S-1/A

As filed with the Securities and Exchange Commission on November 8, 2010

Registration Statement No. 333-165554

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 5

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

The Telx Group, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	4899	13-4129783
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

1 State Street, 21st Floor

New York, NY 10004

(212) 480-3300

(Address, including zip code, and telephone number, including area code, of Registrants’ principal executive offices)

Eric Shepcaro

Chief Executive Officer

The Telx Group, Inc.

1 State Street, 21st Floor

New York, NY 10004

(212) 480-3300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Michael L. Zuppone, Esquire Paul, Hastings, Janofsky & Walker LLP 75 East 55^th Street New York, New York 10022 (212) 318-6000 Facsimile: (212) 319-4090 William P. Rogers, Jr., Esquire
Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, New York 10019 (212) 474-1000 Facsimile: (212) 474-3700

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer x	(Do not check if a smaller reporting company)	Smaller reporting company ¨

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

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 8, 2010

             Shares

Common Stock

This is the initial public offering of shares of common stock of The Telx Group, Inc.

We are selling                      shares of our common stock and the selling stockholders are selling shares of our common stock. We will not receive any of the proceeds from the shares of common stock sold by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $             and $             per share. We have applied to list our common stock on The Nasdaq Global Market under the symbol “TELX.”

See the section entitled “Risk Factors” beginning on page 10 to read about factors you should consider before buying shares of our common stock.

	Per Share	Total
Initial public offering price
Underwriting discounts and commissions
Proceeds, before expenses, to the company
Proceeds, before expenses, to the selling stockholders

The underwriters have an option to purchase a maximum of              additional shares of our common stock from us and/or the selling stockholders at the initial public offering price less the underwriting discounts and commissions.

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

The underwriters expect to deliver the shares against payment in New York, New York on                     , 2010.

Goldman, Sachs & Co. Deutsche Bank Securities

	RBC Capital Markets
Oppenheimer & Co.	Piper Jaffray	SunTrust Robinson Humphrey

The date of this prospectus is                     , 2010.

TABLE OF CONTENTS

	Page
Prospectus Summary		1
Risk Factors		10
Forward-Looking Statements		27
Use of Proceeds		29
Dividend Policy		30
Capitalization		31
Dilution		33
Selected Consolidated Financial Data		35
Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
Business		68
Management		85
Executive Compensation		92
Certain Relationships and Related Party Transactions		108
Principal and Selling Stockholders		112
Description of Capital Stock		114
Description of Indebtedness		118
Shares Eligible for Future Sale		120
Material U.S. Federal Tax Considerations		122
Underwriting		127
Legal Matters		131
Experts		131
Where You Can Find More Information		131
Index to Consolidated Financial Statements		F-1

Through and including                     , 2010 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Market data and industry statistics and forecasts used throughout this prospectus are based on independent industry publications, reports by market research firms and other published independent sources. Tier1 Research, Cisco, Gartner, The Insight Research Corporation, Vertical Systems Group, the U.S. Census and Nemertes Research are the primary sources for third-party market data and industry statistics and forecasts. Some data and other information are also based on our good faith estimates, which are derived from our review of internal surveys and independent sources. Although we believe these sources are credible, we have not independently verified the data or information obtained from these sources.

The Gartner reports described herein (the “Gartner Reports”) represent data, research opinion or viewpoints published, as part of a syndicated subscription service by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner Reports are subject to change without notice.

PROSPECTUS SUMMARY

This summary highlights certain information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should carefully read the entire prospectus, including the section entitled “Risk Factors” and our financial statements and related notes, before you decide whether to invest in our common stock. If you invest in our common stock, you are assuming a high degree of risk. See the section entitled “Risk Factors.” References to “we,” “our,” “our company,” “us,” “the company,” “Telx” or “The Telx Group, Inc.” refer to The Telx Group, Inc. and its consolidated subsidiaries. References to “GI Partners Funds” refer to GI Partners Fund II, L.P. and GI Partners Side Fund II, L.P., collectively and references to “GI Partners” refer to the entities that control or manage the GI Partners Funds. Unless otherwise indicated, industry data are derived from publicly available sources, which we have not independently verified.

Business Overview

Telx is a leading provider of network neutral, global interconnection and colocation solutions in the United States. Our interconnection and colocation offerings enable customers to seamlessly connect to hundreds of diverse communications networks and other enterprises. Additionally, we provide a secure and reliable environment to house customers’ mission-critical equipment and time sensitive data. We believe that our 15 facilities, located in nine tier-1 markets, are some of the most strategically positioned datacenters in the United States. These facilities are located at the primary intersections of multiple, major international and domestic fiber routes where we believe Internet and private network traffic is most concentrated and interconnection demand is highest. We believe that our average of 38 physical interconnections per customer as of September 30, 2010 gives us greater physical interconnection density than our competitors. Over the last two years, we have grown our revenues from $50.8 million in 2007 to $98.3 million in 2009, representing a compound annual growth rate of 39%, and our net losses have decreased from $36.4 million to $9.9 million over the same period. For the nine months ended September 30, 2010, we had revenues of $94.7 million and net income of $2.2 million.

As a network neutral provider, we are an unbiased intermediary that provides the necessary interconnection products and related services that facilitate the exchange of communications network traffic between our customers. Customers within a Telx facility are able to connect to any other customer within the facility, including up to 300 communications service providers, depending on the facility. These interconnections effectively allow a customer to replace their existing and more expensive network alternatives. Through these interconnections, our facilities host diverse and densely populated ecosystems of communications service providers, enterprises, online media, video and content providers, and other entities. We view an ecosystem as a set of related businesses and organizations that use our facilities to exchange information with each other. For example, a financial ecosystem can consist of financial exchanges, financial clients and information exchanges that exchange large volumes of real-time financial market data. Our customers benefit from greater choice of networks, reduced network costs, improved capital budget efficiency, improved performance and access to revenue opportunities with accelerated time to market.

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With 844 customers and 31,655 total physical interconnections within our facilities as of September 30, 2010, our interconnection-centric model targets customers that value the interconnection density in our secure and reliable environments. The table below is a representative list of those customers:

Communications Service Providers	Enterprises/Institutions	Online Media, Video and Content Providers	Government / Cloud / SaaS / Other
AT&T Clearwire Cogent Equinix Level 3 Communications Qwest Reliance Globalcom Sprint Tata Telecom Telecom Italia Verizon	ACTIV Financial Systems Emory University Hewlett Packard International Securities Exchange (ISE) University of Florida	CBS Justin TV JahJah Viacom Yahoo!	iland Internet Solutions NASA (via Arcata Associates) DediPower Managed Hosting SoftLayer Technologies

We evaluate market leadership based on publicly available information for physical interconnections per customer and our experience in the industry. Based on this framework, we believe that our average of 38 physical interconnections per customer as of September 30, 2010 makes us a leading network neutral, global interconnection and colocation solutions provider in the United States. We believe that the interconnection density within our facilities can create a network effect that increases the value proposition of our products and related services. Because each additional customer added to a facility can connect to all of the other customers already in that facility, with the addition of each new customer, the potential number of interconnections in our facilities increases. We believe that this enhances our ability to both retain existing customers and attract new customers. Our 15 interconnection and colocation facilities are located in the New York Metropolitan area, the San Francisco Bay area, Los Angeles, Dallas, Chicago, Atlanta, Phoenix, Charlotte and Miami.

The global Internet datacenter market is estimated to grow at a compound annual growth rate of 19% from $9.2 billion in 2008 to $15.5 billion in 2011 according to Tier1 Research’s Internet Datacenter Global Markets Overview—2010 report. Increasing demand for our network neutral interconnection and colocation products and related services is being driven by powerful trends, including favorable datacenter supply and demand dynamics, continued growth in Internet traffic, increasing enterprise adoption of datacenter outsourcing and network based applications, continued adoption of Ethernet technologies, continued growth of Internet video, emerging computing technologies such as cloud computing, increasing demand for proximity hosting and low latency (or low time delay) networking, and increasing datacenter power and cooling requirements.

Our business is characterized by significant monthly recurring revenue, low churn (or loss of revenue), and a predictable cost structure. We generate revenue by charging our customers a recurring monthly fee for our interconnection and colocation products and related services, a one-time fee for the installation of related colocation and interconnection products, and an hourly or a subscription fee for technical support services. The combination of our recurring revenues, representing approximately 94% of our total revenue for the nine months ended September 30, 2010, and our low churn provides us significant visibility into our revenue generating capabilities for the coming years. We believe our high interconnection density demonstrates an interconnection-centric business model that differentiates us from our competition. It improves our ability to maximize revenues and profitability relative to other predominately colocation-centric providers that do not have a similar level of interconnection density within a comparable physical footprint. Additionally, our interconnection-centric model improves our profitability and capital efficiency because we can add a significant number of interconnections between existing customers within our facilities without leasing additional space or incurring significant additional costs.

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Our revenue growth since 2007 is primarily the result of organic growth, consisting of increasing amounts of our products and related services provided to existing and new customers. From December 31, 2007 to December 31, 2009, we grew our customer base from 495 to 763 customers representing a 24% compound annual growth rate and our total physical interconnections increased from 19,692 to 28,272 representing a 20% compound annual growth rate. Over the same period, to meet our customers’ increasing demand for our products and related services, we expanded our footprint from 370,543 gross square feet to 478,412 gross square feet representing a compound annual growth rate of 14%. At September 30, 2010, our customer base had increased to 844, total physical interconnections had increased to 31,655 and our footprint had expanded to 524,204 square feet. The growth in our facility footprint was accomplished through the addition of three new facilities and the expansion of our existing space within our other facilities. We believe that our existing customer base, products and services will continue to grow, which will enhance the ecosystems within our facilities and in turn support our ability to attract new customers.

Our Competitive Strengths

Customers typically use our products and related services because we provide them with a level of interconnection access, quality of service, reliability and flexibility that is difficult to replicate independently or with another interconnection and colocation provider. We believe that our key competitive strengths, which are described below, position us well to take advantage of the favorable trends in our industry.

Strategically Focused Footprint.    Our 15 facilities in nine tier-1 markets across the United States are located at the primary intersections of multiple, major international and domestic fiber routes where we believe Internet and private network traffic is most concentrated and interconnection demand is highest.

Industry Leader in Physical Interconnections.    As of September 30, 2010, we facilitated a total of 31,655 physical interconnections between our customers, which represent an average of 38 physical interconnections per customer. This allows our customers to achieve the seamless exchange of information across hundreds of communications service providers, enterprises, online media, video and content providers, government agencies, cloud computing providers and Software as a Service (SaaS) providers. We believe that our average of 38 physical interconnections per customer as of September 30, 2010, represents greater physical interconnection density than our peers in the United States.

Network Neutral Business Model.    We do not own or operate our own network. The ecosystems in our facilities provide our customers with the flexibility to optimize their connection partners based on their individual application and connectivity requirements. We believe this optionality provides for increased operational efficiency and reduced cost for the customer.

High Barriers to Entry.    We believe our interconnection-centric model has high barriers to entry primarily resulting from the difficulty in replicating the ecosystems that exist within our facilities and the resulting network effect that exists among our customers. Significant time and resources are required to develop these ecosystems. In addition, we believe that the buildings in which we operate are already the primary landing points and crossroads for global fiber networks and the ability to replicate this network proximity would be difficult and cost prohibitive. While significant barriers to entry exist, we believe that our experience, relationships with a critical mass of communities of interest and leading communications service providers, reputable brand, associated track record and proven business model enable us to pursue expansion opportunities more effectively than potential competitors.

Exclusive Operator of Interconnection Areas within 10 Digital Realty Trust Wholesale Datacenter Buildings.    Our relationship with Digital Realty Trust, Inc., or Digital Realty Trust, one of the leading datacenter real estate investment trusts, generally provides us with the exclusive ability to operate the interconnection areas in 10 tier-1 wholesale datacenter buildings across the United States.

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Engineering and Operational Excellence.    Our facilities provide the structural integrity and redundant power and cooling infrastructure required for a secure, reliable and effective networking and computing environment. Since 2003, we have provided our customers with over 99.999% uptime on our overall power and cooling systems. Based on our industry experience and customer feedback, we believe that we also offer best-in-class installation and technical support services that enhance networking opportunities and maximum exposure to the global communications marketplace.

Our Strategy

Our goal is to expand our leadership position in network neutral, global interconnection and colocation products and related services. Our strategy for accomplishing this goal includes the key elements described below.

Continue to Expand our Relationships with Existing Customers.    We will continue to offer our existing customers best-in-class interconnection and colocation products and related services to meet their growing requirements. Over 70% of our revenue growth during 2008 and 2009 resulted from revenues from existing customers. 81% of our revenue growth for the nine months ended September 30, 2010 resulted from revenues from existing customers. We will strive to continue to provide the quality of service and interconnections that have resulted in low average monthly churn of 0.8% and 0.6%, respectively, during 2008 and 2009. Our average monthly churn was 0.7% for the nine months ended September 30, 2010.

Continue to Acquire Profitable New Customers.    We recognize the ability of additional customers to enhance the value proposition of our interconnection ecosystems. We will continue to target and develop relationships with customers that will benefit most from their inclusion in a Telx ecosystem and that will increase the value proposition to our other customers due to their expected demand for interconnection. We intend to continue to price our products and services at a level that reflects both the market demand for our products and related services, as well as our short and long term profitability goals and return on invested capital expectations.

Further Penetrate Attractive Industry Sectors.    A substantial portion of our revenue is derived from communications service providers that require the high level of interconnections we offer. Revenue from other industry sectors, however, has grown from an annualized rate of 15% of our revenues in December 2007 to an annualized rate of 24% in December 2009 and, for the nine months ended September 30, 2010 these other sectors represented 26% of our revenues. The enterprise, online media, video and content provider, government, cloud computing provider and SaaS provider industry sectors have grown significantly within the ecosystems that exist within our facilities and provide attractive opportunities for further ecosystems development and growth. We also believe other industry sectors, such as healthcare, will provide additional long-term opportunities for ecosystems development and growth. We intend to continue to focus our efforts to further penetrate these sectors.

Increase Network Densities.    As our network densities increase, our customer value proposition increases. As an interconnection-centric company, we aim to continuously increase the number of interconnections we facilitate. We will continue to focus our sales, marketing, technology and facilities efforts accordingly.

Selective Product and Services Expansion.    We intend to continually develop our interconnection and colocation offerings and introduce new products and related services to meet our customers’ needs. Product and services launched during 2009 included the Telx Video Exchange and our Managed Security Services offerings. In October 2010, we announced that our Ethernet Exchange product that allows service providers and enterprises to seamlessly interconnect their Ethernet networks had been deployed in five locations with nine charter service provider customers testing the service.

Selective Expansion in Existing and New Markets.    As we grow our business, we aim to grow efficiently by increasing our gross square footage to satisfy the demand for our products and related services in existing

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facilities and by selectively identifying domestic and international opportunities for expansion into new markets. We only begin new expansions once we have identified customers and we have the capital to fully fund the build out. Our expansions are done in phases in order to manage the timing and scale of our capital expenditure obligations, reduce risk and improve our return on capital.

Pursue Selective Acquisitions.    We believe our industry has favorable consolidation characteristics and we expect this trend to continue in the foreseeable future. Given the limited availability of interconnection and colocation facilities within tier-1 markets, acquisitions of existing businesses may provide a cost-effective method of increasing network densities, expanding our customer base and broadening our geographic footprint. We intend to pursue attractive opportunities as they arise.

Summary Risk Factors

Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties summarized below, the risks described under “Risk Factors,” the other information contained in this prospectus and our consolidated financial statements and the related notes before you decide whether to invest in our common stock.

• We have incurred substantial losses in the past and may continue to incur losses in the future.

• Our operating results have fluctuated historically and could continue to fluctuate in the future, which could affect our ability to maintain our current market position or expand.

• In the past, significant deficiencies and material weaknesses in our internal control over financial reporting have been identified. If new material weaknesses arise or if we fail to maintain proper and effective internal controls going forward, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our business, operating results and financial condition.

• Our ability to maximize the utilization of our facilities is limited by the availability and cost of sufficient electrical power and cooling capacity, which may result in our inability to accept new customers at our facilities. This could lead to a decline in our revenue growth and may cause us to incur additional costs to increase the power supply, increase cooling capacity or acquire space at an additional facility.

• We are dependent upon third-party suppliers for power and certain other services, and we are vulnerable to service failures of our third-party suppliers and to price increases by such suppliers.

• We are continuing to invest in our expansion efforts, but we may not experience sufficient customer demand in the future to realize expected returns on these investments.

• Changes in technology could adversely affect our business.

• Our success largely depends upon retaining the services of our management team.

• The forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, we cannot assure you our business will grow at similar rates, or at all.

Recent Developments

On June 17, 2010, we and certain of our subsidiaries entered into a senior secured credit facility, consisting of a $150.0 million term loan and a $25.0 million revolving facility, which we refer to herein as the New Credit Facility. The term loan matures on June 17, 2015 and the revolving loan matures on June 17, 2014. The New Credit Facility is guaranteed by all of our current subsidiaries, and certain of our subsidiaries that we may acquire

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or create in the future, and is secured by substantially all of our and such subsidiary guarantors’ assets. The non-default interest rates for the loans under the New Credit Facility are determined by reference to either LIBOR plus 6.00% or, at our election, a prime-based rate plus 5.00%. These margins are subject to increase in certain circumstances as set forth in the credit agreement. Pursuant to the credit agreement, the margin increase will terminate, to the extent it occurs, if our senior secured leverage ratio drops below a threshold set forth in the credit agreement or once leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust have been obtained and the related leases (or memoranda of such leases) have been recorded to give constructive notice of such leasehold mortgages. As of November 4, 2010, leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust were obtained in accordance with the credit agreement and the related leases (or memoranda of such leases) were delivered for recordation. The credit agreement provides for a floor of 2.00% for LIBOR and a floor of 3.00% for loans based on the prime rate.

We used $138.1 million of the proceeds of the term loan to repay indebtedness outstanding under our prior credit agreement with CIT Lending Services Corporation and loans associated with our ownership of a facility in Atlanta, Georgia, other minor indebtedness, and to pay the fees and expenses of the transaction, and we used an additional $1.1 million of proceeds to pay accrued interest on repaid indebtedness. We intend to use the remaining proceeds from the borrowings to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes. We did not draw upon the revolving facility at closing or through September 30, 2010, but when or if we do so, such proceeds will be used to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes.

Corporate Information

We were incorporated on August 3, 2000 as a Delaware corporation. We currently conduct certain operations through our wholly owned subsidiaries. We are headquartered in New York, New York. Our principal executive offices are located at 1 State Street, 21st Floor, New York, New York 10004 and our telephone number at this location is (212) 480-3300. Our website address is www.telx.com. Information included or referred to on, or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this prospectus.

The Offering

Common stock offered by us                      shares

Common stock offered by the selling stockholders                      shares

Common stock to be outstanding after this offering                      shares

Option to purchase additional shares                      shares

Use of proceeds We intend to use the net proceeds of this offering for capital expenditures, working capital and general corporate purposes. We may also use a portion of the net proceeds to finance growth through the acquisition of, or investment into, businesses, products, services or technologies complementary to our current business. We will not receive any of the proceeds from the sale of shares by the selling stockholders. See the section entitled “Use of Proceeds.”

Proposed Nasdaq Global Market symbol TELX

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The number of shares of our common stock to be outstanding immediately after this offering is based on the number of shares outstanding as of                     , 2010, after giving effect to the conversion of all of our outstanding shares of preferred stock into shares of common stock; and excludes:

• 112,085 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2010, having a weighted average exercise price of $33.53 per share;

• 12,308 shares of common stock reserved for issuance under our equity incentive plans as of September 30, 2010; and

• 1,000 shares issuable upon the exercise of warrants outstanding as of September 30, 2010, having an exercise price of $40.00 per share.

Assumptions Used in This Prospectus

Except as otherwise indicated, all information contained in this prospectus assumes:

• an offering price of $                      per share of common stock, which is the mid-point of the range set forth on the cover of this prospectus;

• the underwriters do not exercise their option to purchase up to an additional                  shares of our common stock from us and/or the selling stockholders;

• the conversion of all outstanding shares of our preferred stock into an aggregate of              shares of common stock immediately prior to the closing of this offering;

• a                      for                      stock split of our outstanding capital stock that was effected on                     , 2010;

• the filing of our amended and restated certificate of incorporation upon the completion of this offering; and

• our issuance of                      shares of common stock in this offering.

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Summary Consolidated Financial Data

The following summary consolidated financial data for the fiscal years ended December 31, 2009, 2008 and 2007 are derived from our audited financial statements. Summary consolidated financial data for the nine months ended September 30, 2010 and 2009 are derived from our unaudited financial statements. You should read this data together with our audited financial statements and related notes included elsewhere in this prospectus and the information under the sections entitled “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Nine Months Ended September 30,						Years Ended December 31,
	2010			2009			2009			2008			2007
	(in thousands, except share and per share data)
	(unaudited)
Statement of Operations Data:(1)(2)(3)(4)
Revenues	$	94,683		$	70,606		$	98,335		$	70,038		$	50,762
Operating expenses		81,794			74,417			99,937			93,332			78,063
Operating income (loss)		12,889			(3,811	)		(1,602	)		(23,294	)		(27,301	)
Interest income		189			262			374			396			612
Interest expense		(9,516	)		(5,031	)		(7,221	)		(7,380	)		(9,769	)
Other income (expense)		12			(46	)		(12	)		(330	)		(739	)
Income (loss) from operations before income taxes		3,574			(8,626	)		(8,461	)		(30,608	)		(37,197	)
Income tax benefit (expense)		(1,403	)		(1,486	)		(1,458	)		(772	)		811
Net income (loss)		2,171			(10,112	)	$	(9,919	)	$	(31,380	)	$	(36,386	)
Less: preferred dividends		(19,935	)		(18,060	)		(24,452	)		(21,743	)		(17,676	)
Net loss available for common stockholders	$	(17,764	)	$	(28,172	)	$	(34,371	)	$	(53,123	)	$	(54,062	)
Net loss per common share	$	(25,161	)	$	(57,260	)	$	(63,066	)	$	(290,290	)	$	(540,620	)
Weighted average common shares outstanding		706			492			545			183			100
(1) Includes stock-based compensation expense of:	$	1,402		$	868		$	1,179		$	919		$	379
(2) Includes depreciation and amortization expense of:	$	8,480		$	17,828		$	21,686		$	32,256		$	31,560
(3) Includes non-cash rent of:	$	7,941		$	5,702		$	7,953		$	6,720		$	5,373
(4) Includes non-cash compensation expense for executive loan forgiveness of:	$	414		$	—		$	—		$	—		$	—

Adjusted EBITDA Reconciliation

We use a non-GAAP financial metric that we call Adjusted EBITDA to track, analyze and understand our financial performance, which we define as operating income from continuing operations, plus depreciation and amortization, stock-based compensation expense and other non-cash items such as deferred rent (income)/expense. We believe that Adjusted EBITDA is a helpful metric for the following reasons:

• As a measurement of operating performance, it assists management in comparing our operating results for various periods, since it removes the impact of items not directly resulting from operations;

• For planning purposes, we use it to help prepare our internal operating budgets;

• It allows us to establish targets for certain management compensation that relate to the results of our operations, avoiding the impact of items not directly resulting from operations; and

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• It allows us to effectively evaluate our capacity to incur and service debt, fund capital expenditures and expand our business.

The following is a reconciliation of our net income (loss) for the nine months ended September 30, 2010 and 2009, and the years ended December 31, 2009, 2008 and 2007 to Adjusted EBITDA.

	Nine Months Ended September 30,						Year Ended December 31,
	2010			2009			2009			2008			2007
	(in thousands)
	(unaudited)
Net income (loss)	$	2,171		$	(10,112	)	$	(9,919	)	$	(31,380	)	$	(36,386	)
Interest expense, net		9,327			4,769			6,847			6,984			9,157
Other income (expense)		(12	)		46			12			330			739
Income tax expense (benefit)		1,403			1,486			1,458			772			(811	)
Non-cash rent expense (1)		7,941			5,702			7,953			6,720			5,373
Depreciation and amortization expense		8,480			17,828			21,686			32,256			31,560
Non-cash compensation expense (2)		1,816			868			1,179			919			379
Adjusted EBITDA	$	31,126		$	20,587		$	29,216		$	16,601		$	10,011

(1) Non-cash rent expense includes deferred rent expense and non-cash rent expense related to a stock option granted to a landlord. Deferred rent expense represents the non-cash component of rent expense required by GAAP to reflect the total escalating rent payments under our long-term leases as a straight-line expense each period over the estimated term of the lease.

(2) Non-cash compensation expense includes the non-cash component of compensation expense related to our equity incentive plans and in the first quarter of 2010, the non-cash compensation related to executive loan forgiveness of $414.

Our Adjusted EBITDA is not necessarily comparable to similarly titled measures used by other companies. In addition, Adjusted EBITDA: (a) does not represent net income or cash flows from operating activities as defined by U.S. generally accepted accounting principles, or GAAP; (b) is not necessarily indicative of cash available to fund our cash flow needs; and (c) should not be considered as an alternative to net income, operating income, cash flows from operating activities or other financial information as determined under GAAP.

