which the Agent needed
to have information relating to such changes. The Agent shall have no duty to
inquire about such changes if any Pledgor does not inform the Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible or
practical for the Agent to search for information on such changes if such
information is not provided by any Pledgor.



                                      -21-


                  SECTION 4.6. LOCATION OF INVENTORY AND EQUIPMENT. It shall not
move any Equipment or Inventory to any location other than one within the
continental United States and until (i) it shall have given the Agent not less
than 30 days' prior written notice (in the form of an Officers' Certificate) of
its intention so to do, clearly describing such new location within the
continental United States and providing such other information in connection
therewith as the Agent may request and (ii) with respect to such new location,
such Pledgor shall have taken all action reasonably satisfactory to the Agent to
maintain the perfection and priority of the security interest of the Agent for
the benefit of the Secured Parties in the Pledged Collateral intended to be
granted hereby, including using commercially reasonable efforts to obtain
waivers of landlord's liens with respect to such new location, if applicable,
and if requested by the Agent. Such Pledgor agrees to provide the Agent with
prompt notice following the movement of any Equipment or Inventory to any
location other than one that is listed in the relevant Schedules to the
Perfection Certificate.

                  SECTION 4.7. DUE AUTHORIZATION AND ISSUANCE. All of the
Initial Pledged Shares have been, and to the extent any Pledged Shares are
hereafter issued, such Pledged Shares will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged
Interests or any Pledgor's status as a partner or a member of any issuer of the
Initial Pledged Interests.

                  SECTION 4.8. CONSENTS, ETC. In the event that the Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Agent, such Pledgor
agrees to use its commercially reasonable efforts to assist and aid the Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.

                  SECTION 4.9. PLEDGED COLLATERAL. All information set forth
herein, including the schedules annexed hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the schedules annexed to the Perfection Certificate constitutes all of the
property of such type of Pledged Collateral owned or held by the Pledgors that
is required to be pledged herein or by the Purchase Agreement.

                  SECTION 4.10. INSURANCE. In the event that the proceeds of any
insurance claim are paid after the Agent has exercised its right to foreclose
after an Event of Default, such Net Cash Proceeds shall be paid to the Agent to
satisfy any deficiency remaining after such foreclosure.



                                      -22-


                  SECTION 4.11. PAYMENT OF TAXES; COMPLIANCE WITH LAWS;
CONTESTING LIENS; CLAIMS. Each Pledgor represents and warrants that all Claims
imposed upon or assessed against the Pledged Collateral have been paid and
discharged except to the extent such Claims constitute a Lien not yet due and
payable which is a Contested Lien or a Permitted Collateral Lien. Each Pledgor
shall comply with all Requirements of Law applicable to the Pledged Collateral
the failure to comply with which would, individually or in the aggregate, have a
Material Adverse Effect. Each Pledgor may at its own expense contest the
validity, amount or applicability of any Claims so long as the contest thereof
shall be conducted in accordance with, and permitted pursuant to the provisions
of, the Purchase Agreement. Notwithstanding the foregoing provisions of this
SECTION 4.11, (i) no contest of any such obligation may be pursued by such
Pledgor if such contest would expose the Agent or any other Secured Party to (A)
any possible criminal liability or (B) any additional civil liability for
failure to comply with such obligations unless such Pledgor shall have furnished
a bond or other security therefor satisfactory to the Agent, or such Secured
Party, as the case may be and (ii) if at any time payment or performance of any
obligation contested by such Pledgor pursuant to this SECTION 4.11 shall become
necessary to prevent the imposition of remedies because of non-payment, such
Pledgor shall pay or perform the same in sufficient time to prevent the
imposition of remedies in respect of such default or prospective default.

                  SECTION 4.12. ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS;
OTHER INFORMATION. Except as provided in the Purchase Agreement, upon reasonable
request to each Pledgor and upon the execution of a confidentiality agreement
substantially in the form set forth in the Purchase Agreement or as otherwise
mutually acceptable to the Issuer and the Agent, the Agent, its agents,
accountants and attorneys shall have full and free access to visit and inspect,
as applicable, during normal business hours and such other reasonable times as
may be requested by the Agent all of the Pledged Collateral including all of the
books, correspondence and records of such Pledgor relating thereto. The Agent
and its representatives may examine the same, take extracts therefrom and make
photocopies thereof, and such Pledgor agrees to render to the Agent, at such
Pledgor's cost and expense, such clerical and other assistance as may be
reasonably requested by the Agent with regard thereto. Such Pledgor shall, at
any and all times, within a reasonable time after written request by the Agent,
furnish or cause to be furnished to the Agent, in such manner and in such detail
as may be reasonably requested by the Agent, additional information with respect
to the Pledged Collateral.

                                    ARTICLE V

               CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL


                  SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Agent and forthwith
deliver to the Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of EXHIBIT 2 annexed hereto (each, a "PLEDGE AMENDMENT"),
and the certificates and other documents required under SECTION 3.1 and



                                      -23-


SECTION 3.2 hereof in respect of the additional Pledged Securities or
Intercompany Notes which are to be pledged pursuant to this Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Intercompany Notes listed on any Pledge
Amendment delivered to the Agent shall for all purposes hereunder be considered
Pledged Collateral.

                  SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC.

                  (i) So long as no Event of Default shall have occurred and be
continuing:

                  (A) Each Pledgor shall be entitled to exercise any and all
         voting and other consensual rights pertaining to the Securities
         Collateral or any part thereof for any purpose not inconsistent with
         the terms or purposes hereof, the Purchase Agreement or any other
         document evidencing the Obligations; PROVIDED, HOWEVER, that no Pledgor
         shall in any event exercise such rights in any manner which could
         reasonably be expected to have a Material Adverse Effect.

                  (B) Each Pledgor shall be entitled to receive and retain, and
         to utilize free and clear of the Lien hereof, any and all
         Distributions, but only if and to the extent made in accordance with
         the provisions of the Purchase Agreement; PROVIDED, HOWEVER, that any
         and all such Distributions consisting of rights or interests in the
         form of securities shall be forthwith delivered to the Agent to hold as
         Pledged Collateral and shall, if received by any Pledgor, be received
         in trust for the benefit of the Agent, be segregated from the other
         property or funds of such Pledgor and be forthwith delivered to the
         Agent as Pledged Collateral in the same form as so received (with any
         necessary endorsement).

                  (ii) The Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to SECTION 5.2(I)(A) hereof and to receive the Distributions which it
is authorized to receive and retain pursuant to SECTION 5.2(i)(B) hereof.

                  (iii) Upon the occurrence and during the continuance of any
Event of Default:

                  (A) All rights of each Pledgor to exercise the voting and
         other consensual rights it would otherwise be entitled to exercise
         pursuant to SECTION 5.2(I)(A) hereof shall cease, and all such rights
         shall thereupon become vested in the Agent to the extent permitted by
         applicable law, which shall thereupon have the sole right to exercise
         such voting and other consensual rights to the extent permitted by
         applicable law.



                                      -24-


                  (B) All rights of each Pledgor to receive Distributions which
         it would otherwise be authorized to receive and retain pursuant to
         SECTION 5.2(I)(B) hereof shall cease and all such rights shall
         thereupon become vested in the Agent to the extent permitted by
         applicable law, which shall thereupon have the sole right to receive
         and hold as Pledged Collateral such Distributions to the extent
         permitted by applicable law.

                  (iv) Each Pledgor shall, at its sole cost and expense, from
time to time execute and deliver to the Agent appropriate instruments as the
Agent may request in order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to SECTION 5.2(III)(A)
hereof and to receive all Distributions which it may be entitled to receive
under SECTION 5.2(III)(B) hereof.

                  (v) All Distributions which are received by any Pledgor
contrary to the provisions of SECTION 5.2(I)(B) hereof shall be received in
trust for the benefit of the Agent, shall be segregated from other funds of such
Pledgor and shall immediately be paid over to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).

                  SECTION 5.3. DEFAULTS, ETC. Such Pledgor is not in default in
the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement to which such Pledgor is a party
relating to the Pledged Securities pledged by it, and such Pledgor is not in
violation of any other provisions of any such agreement to which such Pledgor is
a party, or otherwise in default or violation thereunder. No Securities
Collateral pledged by such Pledgor is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any person with respect thereto, and as of the date hereof,
there are no certificates, instruments, documents or other writings (other than
the Organizational Documents and certificates, if any, delivered to the Agent)
which evidence any Pledged Securities of such Pledgor.

                  SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND
HOLDERS OF EQUITY INTERESTS.

                  (i) In the case of each Pledgor which is an issuer of
Securities Collateral, such Pledgor agrees to be bound by the terms of this
Agreement relating to the Securities Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.

                  (ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organizational Document to the
pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Agent or its nominee and to the
substitution of the Agent or its nominee as a substituted partner or member in
such partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner or a limited partner or member, as the
case may be.



                                      -25-


                                   ARTICLE VI

                   CERTAIN PROVISIONS CONCERNING INTELLECTUAL
                               PROPERTY COLLATERAL


                  SECTION 6.1. GRANT OF LICENSE. For the purpose of enabling the
Agent, during the continuance of an Event of Default, to exercise rights and
remedies under ARTICLE IX hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Pledgor hereby grants to the Agent, to the extent assignable, an irrevocable,
non-exclusive license to use, assign, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located. Such license shall include access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout hereof.

                  SECTION 6.2. PROTECTION OF AGENT'S SECURITY. On a continuing
basis, each Pledgor shall, at its sole cost and expense, (i) promptly following
its becoming aware thereof, notify the Agent of (A) any materially adverse
determination in any proceeding in the United States Patent and Trademark Office
or the United States Copyright Office with respect to any material Patent,
Trademark or Copyright or (B) the institution of any proceeding or any adverse
determination in any federal, state or local court or administrative body
regarding such Pledgor's claim of ownership in or right to use any of the
Intellectual Property Collateral material to the use and operation of the
Pledged Collateral, its right to register such Intellectual Property Collateral
or its right to keep and maintain such registration in full force and effect,
(ii) maintain and protect the Intellectual Property Collateral material to the
use and operation of the Pledged Collateral as presently used and operated and
as contemplated by the Purchase Agreement, (iii) not permit to lapse or become
abandoned any Intellectual Property Collateral material to the use and operation
of the Pledged Collateral as presently used and operated and as contemplated by
the Purchase Agreement, and not settle or compromise any pending or future
litigation or administrative proceeding with respect to such Intellectual
Property Collateral, in each case except as shall be consistent with
commercially reasonable business judgment, (iv) upon such Pledgor obtaining
knowledge thereof, promptly notify the Agent in writing of any event which may
be reasonably expected to materially and adversely affect the value or utility
of the Intellectual Property Collateral or any portion thereof material to the
use and operation of the Pledged Collateral, the ability of such Pledgor or the
Agent to dispose of the Intellectual Property Collateral or any portion thereof
or the rights and remedies of the Agent in relation thereto including a levy or
threat of levy or any legal process against the Intellectual Property Collateral
or any portion thereof, (v) not license the Intellectual Property Collateral
other than licenses entered into by such Pledgor in, or incidental to, the
ordinary course of business, or amend or permit the amendment of any of the
licenses in a manner that materially and adversely affects the right to receive
payments thereunder, or in any manner that would materially impair the value of
the Intellectual Property Collateral or the Lien on and security interest in the
Intellectual Property Collateral intended to be granted to the Agent for the
benefit of the Secured Parties, without the consent of the Agent, (vi)
diligently keep adequate records respecting the Intellectual Property Collateral
and (vii) furnish to the Agent from time to time upon the Agent's request
therefor



                                      -26-


reasonably detailed statements and amended schedules further identifying and
describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to the Intellectual Property Collateral as the
Agent may from time to time request.

                  SECTION 6.3. AFTER-ACQUIRED PROPERTY. If any Pledgor shall, at
any time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Purchase
Agreement or the Security Documents, survive the termination thereof), (i)
obtain any rights to any additional Intellectual Property Collateral or (ii)
become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(i) or (ii) of this SECTION 6.3 with respect to such Pledgor shall automatically
constitute Intellectual Property Collateral if such would have constituted
Intellectual Property Collateral at the time of execution hereof and be subject
to the Lien and security interest created by this Agreement without further
action by any party. Each Pledgor shall promptly (i) provide to the Agent
written notice of any of the foregoing and (ii) confirm the attachment of the
Lien and security interest created by this Agreement to any rights described in
clauses (i) and (ii) of the immediately preceding sentence of this SECTION 6.3
by execution of an instrument in form reasonably acceptable to the Agent and the
filing of any instruments or statements as shall be reasonably necessary to
preserve, protect or perfect the Agent's security interest in such Intellectual
Property Collateral. Further, each Pledgor authorizes the Agent to modify this
Agreement by amending SCHEDULES 12(A) and 12(B) annexed to the Perfection
Certificate to include any Intellectual Property Collateral acquired or arising
after the date hereof of such Pledgor.

