A newly filed shareholders report, however, unveils some of the terms for the first time. A little over $4 million worth of the subsidiary's contracts are involved in the deal. MP Telecom, the newly formed company, also received $900,000 in cash as part of the deal.
Terremark sold all interests in the subsidiary, Telecom Routing Exchange Developers Inc., to a partnership that included Thomas M. Mulroy, the subsidiary's president and chief executive officer, and Terremark investor Clifford J. Preminger.
Operating as MP Telecom, Mulroy and Preminger, who has since resigned as a member of the Terremark board of directors, gained control over the subsidiary's T-Rex-brand of telecom hotels, or local Internet switching facilities, in Boca Raton, FL, Cleveland and Hartford, CT; and contracts on proposed facilities in Chicago and in Sterling, VA.
The deal now enables Terremark to focus exclusively on its Internet infrastructure development and managed services business. It maintains ownership of the newly completed 700,000-sf Technology Center of the Americas in Miami, site of the NAP of the Americas, The NAP, the fifth tier-1 network access point developed in the United States, is a sophisticated regional Internet switching system.
Terms of the deal included an agreement by Mulroy and Preminger as MP Telecom to convey ownership of 1.4 million shares of publicly traded stock in Terremark to Terremark. Although retaining ownership over another 6.6 million shares of Terremark, the MP Telecom officials agreed to limit sales of the remaining shares to no more than 25,000 on any single day and no more than 300,000 during any single month.
"As a result of the transactions, (Terremark) will recognize an impairment of intangible assets of approximately $4,155,178 relating to management contracts to be sold for the period ended Dec. 31, 2000," according to a shareholder's report.
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