We prepare Adjusted EBITDA by adjusting net loss to eliminate the impact of a number of items that we do not consider indicative of our core operating performance. You are encouraged to evaluate each adjustment and the reasons we consider them appropriate. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to net loss. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an implication that our future results will be unaffected by unusual or non-recurring items.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. In deciding whether to invest, you should carefully consider the following risk factors, as well as the financial and other information contained in this prospectus, including our consolidated financial statements and related notes. Any of the following risks as well as other risks and uncertainties discussed in this prospectus could have a material adverse effect on our business, financial condition, results of operations or prospects and cause the value of our stock to decline, which could cause you to lose all or part of your investment. Additional risks and uncertainties of which we are unaware, or that are currently deemed immaterial by us, also may become important factors that affect us.

Risks Related to Our Business and Industry

We have incurred substantial losses in the past and may continue to incur losses in the future.

Although we had net income of $2.2 million for the nine months ended September 30, 2010, for the years ended December 31, 2009, 2008 and 2007, we incurred net losses of approximately $9.9 million, $31.4 million and $36.4 million, respectively. As of September 30, 2010, we had an accumulated deficit of $82.2 million. Going forward, there can be no guarantee that we will sustain or increase profitability. Our ability to sustain or increase profitability is dependent upon a number of risks and uncertainties discussed below, many of which are beyond our control. Given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Our operating results have fluctuated historically and could continue to fluctuate in the future, which could affect our ability to maintain our current market position or expand.

Our operating results have fluctuated in the past and may continue to fluctuate in the future as a result of a variety of factors, many of which are beyond our control, including the following:

• changes in general economic conditions and specific market conditions in the telecommunications and Internet-related industries;

• demand for interconnection and colocation products and services in general or at our facilities in particular;

• competition from other suppliers of the products and services we offer;

• timing and magnitude of operating expenses, capital expenditures and expenses related to sales and marketing, including expenses incurred as a result of expansions and acquisitions, if any;

• cost and availability of power and cooling capacity;

• cost and availability of additional space inventory either through lease or acquisition in our target markets;

• our acquisition of additional facilities;

• mix of our current products and services;

• financial condition and credit risk of our customers; and

• our access to capital and ability to fund capital expenditure projects.

Any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition. Although we have experienced growth in revenues in recent quarters, this growth rate is not necessarily indicative of future operating results. A relatively large portion of our expenses are fixed in the short-term, particularly with respect to lease and personnel expenses, depreciation and amortization expenses, and interest expense. Therefore, our results of operations are particularly sensitive to fluctuations in revenues. Comparisons to prior periods should not be relied upon as indications of our future performance.

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In the past, significant deficiencies and material weaknesses in our internal control over financial reporting have been identified. If new material weaknesses arise or if we fail to maintain proper and effective internal controls going forward, our ability to produce accurate and timely financial statements could be impaired, which could adversely affect our business, operating results, and financial condition.

In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2008, our independent registered public accounting firm did not identify any material weaknesses but did identify two significant deficiencies in our internal controls relating to an inadequate system of internal controls during 2008 in certain processes and several deficiencies related to information technology, or IT, processes, controls and documentation. A significant deficiency is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting. In connection with the audit of our consolidated statements as of and for the year ended December 31, 2007, our independent registered public accounting firm identified a deficiency that constituted a material weakness in our internal control over financial reporting for the year ended and as of December 31, 2007. This material weakness related to an inadequate system of internal controls during the first half of 2007 (as we documented a comprehensive set of accounting policies and procedures in the second half of the year) and several control deficiencies related to IT processes, controls and documentation. A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the audit of our consolidated financial statements as of December 31, 2006 and for the periods from January 1 to October 3, 2006 and October 4 to December 31, 2006, our independent registered public accounting firm identified two control deficiencies that represented material weaknesses in our internal control over financial reporting for such periods. These material weaknesses related to insufficient technical resources in accounting, financial reporting and income taxes and an inadequate system of internal controls including a lack of a comprehensive set of accounting policies and procedures and several deficiencies related to IT processes, controls and documentation. Because of these material weaknesses, there is heightened risk that a material misstatement of our financial statements as of and for the periods ended December 31, 2007 and December 31, 2006 was not prevented or detected.

We have taken steps to remediate our material weaknesses and significant deficiencies. However, there are no assurances that the measures we have taken to remediate these internal control weaknesses were completely effective or that similar weaknesses will not recur. Additionally, as part of our ongoing efforts to improve our financial accounting organization and processes, from 2007 to the present we have hired several senior accounting personnel. We plan to continue to assess our internal controls and procedures and intend to take further action as necessary or appropriate to address any other matters we identify.

No material weaknesses or significant deficiencies were identified for the year ended December 31, 2009, and, accordingly, we believe that our remediation efforts were successful. However, we did not perform an assessment of our internal controls over financial reporting nor did our auditors perform an audit over our internal controls over financial reporting; we therefore cannot assure you that these or other similar issues will not arise in future periods. We anticipate that we will next evaluate our internal control over financial reporting in connection with management’s preparation of our financial statements for the year ended December 31, 2010. Although an evaluation of internal controls will only be performed at year end, we will review internal controls in connection with our quarterly reporting.

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Our ability to maximize the utilization of our facilities is limited by the availability and cost of sufficient electrical power and cooling capacity, which may result in our inability to accept new customers at our facilities. This could lead to a decline in our revenue growth and may cause us to incur additional costs to increase the power supply, increase cooling capacity or acquire space at an additional facility.

The availability of an adequate supply of electrical power and cooling capacity, and the infrastructure to deliver that power and cooling, is critical to our ability to provide our products and services. Even though physical space may be available in a facility, the demand for electrical power may exceed our designed capacity. We may be unable to meet the increasing power and cooling needs of our customers if our customer mix does not match our expectations or our customers further increase their use of high density electrical power equipment. In addition, the amount of sellable space within our facilities is reduced to the extent that we house generators and batteries to provide back-up power. Further, certain of the leases for our facilities also contain provisions that limit the supply of electrical power and cooling capacity to such facilities, as a result of which our ability to reach full utilization may be constrained in these facilities. If the availability of power and cooling capacity limits our ability to fully utilize the space within our facilities, we may be unable to accept new customers at our facilities and our revenue growth will decline. We also may incur additional costs to increase the power supply and/or cooling capacity or acquire space at an additional facility, which could increase our losses, or reduce our ability to become profitable.

We are dependent upon third-party suppliers for power and certain other services, and we are vulnerable to service failures of our third-party suppliers and to price increases by such suppliers.

We rely on third parties to provide power, and we cannot ensure that these third parties will deliver such power in adequate quantities or on a consistent basis. If the amount of power available to us is inadequate to support our customer requirements or delivery of power does not occur in a timely manner, we may be unable to provide our services to our customers and our operating results and cash flow may be materially and adversely affected. In addition, our facilities are susceptible to power shortages and planned or unplanned power outages caused by these shortages such as those that occurred in California in 2001, in New York City and the Northeast in 2003 and in Miami in 2005. We attempt to limit exposure to power shortages by using backup generators and batteries. Power outages, which may last beyond our backup and alternative power arrangements, would harm our customers and our business. Although we have maintained power availability in excess of the Tier 4 fault tolerant standards resulting in aggregate availability in excess of 99.999% across our facilities since 2003, a limited number of our customers have experienced temporary losses of power, for which we generally provided credits against future invoices. We could incur similar or other financial obligations or be subject to lawsuits by our customers in connection with a loss of power. In addition, any loss of services or equipment damage could reduce the confidence of our customers in our products and services and could consequently impair our ability to attract and retain customers, which would adversely affect both our ability to generate revenues and our operating results.

We are dependent upon third-party suppliers for the resale of Internet access and other services, and we have no control over the quality and reliability of the services provided by these suppliers. In the past, some of these providers have experienced significant system failures. Users of our products and services may in the future experience difficulties due to service failures unrelated to our systems, products and services. If for any reason these suppliers fail to provide certain services to us, our business, financial condition and results of operations could be adversely affected.

While most of our facilities operate in regulated energy markets, power costs increase from time to time. We generally have the option to pass along increases in the cost of power to our customers, but we may choose not to do so for a variety of operating reasons. To the extent that we do not pass these costs along, or that we delay in passing them along, we will pay higher energy prices, increasing our operating costs and depressing our margins. In addition, even if we do pass these power costs along, we will effectively increase the price for our products and services, which could reduce overall demand for our products and services.

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The high utilization of our facilities may limit our ability to grow in certain key markets, and we may be unable to expand our existing facilities or locate and secure suitable sites for additional facilities.

Our facilities have reached high rates of utilization in many of our key markets. Our ability to meet the growing needs of our existing customers and to attract new customers in these key markets depends on our ability to add additional capacity by incrementally expanding our existing facilities or by locating and securing additional facilities in these markets that meet specific infrastructure requirements such as access to multiple communications service providers, a significant supply of electrical power and sufficient cooling capacity, high ceilings and the ability to sustain heavy floor loading. In many markets, the supply of facilities with these characteristics is limited and subject to high demand. If we are unable to expand our facilities in a timely and cost-effective manner, or to locate facilities with characteristics similar to our current facilities, our revenue growth will decline, and we may not achieve profitability.

We are continuing to invest in our expansion efforts, but we may not experience sufficient customer demand in the future to realize expected returns on these investments.

We expect to acquire or lease additional properties, and potentially may construct new facilities. If successful, we will be required to commit substantial operational and financial resources to these facilities, generally up to 12 months in advance of securing customer contracts, and we may not experience sufficient customer demand in those markets in which we choose to expand to support these facilities once they are built. In addition, unanticipated technological changes could affect customer requirements, and we may not have built such requirements into our new facilities. Any of these contingencies, if they were to occur, could make it difficult for us to realize expected or reasonable returns on these investments and could have a material adverse effect on our operating results.

Moreover, there can be no assurance that we will be able to successfully integrate these new facilities. Specific challenges we have encountered in such prior acquisitions include the following:

• occasional unexpected additional capital expenditures to improve the condition of the acquired equipment so as to achieve the desired level of quality of service;

• the need to create and maintain uniform policies, procedures and controls; and

• the necessary internal corporate skill-sets to properly manage our expanded customer base.

Acquiring or leasing additional properties (including the construction of new facilities) may expose us to the challenges set forth above and other risks such as:

• the diversion of senior management’s attention from daily operations to the negotiation of transactions and integration of such properties;

• the inability to achieve projected synergies;

• the possible loss or reduction in value of acquired properties;

• the possible loss of key personnel; and

• the assumption of undisclosed liabilities.

The failure to successfully integrate such new properties could have a material adverse effect on our business, results of operations and financial condition. Successful integration will depend on our ability to manage acquired operations, realize revenue growth from an expanded customer base and eliminate duplicative and excess costs, among other factors.

Our construction of additional facilities could involve significant risks to our business.

Construction involves substantial planning and allocation of company resources. Construction also requires us to carefully select and rely on the experience of one or more general contractors and associated subcontractors

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during the construction process. Should a general contractor or significant subcontractor experience financial or other problems during the construction process, we could experience significant delays, increased costs to complete the project and other negative impacts to our expected returns.

In the event we decide to construct new facilities separate from our existing facilities, we may provide services to interconnect these two facilities. Should these services not provide the necessary reliability to sustain service, this could result in lower interconnection revenue, lower margins and could have a negative impact on customer retention over time.

If we are unable to manage our growth effectively, our financial results could suffer.

We have increased our number of full-time employees from 103 as of December 31, 2007 to 163 as of December 31, 2009 and have increased our revenue from $50.8 million in 2007 to $98.3 million in 2009. Further, we intend to continue to expand our overall business, customer base, headcount, and operations, domestically and possibly internationally. Creating a global organization and managing a geographically dispersed workforce will require substantial management effort and significant additional investment in our operating and financial system capabilities and controls. If our information systems are unable to support the demands placed on them by our rapid growth, we may be forced to implement new systems which would be disruptive to our business. We may be unable to manage our expenses effectively in the future due to the expenses associated with these expansions, which may negatively impact our gross margins or operating expenses. If we fail to improve our operational systems or to expand our customer service capabilities to keep pace with the growth of our business, we could experience customer dissatisfaction, cost inefficiencies, and lost revenue opportunities, which may materially and adversely affect our operating results.

We lease all but one of our facilities, and the termination or non-renewal of leases poses significant risk to our ongoing operations.

We only own one of our facilities (Atlanta), and operate the rest of them pursuant to commercial leasing arrangements. The initial terms of such leases expire over a period ranging from 2022 to 2050. We would incur significant costs if we were forced to vacate one of our facilities due to the high costs of relocating the equipment in our facilities and installing the necessary infrastructure in a new facility. In addition, if we were forced to vacate a facility, we could lose customers that chose our products and services based on our location. Our landlords could attempt to evict us for reasons beyond our control. Further, we may be unable to maintain good working relationships with our landlords, which would adversely affect our customer service and could result in the loss of current customers.

In addition, our business would be harmed by our inability to renew leases at favorable terms. Most of our leases provide two ten-year renewal options with rents set at then-prevailing market rates. We expect that the then-prevailing market rates will be higher than present rates. To maintain the operating profitability associated with our present cost structure, we must increase revenues within existing facilities to offset the anticipated increase in lease payments at the end of the original and renewal terms. Failure to increase revenue sufficiently to offset these projected higher costs would adversely impact our operating income.

The majority of our leases are with a single landlord, Digital Realty Trust, which makes us more vulnerable than if our leases were diversified. In addition, a significant portion of our revenue is generated by interconnection products and services we provide to customers located in Digital Realty Trust facilities, which we may lose if contractual arrangements we have with Digital Realty Trust are terminated or our rights under such contracts are impaired.

Ten of our 14 leased facilities are leased to us by a single landlord, Digital Realty Trust, representing approximately 31% of our total facility space as of September 30, 2010. The initial terms of these Digital Realty Trust leases expire in 2026, and we have options to extend them through 2046. The terms of all these leases with

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Digital Realty Trust are generally similar. In addition, we recently entered into a colocation agreement with Digital Realty Trust for approximately 40,000 rentable square feet of datacenter space at 111 8th Avenue, New York, New York. The base term of this agreement expires in June 2024. In the event that we are unable to come to agreement with Digital Realty Trust regarding the renewal of these leases, or come to a disagreement regarding our rights and obligations under these agreements, a significant portion of our available inventory may be impaired or lost.

Subject to certain exceptions, we have the general right to exclusively operate the interconnection areas at ten Digital Realty Trust facilities. Although we lease space from Digital Realty Trust (which we then license to our customers) in such facilities, due to our exclusivity arrangement with Digital Realty Trust, a significant number of companies that lease space from Digital Realty Trust directly make their interconnections in our interconnection areas. The revenue generated by the interconnections in such interconnection areas represents a significant portion of our overall revenue. If we were to lose the right to operate these interconnection areas in the future, we may also lose the revenue associated with the interconnections in such interconnection areas, and our business could suffer as a result.

If our contracts with our customers are not renewed or are terminated, our business could be substantially harmed.

Our customer contracts typically have terms of one to three years. Our customers may not elect to renew these contracts. Furthermore, our customer contracts are terminable for cause if we breach a material provision of the contract, including the failure to provide power or connectivity for extended periods of time, or if we violate applicable laws or regulations. We may face increased competition and pricing pressure as our customer contracts become subject to renewal. Our customers may negotiate renewal of their contracts at lower rates, for fewer products and services or for shorter terms. In addition, if we lose one customer, others may elect not to renew their contracts to the extent that such other customers depend substantially on interconnection with the lost customer. If we are unable to successfully renew our customer contracts on their current terms, or if our customer contracts are terminated, our business could suffer.

Any failure of our physical infrastructure or our products and services, or failure to meet performance standards under our service level agreements, could result in our customers terminating their relationship with us and could lead to significant costs and disruptions that could reduce our revenues, harm our business reputation and have a material adverse effect on our financial results.

Our business depends on providing customers with highly reliable products and services. The products and services we provide are subject to failure resulting from numerous factors, including:

• human error;

• power loss;

• improper building maintenance by the landlords of the buildings in which our facilities are located;

• physical or electronic security breaches;

• fire, earthquake, hurricane, flood and other natural disasters;

• water damage;

• the effect of war, terrorism and any related conflicts or similar events worldwide; and

• sabotage and vandalism.

Problems at one or more of our facilities, whether or not within our control, could result in service interruptions or equipment damage. We have service level agreements with substantially all of our customers in which we provide various guarantees regarding our levels of service. We may have difficulty meeting these levels of service if we experience service interruptions. Service interruptions or equipment damage in our facilities could result in credits for service interruptions to these customers. We have at times in the past given credits to our customers against future invoices as a result of service interruptions due to equipment failures. We

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cannot assure you that our customers will accept these credits as compensation in the future. In addition, our inability to meet our service level commitments may damage our reputation and could consequently limit our ability to retain existing customers and attract new customers, which would adversely affect our ability to generate revenues and negatively impact our operating results. Also, service interruptions and equipment failures could result in lost profits or other indirect or consequential damages to our customers and may expose us to additional legal liability and impair our brand image. We depend on our landlords and other third-party providers to properly maintain the buildings in which our facilities are located. Improper maintenance by such landlords and third parties increase the risk of service interruptions and equipment damage.

Additionally, certain of our facilities, including those in New York, California, Florida and Texas, are located in areas particularly susceptible to terrorist activity and natural disasters such as earthquakes, hurricanes and tornadoes. The occurrence of any terrorist activity or natural disaster could shut down one or more of our facilities and result in a material adverse effect upon our results of operations. Moreover, we may not have adequate property or liability insurance to cover catastrophic events.

We may not be able to compete successfully against current and future competitors. If we fail to differentiate our facilities and products and services from those of our competitors, we may not be able to compete successfully and our business and results of operations may be adversely affected.

We compete with network neutral interconnection and colocation service providers and other service providers, including U.S.-based communications service providers, Internet service providers, managed service providers and web hosting companies. Many of our competitors have longer operating histories and significantly greater financial, technical, marketing and other resources than us, and some have a greater presence in our markets and in other markets across the United States and around the world. Because of their greater financial resources, some of our competitors have the ability to adopt aggressive pricing policies. As a result, we may suffer from pricing pressure that would adversely affect our ability to generate revenues and adversely affect our operating results. In addition, most of these competitors currently offer interconnection and colocation products and services in the same markets and buildings where we have facilities, and other competitors may start doing so in the future. Some of these competitors may also provide our current and potential customers with additional benefits and may do so in a manner that is more attractive to our potential customers than our products and services. These competitors may be able to provide bundled interconnection and colocation products and services at prices lower than our cost structure allows. If, as a result of such efficiencies, these competitors are able to adopt aggressive pricing policies for interconnection and colocation products and services, our ability to generate revenues would be materially and adversely affected.

In addition, our competitors may operate more successfully or form alliances to acquire significant market share. Once businesses locate their networking and computing equipment in competitors’ facilities, it may be extremely difficult to convince them to relocate to our facilities. Furthermore, a business that has already invested substantial resources in such arrangements may be reluctant or slow to replace or limit its existing services by becoming our customer. Finally, we may also experience competition from our landlords. Rather than leasing available space in our buildings to us or other large single tenants, they may decide to convert the space instead to smaller units designed for multi-tenant interconnection and colocation use. Landlords may enjoy a cost advantage in providing products and services similar to those provided by us, and this could also reduce the amount of space available to us for expansion in the future.

We depend upon a limited number of communications service providers in certain of our facilities, and the loss of one or more of these providers in those facilities could adversely affect our business.

Because we do not own or operate our own network, we depend upon communications service providers to interconnect and/or colocate as customers in our facilities and contribute to the network density that attracts our other customers. In some of our smaller markets, we have agreements with only a limited number of communications service providers. In these smaller market facilities, we expect that we will continue to rely

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upon a limited number of communications service provider customers to maintain network density within those facilities. Our agreements with these customers are generally for one to three year terms (if not renewed). A loss of one or more of these providers could have a material and adverse effect on the operations of one or more of our smaller facilities.

We may make acquisitions of complementary businesses, customers, products or service lines or technologies, and such acquisitions may pose integration and other risks that could harm our business.

We may acquire complementary businesses, product or service lines and technologies in the future as we did in March 2007 when we acquired certain assets owned by NYC Connect, LLC. There can be no assurance that we will be able to successfully integrate any such acquisitions. To finance these acquisitions, we may incur additional debt and issue additional shares of our stock, which will dilute existing stockholders’ ownership interests in us, and such debt may adversely affect our business and operations.

Specific challenges we have encountered in our acquisition of certain assets owned by NYC Connect, LLC include the following:

• occasional unexpected additional capital expenditures to improve the condition of the acquired equipment so as to achieve the desired level of quality of service;

• creating and maintaining uniform policies, procedures and controls; and

• building the necessary internal corporate skill-sets to properly manage our expanded customer base.

Future acquisitions may expose us to the challenges set forth above and other risks such as:

• Certain financial risks, including, but not limited to (i) the payment of a purchase price that exceeds the future value that we may realize from the acquired operations and businesses; (ii) an increase in our expenses and working capital requirements, which could reduce our return on invested capital; (iii) potential known and unknown liabilities of the acquired businesses; (iv) costs associated with integrating acquired businesses, operations, or technologies; (v) the incurrence of additional debt; and (vi) possible adverse tax and accounting effects.

• Operating risks, including, but not limited to (i) the diversion of management’s attention to the assimilation of the businesses, operations, or technologies to be acquired; (ii) the risk that the acquired businesses, operations, or technologies will fail to maintain the quality of services that we have historically provided; (iii) the need to implement financial and other systems; (iv) the need to maintain customer, supplier or other favorable business relationships of acquired operations and restructure or terminate unfavorable relationships; and (v) the potential for deficiencies in internal controls of the acquired operations.

The failure to successfully integrate acquired businesses, customers, products, service lines or technologies could have a material adverse effect on our business, results of operations and financial condition. Successful integration will depend on our ability to manage acquired operations, realize revenue growth from an expanded customer base and eliminate duplicative and excess costs, among other factors.

Our products and services have a sales cycle that may have a material adverse effect on our business, financial condition and results of operations. The sales cycle may lengthen due to the current macroeconomic environment.

A customer’s decision to license cabinet or cage space in one of our facilities and to purchase interconnection products typically involves a significant commitment of our time and resources. Many customers are reluctant to commit to purchasing our interconnection and colocation products and services until they are confident that our facility has adequate available communications service provider connections and network density. As a result, we may experience a longer than average sales cycle for our products and services. Furthermore, we may expend significant time and resources in pursuing a particular sale or customer that does

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not generate revenue. Delays due to the length of our sales cycle or costs incurred that do not result in sales may have a material adverse effect on our business, financial condition and results of operations.

Our success largely depends upon retaining the services of our management team.

We are highly dependent on our management team. We expect that our continued success and future growth will largely depend upon the efforts and abilities of members of our management team. The loss of services of any key executive, including Eric Shepcaro, our Chief Executive Officer, Christopher W. Downie, our President, Chief Financial Officer and Treasurer, William Kolman, our Executive Vice President, Sales, Michael Terlizzi, our Executive Vice President, Engineering and Construction, J. Todd Raymond, our Senior Vice President, Facility Acquisition, Bradley T. Hokamp, our Chief Marketing Officer, and Clayton Mynard, our Senior Vice President, General Counsel and Secretary, for any reason could have a material adverse effect upon us. Our success also depends upon our ability to identify, develop and retain qualified employees. The loss of some of our management and other employees could have a material adverse effect on our operations. We do not maintain key man insurance on any members of our management team.

Government regulation of dark fiber is largely unsettled, and depending on its evolution, may adversely affect our business. In addition, we may add new products or services that may be subject to regulation.

The telecommunications industry is currently undergoing a transformation as it moves from a traditional dedicated circuit network architecture to a design where all forms of traffic—voice, video, and information—are transmitted as digital bits over IP-based networks. With the advent of these digital data transmissions and the growth of the Internet, data networks are becoming the networks over which all communications services can be offered. Determining the appropriate regulatory framework for these data networks is one of the most significant challenges facing federal and state telecommunication policy makers. As a result of this fundamental shift in the telecommunications industry’s underlying technology, various laws and governmental regulations at the federal, state and local level in the U.S. and in Canada, governing IP-based services, related communications services and information technologies remain largely unsettled.

Although we do not offer telecommunications services on a common carrier basis, there is a risk that we will become subject to regulation. For example, the Federal Communications Commission, or the FCC, has not yet made a final determination of its intent or ability to regulate the provision and sale of so-called “dark fiber,” which we use to connect certain of our facilities, such as our facilities in New York and New Jersey, and offer to our customers for use as part of the larger Telx product and service offerings. The FCC presently considers dark fiber to be a “network element” and not a “telecommunications service” regulated by the FCC. We currently do not believe that we are subject to regulation due to our use of dark fiber in the interconnection between certain of our facilities, although we cannot be certain that the FCC would adopt this position. Additionally, the FCC may change its position in the future. Further, we intend to continue to expand our offerings of products and services. Certain of our new products, or components thereof, such as our new Ethernet Exchange product, may be subject to regulation by the FCC. Although we currently do not anticipate that any regulation will be material to our business, we cannot assure you that this will be the case in the future.

Due to changing technology and applications of that technology, it is uncertain whether and how existing laws or regulations or new laws or regulations will be applied by the FCC and other regulatory bodies in the future to other currently unregulated products and services we offer, or to new products or services that we may offer in the future. Future regulatory, judicial and legislative changes may have a material adverse effect on our ability to deliver products and services within various jurisdictions.