                  SECTION 6.4. LITIGATION. Unless there shall occur and be
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Agent shall have the right but shall in no way be obligated to
file applications for protection of the Intellectual Property Collateral and/or
bring suit in the name of any Pledgor, the Agent or the Secured Parties to
enforce the Intellectual Property Collateral and any license thereunder. In the
event of such suit, each Pledgor shall, at the reasonable request of the Agent,
do any and all lawful acts and execute any and all documents requested by the
Agent in aid of such enforcement and the Pledgors shall promptly reimburse and
indemnify the Agent for all costs and expenses incurred by the Agent in the
exercise of its rights under this SECTION 6.4 in accordance with SECTION 13 of
the Purchase Agreement. In the event that the Agent shall elect not to bring
suit to enforce the Intellectual Property Collateral, each Pledgor agrees, at
the reasonable request of the Agent, to take all commercially reasonable actions
necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or



                                      -27-


other damage to any of the material Intellectual Property Collateral by others
and for that purpose agrees to diligently maintain any suit, proceeding or other
action against any person so infringing necessary to prevent such infringement.

                                   ARTICLE VII

                     CERTAIN PROVISIONS CONCERNING ACCOUNTS


                  SECTION 7.1. MAINTENANCE OF RECORDS. Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Except as provided in the Intercreditor
Agreement, each Pledgor shall, at such Pledgor's sole cost and expense, upon the
Agent's demand made at any time after the occurrence and during the continuance
of any Event of Default, deliver all tangible evidence of Accounts, including
all documents evidencing Accounts and any books and records relating thereto to
the Agent or to its representatives (copies of which evidence and books and
records may be retained by such Pledgor). Except as provided in the
Intercreditor Agreement, upon the occurrence and during the continuance of any
Event of Default and acceleration of the Notes (as defined in the Purchase
Agreement), the Agent may transfer a full and complete copy of any Pledgor's
books, records, credit information, reports, memoranda and all other writings
relating to the Accounts to and for the use by any person that has acquired or
is contemplating acquisition of an interest in the Accounts or the Agent's
security interest therein without the consent of any Pledgor.

                  SECTION 7.2. LEGEND. Each Pledgor shall legend, at the request
of the Agent and in form and manner satisfactory to the Agent, the Accounts and
the other books, records and documents of such Pledgor evidencing or pertaining
to the Accounts with an appropriate reference to the fact that the Accounts have
been assigned to the Agent for the benefit of the Secured Parties and that the
Agent has a security interest therein.

                  SECTION 7.3. MODIFICATION OF TERMS, ETC. No Pledgor shall
rescind or cancel any obligations evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such obligations except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto or sell any Account or interest therein except
in the ordinary course of business consistent with prudent business practice
without the prior written consent of the Agent. Each Pledgor shall timely
fulfill all obligations on its part to be fulfilled under or in connection with
the Accounts.

                  SECTION 7.4. COLLECTION. Each Pledgor shall cause to be
collected from the Account Debtor of each of the Accounts, as and when due in
the ordinary course of business and consistent with prudent business practice
(including Accounts that are delinquent), any and all



                                      -28-


amounts owing under or on account of such Account, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account, except that any Pledgor may, with respect to an Account, allow
in the ordinary course of business (i) a refund or credit due and (ii) such
extensions of time to pay amounts due in respect of Accounts and such other
modifications of payment terms or settlements in respect of Accounts as shall be
commercially reasonable in the circumstances, all in accordance with such
Pledgor's ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including attorneys'
fees) of collection, in any case, whether incurred by any Pledgor, the Agent or
any Secured Party, shall be paid by the Pledgors.

                                  ARTICLE VIII

                                    TRANSFERS


                  SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL. No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral pledged by it hereunder except as permitted by
the Purchase Agreement, including SECTION 7.19 of the Purchase Agreement.

                                   ARTICLE IX

                                    REMEDIES


                  SECTION 9.1. REMEDIES. Upon the occurrence and during the
continuance of any Event of Default the Agent may from time to time exercise in
respect of the Pledged Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to it, the following remedies:

                  (i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any Pledgor or
any other person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and remittances relating to the Pledged Collateral and use in
connection with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;

                  (ii) Demand, sue for, collect or receive any money or property
at any time payable or receivable in respect of the Pledged Collateral including
instructing the obligor or obligors on any agreement, instrument or other
obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Agent, and in connection with any of the foregoing, compromise, settle,
extend the time for payment and make other modifications with respect thereto;
PROVIDED,



                                      -29-


HOWEVER, that in the event that any such payments are made directly to any
Pledgor, prior to receipt by any such obligor of such instruction, such Pledgor
shall segregate all amounts received pursuant thereto in trust for the benefit
of the Agent and shall promptly (but in no event later than one (1) Business Day
after receipt thereof) pay such amounts to the Agent;

                  (iii) Sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to use or
otherwise liquidate, any and all investments made in whole or in part with the
Pledged Collateral or any part thereof, and take possession of the proceeds of
any such sale, assignment, license or liquidation;

                  (iv) Take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the Agent at
any place or places so designated by the Agent, in which event such Pledgor
shall at its own expense: (A) forthwith cause the same to be moved to the place
or places designated by the Agent and therewith delivered to the Agent, (B)
store and keep any Pledged Collateral so delivered to the Agent at such place or
places pending further action by the Agent and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor's obligation to deliver the Pledged Collateral as
contemplated in this SECTION 9.1(IV) is of the essence hereof. Upon application
to a court of equity having jurisdiction, the Agent shall be entitled to a
decree requiring specific performance by any Pledgor of such obligation;

                  (v) Withdraw all moneys, instruments, securities and other
property in any bank, financial securities, deposit or other account of any
Pledgor constituting Pledged Collateral for application to the Obligations as
provided in ARTICLE X hereof;

                  (vi) Retain and apply the Distributions to the Obligations as
provided in ARTICLE X hereof;

                  (vii) Exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and

                  (viii) Exercise all the rights and remedies of a secured party
on default under the UCC, and the Agent may also in its sole discretion, without
notice except as specified in SECTION 9.2 hereof, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Agent's offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Agent may deem
commercially reasonable. The Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
any or all of the Pledged Collateral at any such sale and shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Pledged Collateral sold, assigned or licensed at
such sale, to use and apply any of the Obligations owed to such person as a
credit on account of the purchase price of any Pledged Collateral payable by
such person at such sale. Each purchaser, assignee, licensee or recipient at



                                      -30-


any such sale shall acquire the property sold, assigned or licensed absolutely
free from any claim or right on the part of any Pledgor, and each Pledgor hereby
waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Agent shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law,
any claims against the Agent arising by reason of the fact that the price at
which any Pledged Collateral may have been sold, assigned or licensed at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.

                  SECTION 9.2. NOTICE OF SALE. Each Pledgor acknowledges and
agrees that, to the extent notice of sale or other disposition of Pledged
Collateral shall be required by law, ten (10) days' prior notice to such Pledgor
of the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition.

                  SECTION 9.3. WAIVER OF NOTICE AND CLAIMS. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Agent's taking possession or the Agent's
disposition of any of the Pledged Collateral, including any and all prior notice
and hearing for any prejudgment remedy or remedies and any such right which such
Pledgor would otherwise have under law, and each Pledgor hereby further waives,
to the fullest extent permitted by applicable law: (i) all damages occasioned by
such taking of possession, (ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Agent's rights hereunder and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law. The Agent shall not be liable for any incorrect or improper
payment made pursuant to this ARTICLE IX in the absence of gross negligence or
willful misconduct. Any sale of, or the grant of options to purchase, or any
other realization upon, any Pledged Collateral shall operate to divest all
right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.

                  SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL.

                  (i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those



                                      -31-


who meet the requirements of such Governmental Authority. Each Pledgor
acknowledges that any such sales may be at prices and on terms less favorable to
the Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Agent shall have no obligation
to engage in public sales.

                  (ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, the Agent may be compelled, with respect to any sale of all or any part of
the Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Securities Collateral or Investment
Property for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would agree to do so.

                  (iii) Notwithstanding the foregoing, each Pledgor shall, upon
the occurrence and during the continuance of any Event of Default, at the
reasonable request of the Agent, for the benefit of the Agent, cause any
registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Agent to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof,
shall furnish to the Agent such number of prospectuses, offering circulars or
other documents incident thereto as the Agent from time to time may request, and
shall indemnify and shall cause the issuer of the Securities Collateral to
indemnify the Agent and all others participating in the distribution of such
Securities Collateral against all claims, losses, damages and liabilities caused
by any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or the
like) or by any omission (or alleged omission) to state therein (or in any
related registration statement, notification or the like) a



                                      -32-


material fact required to be stated therein or necessary to make the statements
therein not misleading.

                  (iv) If the Agent determines to exercise its right to sell any
or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the Agent all
such information as the Agent may request in order to determine the number of
securities included in the Securities Collateral or Investment Property which
may be sold by the Agent as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same are from
time to time in effect.

                  (v) Each Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9.4 will cause irreparable injury to the
Agent and other Secured Parties, that the Agent and the other Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this SECTION 9.4 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing.

                  SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES.

                  (i) No failure on the part of the Agent to exercise, no course
of dealing with respect to, and no delay on the part of the Agent in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy; nor shall the Agent be required to look first to,
enforce or exhaust any other security, collateral or guaranties. The remedies
herein provided are cumulative and are not exclusive of any remedies provided by
law.

                  (ii) In the event that the Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Agent, then and in every such case, the Pledgors, the Agent and each
other Secured Party shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral, and all rights,
remedies and powers of the Agent and the other Secured Parties shall continue as
if no such proceeding had been instituted.

                  SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL
PROPERTY. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Agent, each Pledgor shall execute and deliver to the
Agent an assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and Goodwill constituting Intellectual Property Collateral and such
other documents as are necessary or appropriate to carry out the intent and
purposes hereof. Within five (5) Business Days of written notice thereafter from
the Agent, each Pledgor shall make available to the Agent, to the extent within
such Pledgor's power and authority, such personnel in such Pledgor's employ on
the date of the Event of Default as the Agent may reasonably designate to permit
such Pledgor to continue, directly or indirectly, to



                                      -33-


produce, advertise and sell the products and services sold by such Pledgor under
the registered Patents, Trademarks and/or Copyrights constituting Intellectual
Property Collateral, and such persons shall be available to perform their prior
functions on the Agent's behalf.

                                   ARTICLE X

            PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
                             APPLICATION OF PROCEEDS


                  SECTION 10.1. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS. The Pledgors shall take all actions required by the Purchase
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.

                  SECTION 10.2. APPLICATION OF PROCEEDS. The proceeds received
by the Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the Agent of
its remedies shall be applied, together with any other sums then held by the
Agent pursuant to this Agreement, in accordance with the Purchase Agreement.

                                   ARTICLE XI

                                  MISCELLANEOUS


                  SECTION 11.1. CONCERNING AGENT.

                  (i) The Agent has been appointed as collateral agent pursuant
to the Purchase Agreement. The actions of the Agent hereunder are subject to the
provisions of the Purchase Agreement. The Agent shall have the right hereunder
to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking action (including the release or
substitution of the Pledged Collateral), in accordance with this Agreement and
the Purchase Agreement. The Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be liable for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good faith. The Agent may
resign and a successor Agent may be appointed in the manner provided in the
Purchase Agreement. Upon the acceptance of any appointment as the Agent by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
under this Agreement, and the retiring Agent shall thereupon be discharged from
its duties and obligations under this Agreement. After any retiring Agent's
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the Agent.



                                      -34-


                  (ii) The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equivalent to
that which the Agent, in its individual capacity, accords its own property
consisting of similar instruments or interests, it being understood that neither
the Agent nor any of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Agent or any other Secured Party has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve rights
against any person with respect to any Pledged Collateral.

                  (iii) The Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.

                  (iv) If any item of Pledged Collateral also constitutes
collateral granted to the Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, the Agent, in its sole discretion, shall select which
provision or provisions shall control.

                  SECTION 11.2. AGENT MAY PERFORM; AGENT APPOINTED
ATTORNEY-IN-FACT. If any Pledgor shall fail to perform any covenants contained
in this Agreement (including such Pledgor's covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay Claims, (iii)
make repairs, (iv) discharge Liens or (v) pay or perform any obligations of such
Pledgor under any Pledged Collateral) or if any representation or warranty on
the part of any Pledgor contained herein shall be breached, the Agent may (but
shall not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; PROVIDED, HOWEVER, that the Agent
shall in no event be bound to inquire into the validity of any tax, lien,
imposition or other obligation which such Pledgor fails to pay or perform as and
when required hereby and which such Pledgor does not contest in accordance in
accordance with the provisions of SECTION 4.11 hereof. Any and all amounts so
expended by the Agent shall be paid by the Pledgors in accordance with the
provisions of SECTION 13 of the Purchase Agreement. Neither the provisions of
this SECTION 11.2 nor any action taken by the Agent pursuant to the provisions
of this SECTION 11.2 shall prevent any such failure to observe any covenant
contained in this Agreement nor any breach of representation or warranty from
constituting an Event of Default. Each Pledgor hereby appoints the Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, from time to time in the Agent's
discretion to take any action and to execute any instrument consistent with the
terms of the Purchase Agreement, this Agreement and the other Security Documents
which the Agent may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest



                                      -35-


and such appointment shall be irrevocable for the term hereof. Each Pledgor
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof.

                  SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and the other Secured Parties and each of
their respective successors, transferees and assigns. No other persons
(including any other creditor of any Pledgor) shall have any interest herein or
any right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Secured Party may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person, and such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party, herein or otherwise, subject however, to
the provisions of the Purchase Agreement.