We may not be able to continue to add new customers and increase sales to our existing customers, which could adversely affect our operating results.

Our growth is dependent on our ability to continue to attract new customers while retaining and expanding our products and services to existing customers. Growth in the demand for our products and services may be inhibited and we may be unable to sustain growth in our customer base, for a number of reasons, such as:

• our inability to market our products and services in a cost-effective manner to new customers;

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• the inability of our customers to differentiate our products and services from those of our competitors or our inability to effectively communicate such distinctions;

• our inability to successfully communicate to businesses the benefits of our products and services;

• our inability to expand our sales to existing customers;

• our inability to penetrate international markets;

• our inability to strengthen awareness to our brand; and

• reliability, quality or compatibility problems with our products and services.

A substantial amount of our past revenue growth was derived from purchases of additional interconnection and colocation products and services by existing customers. Our costs associated with increasing revenue from existing customers are generally lower than costs associated with generating revenue from new customers. Therefore, a reduction in the rate of revenue increase from our existing customers, even if offset by an increase in revenue from new customers, could reduce our operating margins.

Any failure by us to continue attracting new customers or grow our revenue from existing customers could have a material adverse effect on our operating results.

Our brand is not as well known as that of some of our competitors. Failure to develop and maintain brand recognition could harm our ability to compete effectively.

Many of our competitors are large companies that promote their brands with significantly larger budgets than we have for brand promotion. If we fail to develop and maintain brand recognition through sales and marketing efforts and a reputation for high quality service, we may be unable to attract new customers and risk losing existing customers to competitors with better known brands.

We have significant debt obligations which include restrictive covenants that limit our flexibility to manage our business; failure to comply with these covenants could trigger an acceleration of our outstanding indebtedness.

As of September 30, 2010, outstanding indebtedness under our senior secured credit facility totaled approximately $150 million. Our senior secured credit facility requires that we maintain specific financial ratios and comply with covenants, including various financial covenants, which contain numerous restrictions on our ability to incur additional debt, pay dividends or make other restricted payments, sell assets, enter into affiliate transactions and take other actions. Furthermore, our existing financial arrangements are, and future financing arrangements are likely to be, secured by all of our assets. If we are unable to meet the terms of the financial covenants or if we breach any of these covenants, a default could result under one or more of these agreements. A default, if not waived by our lenders, could result in the acceleration of outstanding indebtedness and cause our debt to become immediately due and payable.

If we are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, we will have to refinance such obligations, or otherwise we will not be able to repay our debt. If new financing is made available, its terms may not be favorable to us and our business may be adversely affected.

We could incur substantial costs as a result of violations of or liabilities under environmental laws.

We are subject to various environmental and health and safety laws and regulations, including those relating to the generation, storage, handling and disposal of hazardous substances and wastes. Certain of these laws and regulations impose liability, without regard to fault or the lawfulness of the disposal activity, for the entire cost of the investigation and cleanup of contaminated sites on current and former owners and operators of real property and persons who have disposed of or released hazardous substances at any location. Our facilities contain tanks for the storage of diesel fuel and significant quantities of lead acid batteries to provide back-up power. Any leak or spill of

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hazardous materials could result in interruptions to our operations and expenditures that could have a material adverse effect on our business, financial condition and results of operations. Moreover, hazardous substances or regulated materials of which we are not aware may be present at facilities we operate and lease. To the extent any such contaminants are discovered at our facilities, we may be responsible under applicable laws, regulations or leases for any required removal or cleanup at substantial cost. In addition, non-compliance with or liabilities under existing environmental or health and safety laws and regulations, or the adoption of more stringent requirements in the future, could result in fines, penalties, third-party claims and other costs that could be material.

We may require additional capital and may not be able to secure additional financing on favorable terms to meet our future capital needs, which could adversely affect our financial position and result in stockholder dilution.

We may need to raise additional funds through equity or debt financings in the future in order to meet our operating and capital needs. We may not be able to secure additional debt or equity financing on favorable terms, or at all, at the time when we need such funding. If we are unable to raise additional funds, we may not be able to pursue our growth strategy and our business could suffer. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock. In addition, any debt financing that we may obtain in the future could have restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Terrorist activity throughout the world could adversely impact our business, particularly in regards to our operations located in New York City.

The continued threat of terrorist activity may increase our costs due to the need to provide enhanced security, which would have a material adverse effect on our business and results of operations. These circumstances may also adversely affect our ability to attract and retain customers, our ability to raise capital and the operation and maintenance of our facilities. We may not have adequate property and liability insurance to cover catastrophic events or attacks brought on by terrorist activity. In addition, we depend heavily on the physical infrastructure, particularly as it relates to power, that exists in the markets in which we operate. Any damage to such infrastructure in these markets, and particularly in New York City, a market where we operate that is likely to be more prone to terrorist activity as a principal financial and technology center of the United States, may materially and adversely affect our business.

We may expand internationally and operate in foreign markets, which would expose us to risks associated with international sales and operations.

We may expand our customer base internationally and operate in foreign markets. In the past, we have not had operations in foreign jurisdictions. Managing a global organization is difficult, time consuming, and expensive. Our inexperience in operating our business globally increases the risk that any potential future international expansion efforts that we may undertake will not be successful. In addition, conducting international operations subjects us to new risks that we have not generally faced. These risks include:

• localization of our products and services, including translation into foreign languages and adaptation for local practices and regulatory requirements;

• lack of familiarity with and unexpected changes in foreign regulatory requirements;

• longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

• difficulties in managing and staffing international operations;

• fluctuations in currency exchange rates;

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• potentially adverse tax consequences, including the complexities of transfer pricing, foreign value added tax systems, and restrictions on the repatriation of earnings;

• dependence on certain third parties, including channel partners with whom we do not have extensive experience;

• the burdens of complying with a wide variety of foreign laws and legal standards;

• increased financial accounting and reporting burdens and complexities;

• political, social, and economic instability abroad, terrorist attacks and security concerns in general; and

• reduced or varied protection for intellectual property rights in some countries.

Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.

We may be vulnerable to security breaches which could disrupt our operations and have a material adverse effect on our financial performance and operating results.

A party who is able to compromise the security of our facilities could misappropriate either our proprietary information or the personal information of our customers, or cause interruptions or malfunctions in our operations. We may be required to expend significant capital and financial resources to protect against such threats or to alleviate problems caused by breaches in security. As techniques used to breach security change frequently, and are generally not recognized until launched against a target, we may not be able to implement security measures in a timely manner or, if and when implemented, these measures could be circumvented. Any breaches that may occur could expose us to increased risk of lawsuits, loss of existing or potential customers, harm to our reputation and increases in our security costs, which could have a material adverse effect on our financial performance and operating results.

Industry consolidation may have a negative impact on our business.

The telecommunications industry is currently undergoing consolidation. As our customers consolidate, there may be fewer communications service providers available in our facilities and, with less network density in our facilities, our network neutral interconnection and colocation products and services may become less attractive to our customers. Further, our customers may require fewer interconnection and colocation products and services as they combine businesses. In addition, consolidation of our competitors may provide them with greater efficiencies of scale than we are able to manage, placing us at a competitive disadvantage. For example, two of our significant competitors and customers, Equinix, Inc. and Switch & Data Facilities Company, Inc., recently merged. Given the competitive and evolving nature of this industry, further consolidation of our customers and competitors may present a risk to our network neutral business model and have a material adverse effect on our revenues and results of operations.

Changes in technology could adversely affect our business.

The markets for the products and services we offer are characterized by rapidly changing technology, evolving industry standards, frequent new service introductions, shifting distribution channels and changing customer demands. We may not be able to adequately adapt our products and services or acquire new products and services that can compete successfully. We risk losing customers to our competitors if we are unable to adapt to this rapidly evolving marketplace. Furthermore, advances in technology, such as ethernet exchange products, may limit the need for, or displace the revenue that we receive from, other, more profitable, products, such as physical interconnections or may shift business away from us to our competitors.

In addition, our large communications service provider customers that may be colocated at our facilities and our competitors’ facilities may, for reasons that are beyond our control, decide to upgrade the equipment in our

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competitors’ facilities but not at our facilities. This could lead to the phasing out of our facilities as a marketplace for communications services, making our products and services less desirable for our customers. Such an occurrence would adversely affect our financial condition, our ability to retain existing customers and our ability to attract new customers.

The forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, we cannot assure you our business will grow at similar rates, or at all.

Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates which may not prove to be accurate. Forecasts relating to the expected growth in the global interconnection and colocation market, datacenter supply and demand, consumer and business Internet traffic, the Ethernet market, Internet video applications, the cloud computing market and the proximity hosting and low latency networking market may prove to be inaccurate. Even if these markets were to experience the forecasted growth, we may not grow our businesses at similar rates, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts included in this prospectus should not be taken as indicative of our future growth.

Risks Related to the Offering and Share Ownership

Our costs will increase significantly as a result of operating as a public company, and our management will be required to devote substantial time to complying with public company regulations.

We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, or the SEC, and The Nasdaq Global Market have imposed various requirements on public companies, including requiring changes in corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to comply with these rules and regulations. Moreover, these rules and regulations relating to public companies will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these new rules and regulations to make it more difficult and more expensive for us to obtain and maintain director and officer liability insurance. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain and periodically evaluate our internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit function, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to satisfy SEC rules and the ongoing requirements of Section 404. If our finance and accounting organization is unable for any reason to respond adequately to the increased demands that will result from being a public company, the quality and timeliness of our financial reporting may suffer and we could experience internal control weaknesses. Any consequences resulting from inaccuracies or delays in our reported financial statements could have an adverse effect on the trading price of our common stock as well as an adverse effect on our business, operating results and financial condition.

Failure to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.

As a public company, we will have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that

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requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our financial statements and harm our operating results. In addition, we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our auditors have issued an attestation report on effectiveness of our internal controls. As described above, in connection with prior audits of our consolidated financial statements for certain prior periods, our independent registered public accounting firm identified several significant deficiencies and material weaknesses. In the future, we may discover additional deficiencies, which we may not be able to remediate in time to meet our deadline for compliance with Section 404. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent auditors may not issue a favorable assessment. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or their effect on our operations. If either we are unable to conclude that we have effective internal control over financial reporting or our independent auditors are unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

There is no existing market for our common stock, and you cannot be certain that an active trading market or a specific share price will be established.

Prior to this offering, there has been no public market for shares of our common stock. We have applied to list our common stock on The Nasdaq Global Market. We cannot predict the extent to which investor interest in our company will lead to the development of a trading market on The Nasdaq Global Market or otherwise or how liquid that market might become. The initial public offering price for the shares of our common stock will be determined by negotiations between us and the underwriters, and may not be indicative of the price that will prevail in the trading market following this offering. The market price for our common stock may decline below the initial public offering price, and our stock price is likely to be volatile.

If our stock price fluctuates after this offering, you could lose a significant part of your investment.

The market price of our stock may be influenced by many factors, some of which are beyond our control, including those described above under “Risks Related to Our Business and Industry” and the following:

• the failure of securities analysts to publish research about us after this offering or to make changes in their financial estimates;

• announcements by us or our competitors of significant contracts, productions, acquisitions or capital commitments;

• variations in quarterly operating results;

• general economic conditions;

• terrorist acts;

• future sales of our common stock; and

• investor perception of us and the telecommunications industry.

As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial offering price. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.

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A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. If there are substantial sales of our common stock, the price of our common stock could decline.

The price of our common stock could decline if there are substantial sales of our common stock in the public stock market after this offering. After this offering, we will have              shares of common stock outstanding. This includes              shares being sold in this offering, all of which may be resold in the public market immediately following this offering. The remaining              shares, or approximately     % of our outstanding shares after this offering, including              owned by the GI Partners Funds, are currently restricted as a result of securities laws or lock-up agreements but will be able to be sold in the near future as set forth below:

Number of shares and percentage of total outstanding*	Date available for sale into public market
shares, or     %	Immediately after this offering.
shares, or     %	Generally, 180 days after the date of this prospectus due to lock-up agreements between certain of the holders of these shares and the underwriters or to contractual arrangements between the other holders of these shares and us, subject to a potential extension under certain circumstances.
shares, or     %	At various dates more than 180 days after the date of this prospectus.

* Number of shares does not include shares issuable pursuant to the exercise of options.

After this offering and the expiration of the lock-up period, the holders of an aggregate of shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the issuance of all shares of common stock that we have issued and may issue under our option plans. Once we register the issuance of these shares, subject to lock-up restrictions, they can be freely sold in the public market upon issuance. Furthermore, Goldman, Sachs & Co. and Deutsche Bank Securities Inc. may, at their discretion and at any time without notice, release all or any portion of the securities subject to lock-up agreements with the underwriters. Due to these factors, sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Investors in this offering will suffer immediate and substantial dilution.

The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our outstanding common stock immediately after this offering. Therefore, if you purchase our common stock in this offering, you will incur an immediate dilution of $             in net tangible book value per share from the price you paid. In addition, following this offering, purchasers in the offering will have contributed     % of the total consideration paid by our stockholders to purchase shares of common stock in exchange for acquiring approximately         % of our total outstanding shares of common stock as of                     , 2010, after giving effect to this offering. The exercise of outstanding options and an outstanding warrant will result in further dilution. For a further description of the dilution that you will experience immediately after this offering, see the section entitled “Dilution.”

The issuance of additional stock in connection with acquisitions, our stock incentive plans or otherwise will dilute all other stockholdings.

After this offering, we will have an aggregate of              shares of common stock authorized but unissued and not reserved for issuance under our equity incentive plans or otherwise. We may issue all of these shares without any action or approval by our stockholders. We intend to continue to actively pursue strategic acquisitions. We may pay for such acquisitions, partly or in full, through the issuance of additional equity. Any issuance of shares in connection with our acquisitions, the exercise of stock options or otherwise would dilute the percentage ownership held by the investors who purchase our shares in this offering.

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Your ability to influence corporate matters may be limited because a small number of stockholders beneficially own a substantial amount of our common stock and will continue to have substantial control over us after the offering.

Upon completion of this offering, the GI Partners Funds will beneficially own approximately             % of our common stock. As a result, these stockholders will be able to exert significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or its assets, and may have interests that are different from yours and may vote in a way with which you disagree and which may be adverse to your interests. In addition, this concentration of ownership may have the effect of preventing, discouraging or deferring a change of control, which could depress the market price of our common stock. For information regarding ownership of our outstanding stock by the GI Partners Funds, see the section entitled “Principal and Selling Stockholders.”

Our authorized but unissued common stock and preferred stock may prevent a change in our control.

Upon the consummation of this offering, our amended and restated certificate of incorporation will authorize us to issue additional authorized but unissued shares of our common stock or preferred stock. In addition, our board of directors may classify or reclassify any unissued shares of our preferred stock and may set the preferences, rights and other terms of the classified or reclassified shares. As a result, our board may establish a series of preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion to use our net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management may not apply our net proceeds from this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering primarily for capital expenditures, for working capital and for other general corporate purposes. In addition, we may also use a portion of the remaining net proceeds to acquire or invest in businesses, products, services or technologies complementary to our current business, through mergers, acquisitions, joint ventures or otherwise. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.

Anti-takeover provisions in our organizational documents could delay a change in management and limit our share price.

Upon the consummation of this offering, certain provisions of our amended and restated certificate of incorporation and amended and restated by-laws could make it more difficult for a third party to acquire control of us even if such a change in control would increase the value of our common stock and limit the ability of our stockholders to replace or remove our current board of directors.

We will have a number of anti-takeover devices in place that will hinder takeover attempts and could reduce the market value of our common stock or prevent sale at a premium. Our anti-takeover provisions will include:

• a staggered, or classified, board of directors;

• removal of directors, only for cause, by a supermajority of the voting power of stockholders entitled to vote;

• blank-check preferred stock, the preference, rights and other terms of which may be set by the board of directors and could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise benefit our stockholders;

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• a provision denying stockholders the ability to act by written consent from and after the date upon which GI Partners ceases to beneficially own at least 50% of the outstanding shares of our common stock;

• a provision denying stockholders the ability to call special meetings;

• Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, which restricts certain business combinations with interested stockholders in certain situations will apply from and after the time at which GI Partners and its affiliates cease to beneficially own at least 5% of the outstanding shares of our common stock; and

• advance notice requirements for stockholder proposals and nominations.

After the completion of this offering, we do not expect to declare any dividends in the foreseeable future.

After the completion of this offering, we do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. In addition, our existing credit facilities prohibit us from paying cash dividends, and any future financing agreements may prohibit us from paying any type of dividends. Consequently, investors may need to sell all or part of their holdings of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

Risks Related to Tax Matters

Our ability to use net operating loss carryforwards to reduce future tax payments may be limited if we experience a change in ownership, or if taxable income does not reach sufficient levels.

Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.

We experienced ownership changes in 2003 and 2006 that triggered the limitations of Section 382 of the Code on our net operating loss carryforwards. We may also experience ownership changes in the future as a result of this initial public offering and subsequent shifts in our stock ownership. As a result, we are limited with respect to net operating loss carryforwards accrued prior to 2006 and may be further limited in the portion of net operating loss carryforwards that we can use in the future to offset taxable income for U.S. Federal income tax purposes.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. Forward-looking statements convey our current expectations or forecasts of future events. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans, use of the net proceeds of this offering, and our objectives for future operations, are forward-looking. You can identify forward-looking statements by terminology such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” “can,” “continue,” or “may,” or the negative of these terms or other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements in this prospectus may include statements about:

• our financial outlook and the financial outlook of Internet dependent businesses, including telecommunications carriers, Internet service providers, online content providers and enterprises;

• our ability to remediate any material weaknesses in our internal control over financial reporting and our ability to maintain proper and effective internal controls;

• our ability to compete successfully with our competitors;

• our use of our proceeds from this offering;

• our cash needs;

• implementation of our corporate strategy;

• our financial performance;

• our ability to leverage our network densities;

• our ability to grow in our markets and expand the capacity in our facilities to meet the increasing needs of our existing customers and to serve new customers;

• the availability and cost of sufficient electrical power and cooling capacity in our facilities;

• our ability to pursue and successfully integrate acquisitions;

• our ability to strengthen existing customer relationships and reach new customers;

• our ability to develop relationships with customers in emerging, bandwidth-intensive segments and to develop new sales channels;

• our ability to offer a mix of products and services that will develop and maintain a diverse customer base;

• our ability to design and architect facilities which proactively address the evolving needs of our customers;

• our ability to meet the service levels required by our service level agreements with our customers;

• future regulatory, judicial and legislative changes in our industry;

• the growth in Internet traffic;

• the supply of network neutral interconnection and colocation capacity;

• the adoption of advanced networking technology;

• the adoption and usage of bandwidth-intensive services;

• the growing awareness of business continuity and disaster recovery planning; and

• the effect of industry consolidation on our business.

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There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss in this prospectus under the caption “Risk Factors.” You should read these factors and the other cautionary statements made in this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This prospectus also contains statistical data and estimates, including those relating to market size and growth rates of the markets in which we participate, that we obtained from industry publications and reports generated by Tier1 Research, Cisco, Gartner, The Insight Research Corporation, Vertical Systems Group and Nemertes Research. These publications include forward-looking statements made by the authors of such reports. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions. Actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We have not independently verified any third-party information and cannot assure you of its accuracy or completeness.

You should rely only on the information contained in this prospectus. We and the selling stockholders have not authorized anyone to provide information different from that contained in this prospectus. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

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USE OF PROCEEDS

We estimate that our net proceeds from the sale of the shares of common stock by us will be approximately $             million, assuming an initial public offering price of $             per share, the mid-point of the range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, the net proceeds to us will be approximately $             million. We will not receive any of the proceeds from the sale of shares by the selling stockholders. Assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus, a $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) the net proceeds to us from this offering by $             million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use our net proceeds for capital expenditures, working capital and other general corporate purposes. In addition, we may also use a portion of the net proceeds to finance growth through the acquisition of, or investment into, businesses, products, services or technologies complementary to our current business, through mergers, acquisitions, joint ventures or otherwise. However, we have no agreements or commitments for any specific acquisitions at this time. Pursuant to a management agreement, as amended, with the manager of the GI Partners Funds, or GI Manager, GI Manager is entitled to 1.5% transaction closing fee on the gross proceeds in connection with this offering. Assuming that the gross proceeds to us from this offering are $100 million, GI Manager will be entitled to $1.5 million upon the consummation of this offering.

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DIVIDEND POLICY

Since our acquisition by the GI Partners Funds in 2006, we have not declared or paid any dividends. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business and do not anticipate paying cash dividends for the foreseeable future. Our existing credit facilities prohibit us from paying cash dividends, and any future financing agreements may prohibit us from paying any type of dividends. For more information about these restrictions, see “Description of Indebtedness.”

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CAPITALIZATION

The following table sets forth our consolidated capitalization as of September 30, 2010:

• on an actual basis;

• on a pro forma basis to give effect to the conversion of all outstanding shares of our preferred stock into                  shares of common stock immediately prior to the closing of this offering; and

• on a pro forma as adjusted basis to give effect to the sale of                  shares of common stock by us in this offering at an assumed initial public offering price of $             per share, the mid-point of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information set forth in the table below is illustrative only and will adjust based on the actual initial public offering price and other terms of the offering determined at pricing.

This table should be read with our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

	As of September 30, 2010 (Unaudited)
	Actual			Pro Forma	Pro Forma Adjusted
	(in thousands, except share data)
Cash and cash equivalents	$	35,463		$	$
Current capital lease and other financing obligations		1,780
Current portion of debt		1,500
Non-current capital lease and other financing obligations		4,419
Non-current debt		148,125
Stockholders’ equity:
Series A Preferred stock, $0.0001 par value; 2,300,000 shares authorized, 1,930,399 shares issued and outstanding, actual; no shares issued pro forma and pro forma as adjusted		—
Series B Preferred stock, $0.0001 par value; 253,223 shares authorized, 240,354 shares issued and outstanding, actual; no shares issued pro forma and pro forma as adjusted		—
Common stock, $0.0001 par value; 4,500,000 shares authorized, 706 shares issued and outstanding, actual; no shares outstanding, pro forma; shares issued and outstanding, pro forma as adjusted		—
Additional paid-in capital		206,084
Accumulated deficit		(82,181	)
Total stockholders’ equity		123,903
Total capitalization	$	279,727		$	$

Assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus, a $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital and total stockholders’ equity by $             million, would decrease (increase) long term debt, including current portion, by $             million and would increase (decrease) total capitalization by $             million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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The number of shares of our common stock set forth in the table above excludes:

• our issuance of up to              shares of common stock that the underwriters have the option to purchase from us;

• 112,085 shares issuable upon the exercise of options outstanding as of September 30, 2010, having a weighted average exercise price of $33.53 per share;

• 1,000 shares issuable upon the exercise of warrants outstanding as of September 30, 2010, having an exercise price of $40.00 per share (excluding warrants issued to a single party that no longer had any economic value); and

• 12,308 shares available for future grant under our equity incentive plan as of September 30, 2010.

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DILUTION

If you invest in our common stock your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after the completion this offering. We calculate net tangible book value per share by dividing our net tangible book value, which equals total assets less goodwill, net other intangible assets and total liabilities, by the number of common shares outstanding, including shares of common stock issued upon the conversion of all outstanding shares of our preferred stock upon the completion of this offering. The pro forma net tangible book value of our common stock as of September 30, 2010 (assuming conversion of our outstanding preferred stock given our enterprise value implied by the assumed initial public offering price per share set forth below) was approximately $             million, or $             per share, based upon              shares outstanding. After giving effect to the sale of shares             of common stock by us in this offering at an assumed initial public offering price of $             per share, the mid-point of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us, our pro forma net tangible book value as of September 30, 2010 would have been $             million, or $             per share. This represents an immediate increase in pro forma net tangible book value of $             per share to existing stockholders and an immediate dilution in net tangible book value of $             per share to investors purchasing shares of our common stock in this offering. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of September 30, 2010	$
Increase per pre-offering share in pro forma net tangible book value per share attributable to sale of common stock in this offering	$
Pro forma as adjusted net tangible book value per share after giving effect to this offering		$
Dilution of net tangible book value per share to new investors		$

Assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus, a $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) our net tangible book value by $             million or $             per share.

If the underwriters exercise their option to purchase additional shares of our common stock in full, the pro forma as adjusted net tangible book value per share after this offering would be $             per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $             per share.

The following table summarizes on a pro forma as adjusted basis as of September 30, 2010, after giving effect to the completion of this offering, the total cash consideration paid to us and the average price per share paid by existing stockholders for their common stock and by new investors purchasing common stock in this offering at an assumed initial public offering price of $             per share, before deducting estimated underwriting discounts and estimated expenses payable by us.

	Shares Issued				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%	$			%	$
New investors				%				%
Total			100	%	$		100	%

A $1.00 increase or decrease in the assumed initial public offering price of $             per share would increase or decrease, respectively, total consideration paid by new investors and total consideration paid by all stockholders by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

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If the underwriters exercise their option to purchase additional shares in full, our existing stockholders would own     % and our new investors would own     % of the total number of shares of our common stock outstanding after this offering.

Sales by selling stockholders in this offering will cause the number of shares held by existing stockholders to be reduced to             , or     % of the total number of shares of our common stock outstanding after this offering, and will increase the total number of shares held by new investors to             , or     % of the total number of shares of our common stock outstanding after this offering.

The foregoing discussion and tables are based upon the number of shares issued and outstanding on September 30, 2010, reflects a              for              stock split of our outstanding capital stock that was effected on                 , 2010, assumes the conversion of all outstanding shares of our preferred stock as of September 30, 2010 into              shares of common stock and assumes no exercise of options or warrants outstanding as of September 30, 2010. As of that date, there were:

• 112,085 shares issuable upon the exercise of options outstanding, having a weighted average exercise price of $33.53 per share; and

• 1,000 shares issuable upon the exercise of warrants outstanding, having an exercise price of $40.00 per share (excluding warrants issued to a single party that no longer had any economic value);

For a description of our equity incentive plans, see the section entitled “Management—Equity Incentive Plans.”

If all our outstanding options and warrants (excluding warrants without any economic value) had been exercised, the pro forma net tangible book value as of September 30, 2010 would have been $             million, or $             per share, and the pro forma net tangible book value after this offering would have been $             million, or $             per share, causing dilution to new investors of $             per share.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with the financial statements and the notes to those statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this prospectus. The selected consolidated financial data in this section are not intended to replace the financial statements and are qualified in their entirety by the consolidated financial statements and related notes thereto included elsewhere in this prospectus.

Our selected consolidated financial data as of and for the years ended December 31, 2009, 2008 and 2007 have been derived from our audited consolidated financial statements that are included elsewhere in this prospectus. Our selected consolidated financial data as of December 31, 2006 and for the three months ended December 31, 2006 have been derived from our audited consolidated financial statements that are not included elsewhere in this prospectus. Our selected consolidated financial data as of and for the year ended December 31, 2005 and for the nine months ended October 3, 2006 have been derived from our audited consolidated financial statements of our predecessor that are not included in this prospectus. Our selected consolidated financial data as of September 30, 2010 and for the nine months ended September 30, 2010 and 2009 have been derived from our unaudited financial statements.

	Successor(5)																		Predecessor(5)
	Nine Months Ended September 30,						Years Ended December 31,									Three Months Ended December 31, 2006			Nine  Months Ended October 3, 2006			Year Ended December 31, 2005
	2010			2009			2009			2008			2007(6)
	(in thousands, except share and per share data)
	(unaudited)
Statement of Operations Data:(1)(2)(3)(4)
Revenues	$	94,683		$	70,606		$	98,335		$	70,038		$	50,762		$	7,963		$	22,248		$	24,081
Operating expenses		81,794			74,417			99,937			93,332			78,063			15,098			18,569			18,683
Operating income (loss)		12,889			(3,811	)		(1,602	)		(23,294	)		(27,301	)		(7,135	)		3,679			5,398
Interest income		189			262			374			396			612			104			205			548
Interest expense		(9,516	)		(5,031	)		(7,221	)		(7,380	)		(9,769	)		(2,357	)		(11,374	)		(7,338	)
Other income (expense)		12			(46	)		(12	)		(330	)		(739	)		(1,098	)		(12,974	)		(2,031	)
Income (loss) from continuing operations		3,574			(8,626	)		(8,461	)		(30,608	)		(37,197	)		(10,486	)		(20,464	)		(3,423	)
Noncontrolling interest in net income of consolidated partnership		—			—			—			—			—			—			98			152
Income tax benefit (expense)		(1,403	)		(1,486	)		(1,458	)		(772	)		811			3,819			—			—
Net income (loss)	$	2,171		$	(10,112	)	$	(9,919	)	$	(31,380	)	$	(36,386	)	$	(6,667	)	$	(20,366	)	$	(3,271	)
Less: preferred dividends		(19,935	)		(18,060	)		(24,452	)		(21,743	)		(17,676	)		(3,084	)		—			—
Net loss available to common stock holders	$	(17,764	)	$	(28,172	)	$	(34,371	)	$	(53,123	)	$	(54,062	)	$	(9,751	)	$	(20,366	)	$	(3,271	)
Net loss per common share:
Basic and diluted	$	(25,161	)	$	(57,260	)	$	(63,066	)	$	(290,290	)	$	(540,620	)	$	(97,510	)	$	(11	)	$	(2	)
Weighted average common shares outstanding:
Basic and diluted		706			492			545			183			100			100			1,898,763			1,865,013
(1)Includes stock-based compensation expense of:	$	1,402		$	868		$	1,179		$	919		$	379		$	1,981		$	1,292		$	507
(2)Includes depreciation and amortization expense of:	$	8,480		$	17,828		$	21,686		$	32,256		$	31,560		$	6,656		$	4,190		$	5,446
(3)Includes non-cash rent of:	$	7,941		$	5,702		$	7,953		$	6,720		$	5,373		$	492		$	268		$	457
(4)Includes non-cash compensation expense for executive loan forgiveness of:	$	414		$	—		$	—		$	—		$	—		$	—		$	—		$	—

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	Successor																					Predecessor
	September 30, 2010						As of December 31,															As of December 31, 2005
							2009			2008			2007			2006
							(in thousands)															(in thousands)
	(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	35,463					$	40,655		$	22,638		$	7,705		$	6,830					$	1,925
Total assets		343,074						303,422			280,302			277,685			242,204						59,066
Long-term obligations		193,125						151,400			125,754			115,737			8,557						58,276
Total stockholder's equity (deficit)		123,903						120,330			129,060			144,283			127,655						(6,900	)
	Successor(5)																		Predecessor(5)
	Nine Months Ended September 30,						Years Ended December 31,									Three Months Ended December 31, 2006			Nine Months Ended October 3, 2006			Year Ended December 31, 2005
	2010			2009			2009			2008			2007(6)
														(in thousands)
		(unaudited)
Statement of Cash Flow Data:
Cash flow from:
Operating activities	$	22,435		$	19,735		$	27,918		$	14,845		$	(4,717	)	$	1,003		$	2,721		$	5,246
Investing activities		(33,715	)		(22,979	)		(28,982	)		(14,502	)		(55,651	)		(958	)		(2,396	)		(905	)
Financing activities		6,088			10,211			19,081			14,590			61,243			5,768			(21	)		(4,094	)

(5) The financial data of the Predecessor is not comparable to the Successor periods due to a new basis of accounting as a result of purchase accounting from the October 2006 acquisition of us by the GI Partners Funds.

(6) The financial data for 2007 and subsequent periods reflects the operations of the March 2007 acquisition of certain net assets of NYC Connect, LLC, and the operations of the Digital Realty Trust leased facilities from December 2006.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Prospectus Summary—Summary Consolidated Financial Data,” “Selected Consolidated Financial Data” and our consolidated financial statements included elsewhere in this prospectus. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in the sections entitled “Risk Factors” and “Forward-Looking Statements” included elsewhere in this prospectus.

Overview

Telx is a leading provider of network neutral, global interconnection and colocation solutions in the United States. Our interconnection and colocation offerings enable customers to seamlessly connect to hundreds of diverse communications networks and other enterprises. Additionally, we provide a secure and reliable environment to house customers’ mission-critical equipment and time sensitive data. We believe that our 15 facilities, located in nine tier-1 markets, are some of the most strategically positioned datacenters in the United States. These facilities are located at the primary intersections of multiple, major international and domestic fiber routes where we believe Internet and private network traffic is most concentrated and interconnection demand is highest. We believe that our average of 38 physical interconnections per customer as of September 30, 2010 gives us greater physical interconnection density than our competitors. Over the last two years, we have grown our revenues from $50.8 million in 2007 to $98.3 million in 2009, representing a compound annual growth rate of 39%, and our net losses have decreased from $36.4 million to $9.9 million over the same period. For the nine months ended September 30, 2010, we had revenues of $94.7 million and net income of $2.2 million.

As a network neutral provider, we do not own or operate our own network, allowing us to act as an unbiased intermediary in providing the necessary interconnection products and related services that facilitate the exchange of communications network traffic between our customers. Customers within a Telx facility are able to connect to any other customer within the facility, including up to 300 communications service providers, depending on the facility. These interconnections effectively allow a customer to replace their existing and more expensive network alternatives. Through these interconnections, our facilities host diverse and densely populated ecosystems of communications service providers, enterprises, online media, video and content providers, and other entities. We view an ecosystem as a set of related businesses and organizations that use our facilities to exchange information with each other. For example, a financial ecosystem can consist of financial exchanges, financial clients and information exchanges that exchange large volumes of real-time financial market data. Our customers benefit from a wide choice of networks, reduced network costs, improved capital budget efficiency, improved performance and access to revenue opportunities with accelerated time to market.

Our customers rely on our offerings to support their mission-critical communication and information technology (IT) infrastructure needs. Our products and related services enable the exchange of increasing volumes of content and information from across the globe, creating a global connectivity marketplace to support and accelerate our customers’ business growth. With 844 customers and 31,655 total physical interconnections within our facilities as of September 30, 2010, our interconnection-centric model targets customers that value the interconnection density in our secure and reliable environments. We evaluate market leadership based on publicly available information for physical interconnections per customer and our experience in the industry. Based on this framework, we believe that our average of 38 physical interconnections per customer as of September 30, 2010 makes us a leading network neutral, global interconnection and colocation solutions provider in the United States. We believe that the interconnection density within our facilities can create a network effect that increases the value proposition of our products and related services. Because each additional customer added to a facility can connect to all of the other customers already in that facility, with the addition of each new customer, the potential number of interconnections in our facilities increases. We believe that this enhances our

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ability to both retain existing customers and attract new customers. Our 15 interconnection and colocation facilities are located in the New York Metropolitan area, the San Francisco Bay area, Los Angeles, Dallas, Chicago, Atlanta, Phoenix, Charlotte and Miami.

We believe that the growth in our revenues and customer base and the decrease in our net losses since 2007, combined with the improvement in public equity market conditions, provide us with the opportunity to access the public equity markets on terms more favorable than those previously available to us. We expect that as a public company, our visibility in the marketplace will increase, thereby enhancing our ability to attract new customers and further grow our business. Additionally, creating a public market for our common stock will facilitate future access to public equity markets and enhance our ability to use our common stock as a means of attracting and retaining key employees and as consideration for potential acquisitions or strategic transactions. As a public company we will seek attractive opportunities to grow our interconnection and colocation market share by growing our relationships with existing and new customers. To support these relationships we may selectively expand our footprint and introduce new related product and service offerings. Consistent with our historical expansion activities, our expansion criteria include several factors such as the demand from existing and new interconnection-centric customers, access to communications service providers, availability of sufficient space and power, amount of incremental investment required and expected return on capital invested. In addition, we intend to continuously develop our interconnection and colocation offerings and introduce new products and related services to meet our customers’ needs across multiple industry sectors including communications service providers, enterprises, online media, video and content providers, government agencies and cloud and SaaS providers. We are committed to our interconnection-centric business model because we believe it provides a differentiated value proposition to both our new and existing customers as compared to other colocation-centric providers. Furthermore, we believe our interconnection-centric model enables us to monetize our physical footprint and deploy our capital more efficiently as we can generate incremental revenue via additional interconnections without material consumption of additional space or power resources.

Material Weaknesses in Internal Control

While our independent registered public accounting firm did not identify any material weaknesses or significant deficiencies in our internal controls over financial reporting for the year ended December 31, 2009, we did not perform an assessment of our internal controls over financial reporting nor did our auditors perform an audit over our internal controls over financial reporting; we therefore cannot assure you that internal control issues will not arise in future periods. In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2008, our independent registered public accounting firm did not identify any material weaknesses but did identify two significant deficiencies in our internal controls relating to (i) an inadequate system of internal controls during 2008 for the timely reconciliations of bank accounts and physical inventories, and errors in recording fixed asset depreciation expense and installation revenues, and (ii) inadequate controls and procedures around access and security around programs and data, segregation of duties and operations in certain IT systems. A significant deficiency is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

During the audit of our consolidated statements as of and for the year ended December 31, 2007, our independent registered public accounting firm identified a deficiency that constituted a material weakness in our internal control over financial reporting. This material weakness related to an inadequate system of internal controls during the first half of 2007 (as we documented a comprehensive set of accounting policies and procedures and implemented certain controls in the second half of the year) and several control deficiencies related to inadequate controls and procedures around access and security around programs and data, segregation of duties, and operations in certain IT systems. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. See “Risk Factors—Risks Related to Our Business and Industry.”

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We have taken steps to remediate the material weaknesses that existed in 2007 and significant deficiencies that existed in 2008. In 2007, we documented, issued and implemented a set of accounting policies and procedures and implemented additional controls to establish an internal control environment and discipline that will continue to ensure the completeness and accuracy of accounting and reporting. We believe this manual includes procedures for all significant policies, business practices, and routine and non-routine procedures performed by each functional area. We plan to periodically review this manual and outlined policies and procedures and update as appropriate for emerging accounting issues. During 2008 and 2009, we also implemented remedial control procedures to address: (i) IT back-up and recovery, (ii) operating systems access, (iii) firewall protections, and (iv) control policies and procedures in certain transaction cycles. We have also implemented additional monitoring activities, as well as evaluated job responsibilities, in order to improve internal controls related to (i) our information security and access to non-financial reporting software applications, (ii) the ability to access and change the management controls, policies and procedures for our customer management and billing systems, and (iii) the initiation, authorization, review and transaction recording for certain transaction cycles and non-routine transaction processing. We plan to conduct further periodic reviews and evaluations of our IT control environment to ensure we prevent any control deficiencies. Additionally, as part of our on-going efforts to improve our financial accounting organization and processes, from 2007 to the present we have hired several senior and supporting accounting personnel, including a controller, assistant controller, director of technical accounting and three accounting clerks. We believe that the corrective actions described above will remediate the internal control weaknesses and deficiencies identified, however, there are no assurances that the measures we have taken to remediate these internal control weaknesses and deficiencies were completely effective or that similar weaknesses will not recur. We plan to continue to assess our internal controls and procedures and intend to take further action as necessary or appropriate to address any other matters we identify. Because of these prior material weaknesses and significant deficiencies, there is heightened risk that a material misstatement of our financial statements relating to the years ended as of December 31, 2007 and December 31, 2008, respectively, was not prevented or detected. While no material weaknesses were identified for the year ended December 31, 2009, we cannot assure you that these or other similar issues will not arise in future periods.

To date, the audits of our consolidated financial statements by our independent registered public accounting firm have included a consideration of internal control over financial reporting as a basis of designing their audit procedures, but not for the purpose of expressing an opinion on the effectiveness of our internal controls over financial reporting. If such an evaluation had been performed or when we are required to perform such an evaluation, additional material weaknesses and other control deficiencies may have been or may be identified. Ensuring that we have adequate internal financial and accounting controls and procedures in place to help produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be evaluated frequently. We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies relating to internal controls, which could materially adversely affect our operating results. If we fail to implement and maintain effective internal controls going forward, our ability to produce accurate and timely financial statements could be impaired, which could have a material adverse effect on our business, financial condition, results of operations and stock price.

Key Factors Affecting Our Results of Operations

Our operations and financial results are exposed to certain risks and uncertainties that may impact our financial condition and results of operations. See “Risk Factors” for further discussion of these risks.

Customer demand and industry trends.    We have benefited from strong growth in customer demand for our products and related services over the last several years. Our growth in the past has been aided by a limited supply of interconnection and colocation facilities in the markets we serve. An increase in the supply of interconnection and colocation facilities may result in an increased number of competitive offerings and reduce the overall demand for our products and related services, and therefore cause a decline in our revenues. The growth of customer demand for our products and related services has also been supported by many other factors,

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including the continuing increases in Internet traffic, enterprise datacenter outsourcing, network-based business application adoption, adoption of Ethernet technologies, growth in Internet video, demand for proximity hosting and low latency interconnection and the emergence of new internet-based computing technologies, such as cloud computing. Our future growth will depend in part on the continued prevalence of these industry trends. If, however, these trends slow or reverse, it would slow or reverse the pace of both our new customer acquisition and revenue growth.

Ability to expand into new facilities and markets.    To meet our customers’ increasing demand for our products and related services, we operated facilities consisting of 524,204 total gross square feet as of September 30, 2010. We have expanded our footprint through the addition of three new facilities and the expansion of our existing facilities over the past three years. Our future growth is dependent on our ability to identify new space within existing facilities, new facilities with attractive adjacencies to our primary interconnection and colocation facilities or new markets in which to build our facilities. If we cannot obtain adequate new space to meet the demand for our products and related services, our rate of growth will decline. Additionally, our future profit margins may be materially impacted, either positively or negatively, by the material conditions of the manner in which we expand into this new space. Material conditions that could impact our financial results include construction costs and lease costs, including lease incentives such as rent abatements and construction allowances.

Ability to align expansion with customer demand growth.    We build out the infrastructure in our facilities to accommodate anticipated future demand for our products and related services. While we attempt to minimize the amount of excess capacity in our facilities and the associated operating costs, we do consider the necessary lead times for these facility expansions, which require us to build ahead of actual customer demand and revenue growth. When we begin such build-outs, we typically do not have any guarantees regarding the scope or timing of this anticipated growth which exposes us to risks related to excess capacity and the associated negative impact to our profitability. Additionally, long lead times of build-out periods can expose us to periods of increased costs related to expansion before new revenue can be generated from expansion which depress our operating margins. While we make efforts to minimize this impact by negotiating lease incentives, there can be no guarantee that we will be successful and our results may be negatively impacted in future periods.

Energy costs.    We have been exposed to the recent increases in energy costs. See “—Quantitative and Qualitative Disclosures about Market Risk.” While most of our datacenters operate in regulated energy markets, power cost increases or decreases are possible. To the extent that there is an increase, we generally have the option to pass along such increase to our customers, but we may choose not to do so for a variety of commercial reasons. To the extent that we do not pass these costs along, or that we delay in passing them along, we will pay higher energy prices without incremental revenue, increasing our operating costs and depressing our margins. In addition, even if we do pass these power costs along, this will effectively increase the price for our products and related services, which could reduce overall demand. Conversely, to the extent that power costs decrease and such decease is not passed along to our customers, our costs will fall and consequently our profit margins will improve. Furthermore, if the cost reduction were to be passed to our customers, this could result in increased demand for our products and related services.

Type of customer and product sold.    A significant amount of our new customer growth in 2008 and 2009 resulted from further extension of our customer base beyond communications service provider customers. We believe that increasing enterprise adoption of datacenter outsourcing and network based business applications are key factors that make our products and related services attractive to a wide range of enterprises. However, should these factors change, a reduction in customer demand could occur and slow our revenue growth. In addition, a significant amount of our revenue growth and profit margin expansion is driven by increased utilization of our interconnection products by our existing customers relative to the colocation products they purchase. Whereas our colocation products consume both space and power, our interconnection products consume insignificant amounts of space and power, thereby providing higher operating margins and attractive return opportunities. As revenue from interconnection products increases compared to colocation revenue, our profitability should improve. However, if we sell fewer interconnection products and more colocation products, our profit margins will fall.

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Expanding and maintaining our talent base.    We rely heavily on knowledgeable and experienced employees to provide a high level of service on a continuous basis in a complex technology-driven environment. This requires us to hire and retain professionals, many of whom may have employment opportunities elsewhere. We may have to adjust salary levels in the future to remain competitive in the market for talent which may increase our cost structure and may depress our margins. As we expand, we will need to identify and attract additional suitably qualified employees to maintain our level of service in both our existing and future footprint.

Public company operating expenses.    As a public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs in order to comply with the Sarbanes-Oxley Act of 2002 and related rules implemented by the SEC and Nasdaq. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty.

Key Components of Our Results of Operations

Revenues

Our revenues consist of recurring and non-recurring revenues. We generate recurring revenue from our interconnection and colocation products. We generate non-recurring revenue from our installation and technical support services. Installation services are directly related to providing interconnection and colocation products. To review our revenue recognition policies for our recurring and non-recurring revenues, see “—Critical Accounting Policies and Estimates” below.

We use several primary metrics to analyze our revenues and measure our performance as set forth below.

	Nine Months Ended September 30, 2010			Year Ended December 31,
				2009			2008			2007
Number of customers		844			763			626			495
Number of physical interconnections		31,655			28,272			23,867			19,692
Cabinet equivalents billed		7,009			5,781			4,390			3,337
Utilization rate		72	%		67	%		60	%		63	%
Percentage of incremental revenue attributable to existing customers (1)		81	%		70	%		72	%		NA
Average monthly churn as a percentage of monthly recurring revenue (1)		0.7	%		0.6	%		0.8	%		NA

(1) Data not available for these metrics in 2007 due to database systems conversion.

Number of customers.    The amounts in the table above represent the number of customers as of the end of each period shown. The number of customers is a measure of our growth in our customer base year over year.

Number of physical interconnections (cross connects).    The amounts in the table above represent the total number of connections between our customers as of the end of each period shown. The number of physical interconnections is a measure of the connectivity density of our ecosystems. By increasing connection densities within our interconnection and colocation facilities, we are able to increase the utility of facilities for information exchange and enhance our value proposition to our customers. We target customers with significant requirements for information and bandwidth exchange with multiple counterparties. Each additional customer added to our facilities adds connectivity options and opportunities for themselves and all other customers in our ecosystems.

Cabinet equivalents billed.    The amounts in the table above represent the total cabinet equivalents billed as of the end of each period shown. Cabinet equivalents billed is an indication of how much space in our interconnection and colocation facilities is generating revenue. Our interconnection and colocation facilities have

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a certain amount of space and power that can be utilized to provide colocation services which includes cabinet and cage products. Each cabinet is estimated at 18 square feet. Our cage product, on the other hand, is sold in square foot increments to customers who typically want a more significant amount of space to store their equipment. Accordingly, cabinet equivalents billed is the sum of the number of cabinets occupied by customers plus the square footage of cage space occupied by customers divided by 18.

Utilization rate.    The amounts in the table represent the utilization rate as of the end of each period. The utilization rate represents the percentage of our interconnection and colocation facility sellable space that has been sold to customers. The number fluctuates due to increases in capacity (new interconnection and colocation facility expansion space), new sales, and the loss of customers. The utilization rate is calculated as a percentage, the numerator of which is the total square footage occupied by our customers and the denominator of which is equal to the total sellable square footage of our facilities (which takes into account power and cooling capacity limitations and excluding space occupied by our infrastructure and equipment). Power and cooling capacity are assessed to ensure that distributed power and cooling load requirements are not exceeded by power usage capabilities of the customers.

Percentage of incremental revenues attributable to existing customers.    The amounts in the table above represent the percentage of incremental revenues attributable to existing customers for each period. We measure the amount of incremental revenues in a given period that results from new customers to a Telx facility as compared to additional service to a customer with an existing presence in the Telx facility. We view this measure as important to our understanding of our customers’ organic growth requirements once present in a Telx ecosystem.

Average monthly churn as a percentage of monthly recurring revenues.    The amounts in the table above represent the average monthly churn for each period. Churn represents lost monthly recurring revenues (MRR) from existing customers during a given period due to either the loss of a customer or a reduction in services provided to existing customers. We define churn as lost recurring revenues during a current month divided by the total recurring revenues from the prior month. Our business is based on a recurring revenue model, therefore lost revenues in a period affect future periods.

Recurring Revenue

Our business is characterized by significant monthly recurring revenue streams and low churn rates. In each of 2009 and the first nine months of 2010, monthly recurring revenue represented 94% of total revenue and we had average monthly churn rates that approximated 0.6% and 0.7%, respectively. We generate recurring revenues from the following products.

Interconnection.    Our interconnection products include our cross connect (a physical interconnection), Internet exchange (connectivity facilitated through an Internet switching device), and other interconnection related products. Our cross connect products enable our customers to connect directly to any communications service provider, enterprise or other customer in our facilities. These products are typically provided for a recurring monthly fee per connection. Our Internet exchange products enable our customers to connect directly to our Internet exchange, which provides for public or private peering with other customers on an intermediary switch device. Our customers license connections to our Internet exchange for a recurring monthly fee, based on needed bandwidth. Our interconnection products are predominantly direct connections via physical interconnections. We also generate recurring revenues from providing customers with Internet access as an additional product offering, which is billed as a recurring monthly fee.

Colocation.    We generate recurring revenue from providing colocation space and power as further described below.

Colocation Space.    We provide colocation space for a recurring monthly fee for a cabinet or on a per square foot basis for cage space. Customers that license cage space typically use between 50 and 500 square feet in one of our facilities, and often license such space in multiple facilities. In 2009, 95% of our top 20 customers by revenue and 65% of our top 100 customers by revenue utilized our products and related services in multiple

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facilities. For the nine months ended September 30, 2010, 95% of our top 20 customers by revenue and 67% of our top 100 customers by revenue utilized our products and related services in multiple facilities. Customers sign a service order, governed by the terms and conditions of a master services agreement, with a typical term of one to three years.

Power.    We provide access to A/C or D/C power for a recurring monthly fee under our standard colocation contracts. Our customers pay for power on a per amp basis, typically in 20 to 30 amp increments.

Our inventory of sellable colocation space within each interconnection and colocation facility is limited by the space equipped by our existing power and cooling infrastructure, as well as customer requirements for power and cooling. Power and cooling requirements at each facility continue to grow on a per cabinet or square foot basis as the speed and power of computing equipment continues to increase relative to its physical footprint. We carefully monitor the power and cooling usage in each of our interconnection and colocation facilities and continue to invest in our power and cooling infrastructure to maximize the amount of utilizable space in our interconnection and colocation facilities.