                  SECTION 11.4. TERMINATION; RELEASE. (a)When all the
Obligations have been paid in full, this Agreement shall terminate. Upon
termination of this Agreement the Pledged Collateral shall be released from the
Lien of this Agreement. Upon the transfer of any Pledged Collateral that is
permitted by SECTION 7.19(A) or SECTION 8.05 of the Purchase Agreement to a
party that in not the Issuer or a Guarantor, such Pledged Collateral shall be
released from the Lien of this Agreement. Upon such release or any release of
Pledged Collateral in accordance with the provisions of the Purchase Agreement,
the Agent shall, upon the request and at the sole cost and expense of the
Pledgors, assign, transfer and deliver to Pledgor, against receipt and without
recourse to or warranty by the Agent except as to the fact that the Agent has
not encumbered the released assets, such of the Pledged Collateral to be
released (in the case of a release) as may be in possession of the Agent and as
shall not have been sold or otherwise applied pursuant to the terms hereof, and,
with respect to any other Pledged Collateral, proper documents and instruments
(including UCC-3 termination statements or releases) acknowledging the
termination hereof or the release of such Pledged Collateral, as the case may
be.

                  SECTION 11.5. MODIFICATION IN WRITING. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Purchase Agreement
and unless in writing and signed by the Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement or any other document evidencing the Obligations, no notice to or
demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.

                  SECTION 11.6. NOTICES. Unless otherwise provided herein or in
the Purchase Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Purchase Agreement, as to any



                                      -36-


Pledgor, addressed to it at the address of the Issuer set forth in the Purchase
Agreement and as to the Agent, addressed to it at the address set forth in the
Purchase Agreement, or in each case at such other address as shall be designated
by such party in a written notice to the other party complying as to delivery
with the terms of this SECTION 11.6.

                  SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND
SERVICE OF PROCESS; WAIVER OF JURY TRIAL. SECTION 15.08 of the Purchase
Agreement is incorporated herein, MUTATIS MUTANDIS, as if a part hereof.

                  SECTION 11.8. SEVERABILITY OF PROVISIONS. Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

                  SECTION 11.9. EXECUTION IN COUNTERPARTS. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

                  SECTION 11.10. BUSINESS DAYS. In the event any time period or
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.

                  SECTION 11.11. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION.
Such Pledgor shall not be entitled to any credit against the principal, premium,
if any, or interest payable under the Purchase Agreement, and such Pledgor shall
not be entitled to any credit against any other sums which may become payable
under the terms thereof or hereof, by reason of the payment of any Tax on the
Pledged Collateral or any part thereof.

                  SECTION 11.12. NO CLAIMS AGAINST AGENT. Nothing contained in
this Agreement shall constitute any consent or request by the Agent, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Pledged Collateral or any part
thereof, nor as giving any Pledgor any right, power or authority to contract for
or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Agent in respect thereof or any claim that any Lien based on
the performance of such labor or services or the furnishing of any such
materials or other property is prior to the Lien hereof.

                  SECTION 11.13. NO RELEASE. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor's part to be performed or observed under or in
respect of any of the Pledged Collateral or from any liability to any person
under or in respect of any of the Pledged Collateral or shall



                                      -37-


impose any obligation on the Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor's part
to be so performed or observed or shall impose any liability on the Agent or any
other Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, the Purchase Agreement or the other Basic
Documents, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith. The obligations of each Pledgor contained in
this SECTION 11.13 shall survive the termination hereof and the discharge of
such Pledgor's other obligations under this Agreement, the Purchase Agreement
and the other Basic Documents.

                  SECTION 11.14. OBLIGATIONS ABSOLUTE. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:

                  (i) any bankruptcy, insolvency, reorganization, arrangement,
         readjustment, composition, liquidation or the like of any other
         Pledgor;

                  (ii) any lack of validity or enforceability of the Purchase
         Agreement or any other Basic Document, or any other agreement or
         instrument relating thereto;

                  (iii) any change in the time, manner or place of payment of,
         or in any other term of, all or any of the Obligations, or any other
         amendment or waiver of or any consent to any departure from the
         Purchase Agreement or any other Basic Document or any other agreement
         or instrument relating thereto;

                  (iv) any pledge, exchange, release or non-perfection of any
         other collateral, or any release or amendment or waiver of or consent
         to any departure from any guarantee, for all or any of the Obligations;

                  (v) any exercise, non-exercise or waiver of any right, remedy,
         power or privilege under or in respect hereof, the Purchase Agreement
         or any other Basic Document except as specifically set forth in a
         waiver granted pursuant to the provisions of SECTION 11.5 hereof; or

                  (vi) any other circumstances which might otherwise constitute
         a defense available to, or a discharge of, any Pledgor.


               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




                                      S-1


                  IN WITNESS WHEREOF, the Pledgors and the Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.

                                       TERREMARK WORLDWIDE, INC.,
                                       as Pledgor


                                       By: /s/ JOSE SEGRERA
                                           -------------------------------------
                                           Name:
                                           Title:


                                       NAP OF THE AMERICAS, INC.
                                       NAP OF THE AMERICAS/WEST, INC.
                                       OPTICAL COMMUNICATIONS, INC.
                                       PARK WEST TELECOMMUNICATIONS
                                       INVESTORS, INC.
                                       SPECTRUM TELECOMMUNICATIONS CORP.
                                       TECOTA SERVICES CORP.
                                       TERREMARK FINANCIAL SERVICES, INC.
                                       TERREMARK FORTUNE HOUSE #1, INC.
                                       TERREMARK LATIN AMERICA, INC.
                                       TERREMARK MANAGEMENT SERVICES, INC.
                                       TERREMARK REALTY, INC.
                                       TERREMARK TECHNOLOGY CONTRACTORS, INC.
                                       TERRREMARK TRADEMARK HOLDINGS, INC.
                                       TERRENAP DATA CENTERS, INC.
                                       TERRENAP SERVICES, INC.

                                       as Pledgors


                                       By: /s/ JOSE SEGRERA
                                           -------------------------------------
                                           Name:
                                           Title:





                                      S-2

                                       FMP AGENCY SERVICES, LLC,
                                       as Agent


                                       By: /s/ RAFAEL FOGEL
                                           -------------------------------------
                                           Name:
                                           Title:

EX-10.30

                                                                   EXHIBIT 10.30


                            TERREMARK WORLDWIDE, INC.

                          REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made and
entered into as of December 31, 2004, by and between Terremark Worldwide, Inc.
(the "Company"), Falcon Mezzanine Partners, LP ("Falcon") and Stichting
Pensioenfonds ABP and Stichting Pensioenfonds Voor De Gezondheid, Geestelijke En
Maatschappelijke Belangen (collectively "AlpInvest" and together with Falcon the
"Purchasers").


                                R E C I T A L S :

         A. The Company and the Purchasers have entered into a Purchase
Agreement ("Purchase Agreement"), dated as of the date hereof for the purchase
and sale of $30,000,000 principal amount of the Company's Senior Secured Notes
due 2009 (the "Notes"), 3,060,444 shares (the "Shares") of the Company's common
stock, par value $.001 (the "Common Stock") and Warrants to purchase 15,000,000
shares of Common Stock (the "Warrants").

         B. As a condition to closing of the Purchase Agreement, the parties
have agreed to enter into this Agreement.

         NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants, representations, warranties and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto intending to be legally bound do hereby
agree as follows:

         1. DEFINED TERMS. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Purchase Agreement.

         2. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents and
warrants to the Company as follows:

                  (a) Each Purchaser acknowledges and agrees that the
certificates representing the Shares and the Warrant Shares shall bear a legend
in substantially the form appearing below (unless subsequently registered under
the Act):

         "THE COMMON STOCK EVIDENCED HEREBY HAS 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 THAT
         HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES,
         OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT BUT ONLY UPON THE COMPANY 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."

                  Each Purchaser also acknowledges that the Company may place a
stop transfer order against transfer of any of the Shares or Warrant Shares, if
necessary in the Company's reasonable judgment, in order to assure compliance by
the Purchaser with the terms of the Purchase Agreement and this Agreement.

                  (b) The individual executing this Agreement has appropriate
authority to act on behalf of such Purchaser. This Agreement has been duly
executed and delivered by or on behalf of such Purchaser and constitutes the
valid and binding agreement of such Purchaser, enforceable against such
Purchaser 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).

         3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchaser that the Company has full right, power
and authority to enter into this Agreement and this Agreement has been duly
authorized, executed and delivered by the Company and 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).

         4. COVENANTS OF THE PURCHASER. Each Purchaser agrees and covenants that
it will not sell, transfer or make any disposition of any securities of the
Company after the effectiveness of any registration statement relating to a
primary public offering by the Company for a period of time as required by the
managing underwriter of any such offering not to exceed 90 days; provided that
each director, executive officer and 5% or greater shareholder of the Company
shall have agreed to such restrictions for the same time period.

         5. REGISTRATION OF SHARES, WARRANTS AND WARRANT SHARES AND LISTING OF
SHARES AND WARRANT SHARES. The Company hereby agrees with the Purchasers that:

                  (a) (i) The Company shall use its commercially reasonable
efforts to file or cause to be filed, a registration statement (the
"Registration Statement") under the Securities Act, to permit the resale by a
holder thereof of the Shares, Warrants and Warrant Shares and to have such
registration statement declared effective no later than 180 days following the
Closing Date (the "Effectiveness Deadline").



                                       2


                           (ii) The Company shall use its commercially
reasonable efforts to cause such Registration Statement to remain effective
until the earlier to occur of (A) the expiration of the time period referred to
in Rule 144(k) under the Securities Act with respect to the Purchasers and (B)
such time as all the Shares, Warrants and Warrant Shares covered by the
Registration Statement have been sold or are otherwise freely tradable without
registration under the Securities Act (the "Effectiveness Period").

                  (b) In connection with the foregoing, the Company will:

                           (i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a Registration Statement with respect to such
securities and use its commercially reasonable efforts to cause such
Registration Statement to become and remain effective.

                           (ii) Prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities covered by such
Registration Statement whenever the holder of such securities shall desire to
sell the same.

                           (iii) Furnish to holder such number of copies of a
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as holder may reasonably request in order to facilitate the sale of
the Common Stock owned by holder.

                           (iv) Use its commercially reasonable efforts to
register or qualify the securities covered by such Registration Statement under
applicable blue sky laws, and do such other reasonable acts and things as may be
required in jurisdictions to which such blue sky laws apply; 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.

                           (v) Furnish at the request of holder, on the date
that the Registration Statement with respect to the Shares, Warrants and Warrant
Shares becomes effective, an opinion, dated as of such date, of the independent
counsel representing the Company for the purposes of such registration,
addressed to the Purchaser stating that such Registration Statement has become
effective under the Securities Act and that to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act.

                  (c) All of the expenses incurred in complying with the
foregoing, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), printing expenses,
fees and disbursements of counsel for the Company, expenses of any special
audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws or any jurisdictions shall be
paid by the Company.



                                       3


                  (d) The Company shall also use its commercially reasonable
efforts to cause such Common Stock to be listed on the American Stock Exchange
or such other principal national securities exchange on which the shares of
Common Stock are then listed or if the shares are not so listed, on The NASDAQ
Stock Market, if the shares are then listed on such market.

                  (e) Each Purchaser shall furnish to the Company such
information regarding itself, the Shares, Warrants and Warrant Shares
beneficially owned by it and the intended method of disposition of the Shares,
Warrants and Warrant Shares beneficially owned by it as shall be reasonably
required to effect the registration of such Shares, Warrants and Warrant Shares
and shall execute such documents in connection with such registration as the
Company may reasonably request.

         6. INDEMNIFICATION. In the event of any offer of the Shares, Warrants
or Warrant Shares pursuant to the Registration Statement or any amendment
thereof hereof, the Company agrees to indemnify and hold harmless each
Purchaser, each underwriter, if any, of such Shares, Warrants or Warrant Shares,
and each other person, if any, who controls such Purchaser or any such
underwriter within the meaning of the Act, from and against any and all losses,
claims, damages or liabilities (or actions in respect thereof) which arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement under which the Shares,
Warrants and Warrant Shares were registered and offered under the Act or any
prospectus contained therein, or arise out of or are based upon 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, and will reimburse
such Purchaser, each such underwriter, and each such controlling person for any
legal or any other expenses reasonably incurred by such Purchaser, such
underwriter or controlling person in connection with the investigation or
defense of any such loss, claim, damage, liability or action, PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or such prospectus in reliance upon, and in
conformity with, written information furnished to the Company by such Purchaser,
such underwriter or such controlling person, specifically for use in preparation
thereof, PROVIDED FURTHER, that the Company shall not file any such Registration
Statement or prospectus containing information relating to such Purchaser
without providing the Purchaser with an opportunity to review and, to the extent
incorrect, correct such information.