Non-recurring Revenue

We generate non-recurring revenue from the services described below.

Installation Services.    We provide installation services to assist our customers in accessing our interconnection and colocation services. We receive one-time installation fees determined by the complexity of the installation. Colocation installation fees are typically billed per cabinet or square foot of cage space installed and per amp of power installed. Colocation installation fees are billed at the time of the installation and are recognized as non-recurring revenue on a straight-line basis over the estimated life of the customer relationship. Interconnection installation fees are typically in the form of port services which are typically sold on one or multi-year terms and recognized over the estimated life of the customer relationship or as cross connect services which are provided on a month-to-month basis and recognized in the period the installation is provided and complete. The earnings process from cross connect installation is culminated in the month the installation is complete.

Technical Support Services.    Technical support services are provided by our technicians, who are available 24 hours per day, 365 days per year. These services include system reboots, hardware and software troubleshooting, circuit, loop and fiber troubleshooting, equipment installation and provisioning and infrastructure installations. We generally charge customers for these services for a minimum of one hour and thereafter in 15 minute increments.

The following table presents our revenues and percentage of revenues for the periods presented.

	Nine Months Ended September 30,								Year Ended December 31,
	2010				2009				2009				2008				2007
	($ in Thousands)
	(unaudited)
Revenue
Colocation		55,193	58	%		42,431	60	%	$	58,675	60	%	$	44,215	63	%	$	30,761	61	%
Interconnection		34,104	36	%		23,685	34	%		33,304	34	%		23,077	33	%		15,281	30	%
Recurring Total		89,294	94	%		66,116	94	%		91,979	94	%		67,292	96	%		46,042	91	%
Non Recurring		5,389	6	%		4,490	6	%		6,356	6	%		2,746	4	%		4,720	9	%
Total	$	94,683	100	%	$	70,606	100	%	$	98,335	100	%	$	70,038	100	%	$	50,762	100	%

Costs and Operating Expenses

Our cost structure includes expenses which are highly predictable, such as rent expense and personnel expenses, and variable costs, such as electricity expenses for which we generally have the ability to pass on cost increases to our customers.

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Cost of Revenues.    Cost of revenues is comprised primarily of colocation costs for our interconnection and colocation facilities including rent expense and other lease costs, and real estate taxes. It also includes utilities, labor and materials, depreciation and amortization of fixed assets, repairs and maintenance, wholesale network and telecommunication services that support our customers, and security. Labor includes the cost of personnel who perform the installations and technical support services including both external contractors and internal technicians. Internal labor costs also include non-cash stock-based compensation expenses related to internal technicians. The largest components of our cost of revenues, such as rent and compensation expense, are mostly fixed in nature and do not vary significantly from period to period. However, certain components of our cost of revenues, such as utilities, are variable in nature and are directly related to the growth of our revenues. We expect our utilities expenses to increase in the future on a per unit basis due to increases in rates from our utility providers and increased power usage by our customers. Further, we experience seasonality in our utilities expenses based on temperatures and seasonal rate adjustments, which causes the amount of these expenses to fluctuate during the year. In connection with our expansion into new facilities, we typically incur lease, utilities, and labor related expenses prior to being able to accept customers for, and generate revenue from, new interconnection and colocation facilities. As we expand our interconnection and colocation facilities, we expect cost of revenues to increase.

Sales and Marketing.    Sales and marketing expenses consist primarily of personnel related expenses for our sales and marketing employees, including wages, benefits, bonuses, commissions, non-cash stock-based compensation, and travel, in addition to the cost of marketing programs such as sales support, trade shows, corporate communications, promotional events, and advertising. Sales and marketing expense also includes bad debt expense and the amortization of customer relationship intangible assets related to the October 2006 acquisition of us by the GI Partners Funds and the March 2007 acquisition of customer relationships from NYC Connect, LLC. We expect our sales and marketing expenses to increase as we increase the headcount of our sales staff and increase our marketing and promotional efforts. This increase, however, will be offset by a reduction of amortization expense related to customer relationship intangible assets as they become fully amortized in the first quarter of 2010.

General and Administrative.    General and administrative expenses include personnel related expenses, corporate office rent, legal, accounting, and consulting expenses, insurance, taxes, phone and network expenses for our internal systems, office expenses and depreciation and amortization expenses related to our corporate fixed and intangibles assets. Personnel related expenses include wages, benefits, bonuses, non-cash stock-based compensation, as well as travel expenses for our corporate employees. We expect our general and administrative expenses to increase as we incur additional costs to support our growth, including higher personnel, legal, insurance, and financial reporting expenses. However, we expect general and administrative expenses to decrease as a percentage of revenues over time.

Results of Operations

The following is a more detailed discussion of our financial condition and results of operations for the periods presented. The quarter-to-quarter and year-to-year comparison of financial results is not necessarily indicative of future results.

The following table presents our historical costs and operating expenses as a percentage of revenues for the periods indicated.

	Nine Months Ended September 30,						Year Ended December 31,
	2010			2009			2009			2008			2007
Revenues		100	%		100	%		100	%		100	%		100	%
Costs and operating expenses:
Cost of revenues		59	%		61	%		62	%		60	%		63	%
Sales and marketing		11	%		28	%		24	%		53	%		63	%
General and administrative		16	%		16	%		16	%		21	%		28	%
Total costs and operating expenses		86	%		105	%		102	%		133	%		154	%
Income (loss) from operations		14	%		(5	%)		(2	%)		(33	%)		(54	%)

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Nine Months Ended September 30, 2010 Compared to the Nine Months Ended September 30, 2009

Revenues

	For the Nine Months ended September 30,				$ Change		% Change
	2010		2009
	($ in thousands)
Revenues	$	94,683	$	70,606	$	24,077		34	%

Revenues increased by $24.1 million, or 34%, to $94.7 million for the nine months ended September 30, 2010 compared to $70.6 million for the nine months ended September 30, 2009. Recurring revenues increased by $23.2 million from the sale of our products and services to new and existing customers. The increase in recurring revenues consisted of $12.8 million of colocation revenues and $10.4 million of interconnection revenues. The increase in revenues reflected an increase in the number of customers as well as higher average revenue per customer, driven in part by (i) facilities expansions, which created additional capacity available for sale, and (ii) increasing interconnection growth between new and existing customers. Existing customers continue to drive revenue growth and comprised 81% of incremental revenues for the nine months ended September 30, 2010. This percentage of incremental revenues was higher when compared to 79% for the nine months ended September 30, 2009. Cabinet equivalents billed increased 30% to 7,009 at September 30, 2010 compared to 5,409 at September 30, 2009. The number of cross connects was 31,655 at September 30, 2010, which reflects a 17% increase over September 30, 2009 cross connects of 27,000. Non-recurring revenues increased by $0.9 million primarily related to interconnection installations and technical support services as a result of the increase in customer installations and support services for an increased customer base.

Cost of Revenues

	For the Nine Months ended September 30,						$ Change		% Change
	2010			2009
	($ in thousands)
Cost of revenues	$	56,360		$	43,313		$	13,047		30	%
as a percentage of revenue		59	%		61	%

Cost of revenues increased by $13.0 million, or 30%, to $56.4 million for the nine months ended September 30, 2010 compared to $43.3 million for the nine months ended September 30, 2009. Total rent expense increased $5.0 million primarily due to the expansion of space in several of our facilities. Utilities increased $2.9 million due to the addition of new customers, additional usage by our existing customers, and rate increases. Due to the growth of our customer base and the expansion of our facilities, labor and materials increased by $2.1 million. Depreciation and amortization of fixed assets increased $2.5 million due to expansion of our colocation and interconnection facilities and other miscellaneous costs increased by $0.5 million. We anticipate our cost of revenues will increase in absolute dollars as we continue our expansion efforts.

Sales and Marketing

	For the Nine Months ended September 30,						$ Change			% Change
	2010			2009
	($ in thousands)
Sales and marketing	$	10,189		$	19,595		$	(9,406	)		(48	)%
as a percentage of revenue		11	%		28	%

Sales and marketing expenses decreased by $9.4 million, or 48%, to $10.2 million for the nine months ended September 30, 2010 compared to $19.6 million for the nine months ended September 30, 2009. The decrease was

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attributable to the reduction of amortization expense related to our customer relationship intangible assets of $12.2 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009. Excluding the amortization of intangible assets, sales and marketing expenses increased $2.8 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 and were 10% and 10% of revenue for the nine months ended September 30, 2010 and 2009, respectively. This $2.8 million increase was primarily the result of increased personnel related expenses of $2.1 million resulting from an increase in headcount and commissions, an increase of $0.2 million in advertising and an increase of $0.4 million in miscellaneous marketing costs. We expect sales and marketing expenses to increase consistent with revenue growth as we continue to invest in sales distribution and marketing to achieve that growth.

General and Administrative

	For the Nine Months ended September 30,						$ Change		% Change
	2010			2009
	($ in thousands)
General and administrative	$	15,245		$	11,509		$	3,736		32	%
as a percentage of revenue		16	%		16	%

General and administrative expenses increased by $3.7 million, or 32%, to $15.2 million for the nine months ended September 30, 2010 compared to $11.5 million for the nine months ended September 30, 2009. The increase was attributed to an increase in personnel related expenses of $1.7 million resulting from an increase in headcount, an increase in professional fees of $1.2 million related to consulting and recruiting fees and an increase of $0.9 million in other general and administrative expenses. We expect general and administrative expenses to increase as we add corporate support resources for our expansion efforts.

Interest Expense, Net

	For the Nine Months ended September 30,				$ Change		% Change
	2010		2009
	($ in thousands)
Interest expense, net	$	9,327	$	4,769	$	4,558		96	%

Interest expense, net increased by $4.6 million, or 96%, to $9.3 million for the nine months ended September 30, 2010 compared to $4.8 million for the nine months ended September 30, 2009. The increase was primarily due to an increase in interest expense of $2.7 million related to our $150 million term loan financing in June 2010 and our $10 million term loan financing in October 2009, a mark to market adjustment of $0.4 million related to our interest rate swap agreement and an increase of $1.4 million for the amortization of fees associated with the debt financing in June 2010.

Provision for Income Taxes

	For the Nine Months ended September 30,				$ Change			% Change
	2010		2009
	($ in thousands)
Provision for income taxes	$	1,403	$	1,486	$	(83	)		(6	)%

For the nine months ended September 30, 2010, we recorded deferred and current income tax expense of $0.9 million and $0.5 million, respectively, compared to $1.0 million and $0.5 million, respectively, for the nine months ended September 30, 2009. The deferred tax expense for the nine months ended September 30, 2010 of

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$0.9 million was primarily due to amortization of goodwill associated with our acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against our deferred tax assets under U.S. generally accepted accounting principles, or GAAP. The $0.5 million current tax expense for the nine months ended September 30, 2010 was due primarily to federal alternative minimum tax and California franchise tax which could not be offset by net operating losses.

The deferred tax expense of $1.0 million for the nine months ended September 30, 2009 was primarily due to amortization of goodwill associated with our acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against our deferred tax assets under GAAP. The $0.5 million current tax expense for the nine months ended September 30, 2009 was due primarily to federal alternative minimum tax and California franchise tax which could not be offset by net operating losses.

Net Income (Loss)

	For the Nine Months ended September 30,					$ Change		% Change
	2010		2009
	($ in thousands)
Net income (loss)	$	2,171	$	(10,112	)	$	12,283		121	%

Net income was $2.2 million for the nine months ended September 30, 2010 compared to a net loss of $10.1 million for the nine months ended September 30, 2009. The change in net income (loss) of $12.3 million, or 121%, was the result of a $16.7 million improvement in operating income resulting from an increase in revenue of $24.1 million and a decrease in sales and marketing expense of $9.4 million offset by an increase in general and administrative expenses of $3.7 million and an increase in cost of revenues of $13.0 million. Also, there was an increase of $4.6 million of interest expense.

Year Ended December 31, 2009 Compared to the Year Ended December 31, 2008

Revenues

	For the year ended December 31,				$ Change		% Change
	2009		2008
	($ in Thousands)
Revenues	$	98,335	$	70,038	$	28,297		40	%

Revenues increased by $28.3 million, or 40%, to $98.3 million for 2009 compared to $70.0 million for 2008. Recurring revenues increased by $24.7 million from the sale of our products and services to new and existing customers. The increase in recurring revenues consisted of $14.5 million of colocation revenues and $10.2 million of interconnection revenues. The increase in revenues reflected an increase in the number of customers as well as higher average revenue per customer, driven in part by (i) facilities expansions during 2008 and 2009 which created additional capacity available for sale, and (ii) increasing interconnection growth between new and existing customers. Existing customers continue to drive revenue growth and comprised 70% of incremental revenues in 2009 compared to 72% in 2008. Cabinet equivalents billed increased 32% to 5,781 at December 31, 2009 compared to 4,390 at December 31, 2008. The number of cross connects was 28,272 at December 31, 2009, which reflects an 18% increase over December 31, 2008 cross connects of 23,867. Non-recurring revenues increased by $3.6 million primarily related to interconnection installations and technical support services as a result of the increase in customer installations and support services for an increased customer base.

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Cost of Revenues

	For the year ended December 31,						$ Change		% Change
	2009			2008
	($ in Thousands)
Cost of Revenues	$	60,577		$	41,701		$	18,876		45	%
As a percentage of revenue		62	%		60	%

Cost of revenues increased by $18.9 million, or 45%, to $60.6 million for 2009 compared to $41.7 million for 2008. Total rent expense increased $8.4 million primarily due to the expansion of 21,910 square feet of space in our Los Angeles, Chicago and Phoenix markets in 2009, and the full year impact of the 2008 expansion of 85,974 square feet at our New York, New Jersey, Chicago, San Francisco, and Dallas facilities. Utilities increased $3.4 million due to the addition of new customers, additional usage by our existing customers, and rate increases. Due to the growth of our customer base and the expansion of our facilities, labor and materials increased by $2.3 million, repairs and maintenance increased $0.7 million, and cost related to interconnection services increased $0.4 million as we connected several of our facilities together in 2009. Depreciation and amortization of fixed assets increased $3.6 million to $5.5 million from $1.9 million, due to expansion of our colocation and interconnection facilities. We anticipate our cost of revenues will increase in absolute dollars as we continue our expansion efforts.

Sales and Marketing

	For the year ended December 31,						$ Change			% Change
	2009			2008
	($ in Thousands)
Sales and Marketing	$	23,753		$	36,826		$	(13,073	)		(35	)%
As a percentage of revenue		24	%		53	%

Sales and marketing expenses decreased by $13.1 million, or 35%, to $23.8 million for 2009 compared to $36.8 million for 2008. The decrease was attributable to the reduction of amortization expense related to our customer relationship intangible assets to $14.0 million in 2009 from $28.2 million in 2008, or a $14.2 million decrease, as certain of these intangible assets became fully amortized. Excluding the amortization of intangible assets, sales and marketing expenses increased $1.1 million in 2009 from 2008, and were 9.9% and 12.3% of revenue, respectively, for 2009 and 2008. This $1.1 million increase was mainly the result of increased personnel related expenses resulting from an increase in headcount. We expect sales and marketing expenses to increase consistent with revenue growth as we continue to invest in sales distribution and marketing to achieve that growth.

General and Administrative

	For the year ended December 31,						$ Change		% Change
	2009			2008
	($ in Thousands)
General and Administrative	$	15,607		$	14,805		$	802		5	%
As a percentage of revenue		16	%		21	%

General and administrative expenses increased by $0.8 million, or 5%, to $15.6 million for 2009 compared to $14.8 million for 2008. The increase was attributed to an increase in personnel related expenses of $1.2 million resulting from an increase in headcount, offset by a $0.4 million reduction in other general and administrative expenses. We expect general and administrative expenses to increase as we add corporate support resources for our expansion efforts.

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Interest Expense, Net

	For the year ended December 31,				$ Change			% Change
	2009		2008
	($ in Thousands)
Interest Expense, Net	$	6,847	$	6,984	$	(137	)		(2	)%

The decrease in interest expense, net was due to lower interest rates on the mortgages on our 56 Marietta Loans (as defined under our Debt Obligations below) offset by higher interest rates and higher debt balances on our NY Credit Agreement (as defined below under our Debt Obligations below) as we borrowed an additional $25 million in two transactions in March and October 2009. Also, 2009 interest expense includes $0.4 million of fees associated with the amendments to our loan facilities in 2009. Interest expense was offset by $0.4 million in interest income in both 2009 and 2008.

Provision for Income Taxes

	For the year ended December 31,				$ Change		% Change
	2009		2008
	($ in Thousands)
Provision for Income Taxes	$	1,458	$	772	$	686		89	%

In 2009 we recorded deferred and current income tax expense of $1.0 million and $0.5 million, respectively. The deferred tax expense of $1.0 million was primarily due to amortization of goodwill associated with our acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against our deferred tax assets under GAAP. The $0.5 million current tax expense in 2009 was due primarily to federal alternative minimum tax and California franchise tax which could not be offset by net operating losses.

The deferred tax expense of $0.8 million in 2008 was primarily due to amortization of goodwill associated with our acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against our deferred tax assets under GAAP.

Net Loss

	For the year ended December 31,						$ Change		% Change
	2009			2008
	($ in Thousands)
Net Loss	$	(9,919	)	$	(31,380	)	$	21,461		68	%

Net loss decreased by $21.5 million or 68%, to $9.9 million for 2009 compared to a net loss of $31.4 million for 2008. The improvement was the result of a $21.7 million improvement in operating income resulting from an increase in revenue of $28.3 million and a decrease in sales and marketing expense of $13.1 million offset by an increase in cost of revenues of $18.9 million and an increase of general and administrative expenses of $0.8 million. In addition there was a reduction of $0.5 million on interest, net and other expenses due to reduced interest rates and an increase in taxes of $0.7 million.

Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007

Revenues

	For the year ended December 31,				$ Change		% Change
	2008		2007
	($ in Thousands)
Revenues	$	70,038	$	50,762	$	19,276		38	%

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Revenues increased by $19.3 million, or 38%, to $70.0 million for 2008 compared to $50.8 million for 2007. Recurring revenues increased by $21.3 million from the sale of our services to new and existing customers. The increase in recurring revenues consisted of $13.5 million of colocation revenues and $7.8 million of interconnection revenues. 2008 revenues reflect a full year of revenue from our 111 8^th Avenue facility which was acquired in connection with our acquisition of certain assets and liabilities of NYC Connect, LLC in March 2007. The increase in revenues also reflects an increase in the number of customers, as well as higher average revenue per customer, driven in part by (i) facilities expansions during 2008 and 2007 which created additional capacity, and (ii) increasing interconnection growth between new and existing customers. Cabinet equivalents billed increased 32% to 4,390 at December 31, 2008 compared to 3,337 at December 31, 2007. The number of cross connects was 23,867 at December 31, 2008, which reflects a 21% increase over December 31, 2007 cross connects of 19,692. Non-recurring revenues decreased by $2.0 million primarily related to installation services and technical support. The installation services revenue reduction is directly related to pricing reductions.

Cost of Revenues

	For the year ended December 31,						$ Change		% Change
	2008			2007
	($ in Thousands)
Cost of Revenues	$	41,701		$	31,766		$	9,935		31	%
As a percentage of revenue		60	%		63	%

Cost of revenues increased by $9.9 million, or 31%, to $41.7 million for 2008 compared to $31.8 million for 2007. Total rent expense increased $7.0 million primarily due to the expansion of 85,974 square feet at our New York, New Jersey, Chicago, San Francisco, and Dallas facilities in 2008, and the full year impact of the 2007 expansion of 58,783 square feet at our New York, Chicago, and Dallas facilities, along with rent increases. Utilities increased $2.4 million due to the addition of new customers, additional usage by our existing customers, and rate increases. Due to the growth of our customer base and the expansion of our facilities, costs related to labor and materials, repairs and maintenance, interconnection services, and security costs increased by $0.5 million.

Sales and Marketing

	For the year ended December 31,						$ Change		% Change
	2008			2007
	($ in Thousands)
Sales and Marketing	$	36,826		$	31,976		$	4,850		15	%
As a percentage of revenue		53	%		63	%

Sales and marketing expenses increased by $4.9 million, or 15%, to $36.8 million for 2008 compared to $32.0 million for 2007. The increase was attributable to increase in amortization expense of $1.4 million related to a full year of amortization expense for our customer contract intangible assets from the March 2007 NYC Connect, LLC acquisition. Excluding amortization expense, sales and marketing expenses were 12.3% and 10.1% of revenue, respectively, for 2008 and 2007, and increased $3.5 million in 2008 from 2007. This $3.5 million increase was mainly the result of increased personnel related expenses of $2.6 million as we increased headcount in sales and marketing department and $1.0 million in additional bad debt expense.

General and Administrative

	For the year ended December 31,						$ Change		% Change
	2008			2007
	($ in Thousands)
General and Administrative	$	14,805		$	14,321		$	484		3	%
As a percentage of revenue		21	%		28	%

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General and administrative expenses increased by $0.5 million, or 3%, to $14.8 million for 2008 compared to $14.3 million for 2007. The increase was attributed mainly to personnel related expenses of $1.3 million resulting from increased headcount offset by a reduction of $0.9 million for one-time data migration costs.

Interest Expense, Net

	For the year ended December 31,				$ Change			% Change
	2008		2007
	($ in Thousands)
Interest Expense, Net	$	6,984	$	9,157	$	(2,173	)		(24	)%

The decrease in interest expense, net, was due to lower interest rates on our 56 Marietta Loans (as defined under “—Debt Obligations” below) and our NY Credit Agreement (as defined under “—Debt Obligations below) as LIBOR rates decreased. Interest expense was offset by $0.4 million and $0.6 million in interest income in 2008 and 2007, respectively.

Provision (Benefit) for Income Taxes

	For the year ended December 31,					$ Change		% Change
	2008		2007
	($ in Thousands)
Provision (Benefit) for Income Taxes	$	772	$	(811	)	$	1,583		(195	)%

The $0.8 million income tax benefit in 2007 resulted from net reductions to deferred tax liabilities (primarily regarding GI Partners Funds acquisition related intangibles), which were not fully offset by the valuation allowance increase for the year.

The deferred tax expense of $0.8 million in 2008 was primarily due to amortization of goodwill associated with our acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against our deferred tax assets under GAAP.

Net Loss

	For the year ended December 31,						$ Change		% Change
	2008			2007
	($ in Thousands)
Net Loss	$	(31,380	)	$	(36,386	)	$	5,006		14	%

Net loss decreased by $5.0 million, or 14%, to $31.4 million for 2008 compared to a net loss of $36.4 million for 2007. The improvement was the result of a $4.0 million improvement in operating income resulting from an increase in revenue of $19.3 million offset by an increase in cost of revenues of $9.9 million, an increase in sales and marketing expense of $4.9 million and an increase of general and administrative expenses of $0.5 million. In addition to the operating income, we improved $2.6 million on interest, net and other expenses which was offset by increase in provision for taxes of $1.6 million.

Liquidity and Capital Resources

As of September 30, 2010, we had $35.5 million of cash on hand (excluding restricted cash of $5.1 million). This cash balance is maintained primarily for operating and capital expenditure reasons and for short-term access to liquidity.

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Historically, we have funded our operations and met our capital expenditures requirements primarily from our cash flows provided by operating activities, and through equity and debt financing. Our principal uses of cash have been for acquisitions, such as our acquisition of NYC Connect, LLC in March 2007, capital expenditures for expansion of operating facilities within existing and new sites throughout 2007, 2008, 2009 and the nine months ended September 30, 2010, and funding our operating expenses, including any cash flow shortfalls from operations. These uses of cash were funded increasingly by cash provided by operating activities of $14.8 million, $27.9 million and $22.4 million in 2008, 2009 and the nine months ended September 30, 2010, respectively. However, the cash used in investing activities of $55.7 million, $14.5 million, $29.0 million and $33.7 million for 2007, 2008, 2009 and the nine months ended September 30, 2010, respectively, exceeded the cash provided by operating activities. As a result, we were required to secure equity and debt financing during these periods. We secured new equity and debt financing in 2007, 2008, 2009 and 2010, which provided cash flow from financing activities of $61.2 million, $14.6 million, $19.1 million, and $6.1 million, respectively, to support our operations and expansion projects. While we expect that our cash flows from operations will continue to increase, we expect our cash used in investing activities, primarily as a result of our expansion efforts, will continue to be greater than our cash flows generated from operating activities for at least the next twelve months.

We expect our principal sources of future liquidity to come from increasing cash flows provided by operating activities and additional financing activities we may pursue, such as this offering of common stock. We intend to use cash from operations and the net proceeds generated by this offering for capital expenditures, working capital and other general corporate purposes. We currently anticipate making aggregate capital expenditures of approximately $45 million to $65 million in 2010, primarily for the expansion of our Atlanta, New York Metro, Los Angeles and Chicago area facilities. In addition, we may also use a portion of the net proceeds of this offering to finance growth through the acquisition of, or investment into, businesses, products, services or technologies complementary to our current business, through mergers, acquisitions, joint ventures or otherwise. However, we have no agreements or commitments for any specific acquisitions at this time.

We believe we have sufficient cash on hand, coupled with anticipated cash generated from operating activities and the proceeds from this offering to meet our operating and debt service requirements, and to complete our expansion plans, for at least the next twelve months. Our long-term future capital requirements will depend on many factors, most importantly the acquisition of additional facilities and the expansion of sellable space within our existing facilities, the continued growth of our revenue, the expansion of sales and marketing activities, and the continued demand for our products and services.

Our ability to generate cash depends on our financial performance, general economic conditions, technology trends and developments, and other factors. The U.S. economy is currently undergoing a period of economic uncertainty, and the U.S. financial markets are experiencing significant volatility. Despite the continued adverse general economic conditions, we have not experienced any material liquidity issues. While we believe we have sufficient liquidity and capital resources to meet our current operating requirements and expansion plans, we may want to pursue additional expansion opportunities within the next year which could require additional financing, either debt or equity. If we are unable to secure additional financing at favorable terms in order to pursue such additional expansions opportunities, our ability to maintain our desired level of revenue growth could be materially adversely affected.

Debt Obligations

On October 3, 2006, in connection with our acquisition by the GI Partners Funds, we entered into a $70.0 million demand note with GI Partners Fund II, L.P. and a $28.0 million demand note with GI Partners Side Fund II, L.P. (collectively, the Demand Notes). The Demand Notes were payable on demand, and bore interest at 10% per annum, which was also due and payable upon demand. In March 2007, $78.0 million of the Demand Notes were refinanced with proceeds from the 56 Marietta Loans (as defined below) and in September 2007, the remainder of the Demand Notes were refinanced with proceeds from the NY Credit Agreement (as defined below).

On March 8, 2007, (i) Colo Properties Atlanta, LLC (“Colo Properties”), our indirect, but wholly owned subsidiary, entered into a Loan Agreement with UBS Real Estate Securities, Inc. (the “Colo Properties Mortgage Loan”) pursuant to which UBS made a $60.0 million mortgage loan to Colo Properties secured by Colo Properties

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datacenter facility at 56 Marietta Street in Atlanta, Georgia, and (ii) CP Atlanta, LLC, the parent entity to Colo Properties, entered into a Mezzanine Loan Agreement with UBS pursuant to which UBS made a $20.0 million mezzanine loan to CP Atlanta, LLC. On August 10, 2007, these agreements were amended to bifurcate the mezzanine loan into two separate $10.0 million mezzanine loans (the “56 Marietta Mezzanine Loans”), one to CP Atlanta, LLC and the other to CP Atlanta II, LLC the parent of CP Atlanta, LLC, and to reflect certain minor changes. Collectively and as amended, we refer to these three loans as the 56 Marietta Loans.

In September 2007, telx—New York Holdings, LLC, our wholly owned subsidiary, and three of its subsidiaries (collectively, the “New York Borrowers”) entered into a senior secured credit agreement with CIT Lending Services Corporation, as agent (“CIT”), and certain lenders (as amended, the “NY Credit Agreement”). The credit agreement initially permitted the NY Borrowers to borrow up to $31.0 million, comprised of a $25.0 million term loan and a $6.0 million revolving credit facility, including letters of credit. In March 2009, the NY Borrowers amended and restated these agreements to provide for an additional $15.0 million of term loan borrowings. In June and September 2009, the New York Borrowers entered into amendments to these agreements, under which the lenders extended certain deadlines to request further expansions to the facility, among other things. On October 9, 2009, the New York Borrowers entered into another amendment to these agreements to further increase the term loan borrowings under the NY Credit Agreement by $10.0 million. The term loan facility provided by the NY Credit Agreement is sometimes referred to herein as the “NY Term Loan.”

On June 17, 2010, we and certain of our subsidiaries entered into a senior secured credit facility, consisting of a $150.0 million term loan and a $25.0 million revolving facility. The term loan matures on June 17, 2015 and the revolving loan matures on June 17, 2014. The credit facility is guaranteed by all of our current subsidiaries, and certain of our subsidiaries that we may acquire or create in the future, and is secured by substantially all of our and such subsidiary guarantors’ assets. The non-default interest rates for the loans under the credit facility are determined by reference to either LIBOR plus 6.00% or, at our election, a prime-based rate plus 5.00%. These margins are subject to increase in certain circumstances as set forth in the credit agreement. Pursuant to the credit agreement, the margin increase will terminate, to the extent it occurs, if our senior secured leverage ratio drops below a threshold set forth in the credit agreement or once leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust have been obtained and the related leases (or memoranda of such leases) have been recorded to give constructive notice of such leasehold mortgages. As of November 4, 2010, leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust were obtained in accordance with the credit agreement and the related leases (or memoranda of such leases) were delivered for recordation. The credit agreement provides for a floor of 2.00% for LIBOR and a floor of 3.00% for loans based on the prime rate.

We used $138.1 million of the proceeds of the term loan to repay indebtedness outstanding under our NY Credit Agreement, the 56 Marietta Loans, other minor indebtedness, and to pay the fees and expenses of the transaction, and we used an additional $1.1 million of proceeds to pay accrued interest on repaid indebtedness. We intend to use the remaining proceeds from the borrowings to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes. We did not draw upon the revolving facility at closing, but when or if we do so, such proceeds will be used to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes. See “Description of Indebtedness—Secured Credit Facility.”

Sources and Uses of Cash

The following table sets forth a summary of our cash flows for the periods indicated:

	Nine Months Ended September 30,						Year Ended December 31,
	2010			2009			2009			2008			2007
	(unaudited)						($ in thousands)
Net cash provided by (used in) operating activities	$	22,435		$	19,735		$	27,918		$	14,845		$	(4,717	)
Net cash used in investing activities		(33,715	)		(22,979	)		(28,982	)		(14,502	)		(55,651	)
Net cash provided by financing activities		6,088			10,211			19,081			14,590			61,243

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Net Cash provided by Operating Activities

Net cash provided by operating activities was $22.4 million and $19.7 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in net cash provided by operating activities was primarily due to improved operating results as discussed above and improved working capital management primarily due to timing of vendor payments.

Net cash provided by operating activities was $27.9 million and $14.8 million for 2009 and 2008, respectively, and $4.7 million was used to support operating activities in 2007. The increase in net cash provided by operating activities was primarily due to improved operating results as discussed above and improved working capital management including the collections of accounts receivable. We expect that cash from our operations will continue to be a principal source of cash for the foreseeable future.

Net Cash used in Investing Activities

Net cash used in investing activities was $33.7 million and $23.0 million for the nine months ended September 30, 2010 and 2009, respectively. For the nine months ended September 30, 2010, our primary use of cash was for capital expenditures associated with our expansion efforts across our Atlanta, Chicago, Los Angeles and New York facilities. For the nine months ended September 30, 2009, our primary use of cash was for capital expenditures associated with our expansion efforts across our Chicago, New York and New Jersey facilities.

Net cash used in investing activities was $29.0 million, $14.5 million and $55.7 million for 2009, 2008, and 2007 respectively. In 2009, our primary use of cash was for capital expenditures associated with our expansion efforts across our New York, Chicago and New Jersey facilities. In 2008, our primary use of cash was for capital expenditures associated with our expansion efforts across our New York, Chicago, San Francisco and Dallas facilities. In 2007, our primary use of cash was for the purchase of certain assets and liabilities from NYC Connect, LLC for $46.0 million and for capital expenditures for all our facilities. We expect to continue to prudently expand our facilities and therefore capital expenditures will continue to be our primary use of cash.

Net Cash provided by Financing Activities

Net cash provided by financing activities was $6.1 million and $10.2 million for the nine months ended September 30, 2010 and 2009, respectively. For the nine months ended September 30, 2010, net cash provided by financing activities included a new debt financing of $150.0 million and proceeds from other financing obligations of $1.0 million. This was offset by payments for the UBS mortgage, the UBS mezzanine loan and the CIT loans of approximately $130.0 million, payments of $2.1 million for other financing obligations and $11.5 million of costs primarily for the new debt financing. Financing activities also included payments on our capital lease obligations of $0.9 million. For the nine months ended September 30, 2009, our financing activities included proceeds from the CIT financing of $15.0 million and proceeds from other financing obligations of $1.8 million offset by payments of $5.0 million for other financing obligations, $0.4 million for capital leases and $1.2 million for financing costs.

Net cash provided by financing activities was $19.1 million, $14.6 million and $61.2 million for 2009, 2008 and 2007, respectively. In 2009 our financing activities included additional borrowings under the NY Credit Agreement in March for $15.0 million and October for $10.0 million in addition to capital leases entered into to finance equipment related to our expansion efforts, offset by repayments against the NY Term Loan, other loans, and capital leases. In 2008, our financing activities included the addition of $15.0 million of equity investment by the GI Partners Funds and $0.2 million of equity investment by Telxinvest, LLC, offset by repayments against the NY Term Loan, other loans, and capital leases. In 2007, our financing activities included the addition of $50.0 million of equity investment by the GI Partners Funds to fund the acquisition of certain assets and liabilities from NYC Connect, LLC, $0.8 million of equity investment by Telxinvest, LLC, the financing of the 56 Marietta Loans and, the NY Credit Agreement and related costs, offset by repayments of a $98.0 million bridge loan from the GI Partners Funds. We expect that cash provided by financing activities will continue to be a principal source of cash for the foreseeable future.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as of September 30, 2010.

Capital Lease Obligations

Obligations under capital leases at September 30, 2010 total $3.2 million.

We have entered into various lease agreements for equipment. These lease agreement terms are for three years and the base terms expire between 2011 and 2013. Certain lease agreements also include a bargain purchase option.

Contractual Obligations

The following table summarizes, as of December 31, 2009, our minimum payments for long-term debt and other obligations for the next five years and thereafter:

	2010		2011		2012		2013		2014		2015 and Thereafter		Total
	($ in Thousands)
Capital lease and other financing obligations(3)	$	916	$	888	$	347	$	288	$	317	$	2,780	$	5,536
Long-term debt(1)(3)		13,301		116,693		—		—		—		—		129,994
Interest expense on long-term debt, capital lease and other financing obligations(2)		6,484		4,016		318		289		260		1,444		12,811
Operating lease obligations		27,132		28,732		29,581		29,342		29,518		571,036		715,341
Total contractual obligations	$	47,833	$	150,329	$	30,246	$	29,919	$	30,095	$	575,260	$	863,682

(1) Includes $80.0 million of the 56 Marietta Loans renewed through 2011, which we have an option to extend until March 2012. Repayment on our NY Credit Agreement includes estimates of mandatory prepayments based on estimated excess cash flow requirements. 2010 includes $6.0 million related to the revolving credit facility.

(2) Interest is based on timing of debt repayments included in this schedule. Interest on the 56 Marietta Loans is estimated based on rates in effect for our December 2009 payment of 2.3% per annum. For NY Credit Facility interest is based on current rates in effect of 9.00% per annum.

(3) On June 17, 2010, we and certain of our subsidiaries entered into a senior secured credit facility consisting of a $150.0 million term loan and a $25.0 million revolving facility. We used $138.1 million of the proceeds to repay indebtedness outstanding under our NY Credit Agreement, the 56 Marietta Loans and other minor indebtedness. See the section entitled “Description of Indebtedness.”

In addition, pursuant to a management agreement, as amended, with the manager of the GI Partners Funds, or GI Manager, GI Manager is entitled to a management base fee as compensation for certain non-transaction related services specifically requested by our board of directors, in an annual amount to be determined by our board of directors during the first calendar quarter of each year during the term of the agreement, but not to exceed $0.8 million per year, plus reasonable expenses. For each of the years ended December 31, 2007, 2008 and 2009, our board of directors did not request from GI Manager any non-transaction related services and therefore, a management base fee was never incurred. In addition to this management base fee, GI Manager is also entitled to a 1.5% transaction closing fee with respect to any refinancing (other than with respect to the New Credit Facility which GI Manager is entitled to a 0.75% transaction closing fee), restructuring, equity or debt offering, acquisition, merger, consolidation, business combination, sale or divestiture. The management agreement will terminate immediately upon the date that this registration statement, of which this prospectus forms a part, is declared effective by the SEC.

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Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Cap and Swap Agreements

On August 2, 2010, we entered into an interest rate cap agreement with a notional amount of $87.5 million with SunTrust Bank as required by the new credit agreement. The term of the agreement is eleven months, beginning on August 3, 2010 and ending on June 30, 2011. The agreement calls for a cap rate of 3% and a floating option of USD-LIBOR-BBA.

Also, on August 2, 2010, the Company entered into an interest rate swap agreement with a notional amount of $87.5 million with SunTrust Bank. The term of the agreement is two years, beginning on June 30, 2011 and ending on June 30, 2013. The agreement calls for a cap rate of 1.44% and a floating option of USD-LIBOR-BBA.

Fair Value.    We do not have material exposure to market risk with respect to investments, as all such investments are kept in money market accounts. We do not use derivative financial instruments for speculative or trading purposes; however, this does not preclude our adoption of specific hedging strategies in the future.

Commodity Price Risk.    Operating costs incurred by us are subject to price fluctuations caused by the volatility of underlying electricity prices at our facilities. We monitor the cost of electricity at our interconnection and colocation facilities closely. In a limited number of our facilities, we enter into power purchase agreements to fix the price at which we acquire electricity, typically over a one-year period. An immediate 10% increase or decrease in current power rates from their price as of September 30, 2010 would not have a material impact on our results of operations and would represent less than a $1 million difference in our aggregate power expense or approximately 1% of our cost of sales for the nine months ended September 30, 2010. Power costs vary by geography and the source of the power generation and they further exhibit substantial seasonal fluctuation, however, we have not experienced fluctuations of this magnitude in the past across all facilities.

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. In preparing our consolidated financial statements, we make estimates and assumptions that can have a significant impact on our financial position and results of operations. The application of our critical accounting policies requires an evaluation of a number of complex criteria and significant accounting judgments by us. In applying those policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions, and these differences could be material.

Critical accounting policies are defined as those policies that require significant judgments and assumptions about matters that are highly uncertain at the time of the estimate and could potentially result in materially different results under different assumptions and conditions. See Note 2 of the Consolidated Financial Statements for additional information.

Revenue Recognition.    We follow the provisions of SEC Staff Accounting Bulletin No. 104, Revenue Recognition, and Accounting Standards Codification (ASC) FASB ASC Topic 605-25, Multiple-Element Arrangements.

We generate recurring revenue from providing colocation and interconnection services. More than 90% of our revenues are provided from these recurring revenues. The remaining revenues are nonrecurring and consist of installation services and technical support.

• Colocation services are governed by the terms and conditions of a master service agreement. Customers typically execute agreements for one to three year terms. We bill customers on a

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monthly basis and recognize the revenue over the term of the agreement as the services are performed. Installation services for colocation services are recognized on a straight-line basis over the estimated life of the customer relationship.

• Interconnection services are generally provided on either a month-to-month or one or multi-year term under an arrangement separate from those services provided under colocation services. Interconnection services include port and cross connect services. Port services are typically sold on a one or multi-year term and revenue is recognized in a manner similar to colocation services. Cross connect services are typically sold on a month-to-month basis. These interconnection services are considered as a separate earnings process that is provided and completed on a month-to-month basis. We bill customers on a monthly basis and recognize the revenue in the period the service is provided. Installation service revenue for these cross connect services is recognized in the period when the installation is complete. The earnings process from cross connect installation is culminated in the month the installation is complete.

• Technical support services are provided on a time and materials basis and are billed and recognized in the period services are provided.

Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the receivable is reasonably assured. Our customers generally have the right to cancel their contracts by providing prior written notice to us of their intent to cancel the remainder of the contract term. However, in the event that a customer cancels its contract, it remains obligated to the service commitments for the reminder of the term.

Allowance for Doubtful Accounts.    We make judgments as to our ability to collect outstanding receivables and provide allowances when collection becomes doubtful. Judgment is required to assess the likelihood of ultimate realization of recorded accounts receivable. If the financial condition of our customers were to deteriorate, resulting in an impairment of either their ability or willingness to make payments, an increase in the allowance for doubtful accounts would be required. Similarly, a change in the payment behavior of customers generally may require an adjustment in the calculation of the appropriate allowance. Each month, management reviews customer payment patterns, historical data and anticipated customer default rates of the various aging categories of accounts receivables in order to determine the appropriate allowance for doubtful accounts. We write off customer accounts receivable balances to the allowance for doubtful accounts when it becomes likely that we will not collect from the customer.

Property and Equipment and Other Long Lived Assets.    We have a substantial amount of property and equipment recorded on our balance sheet at cost. The vast majority of our property and equipment represents the costs incurred to build out or acquire our interconnection and colocation facilities. The majority of facilities are in properties that are leased. We commence depreciation when the assets are placed in service. We depreciate our property and equipment using the straight-line method over the estimated useful lives of the respective assets (subject to the term of the lease in the case of leased assets or leasehold improvements).

Accounting for property and equipment involves a number of accounting issues including determining the appropriate period in which to depreciate such assets, making assessments for leased properties to determine whether they are capital or operating leases and assessing the initial asset retirement obligations required for certain leased properties that require us to return the leased properties back to their original condition at the time we decide to exit a leased property. We determine estimated useful lives based on established accounting guidelines. Leasehold improvements are amortized on a straight-line basis over the lesser of the term of the related lease (including renewal periods, which are reasonably assured) or the estimated life of the asset.

Periodically we assess potential impairment of our property and equipment, primarily located at our facilities, and intangible assets with finite useful lives, in accordance with the provisions of FASB ASC Topic 360, Property, Plant and Equipment. We perform an impairment review whenever events or changes in

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circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, significant loss of customers within a facility, significant changes in the manner of our use of the acquired assets or our overall business strategy, and significant industry or economic trends. When we determine that the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators, we determine the recoverability by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate. We recognize an impairment charge equal to the amount by which the carrying amount exceeds the fair market value of the assets.

Goodwill and Other Intangible Assets.    Goodwill, which consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired, is evaluated for impairment on an annual basis, or whenever events or circumstances indicate that impairment may have occurred. We follow the provisions of FASB ASC Topic 350, Intangibles-Goodwill and Others when evaluating goodwill for impairment.

Intangible assets, including tradenames, contracts, customer relationships, and non-compete agreements arising principally from acquisitions, are recorded at cost less accumulated amortization. Intangible assets deemed to have indefinite useful lives, such as goodwill, are not amortized and are subject to annual impairment tests or whenever events or circumstances indicate impairment may have occurred. The goodwill impairment test involves a two-step approach. The first step involves a comparison of the fair value of each of the reporting units with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, the second step is performed. The second step involves a comparison of the implied fair value and carrying value of that reporting unit’s goodwill. To the extent that a reporting unit’s carrying amount exceeds the implied fair value of its goodwill, an impairment loss is recognized. Besides goodwill, the Company has no other intangible assets with indefinite lives. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company completed its annual impairment reviews as of September 30, 2009, 2008 and 2007 and determined that the fair value amount of its reporting units exceeded its carrying amount, and the Company is not at risk of failing step one; accordingly no impairment was recorded.

There are many assumptions and estimates used that directly impact the results of impairment testing, including an estimate of future expected revenues, earnings and cash flows, and discount rates applied to such expected cash flows in order to estimate fair value. We use both the income and market approach in step one of our goodwill impairment reviews and weight the results of both equally. Under the income approach, we develop an eight-year cash flow forecast and use our weighted-average cost of capital applicable to our reporting units as a discount rate. The weighted-average cost of capital was derived based on comparable public companies. We considered both what a market participant would likely consider and the characteristics of each public company, including an evaluation of the industry sector, size, growth rates, margins, and leverage profiles of the selected public guideline companies. This resulted in twelve guideline public companies that were used as a basis to derive the expected assumptions for the Company’s weighted-average cost of capital. This analysis requires assumptions and estimates derived from a review of our actual and forecasted operating results, approved business plans, future economic conditions and other market data. These assumptions require significant management judgment and are inherently subject to uncertainties.

Future events, changing market conditions and any changes in key assumptions may result in an impairment charge. While we have never recorded an impairment charge against our goodwill or intangible assets to date, the development of adverse business conditions in our reporting unit, such as higher than anticipated churn or significantly increased operating costs, or significant deterioration of our market comparables that we use in the market approach, could result in an impairment charge in future periods.

Operating and Capital Leases.    We occupy and operate facilities and offices under various leases. The leases include scheduled base rent increases over the terms of the leases. We recognize rent expense from operating leases with periods of free and scheduled rent increases on a straight-line basis over the applicable

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lease term. We consider lease renewals in the useful life of its leasehold improvements when such renewals are reasonably assured. From time to time, we may receive construction allowances from our lessors. These amounts are recorded as deferred liabilities and amortized over the remaining lease term as a reduction of rent expense.

We lease certain property and equipment under capital lease agreements. The assets held under capital lease agreements and the related obligations are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the assets held under capital lease. Such assets are amortized over the shorter of the terms of the leases, or the estimated useful lives of the assets.

Accounting for Income Taxes.    We account for income taxes in accordance with the provisions of FASB ASC Topic 740, Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local state, and federal statutory tax audits or estimates and judgments used.

Realization of deferred tax assets associated with net operating loss and credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration in the applicable tax jurisdiction. We periodically review the recoverability of tax assets recorded on our balance sheet and provide valuation allowances as we deem necessary. Deferred tax assets could be reduced in the near term if our estimates of taxable income during the carryforward period are significantly reduced or alternative tax strategies are no longer viable.

Our income tax returns are periodically audited by the Internal Revenue Service and state and local jurisdictions. We reserve for tax contingencies when it is probable that a liability has been incurred and the contingent amount is reasonably estimable. These reserves are based upon our best estimation of the potential exposures associated with the timing and amount of deductions, as well as various tax filing positions.

Effective January 1, 2009, we adopted FASB ASC Topic 740. FASB ASC Topic 740 provides guidance for the recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The adoption of FASB ASC Topic 740 resulted in no cumulative effect of a change in accounting principle being recorded on our consolidated financial statements for the year ended December 31, 2009. See Note 11 to our consolidated financial statements for the year ended December 31, 2009, for more information on income taxes.

Prior to 2009 and the adoption of FASB ASC Topic 740, reserves were recorded when management determined that it was probable that a loss would be incurred related to these matters and the amount of the loss was reasonably determinable. Subsequent to the adoption of FASB ASC Topic 740, we are required to recognize, at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority, the impact of an uncertain income tax position on our income tax return. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The tax positions are analyzed periodically (at least quarterly) and adjustments are made as events occur that warrant adjustments to those positions.

Stock-Based Compensation

Effective January 2006, we adopted the fair market value method of recording stock-based compensation in accordance with FASB ASC Topic 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors. Under the fair-value recognition provisions of FASB ASC Topic 718, stock-based compensation cost is measured at the grant date based on the fair market value of the award using an option-pricing model and is recognized as an expense over the requisite service period, which is generally the vesting period.

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Information regarding our stock option grants for 2007, 2008, 2009 and the nine months ended September 30, 2010, is summarized as follows:

Grant Dates	Number of Options Granted		Exercise Price		Estimated Fair Market Value of  Our Common Stock	Estimated Fair Value of Our Common Stock Options
May 1, 2007 – November 12, 2007		64,064	$	20.00	$16.90 - $36.20	$11.68 - $25.60
June 2, 2008		41,121	$	40.00	$39.70	$25.61
January 1, 2009		25,375	$	40.00	$37.26	$23.32 - $24.21
July 1, 2009		11,400	$	40.00	$39.65	$26.87 - $27.31
January 8, 2010		19,440	$	45.00	$110.00	$89.49

Background of Valuations

Prior to this offering, in evaluating the fair market value of our common stock, we followed procedures that are consistent with the recommendations of the American Institute of Certified Public Accountants (AICPA) Practice Aid regarding “Valuation of Privately-Held Company Equity Securities Issued as Compensation”. Our management and board of directors made its determinations as to the fair market value in connection with the grant of stock options exercising its best reasonable judgment at the time. In the absence of a public market for our common stock, numerous objective and subjective factors, referred to as the key valuation considerations, were analyzed to determine the fair market value at each grant date, including the following:

Business Conditions and Results:

• Our actual financial condition and results of operations during the relevant period;

• The status of strategic initiatives to expand our facilities to increase the target market for our products and services;

• The competitive environment that existed at the time of the valuation;

• All important developments for us including the growth of our customer base, the progress of our business model, and the introduction of new services;

• The status of our efforts to build our management team and to retain and recruit the talent and organization required to support our anticipated growth;

Market Conditions:

• The market conditions affecting the colocation/datacenter, hosting and technology industries;

• The general economic outlook in the U.S.;

• The market prices of various publicly-held colocation/datacenter, hosting and technology companies operating in our industry and other marketplaces similar to our business;

Liquidity and Valuation:

• The fact that the option grants involved illiquid securities in a private company;

• The likelihood of achieving a liquidity event for the shares of our common stock underlying the options, such as an initial public offering or sale of our company, given prevailing market conditions and our relative financial condition at the time of grant; and

• A series of valuations conducted by an independent third party valuation firm.

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The major drivers and assumptions used in calculating the fair market value of our shares include:

• Company Performance and Projections. Management prepared financial forecasts for an eight-year period from the date of valuations, which were used, along with historical financials and information in regard to any material events and trends, as a basis for the valuations.