         In the event of any offer of the Shares, Warrants and Warrant Shares
pursuant to the Registration Statement or any amendment thereof, and to the
extent permitted by applicable law, each Purchaser and each other person, if
any, who controls such Purchaser within the meaning of the Act, agrees to
indemnify and hold harmless the Company, each person who controls the Company
within the meaning of the Act, and each officer and director of the Company from
and against any losses, claims, damages or liabilities, joint or several, to
which the Company, such controlling person or any such officer or director may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material



                                       4


fact contained in such post-effective amendment or other Registration Statement
under which such Shares, Warrants and Warrant Shares were offered or any
prospectus contained therein, or arise out of or are based upon 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, which untrue
statement or alleged untrue statement or omission or alleged omission was made
therein in reliance upon, and in conformity with, written information furnished
to the Company by such Purchaser or such controlling person specifically for use
in connection with the preparation thereof (provided that the Company shall have
afforded the Purchaser with an opportunity to review, and to the extent
incorrect, correct such information prior to the filing thereof), and to
reimburse the Company, each such controlling person and each such officer or
director for any legal or any other expenses reasonably incurred by them in
connection with investigating, or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that any such indemnification obligation
shall be individual to each Purchaser and limited to an aggregate maximum dollar
amount not to exceed the aggregate dollar amount of the proceeds received by the
Purchasers in any such offering.

         Promptly after receipt by an indemnified party of notice of the
commencement of any action or the assertion of a claim that may be subject to
indemnification hereunder, such indemnified party, if a claim in respect thereof
is to be made against an indemnifying party, will give written notice to such
indemnifying party of the commencement or assertion thereof. Indemnification
provided for under this Section 6 shall not be available to the indemnified
party if it shall fail to give such notice to the indemnifying party (if the
indemnifying party was not aware of the action) to the extent the indemnifying
party was prejudiced by failure to receive such notice, but the omission to give
such notice shall not relieve the indemnifying party from any liability it
otherwise may have to the indemnified party. In case any such action is brought
or such assertion is made against any indemnified party, and it notifies any
indemnifying party of such commencement or assertion, the indemnifying party
will be entitled to participate in and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof, other than the
reasonable cost of investigation.

         7. LIQUIDATED DAMAGES. If the Registration Statement covering the
securities required to be filed by the Company pursuant to Section 5 hereof is
not declared effective by the Commission by the Effectiveness Deadline, or the
Registration Statement shall cease to be effective at any time after the
Effectiveness Deadline but prior to the termination of the Effectiveness Period
(a "Noneffective Period"), then the Company shall make the payments to the
Purchaser as provided in the next sentence as liquidated damages and not as a
penalty; PROVIDED HOWEVER, that if after a Registration Statement is declared
effective the Board of Directors of the Company reasonably determines in good
faith that the continued effectiveness of the filing of such Registration
Statement at such time would be materially detrimental to the Company and it is
therefore necessary to suspend the filing of such Registration Statement the
Company may suspend the effectiveness of such Registration Statement for a
period of time not



                                       5


to exceed 90 days in any 12 month period without incurring any liquidated
damages pursuant to this Section 7 for such Noneffective Period. The amount to
be paid by the Company to each Purchaser shall be determined as of each
Computation Date (as defined below), and such amount shall be equal to 1.0% (the
"Liquidated Damage Rate") of the total proceeds received by the Company pursuant
to the amount of the Purchase Price allocated to the Shares purchased by such
Purchaser pursuant to the Purchase Agreement for the period from the
Effectiveness Deadline or the commencement of a Noneffective Period, as
applicable, to the first Computation Date, and for each 30-day period of any
subsequent Computation Dates thereafter, calculated on a pro rata basis to the
date on which the Registration Statement is declared effective by the Commission
(the "Periodic Amount"). The full Periodic Amount shall be paid by the Company
to each Purchaser by wire transfer of immediately available funds within three
days after each Computation Date. As used in this Section 7, "Computation Date"
means the date which is 30 days after the Effectiveness Deadline or the
commencement of a Noneffective Period, as applicable, and, if the Registration
Statement to be filed by the Company pursuant to Section 5 has not theretofore
been declared effective by the Commission, each date which is 30 days after the
previous Computation Date until such Registration Statement is so declared
effective.

         8. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, if it ceases to be
required to file such reports, it will, upon the request of the Purchaser, make
publicly available other information that fulfills the information requirements
set forth in Rule 144 (c) (2)), and it will take such further action as the
Purchasers may reasonably request, all to the extent required from time to time
to enable the Purchasers to sell the Shares and Warrant Shares without
registration under the Act within the limitation of the exemptions provided by
(a) Rule 144 under the Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of the Purchasers, the Company will deliver to it a written statement as
to whether the Company has complied with such information disclosure and other
requirements.

         9. NOTICES.

                  (a) Any notice required to be given or delivered to the
Purchaser shall be sent to the Purchaser's address as follows:

         If to Falcon:             Falcon Mezzanine Partners, LP
                                   60 Kendrick Street
                                   Needham, MA 02494
                                   Attention:  Sandeep Alva
                                   Telecopy:  781- 247-7299




                                      6


                                   With a copy to:

                                   Cahill Gordon & Reindel LLP
                                   80 Pine Street
                                   New York, NY 10005
                                   Attention:  John Papchristos
                                   Telecopy:  781-247-7299

         If to AlpInvest:          AlpInvest Partners Inc.

                                   600 Fifth Avenue, 17th Floor
                                   New York, NY 10020
                                   Attention:  Jason Block
                                   Telecopy:  212-332-6241

                                   With a copy to:

                                   Patrick de van der Schueren
                                   NIB Capital Private Equity N.V.
                                   Jachthavenweg 118
                                   1081 KJ Amsterdam
                                   The Netherlands
                                   Telecopy:  31 (0)20 540 7501

                                   And

                                   Daniel C. Kolb Ropes & Gray
                                   45 Rockefeller Plaza 10th Floor
                                   New York, NY 10111-0087
                                   Telecopy: 212-841-5725

                  (b) Any notice required to be given or delivered to the
Company shall be sent to:

                                   Terremark Worldwide, Inc.
                                   2601 S. Bayshore Drive
                                   Miami, Florida 33133
                                   Attention: Fern S. Watts, Chief Legal Officer
                                   Telecopy: 305-250-4244


                  (c) All notices hereunder shall be in writing and shall be
deemed to have been given (i) when delivered personally, (ii) when received via
facsimile if on a business day during customary business hours (otherwise, on
the next business day), (iii) three (3) days after being



                                       7


deposited in the United States mail, registered, postage prepaid, or (iv) the
next business day after being delivered to a nationally recognized overnight
courier.

         10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties and agreements hereunder shall survive execution of this Agreement.

         11. GOVERNING LAW/VENUE. This Agreement and the rights and obligations
of the parties shall be governed by and construed in accordance with the laws of
the State of Florida applicable to contracts made and to be performed wholly
within that State. The Purchaser hereby irrevocably consents to the jurisdiction
of the state or federal courts located in Miami-Dade County, Florida in
connection with any suit, action, or other proceeding arising out of or related
to this Agreement and hereby agrees not to assert, by way of motion, as a
defense, or otherwise in any such suit action or other proceeding that the same
is brought in an inconvenient forum, that the venue is improper, or that the
subject matter hereof can not be enforced by such courts.




                                       8


         IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first set forth above:


COMPANY:                                     INVESTORS:

TERREMARK WORLDWIDE, INC.                    FALCON MEZZANINE PARTNERS, LP


By: /s/ Jose A. Segrera                      By: /s/ Rafael Fogel
    -----------------------------------          -------------------------------
Print Name:                                      Print Name:
Title:                                                      --------------------
                                                 Title:
                                                        ------------------------








                                       9

                                       STICHTING PENSIOENFONDS
                                       ABP, Duly represented by
                                       AlpInvest Partners, N.V.



                                       By: /s/ W. Milders
                                           -------------------------------------
                                           W. Milders
                                           Legal Counsel



                                       By: /s/ E. Thysenn
                                           -------------------------------------
                                           E. Thysenn
                                           Managing Partner Co-Investments



                                       STICHTING PENSIOENFONDS
                                       VOOR DE GEZONDHEID,
                                       GEESTELIJKE EN
                                       MAATSCHAPPELIJKE
                                       BELANGEN, Duly
                                       represented by AlpInvest
                                       Partners, N.V.



                                       By: /s/ W. Milders
                                           -------------------------------------
                                           W. Milders
                                           Legal Counsel



                                       By: /s/ E. Thysenn
                                           -------------------------------------
                                           E. Thysenn
                                           Managing Partner Co-Investments



                                       10

EX-10.31

                                                                   EXHIBIT 10.31


                          [FORM OF WARRANT CERTIFICATE]

                                                                 PPN: [        ]

                               WARRANT CERTIFICATE


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 TO THESE 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 COMPANY, OR OTHER COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS
CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
APPLICABLE STATE SECURITIES LAWS

DATED DECEMBER 30, 2004

                            TERREMARK WORLDWIDE, INC.

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE


                               WARRANT CERTIFICATE
                      To Purchase Shares of Common Stock of
                                 [              ]


No. [   ]                                                         [   ] Warrants

THIS CERTIFIES THAT, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, [INSERT NAME AND ADDRESS OF WARRANT
HOLDER] or its registered assigns (the "Holder"), is the registered owner of the
number of warrants specified above (collectively, the "Warrants"), each of which
warrants entitles the holder, subject to the adjustment provisions and the
conditions and limitations hereinafter set forth, to purchase from TERREMARK
WORLDWIDE, INC. (together with its successor and assignee, the "Company"), a
corporation organized and existing under the laws of the State of Delaware, one
(1) share, as adjusted pursuant to Section 4 hereof, of the Company's Common
Stock at a





                                      -2-


purchase price of $[ ] per share, as adjusted pursuant to Section 4 hereof, (the
"Exercise Price"). The Warrants shall not be terminable by the Company prior to
the Expiration Date (as defined in Section 10 hereof). The shares of Common
Stock issuable upon exercise of the Warrants (and any other or additional
shares, securities or property that may hereafter be issuable upon exercise of
the Warrants) are sometimes referred to herein as the "Warrant Shares," and the
maximum number of shares so issuable under this Warrant Certificate is sometimes
referred to as the "Aggregate Number" (as such number may be increased or
decreased, as more fully set forth herein).

                  The Warrants shall be void and all rights represented hereby
shall cease after 5:00 p.m. Eastern Time on the Expiration Date.

                  The Warrants are part of an authorized issue of warrants (the
"Authorized Warrants") initially exercisable for an aggregate of 15,000,000
shares of Common Stock issued on the date hereof pursuant to the terms of the
Purchase Agreement.

                  Certain terms used in this Warrant Certificate are defined in
Section 10 hereof.

                  The Warrants are subject to the following provisions, terms
and conditions:

                  1. EXERCISE; ISSUE OF CERTIFICATES; PAYMENT FOR SHARES. (a)
The Warrants represented by this Warrant Certificate may be exercised by the
Holder, in whole or in part (but not as to fractional shares of Common Stock),
to purchase the Aggregate Number of shares (initially equal to [ ] shares) of
Common Stock at all times on or prior to 5:00 p.m. Eastern Time on the
Expiration Date hereof.

                  (b) The Warrants shall be exercisable in whole at any time or
in part from time to time by surrendering this Warrant Certificate on any
Business Day (with the Exercise Form annexed hereto as SCHEDULE 1 properly
completed and executed) to the Company at its principal office specified in
Section 15, or its then current address, and upon payment to the Company of the
Exercise Price for the Warrant Shares being purchased.

                  (c) Payment of the aggregate Exercise Price with respect to an
exercise in whole or in part of any Warrants may be made, in the sole discretion
of the Holder, in the form of any of the following: (a) by cash or a check or
bank draft in New York Clearing House funds, (b) by the surrender of the
applicable Warrant or Warrants, and without the payment of the Exercise Price in
cash, for such number of Warrant Shares equal to the product of (1) the number
of Warrant Shares for which such Warrant or Warrants are exercisable with
payment in cash of the Exercise Price as of the date of exercise and (2) the
Cashless Exercise Ratio, (c) by tendering Notes having an aggregate principal
amount, plus accrued and unpaid interest, if any, thereon to the date of
exercise, equal to the Exercise Price or (d) by any combination of (a), (b) and
(c) above. Such certificate or certificates shall be deemed to have been issued
and any Person so designated to be named therein shall be deemed for all
purposes to have become a holder of



                                      -3-



record of such Warrant Shares as of the close of business on the Business Day of
the surrender of this Warrant Certificate and payment of the Exercise Price as
aforesaid.

                  (d) Certificates for the shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding five (5)
Business Days, after this Warrant Certificate shall have been so exercised, and
unless the Warrants represented by this Warrant Certificate have expired or been
fully exercised, a new Warrant Certificate representing the number of shares
with respect to which this Warrant Certificate shall not then have been
exercised shall also be delivered to the Holder within such time.

                  2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES; LISTING.
The Company covenants and agrees that: (a) all Warrant Shares will, upon
issuance, be original-issue shares (and not treasury stock) fully paid and
nonassessable and free from all taxes, claims, liens, charges and other
encumbrances with respect to the issue thereof; (b) without limiting the
generality of the foregoing, it will from time to time take all such action as
may be required to assure that the par value per share of Common Stock shall at
all times be less than or equal to the Exercise Price; (c) during the period
within which the Warrants represented by this Warrant Certificate may be
exercised, the Company will at all times have authorized and reserved for the
purpose of issue or transfer upon exercise of the Warrants represented by this
Warrant Certificate a sufficient number of original-issue shares of its Common
Stock to provide for the exercise of all the Warrants represented by this
Warrant Certificate; and (d) upon the exercise of the Warrants represented by
this Warrant Certificate, it will, at its expense, promptly notify each
securities exchange on which any Common Stock is at the time listed of such
issuance, and use its best efforts to maintain a listing of all shares of Common
Stock from time to time issuable upon the exercise of the Warrants represented
by this Warrant Certificate to the extent such shares can be listed.