• Comparable Companies. Several companies in the colocation/datacenter, hosting or technology services industry publicly traded on securities markets were selected in all valuations for reference as our comparable companies in order to derive market multiples.

• Capital Market Valuation Multiples. Updated capital market data of selected comparable companies was obtained and assessed, and multiples of enterprise value to revenue and enterprise value to earnings before interest, taxes, depreciation, and amortization were used for market approach valuation requirements.

• Valuation Approach. We utilized the income approach and market approach in our historical valuations. The income approach differs from the market approach in that the income approach is based on entity-specific assumptions, whereas the market approach is based on observable valuation ratios of comparable companies. We utilized the market approach as the primary valuation approach for grants between May 1, 2007 and August 31, 2007 because the recent acquisition of us by the GI Partners Funds in October 2006 and the substantial remaining operational deployment risks associated with achieving management’s forecasts at this time resulted in the conclusion that the recent acquisition price established a reasonable estimate of our enterprise value. We also considered subsequent events and changes in circumstances from October 2006 to the grant dates to arrive at a concluded grant-date fair value estimate. Given the differences between the rights, restrictions and preferences of the various classes of preferred and common stock holders (see discussion below), we selected the option method to allocate the resulting enterprise value.

For the 2008 and 2009 grants, we determined that there was sufficient data to develop reasonable income and cash flow estimates, and therefore we utilized the income and market approach under a probability-weighted expected return method to estimate grant-date fair value of the awards. Under this methodology, the enterprise value of the Company and the common stock is estimated based upon an analysis of future value for the entire enterprise assuming various future outcomes. Share value is based upon the probability-weighted present value of these expected outcomes, as well as the rights of each class of preferred and common stock. For purposes of these probability-weighted present values, we contemporaneously modeled our future outcomes to include six different potential future scenarios all of which involved an initial public offering, a strategic merger or sale event within one to four years of the respective valuation date, with a consistent weighting of 40% to the scenarios assuming an initial public offering in one to two years from the respective valuation date. We did not allocate any probability to a long term “stay private” scenario as the likelihood of this occurring was estimated to be very small in consideration of the majority stockholder’s investment strategy. Our valuation for the January 8, 2010 grants initially began with an evaluation of the key valuation considerations discussed above as well an updated independent valuation report prepared as of a September 30, 2009 valuation date. Consistent with our valuation process established prior to 2010, this valuation utilized a consistent probability-weighted expected return method to estimate fair value based upon the probability-weighted present value of these expected outcomes, as well as the rights of each class of preferred and common stock, and we contemporaneously modeled our future outcomes to include six different potential future scenarios. This valuation resulted in a grant date fair value of common stock of $45.00 per share, which was the basis for establishing the exercise price for the employee stock options issued on the January 8, 2010 grant date. However, in connection with the preparation of the financial statements for the three months ended March 31, 2010, we reassessed the estimated grant date fair value of our common stock in light of the potential completion of our initial public offering and preliminary discussions relating to our potential pricing range. As a result of this reassessment, we determined our grant date fair value is $110 per share. During this process, we also reviewed comparable company market prices around the January 2010 grant date, and indicators of potential pricing from discussions with our underwriters. As part of this reassessment, we also determined that a discount for lack of marketability of 10.0% was more appropriate with respect to the determination of

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fair value for the grants in 2010, rather than the prior discounts which ranged from 25.2% to 38.7% over exit alternatives that ranged from one to four years. We also determined that a 100% probability should be assigned to the scenario that considered an initial public offering within the following twelve months. This determination was made because, in retrospect, we now consider the formal discussions with investment bankers in mid-January 2010 to be a key event that has proven to have provided additional certainty that we could achieve an initial public offering. Since January 2010, our underwriters have communicated an estimated valuation range per share of common stock to be sold in our initial public offering, assuming an offering is completed in June 2010. While our underwriters have noted fluctuations in the market values of comparable public companies during this period, the current expected valuation range is consistent with our assessment of fair value in January 2010. We considered the valuation range proposed by the underwriters relative to our financial results and the current economic conditions and determined our reassessed grant date fair value of common stock is $110.

We also reassessed the estimated accounting fair value of our common stock prior to 2010, considering key valuation considerations, including each independent valuation report delivered during the period 2007 through 2009. Our most recent prior grant was on July 1, 2009. Throughout 2007, 2008 and 2009, our management and board of directors talked with advisors with respect to the potential acceptance and success of our business plan in the market. We believed that during 2007 and 2008, there was significant uncertainty as to whether we could achieve the necessary scale and profitability and therefore uncertainty that a liquidity event would occur or whether we would achieve an attractive valuation in a liquidity event. From late 2008 to October 2009, our board of directors took into consideration the occurrence of adverse changes in global financial and stock markets and deteriorating business conditions in the United States. These changes and business conditions resulted in a freezing of capital and credit conditions, and the U.S. and global economies fell into a deep recession and economic contraction, before the U.S. financial and stock markets began to recover in March 2009 and the U.S. economy began to stabilize in the third quarter of 2009. The U.S. Gross Domestic Product declined during this period, before beginning to recover slightly in the third quarter of 2009. The U.S. unemployment rate increased significantly throughout this period. A new presidential administration and government proposals to provide economic stimulus in 2009 caused further uncertainty. The enterprise values of many of our publicly-traded peers fell sharply during this period before beginning to recover during the second and third quarters of 2009. The factors noted above more than offset any positive financial results and adversely affected our assumptions of the expected type, timing and likelihood of possible liquidity scenarios, and reduced the fair market value of our common stock under various initial public offering and sale scenarios as determined by our board of directors before improving in the third quarter of 2009. As a result, the fair market value of our common stock decreased during this period before recovering in part during the third quarter of 2009. As a result of these considerations, given the uncertainty of our business projections and market dynamics, our board of directors determined that the exit event probabilities utilized in the contemporaneous valuation performed prior to 2010 were appropriate in light of the 40% weighting being ascribed to scenarios involving an initial public offering.

Between October 2009 and December 2009, the U.S. economy and financial and stock markets continued to recover and the capital and debt markets continued to improve. For example, between October 2009 and December 2009, the Dow Jones Industrial Average increased 8.6% and the U.S. economy and U.S. Gross Domestic Product are estimated to have continued to improve. In addition, we believe that technology capital spending generally continued to increase. Our prospects and our expectations of growth continued to improve and our outlook regarding the fair market value of our common stock under various initial public offering and sale scenarios improved. In addition, in January 2010 we held our “organizational meeting” for our initial public offering; in March 2010 we filed the registration statement of which this prospectus is a part; and in May 2010 we filed our first amendment to the registration statement. All of these actions signaled that an initial public offering was becoming more likely, which would result in liquidity for the common stock and elimination of the superior

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rights and preferences of the preferred stock. This positively affected assumptions of the expected type, timing and likelihood of possible liquidity scenarios.

Critical assumptions required to perform the probability-weighted expected return method included the following:

Valuations – Expected valuations under each future event scenario were estimated based upon consideration of management’s performance and projections, review of capital market data and review of changes in comparable company multiples.

Timing – Expected dates of each event were estimated based upon discussion with our management and analysis of public market and economic conditions. Exit events ranged from one to four years in the future depending on the valuation date, for an estimated event date between 2009 and 2012.

Discount rates – Risk-adjusted rates of return were standardized across scenarios at the cost of equity as determined under capital asset pricing models. Discount rates ranged from 18.7% to 21.1% depending on the event timing under consideration.

Event probabilities – Estimates of the probability of occurrence of each event were based on discussions with our management and an analysis of market conditions as discussed above. Generally, a higher probability of achievement means a lower risk of achieving the operating projection or event timing objective and vice versa.

Discounts – Appropriate marketability discounts, required to estimate the per share value of the various share classes in each scenario. For marketability discounts, we considered both qualitative and quantitative methods to estimate the discount for lack of marketability, including (i) qualitative assessment based on Company characteristics and restricted stock studies, (ii) statistical regression analysis based on restricted stock studies and (iii) protective put option analysis. Discount for lack of marketability ranged from 19.8% to 39.8% depending on the event timing under consideration, except in the case of the January 2010 grants as noted above.

• Rights, restrictions and preferences of our preferred and common stock holders. The distribution of equity value to our various ownership classes was a consideration in determining the fair market value of our common stock in these historical valuations. We had Series A Preferred Stock, Series B Contingent Preferred and Common Stock outstanding as of each valuation date, as well as an outstanding option to acquire Series A Preferred Stock that expired unexercised in October 2008. Shares of Series A Preferred Stock are entitled to receive, prior and in preference to any distribution of any of our assets to the holders of Series B Preferred Stock or Common Stock, an amount per share equal to a 10% preferential return. Shares of the Series B Contingent Preferred participate in distributions under certain liquidation scenarios and are subject to certain conversion ratios based on the internal rate of return to the Series A Preferred Stock. The rights, restrictions and preferences of our preferred and common stock impact the distribution of proceeds in a hypothetical exit event and thus impact the fair market value of our common stock. For example, influencing factors include (i) Series A Preferred Stock dividends that accumulate as time passes between valuations and future exit events, increasing the requirement for greater enterprise value changes to increase value to the common stockholders, (ii) distributions to the Series B Contingent Preferred increase or decrease based on internal rate of return to the Series A Preferred Stock stockholders, which translate into less or more proceeds to the common stockholders, respectively, (iii) assumptions about the exercise of the Series A Preferred Stock option, and (iv) impacts to equity value based on debt financing and cash balances, which decrease and increase equity value and resulting common stock value, respectively.

All of our valuations were performed at or near the grant dates of the awards and there were no material changes to our business or value drivers between the valuation date and the grant dates.

Although our board of directors carefully considered the key valuation considerations, the primary factors impacting the valuations are (i) our periodic assessment of execution risk in achieving our operating and exit

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objectives, (ii) the steady and continued improvements in our financial performance primarily in revenue and operating income growth, (iii) the fluctuations resulting in favorable and unfavorable comparisons to our public company comparable set and prevailing economic conditions impacting the capital markets, and (iv) the dynamics of our preferred and common equity class structure which impacts value allocations as a result of certain preferred returns and dividend entitlements.

There is inherent uncertainty in these estimates and if we had made different assumptions than those described above, the amount of our stock-based compensation expense, net loss and net loss per share amounts could have been significantly different. In future periods, our stock-based compensation expense is expected to increase as a result of our existing unrecognized stock-based compensation and as we issue additional stock-based awards to continue to attract and retain employees and nonemployee directors.

Board Experience

Our board of directors includes individuals with significant business, finance and/or venture capital experience. During the periods set forth in the table, our board of directors was comprised of several individuals with experience in valuing technology companies and pricing stock options. These board members are familiar with the valuations of technology companies entering into initial public offerings, as well as with the market for the acquisition of technology companies similar to our stage of development.

Consideration of Independent Valuation Firm Qualifications

Our consideration of the valuations from the independent third party valuation firm at the time of the determination of fair market value is consistent with the guidance set forth in the AICPA because:

• The independent third party valuation firm is independent;

• The independent third party valuation firm considered the cost, income and market methods of valuation and determined the method to use based on our stage of life, revenues and outlook;

• The independent third party valuation firm’s valuations were finalized before we established fair market value, not after the fact; and

• The independent third party valuation firm documented its assumptions and methods in its reports and those assumptions and methods were considered to be a consistent and reasonable basis for that assessment.

Consistent with the AICPA and the Staff Commentary, the independent third party valuation firm’s valuations utilized historical and prospective discussions of our performance. The prospective analysis was based on financial plans provided to the independent third party valuation firm by management.

The independent third party valuation firm also selected companies utilized for the market valuation approach, and we and the independent third party valuation firm agreed these were comparable peers due to the nature of their products and services, size and current market positions. In the analyses, factors that distinguished us from the peer companies were noted and taken into account.

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Information regarding the third party valuations of our common stock during the period beginning December 31, 2006 and ending on September 30, 2009 is summarized as follows:

Date of Valuation Report	Effective Date of Valuation (as stated in the Valuation Report)	Value of Common  Stock
March 27, 2007	December 31, 2006	$	16.90
April 8, 2008(1)	September 30, 2007	$	36.20
June 11, 2008(1)	May 1, 2008	$	39.70
April 2, 2009	September 30, 2008	$	37.26
July 14, 2009	May 1, 2009	$	39.65
December 22, 2009(2)	September 30, 2009	$	36.03

(1) Both of these valuation reports were reviewed in conjunction with determining the fair value of our common stock for the June 2, 2008 grants.

(2) This valuation was completed before we began the initial public offering planning process and reflects a probability-weighted valuation across six scenarios. We adjusted this valuation to reflect a 100% probability scenario for an initial public offering within one year to determine our grant date fair value for accounting purposes in the first quarter 2010.

In accordance with FASB ASC Topic 718, we use the Black-Scholes option pricing model to determine the fair market value of the stock options on the grant dates for share awards made on or after January 1, 2006. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions to determine the fair market value of stock-based awards, including the deemed fair market value of the underlying common stock on the date of grant and the expected volatility of the stock over the expected term of the related grants. The value of the award is recognized as expense over the requisite service periods on a straight-line basis in our consolidated statements of income, and reduced for estimated forfeitures. FASB ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Based upon an assumed initial public offering price of $         per share, which is the midpoint of the range listed on the cover page of this prospectus, the aggregate intrinsic value of options outstanding as of September 30, 2010 was $         million, of which $         million related to vested options and $         million to unvested options.

Claims and Contingencies.    We are subject to various claims and contingencies related to legal, regulatory, and other matters arising out of the normal course of business. Our determination of the treatment of claims and contingencies in the consolidated financial statements is based on management’s view of the expected outcome of the applicable claim or contingency. Management may also use outside legal advice on matters related to litigation to assist in the estimating process. We accrue a liability if the likelihood of an adverse outcome is probable and the amount is estimable. If the likelihood of an adverse outcome is only reasonably possible, or if an estimate is not determinable, disclosure of a material claim or contingency is disclosed in the Notes to the Consolidated Financial Statements. We re-evaluate these assessments on a quarterly basis or as new and significant information becomes available to determine whether a liability should be established or if any existing liability should be adjusted. However, the ultimate outcome of various legal issues could be different than management’s estimates and, as a result, adjustments may be required.

Recent Accounting Standards

In March 2008, the Financial Accounting Standards Board (“FASB”) issued FASB ASC Topic 815, Derivatives and Hedging. FASB ASC Topic 815 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for, and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. FASB ASC Topic 815 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2008.

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Accordingly, we adopted FASB ASC Topic 815 beginning in fiscal 2009. The adoption of FASB ASC Topic 815 did not have a material impact on our consolidated financial statements.

In April 2008, the FASB issued FASB ASC Topic 350-30, General Intangibles Other than Goodwill. FASB ASC Topic 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB ASC Topic 350-10. This change is intended to improve the consistency between the useful life of a recognized intangible asset under FASB ASC Topic 350-10 and the period of expected cash flows used to measure the fair value of the asset under FASB ASC Topic 805-10 and other GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FASB ASC Topic 350-30 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB ASC Topic 350-30 did not have a material impact on our consolidated financial statements.

Effective January 1, 2009, we adopted the remaining provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, related to fair-value measurements of certain nonfinancial assets and liabilities. The adoption of the remaining provisions of FASB ASC Topic 820 did not have a material impact on our consolidated financial statements.

In May 2009, the FASB issued new guidance for subsequent events. The new guidance, which is part of FASB ASC Topic 855, Subsequent Events is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The new guidance is effective for fiscal years and interim periods ended after June 15, 2009 and will be applied prospectively. Our adoption of the new guidance did not have a material effect on our consolidated financial statements. We evaluated subsequent events through the date the accompanying consolidated financial statements were issued, which was March 18, 2010.

In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value. Accounting Standards Update (ASU) 2009-05 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, by providing additional guidance clarifying the measurement of liabilities at fair value. ASU 2009-05 applies to the fair value measurement of liabilities within the scope of FASB ASC Topic 820 and addresses several key issues with respect to estimating fair value of liabilities. Among other things, ASU 2009-05 clarifies how the price of a traded debt security (an asset value) should be considered in estimating the fair value of the issuer’s liability. ASU 2009-05 is effective for the first reporting period beginning after its issuance. The adoption of ASU 2009-05 did not have a material impact on our consolidated financial statements.

In September 2009, we adopted FASB ASC Topic 105, Generally Accepted Accounting Principles. FASB ASC Topic 105 establishes the FASB Accounting Standards Codification^TM (Codification) to become the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. FASB ASC Topic 105 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this standard did not have a material impact on our consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements. ASU 2009-13 supersedes certain guidance in FASB ASC Topic 605-25, Multiple-Element Arrangements and requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its

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deliverables based on their relative selling prices (the relative-selling-price method). ASU 2009-13 eliminates the use of the residual method of allocation in which the undelivered element is measured at its estimated selling price and the delivered element is measured as the residual of the arrangement consideration, and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables subject to ASU 2009-13. ASU 2009-13 must be adopted no later than the beginning of the first fiscal year beginning on or after June 15, 2010, with early adoption permitted through either prospective application for the revenue arrangement entered into, or materially modified, after the effective date or through retrospective application to all revenue arrangements for all periods presented. The adoption of ASU 2009-13 is not expected to have a material impact on our consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06 Improving Disclosure about Fair Value Measurements, which amends the use of fair value measures and the related disclosures. ASU 2010-06 requires new disclosures for transfers in and out of Level 1 and Level 2 fair value measurements. ASU 2010-06 is effective for financial statements issued for interim and annual periods ending after December 15, 2009. The adoption of this standard did not have a material impact on our consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09, Subsequent Events (Topic 855) that amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended March 31, 2010.

In March 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-11, Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives (ASU 2010-11) (codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves disclosures originally required under SFAS No. 161. ASU 2010-11 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this standard did not have a material impact on our consolidated financial statements.

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BUSINESS

Company Overview

Telx is a leading provider of network neutral, global interconnection and colocation solutions in the United States. Our interconnection and colocation offerings enable customers to seamlessly connect to hundreds of diverse communications networks and other enterprises. Additionally, we provide a secure and reliable environment to house customers’ mission-critical equipment and time sensitive data. We believe that our 15 facilities, located in nine tier-1 markets, are some of the most strategically positioned datacenters in the United States. These facilities are located at the primary intersections of multiple, major international and domestic fiber routes where we believe Internet and private network traffic is most concentrated and interconnection demand is highest. We believe that our average of 38 physical interconnections per customer as of September 30, 2010 gives us greater physical interconnection density than our competitors. Over the last two years, we have grown our revenues from $50.8 million in 2007 to $98.3 million in 2009, representing a compound annual growth rate of 39%, and our net losses have decreased from $36.4 million to $9.9 million over the same period. For the nine months ended September 30, 2010, we had revenues of $94.7 million and net income of $2.2 million.

As a network neutral provider, we do not own or operate our own network, allowing us to act as an unbiased intermediary in providing the necessary interconnection products and related services that facilitate the exchange of communications network traffic between our customers. Customers within a Telx facility are able to connect to any other customer within the facility, including up to 300 communications service providers, depending on the facility. These interconnections effectively allow a customer to replace their existing and more expensive network alternatives. Through these interconnections, our facilities host diverse and densely populated ecosystems of communications service providers, enterprises, online media, video and content providers, and other entities. Our customers benefit from a wide choice of networks, reduced network costs, improved capital budget efficiency, improved performance and access to revenue opportunities with accelerated time to market.

Our customers rely on our offerings to support their mission-critical communication and information technology (IT) infrastructure needs. Our products and related services enable the exchange of increasing volumes of content and information from across the globe, creating a global connectivity marketplace to support and accelerate our customers’ business growth. With 844 customers and 31,655 total physical interconnections within our facilities as of September 30, 2010, our interconnection-centric model targets customers that value the interconnection density in our secure and reliable environments. We evaluate market leadership based on publicly available information for physical interconnections per customer and our experience in the industry. Based on this framework, we believe that our average of 38 physical interconnections per customer as of September 30, 2010 makes us a leading network neutral, global interconnection and colocation solutions provider in the United States. We believe that the interconnection density within our facilities can create a network effect that increases the value proposition of our products and related services. Because each additional customer added to a facility can connect to all of the other customers already in that facility, with the addition of each new customer, the potential number of interconnections in our facilities increases. We believe that this enhances our ability to both retain existing customers and attract new customers. Our 15 interconnection and colocation facilities are located in the New York Metropolitan area, the San Francisco Bay area, Los Angeles, Dallas, Chicago, Atlanta, Phoenix, Charlotte and Miami.

The global Internet datacenter market is estimated to grow at a compound annual growth rate of 19% from $9.2 billion in 2008 to $15.5 billion in 2011 according to Tier1 Research’s Internet Datacenter Global Markets Overview—2010 report. Increasing demand for our network neutral interconnection and colocation products and related services is being driven by powerful trends, including:

• favorable datacenter supply and demand dynamics (according to Tier1 Research’s Internet Datacenter Supply 2010 report, between 2009 and 2013, datacenter supply growth is forecast to vary between 3.5% to 9%, lagging demand growth varying between 7.5% and 15%);

• continued growth in Internet traffic (according to Cisco Visual Networking Index, from 2008 to 2013, worldwide consumer Internet traffic will grow at a 40% compound annual growth rate);

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• increasing enterprise adoption of datacenter outsourcing and network based applications (according to a December 2008 poll conducted at the Gartner DataCenter Conference, 66% indicated that they expected to have at least 1,000 square feet of colocation space within the next twenty-four months (Source: Gartner, Dataquest Insight: The Changing Colocation and Data Center Market, January 23, 2009));

• continued adoption of Ethernet technologies (according to The Insight Research Corporation, U.S. enterprises and consumers are expected to spend more than $27 billion over the next five years on Ethernet services provided by telecommunications carriers);

• continued growth in Internet video (according to Cisco Visual Networking Index, in 2013, Internet video will account for over 60% of all consumer Internet traffic in 2013);

• emerging computing technologies such as cloud computing (according to Gartner predictions, the cloud computing market will reach $150 billion in 2013, growing from approximately $56 billion in 2009 (Source: Gartner, Dataquest Forecast: Sizing the Cloud; Understanding the Opportunities in Cloud Services, March 18, 2009));

• increasing demand for proximity hosting and low latency networking (according to a recent SEC concept release, the New York Stock Exchange’s average speed of execution for small, immediately executable (marketable) orders decreased from 10.1 seconds in January 2005 to 0.7 seconds in October 2009); and

• increasing datacenter power and cooling requirements (according to Nemertes Research, 25% of datacenters between 5,000 square feet and 50,000 square feet had insufficient power in 2009).

Our business is characterized by significant monthly recurring revenue, low churn (or loss of revenue), and a predictable cost structure. We generate revenue by charging our customers a recurring monthly fee for our interconnection and colocation products and related services, a one-time fee for the installation of related colocation and interconnection products, and an hourly or a subscription fee for technical support services. The combination of our recurring revenues, representing approximately 94% of our total revenue for the nine months ended September 30, 2010, and our low churn provides us significant visibility into our revenue generating capabilities for the coming years. We believe our high interconnection density demonstrates an interconnection-centric business model that differentiates us from our competition. It improves our ability to maximize revenues and profitability relative to other predominately colocation-centric providers that do not have a similar level of interconnection density within a comparable physical footprint. Additionally, our interconnection-centric model improves our profitability and capital efficiency because we can add a significant number of interconnections between existing customers within our facilities without leasing additional space or incurring significant additional costs.

Our revenue growth since 2007 is primarily the result of organic growth, consisting of increasing amounts of our products and related services provided to existing and new customers. From December 31, 2007 to December 31, 2009, we grew our customer base from 495 to 763 customers representing a 24% compound annual growth rate and our total physical interconnections from 19,692 to 28,272 representing a 20% compound annual growth rate. Over the same period, to meet our customers’ increasing demand for our products and related services, we expanded our footprint from 370,543 gross square feet to 478,412 gross square feet representing a compound annual growth rate of 14%. At September 30, 2010, our customer base had increased to 844, total physical interconnections had increased to 31,655 and our footprint had expanded to 524,204 square feet. The growth in our facility footprint was accomplished through the addition of three new facilities and the expansion of our existing space within our other facilities. We believe that our existing customer base, products and services will continue to grow which will enhance the ecosystems within our facilities and in turn support our ability to attract new customers.

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Industry Overview

The increased adoption of network centric applications such as SaaS, on-line video, social networking, cloud computing services, and enterprise IT systems requires an increasing number of connections among the networks that provide the underlying infrastructure. Interconnection and colocation providers have secure and reliable facilities that enable those connections to be made. In the markets we serve, we believe that our facilities offer the greatest number of interconnection options due to their strategic locations in dense, urban population centers where global communications networks intersect.

No single communications network connects every origin and destination point, and as a result, networks must connect with other networks to reach beyond the physical infrastructure of an individual network. Historically, the numerous networks that comprise the Internet initially connected with each other through public network access points that were established by non-profit organizations and government entities. Later, during the 1990s, ownership of the network access points transferred to telecommunications carriers. However, limited investment by the telecommunications carriers, difficulties scaling the various networks, and increased competition among telecommunications service providers resulting from the deregulation of the communications industry, then led Internet service providers to establish independent links connecting their facilities.