                  3. REGISTRATION RIGHTS AGREEMENT. The Holder shall be entitled
to all of the benefits, and subject to all of the obligations, of the
Registration Rights Agreement, in connection with the Warrants and the Warrant
Shares, if issued.

                  4. ADJUSTMENTS TO EXERCISE PRICE AND AGGREGATE NUMBER. The
Exercise Price and the Aggregate Number of shares of Common Stock issuable upon
the exercise of each Warrant (the "Exercise Rate") is subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 4.

                  (a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:

                  (1) pays a dividend or makes any other distribution on its
         Common Stock in shares of its Common Stock or in other capital stock of
         the Company; or

                  (2) subdivides, combines or reclassifies its outstanding
         shares of Common Stock,



                                      -4-



then, in each case, the Exercise Rate and the Exercise Price in effect
immediately prior to such action shall be proportionately adjusted so that the
Holder may upon payment of the same aggregate Exercise Price payable immediately
prior to such action receive the Aggregate Number and kind of shares of capital
stock of the Company which the Holder would have owned immediately following
such action if such Warrants had been exercised immediately prior to such
action.

                  Any such adjustment shall become effective immediately after
the record date of such dividend or distribution or the effective date of such
subdivision, combination or reclassification.

                  If after an adjustment the Holder upon exercise of any
Warrants may receive shares of two or more classes of capital stock of the
Company, the board of directors of the Company shall determine the allocation of
the adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section 4.

                  Such adjustment shall be made successively whenever any event
listed above shall occur.

                  (b) ADJUSTMENT FOR CERTAIN ISSUANCES OF COMMON STOCK. If the
Company issues or sells to any Person shares of its Common Stock or distributes
any rights, options or warrants entitling any Person to purchase shares of
Common Stock, or any rights, warrants or options or other securities convertible
into or exchangeable for Common Stock, in each case, at a price per share less
than the Current Market Value on the record date for determining entitlements to
participate in such issuance, sale or distribution (the "Time of
Determination"), the Exercise Rate shall be adjusted in accordance with the
formula:

                               E' = E x    O + N
                                      ----------
                                       O + N x P
                                           -----
                                               M

and the Exercise Price shall be adjusted in accordance with the following
formula:

                                  EP' = EP x E
                                            --
                                            E'

where:

                  E'  =     the adjusted Exercise Rate.

                  E   =     the Exercise Rate immediately prior to the Time of
                            Determination for any such issuance, sale or
                            distribution.


                                      -5-



                  EP' =     the Adjusted Exercise Price.

                  EP  =     the Exercise Price immediately prior to the Time
                            of Determination for any such issuance, sale or
                            distribution.

                  O   =     the number of Fully Diluted Shares (as defined
                            below) outstanding immediately prior to the Time of
                            Determination for any such issuance, sale or
                            distribution.

                  N   =     the number of additional shares of Common Stock
                            issued, sold or issuable upon exercise of such
                            rights, options or warrants or other convertible or
                            exchangeable securities.

                  P   =     the per share price received and receivable by the
                            Company in the case of any issuance or sale of
                            Common Stock or rights, options or warrants or other
                            convertible or exchangeable securities inclusive of
                            the exercise price per share of Common Stock payable
                            upon exercise of such rights, options or warrants or
                            other convertible or exchangeable securities.

                  M   =     the Current Market Value per share of Common Stock
                            on the Time of Determination for any such issuance,
                            sale or distribution.

                  For purposes of this Section 4 the term "Fully Diluted Shares"
shall mean (i) the shares of Common Stock outstanding as of a specified date,
and (ii) the shares of Common Stock into or for which rights, options, warrants
or other convertible or exchangeable securities outstanding as of such date are
exercisable, convertible or exchangeable (other than the Warrants or any of the
other Authorized Warrants).

                  The adjustments shall be made successively whenever any such
rights, options or warrants or other convertible or exchangeable securities are
issued and shall become effective immediately after the relevant Time of
Determination. Notwithstanding the foregoing, the Exercise Rate and the Exercise
Price shall not be subject to adjustment in connection with (i) the issuance of
any shares of Common Stock upon exercise of any such rights, options or warrants
or other convertible or exchangeable securities which have previously been the
subject of an adjustment under this Agreement for which the required adjustment
has been made; (ii) Common Stock Equivalents or Shares of Common Stock issued
upon exercise of any Common Stock Equivalents issued to employees, officers or
directors of, or consultants or advisors to the Company or any of its
subsidiaries, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the board of directors of the Company for the
purpose of compensation or similar payment in connection with employment or
services rendered to the Company or its Subsidiaries; (iii) Shares of Common
Stock issued upon exercise of any Common Stock Equivalents outstanding on the
date hereof; and (iv) any exercise of the Warrants or any of the other
Authorized Warrants. If at the end of the period during which any such rights,
options or warrants or other convertible or exchangeable securities are
exercisable, not all



                                      -6-



rights, options or warrants or other convertible or exchangeable securities
shall have been exercised, the Warrants shall be immediately readjusted to what
it would have been if "N" in each of the above formulas had been the number of
shares actually issued.

                  (c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company
distributes to holders of its Common Stock (i) any evidences of indebtedness of
the Company or any of its subsidiaries, (ii) any assets of the Company or any of
its subsidiaries (whether in cash, property or otherwise), or (iii) any rights,
options or warrants to acquire any of the foregoing or to acquire any other
securities of the Company, the Exercise Rate shall be adjusted in accordance
with the formula:

                                  E' = E x   M
                                         -----
                                         M - F

and the Exercise Price shall be decreased (but not increased) in accordance with
the following formula:

                                  EP' = EP x E
                                             -
                                             E'

where:

                  E'  =    the adjusted Exercise Rate.

                  E   =    the current Exercise Rate on the record date referred
                           to in this paragraph (c) below.

                  EP' =    the Adjusted Exercise Price.

                  EP  =    the current Exercise Price on the record date
                           referred to in this paragraph (c) below.

                  M   =     the Current Market Value per share of Common Stock
                            on the record date referred to in this paragraph (c)
                            below.

                  F   =     the fair market value (as determined in good faith
                            by the Company's board of directors) on the record
                            date referred to in this paragraph (c) below of the
                            indebtedness, assets, rights, options or warrants
                            distributable in respect of one share of Common
                            Stock.

                  The adjustments shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If any adjustment is made pursuant to clause (iii) above of this subsection (c)
as a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable,



                                      -7-



not all such rights, options or warrants shall have been exercised, the Warrants
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the record date. Notwithstanding
anything to the contrary contained in this subsection (c), if "M-F" in the above
formula is less than $1.00 (or is a negative number) then in lieu of the
adjustment otherwise required by this subsection (c), the Company may elect to
distribute to the Holder, upon exercise of any Warrants, the evidences of
indebtedness, assets, rights, options or warrants which would have been
distributed to such Holder had such Warrants been exercised immediately prior to
the record date for such distribution.

                  This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 4.

                  (d) The following provisions shall be applicable to the making
of adjustments of the Exercise Price and Exercise Rate herein before provided
for in this Section 4:

                  (i) The sale or other disposition of any issued shares of
         Common Stock owned or held by or for the account of the Company shall
         be deemed an issuance thereof for the purposes of this Section 4.

                  (ii) The adjustments required by the preceding paragraphs of
         this Section 4 shall be made whenever and as often as any specified
         event requiring an adjustment shall occur, except as expressly provided
         herein. For the purpose of any adjustment, any specified event shall be
         deemed to have occurred at the close of business on the date of its
         occurrence.

                  (iii) In computing adjustments under this Section 4 fractional
         interests in Common Stock shall be taken into account to the nearest
         one-thousandth (.001) of a share and shall be aggregated until they
         equal one whole share.

                  (iv) If the Company shall take a record of the holders of its
         Common Stock for the purpose of entitling them to receive any item
         described in Sections 4(a) through 4(c) hereof, but abandon its plan to
         pay or deliver such item, then no adjustment shall be required by
         reason of the taking of such record and any such adjustment previously
         made in respect thereof shall be rescinded and annulled.

                  (v) The consideration for any additional shares of Common
         Stock issuable pursuant to any options, warrants or other rights to
         subscribe for or purchase the same shall be the consideration received
         or receivable by the Company for issuing such options, warrants or
         other rights, plus the additional consideration payable to the Company
         upon the exercise of such options, warrants or other rights. The
         consideration for any additional shares of Common Stock issuable
         pursuant to the terms of any convertible or exchangeable securities
         shall be the consideration received or receivable by the Company for
         issuing any options, warrants or other rights to subscribe for or





                                      -8-



         purchase such convertible or exchangeable securities, plus the
         consideration paid or payable to the Company in respect of the
         subscription for or purchase of such convertible or exchangeable
         securities, plus the additional consideration, if any, payable to the
         Company upon the exercise of the right of conversion, exercise or
         exchange of such convertible or exchangeable securities. In case of the
         issuance at any time of any additional shares of Common Stock or
         convertible or exchangeable securities in payment or satisfaction of
         any dividend upon any class of stock other than Common Stock, the
         Company shall be deemed to have received for such additional shares of
         Common Stock or convertible or exchangeable securities a consideration
         equal to the amount of such dividend so paid or satisfied.

                  (e) (i) If any event occurs as to which the other provisions
of this Section 4 are not strictly applicable but the lack of any provision for
the exercise of the rights of the Holder would not fairly protect the purchase
rights of such Holder in accordance with the essential intent and principles of
such provisions, or, if strictly applicable, would not fairly protect the
conversion rights of such Holder in accordance with the essential intent and
principles of such provisions, then the Company shall appoint a firm of
independent certified public accountants in the United States (which may be the
regular auditors of the Company) of recognized national standing in the United
States reasonably satisfactory to the Required Holders, which shall give their
opinion as to the adjustments, if any, necessary to preserve, without dilution,
on a basis consistent with the essential intent and principles established in
the other provisions of this Section 4, the exercise rights of such Holder. Upon
receipt of such opinion, the Company shall forthwith make the adjustments
described therein.

                  (ii) In case of any capital reorganization, other than in the
cases referred to in Section 4(a), (b) or (c) hereof and other than any capital
reorganization that does not result in any reclassification of the outstanding
shares of Common Stock into shares of other stock or other securities or
property, or the consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock into shares of other stock or other
securities or property), or the sale of all or substantially all of the assets
of the Company (collectively such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock that would otherwise have
been deliverable upon the exercise of such Warrant would have been entitled upon
such Reorganization if such Warrant had been exercised in full immediately prior
to such Reorganization. In case of any Reorganization, appropriate adjustment,
as determined in good faith by the board of directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company's Secretary or Assistant Secretary, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall



                                      -9-



thereafter be applicable, as nearly as possible, in relation to any such shares
or other securities or property thereafter deliverable upon exercise of
Warrants.

                  The Company shall not effect any such Reorganization unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such Reorganization or
the corporation or other entity purchasing such assets shall (i) expressly
assume, by a supplemental warrant or other acknowledgment executed and delivered
to the Holder the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase, and the due and punctual performance and
observance of each and every covenant, condition, obligation and liability under
this Warrant Certificate to be performed and observed by the Company in the
manner prescribed herein and (ii) if such Reorganization takes place prior to
consummation by the Company of all of its registration obligations under the
Stockholders Agreement, enter into an agreement providing to the Holder rights
and benefits substantially similar to those enjoyed by the Holder hereof under
the Stockholders Agreement.

                  The foregoing provisions of this Section 4(e)(ii) shall apply
to successive Reorganization transactions.

                  (f) (i) In case:

                  (A) the Company shall authorize the issuance to holders of
         shares of Common Stock of rights, options or warrants to subscribe for
         or purchase shares of Common Stock or of any other subscription rights
         or warrants; or

                  (B) the Company shall authorize the distribution to holders of
         shares of Common Stock of evidences of its indebtedness or assets or of
         rights, options or warrants to subscribe for or purchase any of the
         foregoing; or

                  (C) of any consolidation or merger to which the Company is a
         party and for which approval of any stockholders of the Company is
         required, or of the sale of all or substantially all of the assets of
         the Company, or of any reclassification or change of Common Stock
         issuable upon exercise of the Warrants, or a tender offer or exchange
         offer for shares of Common Stock; or

                  (D) of the voluntary or involuntary dissolution, liquidation
         or winding up of the Company; or

                  (E) the Company proposes to take any action that would require
         an adjustment to the Exercise Rate or Exercise Price pursuant to this
         Section 4;

then the Company shall give prompt written notice to the Holder at least fifteen
(15) days prior to the applicable record date hereinafter specified, or the date
of the event in the case of events for which there is no record date, by
first-class mail, postage prepaid, a written notice stating (i)



                                      -10-



the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such shares, rights, options, warrants or distribution
are to be determined, or (ii) the initial expiration date set forth in any
tender offer or exchange offer for shares of Common Stock, or (iii) the date on
which any such consolidation, merger, sale, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up. The failure by the Company to give such notice or any
defect therein shall not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, dissolution,
liquidation or winding up, or the vote upon any action.

                  (ii) Within five (5) days after the occurrence of an event
resulting in an adjustment pursuant to this Section 4, the Company shall cause
to be promptly mailed to the Holder (and upon the exercise hereof, to the
exercising Holder) by first-class mail, postage prepaid, notice of each
adjustment or adjustments to the Exercise Price and Exercise Rate effected since
the date of the last such notice and a certificate of the Company's Chief
Financial Officer or Chief Accounting Officer, setting forth the Exercise Price
and Exercise Rate after such adjustment(s), a brief statement of the facts
requiring such adjustment(s) and the computation by which such adjustment(s) was
made.

                  (g) The occurrence of a single event shall not trigger an
adjustment of the Exercise Price and Exercise Rate under more than one paragraph
of this Section 4.

                  5. TAXES ON CONVERSION. The issuance of certificates for
Warrant Shares upon the exercise of the Warrants shall be made without charge to
the Holder exercising the Warrants for any issue or stamp tax in respect of the
issuance of such certificates, and such certificates shall be issued in the
respective names of, or in such names as may be directed by, the Holder;
PROVIDED, HOWEVER, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the Holder, and the Company
shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the reasonable satisfaction
of the Company that such tax has been paid.

                  6. LIMITATION OF LIABILITY. No provision hereof in the absence
of the exercise of the Warrants by the Holder and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability on the part
of the Holder for the Exercise Price of the Warrant Shares or as a stockholder
of the Company, whether such liability is asserted by the Company or by any
creditor of the Company. Upon exercise of Warrants the Holder will have the
right to vote the Common Stock received upon such exercise. No Holder shall be
entitled to vote or be deemed the holder of Common Stock (or any other
securities as may be issuable upon the exercise of the Warrants) nor shall
anything contained herein be construed to confer upon the Holder the rights of a
stockholder of



                                      -11-



the Company or the right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or give or withhold
consent to any corporate action or to receive notice of meetings or other
actions affecting stockholders or to receive dividends, distributions or
subscription rights or otherwise (except as provided herein), until the Warrants
shall have been exercised in accordance with the terms and conditions of the
Warrants.

                  7. CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of the Warrants or any Warrant Shares that
have been issued or are issuable upon the exercise of the Warrants in any manner
that interferes with the timely exercise hereof. The Company shall deem and
treat the Holder as the absolute owner thereof for all purposes, including
without limitation for the purpose of exercise thereof. The Company agrees that,
upon exercise of the Warrants in accordance with the terms hereof (including
receipt by the Company of payment of the aggregate Exercise Price), the shares
so purchased shall be deemed to be issued to such holder as the record owner of
such shares as of the close of business on the date on which the Warrants shall
have been exercised and the Holder shall be deemed for all purposes a
stockholder of the Company with respect to such shares as though the certificate
for such shares had been issued on the date of such exercise.

                  8. RESTRICTIONS ON TRANSFER.

                  A. RESTRICTIVE LEGENDS. Each certificate for any Warrant
Shares issued upon the exercise of the Warrants, and each stock certificate
issued upon the transfer of any such Warrant Shares (except as otherwise
permitted by this Section 8) shall be stamped or otherwise imprinted with a
legend in substantially the following form:

                  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 TO THESE 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 COMPANY, OR OTHER COUNSEL REASONABLY
         ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT
         WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
         APPLICABLE STATE SECURITIES LAWS.

                  Each Warrant Certificate issued in substitution for any
Warrant Certificate pursuant to Section 11, 12 or 13 hereof and each Warrant
Certificate issued upon the transfer of any Warrant (except as otherwise
permitted by this Section 8) shall be stamped or otherwise imprinted with a
legend in substantially the following form:



                                      -12-


                  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 TO THESE 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 COMPANY, OR OTHER COUNSEL REASONABLY
         ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT
         WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
         APPLICABLE STATE SECURITIES LAWS.

                  B. TERMINATION OF RESTRICTIONS. The restrictions imposed by
this Section 8 upon the transferability of Warrants and Warrant Shares shall
apply as to the Warrants and any Warrant Shares until (a) such securities shall
have been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering such securities, or (b) such
time as, in the reasonable opinion of counsel for the Company, or upon the
written opinion of counsel for the Holder thereof reasonably acceptable to the
Company, such restrictions are not required in order to comply with the
Securities Act. Whenever such restrictions shall terminate as to any Warrants or
Warrant Shares, the Holder shall be entitled to receive from the Company,
without expense, new certificates of like tenor not bearing the restrictive
legends set forth in Section 8.A.

                  9. PREEMPTIVE RIGHTS. In the event that the Company seeks to
sell newly issued Common Stock Equivalents ("New Issuance Securities"), each
holder of Warrants shall be entitled to acquire, at the proposed offering price
of such New Issuance Securities, that number of New Issuance Securities equal to
the aggregate number of New Issuance Securities proposed to be so offered
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock into which the Warrants held by such holder shall yield upon
exercise if such Warrants were exercised on the issue date of such New Issuance
Securities and the denominator of which shall be the aggregate number of Fully
Diluted Shares of Common Stock issued and outstanding of the Company on the
issue date of such New Issuance Securities. In connection with any proposed
issuance of such New Issuance Securities, the Company shall give to each holder
of Warrants the same information about the Company, its business and such
issuance and the same notice of its intention to effect such issuance (but in no
event less than 10 Business Days notice) as given to the other prospective
purchasers in such transaction specifying in such notice the number of New
Issuance Securities to be sold, and the proposed offering price per New Issuance
Securities. Each holder shall have the right, exercisable concurrently with
purchases by other purchasers, to elect to purchase up to the maximum number of
New Issuance Securities to which such holder is entitled to acquire hereunder
with such purchase being effected by such holder's payment to the Company by
wire transfer of immediately available



                                      -13-


funds, an amount equal to the number of New Issuance Securities to be purchased
by such holder, multiplied by the offering price per New Issuance Security
against delivery of certificates evidencing the number of New Issuance
Securities so acquired, which will be issued in the name of such holder. To the
extent any New Issuance Securities proposed to be sold shall not have been
subscribed to by an existing holder, the Company shall be free thereafter to
sell such New Issuance Securities by way of a private placement, or similar
offering, at an offering price per New Issuance Security not less than that set
forth in the notice to the holders. The preemptive rights established by this
Section 9 shall have no application to any of the following New Issuance
Securities: (i) Common Stock Equivalents or Shares of Common Stock issued upon
exercise of any Common Stock Equivalents issued to employees, officers or
directors of, or consultants or advisors to the Company or any of its
subsidiaries, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the board of directors of the Company for the
purpose of compensation or similar payment in connection with employment or
services rendered to the Company or its Subsidiaries; (ii) Shares of Common
Stock issued upon exercise of any Common Stock Equivalents outstanding on the
date hereof; (iii) any New Issuance Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination approved by the board of directors of the Company; (iv) Common Stock
or Common Stock Equivalents issued in connection with any stock split, stock
dividend or recapitalization by the Company; (v) any New Issuance Securities
that are issued by the Company pursuant to an underwritten public offering and
(vi) any New Issuance Securities sold to any Person who is a vendor of the
Company other than for money or for any purpose other than raising capital for
the Company or its Subsidiaries.

                  10. DEFINITIONS. As used in this Warrant Certificate, unless
the context otherwise requires, the following terms have the following
respective meanings:

                  AFFILIATE: shall mean with respect to any specified Person:
         (i) any other Person directly or indirectly controlling or controlled
         by or under direct or indirect common control with such specified
         Person; (ii) any other Person that owns, directly or indirectly, 5% or
         more of such specified Person's capital stock or any officer or
         director of any such specified Person or other Person or, with respect
         to any natural Person, any person having a relationship with such
         Person by blood, marriage or adoption no more remote than first cousin;
         or (iii) any other Person 5% or more of the voting stock of which is
         beneficially owned or held directly or indirectly by such specified
         Person. For the purposes of this definition, "control" when used with
         respect to any specified Person means the power to direct the
         management and policies of such Person, directly or indirectly, whether
         through ownership of voting securities, by contract or otherwise; and
         the terms "controlling" and "controlled" have meanings correlative to
         the foregoing.

                  AGGREGATE NUMBER: shall have the meaning as set forth in the
         first paragraph of this Warrant Certificate.



                                      -14-


                  AUTHORIZED WARRANT SHARES: shall mean the Warrant Shares and
         all shares of Common Stock (and any other or additional shares,
         securities or property issued upon exercise of any other Authorized
         Warrants) issued upon exercise of any other Authorized Warrants.

                  AUTHORIZED WARRANTS: shall have the meaning as set forth in
         the second paragraph of this Warrant Certificate.

                  BUSINESS DAY:  shall mean any day other than a Legal Holiday.

                  CAPITAL STOCK: shall mean, (i) with respect to any Person that
         is a corporation, any and all shares, interests, participations or
         other equivalents (however designated and whether or not voting) of
         corporate stock, including each class of common stock and preferred
         stock of such Person; (ii) with respect to any Person that is not a
         corporation, any and all partnership, membership or other equity
         interests of such Person; and (iii) any rights, warrants or options
         exchangeable for or convertible into any of the foregoing.

                  CASHLESS EXERCISE RATIO: shall mean an amount equal a
         fraction, the numerator of which is the excess of the Current Market
         Value of one share of Common Stock on the date of exercise over the
         Exercise Price per share as of the date of exercise and the denominator
         of which is the Current Market Value of one share of Common Stock on
         the date of exercise.

                  CLOSING BID PRICE: shall mean for any Security on each trading
         day (A) if such Security is listed or admitted to trading on any
         securities exchange, the closing price, regular way, on such day on the
         principal exchange on which such Security is traded, or if no sale
         takes place on such day, the average of the closing bid and asked
         prices on such day, (B) if such Security is not then listed or admitted
         to trading on any securities exchange, the last reported sale price on
         such day, or if there is no such last reported sale price on such day,
         the average of the closing bid and the asked prices on such day, as
         reported by a reputable quotation source designated by the Company or
         (C) if neither clause (A) nor (B) is applicable, the average of the
         reported high bid and low asked prices on such day, as reported by a
         reputable quotation service, or a newspaper of general circulation in
         the Borough of Manhattan, City of New York, customarily published on
         each trading day designated by the Company. If there are no such prices
         on a trading day, then the market price shall not be determinable for
         such trading day.

                  COMMISSION: shall mean the United States Securities and
         Exchange Commission and any other similar or successor agency of the
         United States federal government administering the Securities Act or
         the Exchange Act.

                  COMMON STOCK: shall mean the shares of Common Stock, par value
         $.001 per share, of the Company, currently provided for in the
         Certificate of Incorporation of the Company, and including, for all
         purposes hereunder, any other capital stock of the



                                      -15-


         Company into which such shares of Common Stock may be converted or
         reclassified or that may be issued in respect of, in exchange for, or
         in substitution of, such Common Stock by reason of any stock splits,
         stock dividends, distributions, mergers, consolidations or like events.

                  COMMON STOCK EQUIVALENTS: shall mean (a) an outstanding share
         of Common Stock, which shall be deemed to equal one Common Stock
         Equivalent, (b) an outstanding security that is, at the time in
         question, convertible by its terms into Common Stock, with such
         security to be deemed to equal to number of Common Stock Equivalents
         that equal the amount of shares of Common Stock into which it is then
         so convertible, (c) an outstanding option, warrant or right to acquire
         Common Stock that is, at the time in question, exercisable by its terms
         for Common Stock, with such option, warrant or right to be deemed to be
         equal to the number of Common Stock Equivalents that equals the number
         of shares of common stock for which it is then so exercisable and (d)
         an outstanding option, warrant or right that is, at the time in
         question, exercisable by its terms for a security that, at the time in
         question, is convertible by its terms in to Common Stock, with such
         option, warrant or right to be deemed to be equal to the number of
         Common Stock Equivalents that equals the number of shares of Common
         Stock for which the convertible securities for which they are then
         exercisable would then be convertible.

                  COMPANY: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  CURRENT MARKET VALUE: per share of Common Stock or of any
         other security (herein collectively referred to as a "Security") at any
         date shall be:

                           (1) if the Security is not registered under the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), the value of the Security determined by an Independent
                  Financial Expert, or

                           (2) if the Security is registered under the Exchange
                  Act, the average of the daily closing bid prices of such
                  Security for the 20 consecutive trading days preceding such
                  date, but only if such Security shall have been listed on a
                  national securities exchange or the Nasdaq National Market or
                  traded through an automated quotation system during such
                  entire 20 trading day period. If such Security shall have not
                  been so listed or traded for such entire 20 trading day
                  period, the Current Market Value of such Security shall be
                  determined as if the Security was not registered under the
                  Exchange Act.

                  EXERCISE PRICE: shall have the meaning as set forth in the
         first paragraph of this Warrant Certificate.

                  EXERCISE RATE: shall have the meaning as set forth in Section
         4(a).



                                      -16-


                  EXCHANGE ACT: shall mean the Securities Exchange Act of 1934,
         as amended.

                  EXPIRATION DATE: shall mean December 30, 2011.

                  FULLY DILUTED SHARES: shall have the meaning as set forth in
         Section 4(b).

                  HOLDER: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  INDEPENDENT: shall mean any Person who (i) is in fact
         independent, (ii) does not have any direct financial interest or any
         material indirect financial interest in the Company or any of its
         subsidiaries, or in any Affiliate of the Company or any of its
         subsidiaries (other than as a result of holding securities of the
         Company in trading accounts) and (iii) is not an officer, employee,
         promoter, trustee, partner, director or Person performing similar
         functions for the Company or any of its subsidiaries or any Affiliate
         of the Company or any of its subsidiaries.

                  INDEPENDENT FINANCIAL EXPERT: shall mean a reputable
         accounting, appraisal or investment banking firm that is, in the
         reasonable judgment of the board of directors of the Company, qualified
         to perform the task for which such firm has been engaged hereunder, is
         nationally recognized and disinterested and Independent with respect to
         the Company and its Affiliates and is reasonably acceptable to the
         Required Holders.

                  NEW ISSUANCE SECURITIES: shall have the meaning as set forth
         in Section 9.

                  NOTES: shall mean the Senior Secured Notes of the Company
         issued pursuant to the Purchase Agreement.

                  PERSON: shall mean any individual, corporation, limited
         liability company, partnership, joint venture, association, joint-stock
         company, trust, unincorporated organization or government or any agency
         or political subdivision thereof.

                  PURCHASE AGREEMENT: shall mean the Purchase Agreement dated
         December 30, 2004 among the Company and purchasers named therein
         pursuant to which the Notes and Authorized Warrants were issued.

                  REGISTRATION RIGHTS AGREEMENT: shall mean the Registration
         Rights Agreement dated as of December 30, 2004 among the Company and
         purchasers named therein.

                  REORGANIZATION: shall have the meaning as set forth in Section
         4(e).

                  REQUIRED HOLDERS: shall mean any registered holder or holders
         holding more than 50% of the outstanding Authorized Warrants (including
         the Warrants) and Authorized Warrant Shares.



                                      -17-


                  SECURITIES ACT: shall mean the Securities Act of 1933, as
         amended.

                  TIME OF DETERMINATION: shall have the meaning as set forth in
         Section 4(b).

                  WARRANTS: shall have the meaning as set forth in the first
         paragraph of this Warrant Certificate.

                  WARRANT SHARES: shall have the meaning as set forth in the
         first paragraph of this Warrant Certificate.

                  11. WARRANTS TRANSFERABLE. This Warrant Certificate is issued
as a Warrant Certificate for which there is a register maintained by the
Company. Subject to the provisions of Section 8, the transfer of the Warrants
represented by this Warrant Certificate and all rights hereunder, in whole or in
part, is registerable at the office or agency of the Company referred to in
Section 1 hereof by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant Certificate with a properly completed Form of
Assignment in the form annexed hereto as SCHEDULE 2. The Holder, by taking or
holding the same, consents and agrees that this Warrant Certificate, when
endorsed in blank, shall be deemed negotiable, and that the holder hereof, when
this Warrant Certificate shall have been so endorsed, may be treated by the
Company and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights of a "Holder" represented by this Warrant Certificate, or to the
registration of transfer hereof on the books of the Company; and until due
presentment for registration of transfer on such books, the Company may treat
the Holder thereof as the owner for all purposes, and the Company shall not be
affected by notice to the contrary. Any transfer tax relating to a transfer of
this Warrant Certificate shall be paid by the Holder who transfers such Warrant
Certificate.

                  12. WARRANT CERTIFICATES EXCHANGEABLE FOR DIFFERENT
DENOMINATIONS. Subject to the provisions of Section 8, this Warrant Certificate
is exchangeable, upon the surrender hereof by the Holder hereof at such office
or agency of the Company, for new Warrant Certificates of like tenor
representing in the aggregate the number of Warrants represented hereby, each of
such new Warrant Certificates to represent the number of Warrants as shall be
designated by said Holder at the time of such surrender.

                  13. REPLACEMENT OF WARRANT CERTIFICATES. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant Certificate and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity bond (or, in the case of the
original Holder hereof or any substantial financial institution to which any
Warrants represented by this Warrant Certificate may be transferred, an
unsecured indemnity agreement) reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant Certificate, the Company will execute and deliver, subject to
the provisions of Section 8, in lieu thereof, a new Warrant Certificate of like
tenor to the Holder of such Warrant, at such Holder's expense.



                                      -18-


                  14. CERTIFICATE RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF
WARRANTS. The rights and obligations of the Company contained in this Warrant
Certificate shall survive the exercise or repurchase of the Warrants represented
by this Warrant Certificate to the extent that such survival is necessary to
give effect to a provision hereof.

                  15. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered to the Holder of this Warrant
Certificate shall be in writing, and shall be delivered, or shall be sent by
first-class mail, postage prepaid and addressed, to such Holder at the address
shown on this Warrant Certificate, or at such other address as shall have been
furnished to the Company by notice from such Holder. All notices, requests and
other communications required or permitted to be given or delivered to the
Company shall be in writing, and shall be delivered, or shall be sent by
certified or registered mail, postage prepaid and addressed to the office of the
Company (return receipt requested) at 2601 S. Bayshore Drive, Miami, FL 33133,
Attention: Chief Financial Officer, with a copy to: Greenberg Traurig at 1221
Brickell Avenue, 21st Floor, Miami, FL 33133, Attention: Paul Berkowitz. Any
such notice, request or other communication may be sent by telegram or telex,
but shall in such case be subsequently confirmed by a writing delivered or sent
by certified or registered mail as provided above. All notices shall be deemed
to have been given either at the time of the delivery thereof to (or the receipt
by, in the case of a telegram or telex) any officer or employee of the person
entitled to receive such notice at the address of such person for purposes of
this Section 15, or, if mailed, at the completion of the third full day
following the time of such mailing thereof to such address, as the case may be.

                  16. AMENDMENTS. Neither this Warrant Certificate nor any term
or provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the Company and the Holder.

                  17. REMEDIES. The Holder may seek to enforce the terms of this
Warrant Certificate by seeking a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of the
terms hereof or otherwise. If any default under the terms of this Warrant
Certificate shall occur and be continuing, the Holder may proceed to protect and
enforce its rights under this Warrant Certificate by exercising such remedies as
are available to such Holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Warrant Certificate or in aid
of the exercise of any power granted in this Warrant Certificate. No remedy
conferred in this Warrant Certificate or the Purchase Agreement upon the Holder
is intended to be exclusive of any other remedy available to such Holder, and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in equity
or by statute or otherwise.

                  18. GOVERNING LAW. THIS WARRANT CERTIFICATE HAS BEEN EXECUTED
AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW YORK.
THIS WARRANT CERTIFICATE AND THE RIGHTS GRANTED HEREIN SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED UNDER THE



                                      -19-


LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW
RULES OR PRINCIPLES). ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST THE COMPANY
WITH RESPECT TO THIS WARRANT CERTIFICATE OR ANY RELATED AGREEMENT SHALL BE
BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
WARRANT CERTIFICATE, THE COMPANY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS WARRANT. IF ANY ACTION IS COMMENCED IN ANY OTHER
JURISDICTION THE PARTIES HERETO HEREBY CONSENT TO THE REMOVAL OF SUCH ACTION TO
THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE HOLDERS OF THIS WARRANT OR THE WARRANT SHARES TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS IN OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.

                  19. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER OF THIS
WARRANT CERTIFICATE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT CERTIFICATE
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS WARRANT
CERTIFICATE AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THE RELATIONSHIP THAT
IS BEING ESTABLISHED HEREUNDER. THE COMPANY AND THE HOLDER OF THIS WARRANT
CERTIFICATE ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTIES. 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 WARRANT
CERTIFICATE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND
THE HOLDER OF THIS WARRANT CERTIFICATE ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS WARRANT CERTIFICATE AND THAT EACH
WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING



                                      -20-


CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS WARRANT
CERTIFICATE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS
CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.




                                      -21-



                  IN WITNESS HEREOF, the Company has caused this Warrant to be
signed on its behalf, in its corporate name, by its duly authorized officer, all
as of the day and year first above written.

                                       TERREMARK WORLDWIDE, INC.


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:





                                      -22-

                                                                      SCHEDULE 1


                                  EXERCISE FORM


                 [TO BE EXECUTED ONLY UPON EXERCISE OF WARRANTS]


To:      [                           ]

                  The undersigned irrevocably exercises _______________ of the
Warrants for the purchase of one share (subject to adjustment) of Common Stock,
par value $.001 per share, of [ ] (the "Company") for each Warrant represented
by the within Warrant Certificate and herewith makes payment of $____ (such
payment being (a) in cash or by check or bank draft in New York Clearing House
funds payable to the order of the Company, (b) by the surrender of the
applicable Warrant or Warrants, and without the payment of the Exercise Price in
cash, for such number of Warrant Shares equal to the product of (1) the number
of Warrants Shares for which such Warrant or Warrants are exercisable with
payment in cash of the Exercise Price as of the date of exercise and (2) the
Cashless Exercise Ratio, (c) by tendering Notes having an aggregate principal
amount, plus accrued and unpaid interest, if any, thereon to the date of
exercise, equal to the Exercise Price or (d) by any combination of (a), (b) and
(c) above, all at the exercise price and on the terms and conditions specified
in the within Warrant Certificate, surrenders the within Warrant Certificate and
all right, title and interest therein (except as to any unexercised Warrants) to
the Company and directs that the Warrant Shares deliverable upon the exercise of
such Warrants be registered or placed in the name and at the address specified
below and delivered thereto.

Date: ____________________                          ____________________________





                                      -23-

                                                                      SCHEDULE 2


                               FORM OF ASSIGNMENT


                  FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the rights of the undersigned under the within
Warrant Certificate with respect to the number of Warrants set forth below:





                                                            Social Security or Other
          Names of                                            Identifying Number of             Number of
          Assignees                     Address                    Assignee(s)                  Warrants
          ---------                     -------             ------------------------            --------
                                                                                       







and does hereby irrevocably constitute and appoint ___________ the undersigned's
attorney to make such transfer on the books of [ ] maintained for that purpose,
with full power of substitution in the premises.

Dated:  ___________________

                                               ________________________________1
                                               (Signature of Owner)

                                               ---------------------------------
                                               (Street Address)

                                               ---------------------------------
                                               (City)     (State)     (Zip Code)




- -----------------
1        The signature must correspond with the name as written upon the face of
         the within Warrant Certificate in every particular, without alteration
         or enlargement or any change whatever.

EX-10.32

                                                                   EXHIBIT 10.32


                                 [FORM OF NOTE]


THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY IS SUBJECT TO THE TERMS OF
THE PURCHASE AGREEMENT, DATED AS OF DECEMBER 31, 2004 (THE "PURCHASE
AGREEMENT"), AMONG TERREMARK WORLDWIDE, INC. (THE "COMPANY"), THE GUARANTORS
NAMED THEREIN, THE AGENT NAMED THEREIN AND THE PURCHASERS NAMED THEREIN. A COPY
OF SUCH PURCHASE AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS NOTE IS BEING
ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS
NOTE, (1) THE ISSUE PRICE IS $939.36; (2) THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT IS $224.07; (3) THE ISSUE DATE IS DECEMBER 31, 2004; AND (4) THE YIELD
TO MATURITY IS 14.42% (COMPOUNDED QUARTERLY).




                          SENIOR SECURED NOTES DUE 2009

                                                                     $__________

No. __________

                  Terremark Worldwide, Inc., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company," which term
includes any successor Person under the Purchase Agreement), for value received,
hereby promises to pay to [ ], or registered assigns, the principal sum of $[ ]
Dollars (as such amount may be increased from time to time in accordance with
Paragraph 2 on the reverse of this Note) on March 10, 2009 (the "STATED
MATURITY").

                  Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.






                                       1


                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

Dated:  December   , 2004

                                       TERREMARK WORLDWIDE, INC.


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:





                                       2

                            [Form of Reverse of Note]


                  1. GENERAL. This Note is one of a duly authorized issue of
Notes of the Company designated as its Senior Secured Notes due 2009 (herein
called the "NOTES"), limited in aggregate principal amount to the sum of (a)
$30,000,000 and (b) the amount of interest which, in accordance with the terms
of Paragraph 2 below, may be capitalized and added to the principal amount of
the Notes, in each case, issued pursuant to the Purchase Agreement, dated as of
December 31, 2004 (herein called the "PURCHASE AGREEMENT"), among the Company,
the Guarantors named therein, the Agent named therein and the Purchasers named
therein, to which Purchase Agreement and all amendments thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company and the Noteholders and of the
terms upon which the Notes are, and are to be, issued and delivered.

                  Principal on this Note shall be payable only against surrender
therefor, while payments of interest on this Note shall be made, in accordance
with the Purchase Agreement and subject to applicable laws and regulations, by
check mailed on or before the due date for such payment to the person entitled
thereto at such person's address appearing on the Security Register or, by wire
transfer to such account as any Noteholder shall designate by written
instructions received by the Company no less than 15 days prior to any
applicable Interest Payment Date, which wire instruction shall continue in
effect until such time as the Noteholder otherwise notifies the Company or such
Noteholder no longer is the registered owner of this Note.

                  2. INTEREST. The Company promises to pay interest on the
principal amount of this Note from the date of issuance of this Note (or any
Predecessor Note) or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly in arrears on March 30,
June 30, September 30 and December 30 in each year commencing March 30, 2005
(each, an "INTEREST PAYMENT DATE") and at Stated Maturity at the Applicable
Rate, until the principal hereof is paid; PROVIDED, HOWEVER, that if any
Interest Payment Date falls on a date which is not a Business Day, interest due
on such Interest Payment Date shall be paid on the Business Day immediately
following such Interest Payment Date, PROVIDED, FURTHER, that such interest
payment shall not include any interest accruing after such Interest Payment
Date. On each such Interest Payment Date occurring during the period during
which the Applicable Rate shall equal the Standard Rate the Company may, at its
option and in its sole discretion, in lieu of the payment in whole or in part of
interest due on this Note which is in excess of 9 7/8% (other than default
interest as described below), pay such amount in excess of 9 7/8% (and only such
excess amount) on this Note by adding such amount to the principal amount of
this Note on such Interest Payment Date. If the Company elects to pay a portion
of the interest due on this Note through an increase in the principal amount of
this Note as provided in the immediately preceding sentence, the Company shall,
within five (5) Business Days of each relevant Interest Payment Date, deliver to
the Noteholder of this Note written notice of such election, which notice shall
also state the amount of interest so added to the principal of this Note and the
new principal amount of this Note. Notwithstanding the foregoing, if at any time
the Applicable Rate shall have converted from the Standard Rate to the Reduced
Rate in accordance with the terms of this Note then (i) interest on this Note
shall accrue and be paid entirely in cash (and no interest shall thereafter be
added to the principal amount of this Notes) and (ii) all interest which shall
have been added to the principal amount of this Note on or prior to such time
shall be paid to the



                                       3


holder hereof in cash in equal consecutive quarterly installments, payable over
that number of successive Interest Payment Dates which equals the number of
Interest Payment Dates which shall have occurred since the Closing Time and
prior to the date of conversion of the Applicable Rate. If as a result of any
Intervening Noncompliance Event (as defined below), the Applicable Rate shall
revert to the Standard Rate, then the Standard Rate shall once again be applied
retroactively to the Closing Time; PROVIDED that no Noteholder shall be required
to return any interest payments made in cash as a result of the Applicable Rate
converting from the Standard Rate to the Reduced Rate, but the Company shall be
deemed to have paid such interest in cash as so paid.

                  "APPLICABLE RATE" means initially 13.5% per annum (the
"STANDARD RATE"); PROVIDED, HOWEVER, that if (and only if) the Company's Total
Leverage Ratio as of the last day of any fiscal quarter of the Company ending
after the Closing Time and on or prior to December 31, 2005 (the "FINAL TEST
QUARTER") shall be equal to or less than 1.75 to 1.0, then the Applicable Rate
shall equal 12.5% per annum (the "REDUCED RATE") and such Reduced Rate shall
apply retroactively to all interest accruing from the Closing Time; PROVIDED,
HOWEVER, if following conversion to the Reduced Rate, the Total Leverage Ratio
as of the last day of any subsequent fiscal quarter through and including the
Final Test Quarter shall be greater than 1.75 to 1.0 (an "INTERVENING
NONCOMPLIANCE EVENT") then the Reduced Rate shall be retroactively converted
back to the Standard Rate.

                  To the extent that the payment of such interest shall be
legally enforceable, any principal of, or premium or installment of interest on,
this Note which is overdue shall bear interest at the rate of 2% per annum in
excess of the rate of interest then borne by the Notes ("DEFAULT INTEREST") from
the date such amounts are due until they are paid, and the entire amount of such
default interest shall be payable in cash.

                  Interest on this Note shall be computed on the basis of a
360-day year of twelve 30-day months.

                  All interest payable, on any Interest Payment Date will, as
provided in the Purchase Agreement, be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close of business
on the "REGULAR RECORD DATE" for such interest, which shall be the fifteenth
calendar day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Notwithstanding the foregoing, if this Note is issued after a
Regular Record Date and prior to an Interest Payment Date, the record date for
such Interest Payment Date shall be the original issue date.

                  3. REDEMPTION. The Company may, at its option, redeem the
Notes, in whole or in part at any time commencing December 31, 2005 through and
including Stated Maturity at a Redemption Price as set forth below plus accrued
and unpaid interest, if any, to the Redemption Date:



                                       4


         Period Commencing:                                 Redemption Price
         -----------------                                  ----------------
         December 31, 2005                                      115.0%
         December 31, 2006                                      107.5%
         June 30, 2007                                          105.0%
         December 31, 2007                                      102.25%
         June 30, 2008 and thereafter                           100.0%


                  4. PROCEDURES FOR REDEMPTION. If less than all the Notes are
to be redeemed, the Notes shall be redeemed PRO RATA from each Noteholder.

                  In the event of redemption or purchase pursuant to an offer to
purchase this Note in part only, a new Note or Notes for the unredeemed or
unpurchased portion hereof will be issued in the name of the Noteholder hereof
upon the cancellation hereof.

                  5. EVENTS OF DEFAULT. If an Event of Default shall occur and
be continuing, the principal of all the Notes may be declared due and payable in
the manner and with the effect provided in the Purchase Agreement.

                  6. OFFERS TO PURCHASE NOTES. The Purchase Agreement provides
that, subject to certain conditions, if (i) certain Excess Proceeds are
available to the Company as a result of Asset Sales or (ii) a Change of Control
occurs, the Company shall be required to make an offer to purchase all or a
specified portion of the Notes as provided for in the Purchase Agreement.

                  7. AMENDMENTS, MODIFICATIONS AND WAIVERS. The Purchase
Agreement permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
certain rights of the Noteholders under the Purchase Agreement at any time by
the Company with the consent of the holders of a majority in aggregate principal
amount of the Notes at the time outstanding. The Purchase Agreement also
contains provisions permitting the Noteholders of specified percentages in the
aggregate principal amount of the Notes at the time outstanding, on behalf of
the Noteholders of all the Notes, to waive compliance by the Company with
certain provisions of the Agreement and certain past defaults under the
Agreement and their consequences. Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such Noteholder and upon all
future Noteholders and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

                  8. REGISTRATION OF TRANSFER. As provided in the Purchase
Agreement and subject to certain limitations therein set forth, the transfer of
this Note is registrable in the Security Register, upon surrender of this Note
for registration of transfer at the principal offices of the Company, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed by, the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.



                                       5


                  The Notes are issuable only in registered form without coupons
in denominations authorized under the Purchase Agreement. As provided in the
Purchase Agreement and subject to certain limitations therein set forth, Notes
are exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Noteholder surrendering the same.

                  No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any Tax or other governmental charge payable in connection therewith.

                  Prior to due presentment of this Note for registration of
transfer, the Company and any agent of the Company may treat the Person in whose
name this Note is registered as the owner hereof for all purposes, whether or
not this Note be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.

                  9. MISCELLANEOUS. All terms used in this Note which are
defined in the Agreement shall have the meanings assigned to them in the
Purchase Agreement. The Company and the Noteholder agree that, unless otherwise
required by law or the good faith resolution of an examination or audit by the
Internal Revenue Service, they shall treat the Notes as not subject to the
provisions of Treasury Regulation 1.1275-4.

                  THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.




                                       6

                       OPTION OF HOLDER TO ELECT PURCHASE


                  If you want to elect to have this Note purchased in its
entirety by the Company pursuant to Section 7.08 or 7.09 of the Purchase
Agreement, check the box:


                  If you want to elect to have only a part of the principal
amount of this Note purchased by the Company pursuant to Section 7.08 or 7.09 of
the Purchase Agreement, state the portion of such amount:
$__________.

Dated:                     Your Signature: _____________________________________
                           (Sign exactly as name appears on the other side of
                           this Note)


Signature Guarantee:
                           _____________________________________________________
                           (Signature must be guaranteed by a financial
                           institution that is a member of the Securities
                           Transfer Agent Medallion Program ("STAMP"), the
                           Stock Exchange Medallion Program ("SEMP"), the New
                           York Stock Exchange, Inc. Medallion Signature
                           Program ("MSP") or such other signature guarantee
                           program as may be determined by the Security
                           Registrar in addition to, or in substitution for,
                           STAMP, SEMP or MSP, all in accordance with the
                           Securities Exchange Act of 1934, as amended.)








                                       7

EX-99.1

FOR IMMEDIATE RELEASE

TERREMARK PURCHASES TECHNOLOGY CENTER OF THE AMERICAS

MIAMI, FLA. (January 4, 2005) Terremark Worldwide, Inc. (AMEX:TWW), a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, today announced that it has acquired from its partners all of the equity interests not owned by it in the entity that owns the Technology Center of the Americas (TECOTA), home of Terremark’s flagship NAP of the Americas. Under the terms of the acquisition, Terremark paid $40 million for the equity interests in Technology Center of the Americas, LLC and repaid $35 million in debt.

“With this purchase we have created a truly unique asset for our Company; we already owned one of the most important telecommunications exchange points in the world – the NAP of the Americas – and now we own one of the most highly connected buildings in the world – TECOTA,” stated Manuel D. Medina, Chairman and CEO of Terremark Worldwide Inc.

The Company financed the purchase from multiple sources. It obtained a $49 million first mortgage loan from Citigroup Global Markets Realty Corp. (“Citigroup”). Simultaneously the Company issued $30 million in Senior Secured Notes and sold 3,060,444 shares of its common stock valued at $2 million to Falcon Investment Advisors, LLC and its co-investment partner AlpInvest Partners, a global private equity investor. The $49 million loan by Citigroup is secured by a first mortgage on TECOTA, bears interest at a rate per annum of LIBOR plus 4.75% and matures in February 2009. The Senior Secured Notes are secured by substantially all of the Company’s assets other than TECOTA, bear cash interest at a rate per annum of 9.875% and “payment in kind” interest at a rate per annum of 3.625%, and mature in March 2009. In connection with the financings, the Company issued to the lenders warrants to purchase an aggregate of 20 million shares of its common stock at an average strike price of $0.78.

“We believe that this transaction is not only beneficial to the Company strategically, but also economically” stated José A. Segrera, Chief Financial Officer of Terremark Worldwide, Inc. “By owning TECOTA, we have eliminated over $7.7 million of annual rent expense which offsets interest expense from the new debt, and have an additional 350,000 square feet of space ready for growth.”

The Company will file a Current Report on Form 8-K with respect to the acquisition and financings by January 5, 2004.

TECOTA, located in downtown Miami, is a state-of-the-art, 750,000 sq. ft. fortress, where the NAP of the Americas currently resides on the second and third floors. TECOTA is an industry leading technology center designed and built for the sole purpose of housing mission-critical systems. The facility is built to disaster resistant standards with maximum-security features. Currently, TECOTA’s roster of tenants includes not only the NAP of the Americas, but also Global Crossing, e-life Group, Sprint and the City of Miami’s Downtown NET office.

About Terremark Worldwide, Inc.:

Terremark Worldwide Inc. (AMEX:TWW) is a leading operator of integrated Tier-1 Internet exchanges and best-in-class network services, creating technology marketplaces in strategic global locations. Terremark is the owner and operator of the NAP of the Americas, the 5th Tier-1 Network

TERREMARK PURCHASES TECHNOLOGY CENTER OF THE AMERICAS
Page 2

Access Point in the world and the model for the carrier-neutral TerreNAP(sm) Data Centers the company has in Santa Clara, California (NAP of the Americas/West), in Sao Paulo, Brazil (NAP do Brasil) and in Madrid, Spain (NAP de las Americas — Madrid). The carrier-neutral NAP of the Americas is a state-of-the-art facility that provides exchange point, collocation and managed services to carriers, Internet service providers, network service providers, government entities, multi-national enterprises and other end users. The NAP, which connects fiber networks in Latin America, Europe, Asia and Africa to those in the U.S., enables customers to freely choose among the many carriers available at the TerreNAP Centers to do business. Terremark is headquartered at 2601 S. Bayshore Drive, 9th Floor, Miami, Florida USA, (305) 856-3200. More information about Terremark Worldwide can be found at http://www.terremark.com.

Statements contained in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terremark’s actual results may differ materially from those set forth in the forward-looking statements due to a number of risks, uncertainties and other factors, as discussed in Terremark’s filings with the SEC. These factors include, without limitation, Terremark’s ability to obtain funding for its business plans, uncertainty in the demand for Terremark’s services or products and Terremark’s ability to manage its growth. Terremark does not assume any obligation to update these forward-looking statements.

For more information contact:

Terremark Worldwide Inc.
Sandra B. Gonzalez-Levy
305-860-7829
sgonzalez-levy@terremark.com

Investor Relations
RCG Capital Markets Group, Inc.
Joe Diaz
480-675-0400
jdiaz@rcgonline.com

Media Relations
Edelman
Monica Glukstad
305-358-5291
monica.glukstad@edelman.com

###