Ultimately, the expense associated with implementing, maintaining and upgrading these independent links led to the creation of commercial, network neutral Internet exchanges and interconnection facilities to accommodate the growing global data transfer needs of the Internet as well as private networks. The increasing amount of data exchanged across the Internet and private networks resulted in increasing demands on enterprise IT systems and datacenters that necessitated expanding levels of related expenditures. The development of colocation facilities allowed datacenter equipment to be housed in secure and reliable offsite facilities operated by third parties, providing access to competencies and capital efficiencies that were attractive from both a financial and business continuity perspective.

Interconnection

Interconnection facilitates the cost efficient exchange of information between communications service providers, enterprises, online media, video and content providers and other entities either directly between two parties (referred to as physical interconnection) or within an intermediary device among multiple parties (referred to as peering). Direct connections most commonly take the form of a fiber optic or Ethernet cable connected between the communications equipment of the two parties. Peering requires the use of an intermediate device, such as an Ethernet switch, to connect one network to many networks. With datacenter equipment of numerous communications services providers and enterprises located in close proximity, thousands of interconnections can be made without the need to add incremental space or to incur significant cost.

Interconnection generally provides a more cost-effective, lower latency, more rapidly deployed method of network traffic exchange than the metro fiber or local loop alternatives, which generally require the deployment of underground fiber to physically connect the datacenter facilities of entities. Parties interconnecting within a common interconnection facility can connect directly, do not require a third party to manage the connection once initially established, and can exchange data over shorter distances with lower capital requirements. Furthermore, the proximity of numerous interconnection customers within a single facility generates network efficiencies that result in cost savings and shorter time to market.

Colocation

Colocation offers the space and power required by customers which locate their datacenter equipment (including routers, switches, servers and storage arrays) within offsite facilities. Colocation facilities are usually characterized by temperature controlled environments for optimal equipment operation as well as redundant power supplies and network access. Colocation space is generally sold as units of cabinets or cages, which hold

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multiple cabinets. In order to promote more efficient methods of network access, colocation facilities are generally located near a clustering of communications service providers and offer interconnection products and services between the enterprises, online media, video and content providers, communications service providers and others housed within them.

Colocation facilities are generally divided into two groups: non-network neutral and network neutral.

Non-network neutral colocation facilities are run by companies that own or operate one or more networks. Generally they require companies located within their facilities to use their networks and services. These limitations on a customer’s network options can result in higher pricing for network access, as well as an inability to easily change network providers to achieve efficient operating results by altering network providers when required by technology. In addition, the use of a single network provider limits disaster recovery capabilities should the network fail.

Network neutral colocation facilities are run by companies that do not own or operate a network. As a result, they offer customers access to multiple networks and allow customers to select the networks best suited to their communications needs. We believe network neutral facilities provide the customer with a choice of providers and therefore lower costs, improved disaster recovery capabilities and better operational performance than non-network neutral providers who necessarily limit their customers’ options.

Customer requirements for colocation products vary due to the nature of the underlying customer application and their associated space and latency requirements. Generally, applications within the communications service provider, online media, video and content provider, and certain other sectors require low latency interconnection to multiple parties. To meet these requirements, numerous entities must be colocated in proximity to each other, which places a premium on space. On a relative basis, applications such as shared hosting, data storage and business continuity/disaster recovery, place a greater emphasis on their need for physical space to accommodate equipment that houses large volumes of data. To meet their primary volume requirement at reasonable cost levels, owners of these applications generally tolerate higher latency thresholds and do not require the same diversity of interconnections. We believe that our customers are willing to pay a premium for colocation space within our facilities given the robust, low latency interconnection products and related services we provide.

Industry Trends

The global Internet datacenter market is estimated to grow at a compound annual growth rate of 19% from $9.2 billion in 2008 to $15.5 billion in 2011 according to Tier1 Research’s Internet Datacenter Global Markets Overview—2010 report. We believe that principal drivers of this growth include favorable datacenter supply and demand dynamics, continued growth in Internet traffic, increasing enterprise adoption of datacenter outsourcing and network based business applications, continued adoption of Ethernet technologies, continued growth of Internet video, emerging computing technologies such as cloud computing, and increasing demand for proximity hosting and low latency enablement. Additionally, the increasing power and cooling requirements of datacenter equipment may result in increasing demand for colocation products and related services.

Favorable Datacenter Supply and Demand Dynamics.    We believe that the demand dynamics in the colocation industry are attractive relative to supply expectations as a result of consolidation, historical underinvestment and accelerated demand growth. From 2009 through 2013, growth in supply for datacenters is forecast to vary between 3.5% and 9% according to Tier1 Research, significantly below expectations for growth in demand for datacenters, which Tier1 Research’s Internet Datacenter Supply 2010 report expects to grow at annual rates varying between 7.5% and 15% over the same time period. We believe this favorable supply and demand dynamic will continue to support a stable pricing environment for our products and related services.

Continued Growth in Internet Traffic.    According to Cisco Visual Networking Index, from 2008 to 2013, worldwide consumer Internet traffic is forecasted to grow at a 40% compound annual growth rate while

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worldwide business Internet traffic is forecasted to grow at a 33% compound annual growth rate. This growth is attributed to a number of trends including increased broadband penetration, popularity of online video content, use of peer-to-peer web applications and smartphone adoption. We believe this ongoing growth in the amount of data created, transferred and exchanged will continue to drive demand in interconnection and colocation products and related services.

Increasing Enterprise Adoption of Datacenter Outsourcing and Network Based Business Applications.    We believe enterprises are reassessing the management of their IT requirements and will increasingly elect to outsource their datacenters to facilities operated by third parties that have superior infrastructure and increased access to interconnection opportunities for communicating with customers, suppliers and peers. Previously, companies often purchased datacenter systems and placed them locally on premises which required significant capital expenditures to support the infrastructure necessary to house the datacenter equipment. On average, the cost to construct a datacenter is $1,300 per square foot according to the Tier 1 Internet Datacenter Supply Midyear 2009 Update. Moreover, depending on the communications service providers in the area, companies constructing their own datacenters were also potentially limited in the networks they could access. Furthermore, as the uninterrupted access to data becomes increasingly important, datacenter outsourcing allows for increased redundancy opportunities that are supportive of business continuity and disaster recovery needs. According to a December 2008 poll conducted at the Gartner Datacenter Conference, although 84% of respondents primarily used datacenters that they own, 66% indicated that they expected to have at least 1,000 square feet of colocation space within the next twenty-four months (Source: Gartner, Dataquest Insight: The Changing Colocation and Data Center Market, January 23, 2009).

In addition, enterprises are increasingly integrating network-based business applications into their IT environments to drive scale economies and achieve greater processing capabilities at lower costs. These applications can cover a host of mission-critical business processes, such as human resource and accounting functionality, sales and customer response management tools and operational efficiency databases. These network-based applications lead to increased requirements for the breadth and depth of the interconnection options that are available at interconnection and colocation facilities, but more difficult to obtain and manage on an in-house basis.

Continued Adoption of Ethernet Technologies.    U.S. enterprises and consumers are expected to spend more than $27 billion over the next five years on Ethernet services provided by telecommunications carriers, according to The Insight Research Corporation. And with metro-area and wide-area Ethernet services now available from virtually all major data service providers, the market is projected to grow at a compounded annual rate of over 22% between 2009 and 2014, increasing to nearly $12 billion, according to Vertical Systems Group. We believe that the growth of Ethernet technologies will drive even more data traffic through the networks within our customer base, increasing the demand for our products and related services.

Continued Growth in Internet Video.    According to Cisco Visual Networking Index, in 2013, Internet video traffic will be nearly 700 times the U.S. Internet backbone in 2000, and will account for over 60% of all consumer Internet traffic in 2013. We believe that this increasing prevalence of video Internet traffic will drive more data traffic through the networks that make up our customer base and consequently increase the demand for our products and services.

Emerging Computing Technologies Such as Cloud Computing.    Enterprises are increasingly reconsidering how they purchase software and IT infrastructure. Rather than purchasing a local version of a program which is installed on an individual user’s computer and is limited to the data available on such computer, a company may opt to purchase a web based service or cloud version accessible by any computer. As the program or application is housed on a remote server, accessing it requires more data transfer over a network than accessing a local version. Enterprises are increasingly using cloud computing as it provides flexible, scalable and ubiquitously available applications with charges based on actual usage rather than long-term commitments. According to Gartner, the cloud computing market was estimated to be approximately $56 billion

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in 2009 and is expected to reach $150 billion by 2013 (Source: Gartner, Dataquest Forecast: Sizing the Cloud; Understanding the Opportunities in Cloud Services, March 18, 2009). We believe the movement towards cloud computing will increase the amount of data housed in colocation facilities as well as increase the demand for interconnection products and related services due to increased connectivity requirements of cloud computing.

Increasing Demand for Proximity Hosting and Low Latency Networking.    We believe that as enterprise applications are becoming increasingly dependent on high speed, low latency data exchange capabilities, the demand for strategically located interconnection and colocation facilities will increase rapidly. For example, financial companies that utilize trading strategies that demand these high speed connections require close proximity to other, similarly situated companies, market data providers and service providers to achieve desired results.

Increasing Datacenter Power and Cooling Requirements.    Computers operating at faster speeds within smaller physical dimensions have resulted in increased power and cooling infrastructure requirements. According to Nemertes Research, at the end of 2009, 25% of datacenters between 5,000 square feet and 50,000 square feet had insufficient power, and this figure is projected to increase to 50% within 18 months (Nemertes Research, September 8, 2009). Since upgrading power capacity at an existing datacenter generally is expensive and in some cases impossible, enterprises may increasingly pursue colocation as an alternative. In addition, power and cooling infrastructure requirements are generally greater for colocation products than for interconnection products due to the nature of the equipment employed. Given this lower power requirement for interconnection products, we believe that interconnection-centric providers will be able to increase the number of customers served within a given facility relative to a colocation-centric business within a similar facility.

Our Competitive Strengths

Customers typically use our products and related services because we provide them with a level of interconnection access, quality of service, reliability and flexibility that is difficult to replicate independently or with another interconnection and colocation provider. We believe our key competitive strengths, which are described below, position us well to take advantage of the favorable trends in our industry.

Strategically Focused Footprint.    Our 15 facilities in nine tier-1 markets across the United States are located at the primary intersections of multiple, major international and domestic fiber routes where we believe Internet and private network traffic is most concentrated and interconnection demand is highest. These markets are major population centers covering 23% of the U.S. population and generating 32% of U.S. GDP in 2008. We are focused on maintaining a geographic footprint that supports the needs of our customers and provides an appropriate return on our invested capital. In 2009, 95% of our top 20 customers by revenue and 65% of our top 100 customers by revenue utilized our products and related services in multiple facilities. For the nine months ended September 30, 2010, 95% of our top 20 customers by revenue and 67% of our top 100 customers by revenue utilized our products and related services in multiple facilities. In February 2010, we entered into a services agreement with Tata Communications Limited, a leading international interconnection service provider, which enables us to provide access to interconnection and colocation products and related services for our customers in key non-U.S. markets including London, Singapore and Mumbai. In August 2010, we entered into a referral agreement and mutual resale agreement with Interxion Headquarters, B.V., a leading international service provider, which enables us to provide access to interconnection and colocation products and related services for our customers in key non-U.S. markets including 11 countries across Europe.

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The map below indicates the geographic locations of our 15 interconnection and colocation facilities in the United States and the population per square mile in those locations.

Source: U.S. Census

Industry Leader in Physical Interconnections.    As of September 30, 2010, we facilitated a total of 31,655 physical interconnections between our customers, which represent an average of 38 physical interconnections per customer. This allows our customers to achieve the seamless exchange of information across hundreds of communications service providers, enterprises, online media, video and content providers, government agencies, cloud computing providers and SaaS providers. We believe that our average of 38 physical interconnections per customer as of September 30, 2010, represents greater physical interconnection density than our peers in the United States. We believe these high network densities are a result of our strategically focused footprint and value of the ecosystems that these interconnections create.

Network Neutral Business Model.    We do not own or operate our own network. The ecosystems in our facilities provide our customers with the flexibility to optimize their connection partners based on their individual application and connectivity requirements. We believe the ability to directly and immediately connect with a dense network of communications service providers, enterprises, online media, video and content providers and other entities allows our customers to optimize both their revenue opportunities and expenditures as well as accelerate the deployment of new applications to market.

High Barriers to Entry.    We believe our network neutral interconnection-centric model has high barriers to entry primarily resulting from the difficulty in replicating the ecosystems that exist within our facilities and the resulting network effect that exists among our customers. Significant time and resources are required to develop these ecosystems. Infrastructure and implementation barriers also exist, including the lack of suitable space in proximity to major network service providers, adequate power supply levels, regulatory and environmental approvals and the capital intensity and time-consuming nature of greenfield projects. In addition, the buildings in which we operate are already the primary landing points and crossroads for global fiber networks and the ability to replicate this network proximity would be cost prohibitive for both emerging colocation products and services providers as well as communications service providers. While significant barriers to entry exist, we believe that our experience, relationships with a critical mass of communities of interest and leading communications service providers, reputable brand, associated track record and proven business model enable us to pursue expansion opportunities more effectively than potential competitors.

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Exclusive Operator of Interconnection Areas within 10 Digital Realty Trust Wholesale Datacenter Buildings.    Our relationship with Digital Realty Trust, one of the leading datacenter real estate investment trusts, generally provides us with the exclusive ability to operate the interconnection areas in 10 tier-1 wholesale datacenter buildings across the United States. The initial terms of these Digital Realty Trust leases expire in 2026, and we have options to extend them through 2046. With the exception of certain legacy arrangements, these interconnection areas are the primary way in which Digital Realty Trust tenants or subtenants in such buildings interconnect to other tenants within such buildings. As a result of this exclusivity, we provide both interconnection for customers in Telx facilities as well as inter-suite connections for the other colocation providers with facilities within these buildings, making us uniquely positioned to meet customer interconnection needs.

Engineering and Operational Excellence.    Our facilities provide the structural integrity and redundant power and cooling infrastructure required for a secure, reliable and effective networking and computing environment. Since 2003, we have been able to provide over 99.999% uptime on our overall power and cooling systems. Based on our industry experience and customer feedback, we believe that we also offer best-in-class installation and technical support services that enhance networking opportunities and maximize exposure to the marketplace. We also provide our customers with numerous tools such as the Telx Portal, which is a web-based solution that allows seamless ordering by our customers and implementation of our products and related services over the Internet. In 2009, over 41% of our new sales orders came through the Telx Portal, and with the new portal released in October 2010, we expect the percentage of new sales from the Portal to increase.

Our Strategy

Our goal is to expand our leadership position in network neutral, global interconnection and colocation products and related services. Our strategy for accomplishing this goal includes the key elements described below.

Continue to Expand our Relationships with Existing Customers.    We will continue to offer our existing customers best-in-class interconnection and colocation products and related services to meet their growing requirements. Over 70% of our revenue growth during 2008 and 2009 resulted from revenues from existing customers. As of December 31, 2009, 95% of our top 20 customers by revenue and 65% of our top 100 customers by revenue had space in multiple Telx facilities. For the nine months ended September 30, 2010, 95% of our top 20 customers by revenue and 67% of our top 100 customers by revenue utilized our products and services in multiple facilities. We will strive to continue to provide the quality of service and interconnections that have resulted in low average monthly churn of 0.8%, 0.6% and 0.7%, respectively, during 2008, 2009 and for the nine months ended September 30, 2010.

Continue to Acquire Profitable New Customers.    We recognize the ability of additional customers to enhance the value proposition of our interconnection ecosystems. We will continue to target and develop relationships with customers that will benefit most from their inclusion in a Telx ecosystem and that will increase the value proposition to our other customers due to their expected demand for interconnections. During the years ended December 31, 2008 and 2009, and for the nine months ended September 30, 2010, we successfully increased our customer base by 131, 137 and 81 customers, respectively. We intend to continue to price our products and services at a level that reflects both the market demand for our products and related services, as well as our short and long term profitability goals and return on invested capital expectations.

Further Penetrate Attractive Industry Sectors.    A substantial portion of our revenue is derived from communications service providers that require the high level of interconnections we offer. Revenue from other industry sectors, however, has grown as a percentage of our revenues, from an annualized rate of 15% in December 2007 to an annualized rate of 24% in December 2009. The enterprise, online media, video and content provider, government, cloud computing provider and SaaS provider industry sectors have grown significantly within the ecosystems that exist within our facilities and provide attractive opportunity for further ecosystems

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development and growth. We also believe other industry sectors, such as healthcare, will provide additional long-term opportunities for ecosystems development and growth. We intend to continue to focus our efforts to further penetrate these sectors.

Increase Network Densities.    As our network densities increase, our customer value proposition increases. As an interconnection-centric company, we aim to continuously increase the number of interconnections we facilitate. We will continue to focus our sales, marketing, technology and facilities efforts accordingly.

Selective Product and Services Expansion.    We intend to continually develop our interconnection and colocation offerings and introduce new products and related services to meet our customers’ needs.

• The Telx Video Exchange launched in 2009 enables the interconnectivity of disparate video conferencing systems. Today it is difficult to make video calls across companies and across networks because most of this traffic runs on private networks. The Telx Video Exchange solves this problem by allowing the secure interconnection of private networks. We believe this product will increase interconnection among our diverse customer base.

• In June 2010, we announced an Ethernet Exchange product that allows the efficient interconnection of geographically dispersed Ethernet based products and related services through virtual interconnection. As a result, Ethernet service providers will be able to expand their geographic reach and connect to new customers. In October 2010, we announced that the Ethernet Exchange had been deployed in five locations with nine charter service provider customers testing the service.

Selective Expansion in Existing and New Markets.    As we grow our business, we aim to grow efficiently by increasing our gross square footage to satisfy the demand for our products and related services in existing facilities and by selectively identifying domestic and international opportunities for expansion into new markets. We only begin new expansions once we have identified customers and we have the capital to fully fund the build out. Our expansions are done in phases in order to manage the timing and scale of our capital expenditure obligations, reduce risk and improve our return on capital. We intend to offer global interconnection and colocation products and related services and will focus our expansion efforts on major population centers with extensive fiber routes and where network traffic is most concentrated. In some markets where we already operate an interconnection facility, we may choose to expand our footprint with a new colocation facility (which we refer to as an “Annex”) and we will connect it to the interconnection facility through a private fiber network. To date, we have successfully deployed Annexes in Clifton, New Jersey and Dallas, Texas. We are also considering operating interconnection and colocation facilities in other companies’ wholesale datacenter buildings similar to our arrangement with Digital Realty Trust.

Pursue Selective Acquisitions.    We believe our industry has favorable consolidation characteristics and expect this trend to continue in the foreseeable future. Given the limited availability of interconnection and colocation facilities within tier-1 markets, acquisitions of existing businesses may provide a cost-effective method of increasing network densities, expanding our customer base and broadening our geographic footprint. We intend to pursue attractive opportunities as they arise.

Our Products and Related Services

We provide network neutral interconnection and colocation products and certain related installation and technical support services to our customers. To access our products and related services, customers purchase and install their datacenter equipment within space in our facilities. We believe that the majority of our customers buy colocation products from us due to the network density in the facility, the ecosystems that exist within the

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facility, and the proximity and low latency interconnection access to numerous communications service providers and other customers within our facilities. We do not sell colocation products without the accompanying sale of interconnection products.

Our facilities enable our customers to interconnect and exchange network traffic with each other, and a number of ecosystems have developed in our facilities from this interconnection. We view an ecosystem as a set of related businesses and organizations that use our facilities to exchange information with each other. Examples of ecosystems that have developed in one or more of our facilities include:

• Communication Service Provider Ecosystem:    In a communications service provider ecosystem, a diverse collection of service providers can extend the reach of their physical networks through interconnections with other communications service providers. These communications service providers can also utilize our facilities to interconnect with their direct customers rather than building an independent fiber link. While the accessibility to our communications service providers ecosystem participants is attractive to enterprises who benefit from access to multiple network providers, enterprises also benefit from the ability to exchange network traffic directly with other enterprises in a low latency environment.

• Financial Ecosystem:    A financial ecosystem can consist of financial exchanges, financial clients and information exchanges that exchange large volumes of real-time financial market data. Direct interconnection with partners in a low latency environment may enable more effective network exchange of time-sensitive data. The financial ecosystem also relies on interconnections with communications service providers to move network traffic between other external locations.

• Media and Content Ecosystem:    A media/content ecosystem can consist of media content providers, content management and storage providers, and media aggregators who each play an important role in the production, storage and distribution of content across various channels. Within this ecosystem, interconnection with communications service providers allows for content to be effectively transferred to additional external locations.

• Government and Education Ecosystem:    A government and education ecosystem can consist of educational institutions, government organizations and research networks, and other peering exchanges and networking organizations that exchange network traffic that pertains to research studies, clinical trials and other activities.

Interconnection Products

Our interconnection products, including our cross connect (a physical interconnection), Internet exchange and other related products, generated 36% and 38% of our recurring revenues during the year ended December 31, 2009 and for the nine months ended September 30, 2010, respectively. Our cross connect products enable our customers to connect directly to any communications service provider, enterprise or other customer in our facilities. These products are typically provided for a recurring monthly fee per connection. Our Internet exchange products enable our customers to connect directly to our Internet exchange, which provides for public or private peering with other customers on an intermediary switch device. Our customers license ports to connect to our Internet exchange for a recurring monthly fee per port, based on port bandwidth capacity. Our interconnection products are predominantly direct connections via cross connects, however, we also provide Internet peering exchanges for the convenience of our customers. We also generate recurring revenues from reselling Internet access, which we sell to accommodate certain customers’ requests for these products. We contract with certain Internet service providers and then resell their Internet access service to customers typically in one megabit per second to one hundred megabits per second increments. Customers typically sign a contract for this offering that matches the term of their order for space and pay us a recurring monthly fee per megabits per second.

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Our interconnection products are outlined in more detail below.

Product	Description
Physical Cross Connect	Physically connects customer networks within our facilities.
Telx Internet Exchange	Facilitates the exchange of IP traffic between service providers through a peering platform.
Telx Virtual Exchange Platform	Provides customers the ability to exchange communications traffic that consists of different communications protocols. It also allows customers to combine multiple slow circuits into a single fast circuit, or vice versa.
Metro Cross Connect	Provides ability to interconnect between two Telx facilities in the same metro area, enabling seamless connectivity between customers within these facilities.
Virtual Meet Me Room (VMMR)	Provides virtual interconnections between Frankfurt and New York with other communications service providers, without having to invest in a physical point-of-presence with expensive hardware.
Telx Video Exchange	Provides video service providers the ability to exchange video traffic in a secure carrier-rich environment translating among various protocols.
Telx Ethernet Exchange	Provides customers the ability to interconnect Ethernet networks.

Colocation Products

Our facilities provide our customers with a reliable, secure and climate controlled environment to house their networking and computing equipment and facilitate interconnections. Our colocation products, consisting of customized space options, redundant power and cooling systems, physical security, fire suppression and water leak detection systems, generated 64% and 62% of our recurring revenue in 2009 and for the nine months ended September 30, 2010, respectively.

Colocation Space.    We provide colocation space for a recurring monthly fee for a cabinet or on a per square foot basis for cage space. Our customers that license cage space typically use between 50 and 500 square feet in an interconnection and colocation facility, and often license such space in multiple interconnection and colocation facilities. As of December 31, 2009, 95% of our top 20 customers by revenue and 65% of our top 100 customers by revenue had space in multiple Telx facilities. For the nine months ended September 30, 2010, 95% of our top 20 customers by revenue and 67% of our top 100 customers by revenue utilized our products and services in multiple facilities. Customers sign service orders, governed by the terms and conditions of a master services agreement, with a typical term of one to three years.

Power.    We provide access to power for a recurring monthly fee under our standard colocation contract. We provide both alternating current and direct current power circuits. Our customers pay for power on a per amp basis, typically in 20 to 30 amp increments. Our redundant power and cooling systems have enabled us to provide over 99.999% uptime since 2003.

Related Services

In addition to our core interconnection and colocation products, we offer customers certain related installation and technical support services on a 24 hours per day, 365 days per year basis to all customers located within our facilities. Designed to provide our customers with an always-available presence, our services allow our customers faster access to their equipment, minimizing cost and time to resolution. Depending on the nature of the services, revenues from these services may be either recurring or non-recurring.

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Installation Services.    We provide installation services to assist our customers in accessing our interconnection and colocation products. We receive one-time installation fees determined by the complexity of the installation. We typically receive fees per interconnection circuit or port installed, per cabinet or square foot of cage space installed and per amp of power installed.

Technical Support Services.    Technical support services are provided by our technicians, who are available 24 hours per day, 365 days per year. These services include system reboots, hardware and software troubleshooting, circuit, loop and fiber troubleshooting, equipment installation and provisioning, and infrastructure installations. We charge customers for these services using 15 minute increments (with 1 hour minimums), or under contractual subscription arrangements for a certain number of hours of technical support per month.

The diagram below is just an example of how customers that are colocated in a Telx facility can interconnect, both physically and via our Telx Internet Exchange, to other Telx customers through our interconnection areas.

Our Customers

Our customers include communications service providers, enterprises, online media, video and content providers, government agencies, cloud computing providers and SaaS providers who utilize our interconnection-centric offering. Our communications service providers include leading global and domestic telecommunications networks, multi-system operators, Internet Service Providers and wireless providers. Our online media, video and content provider customers consist of businesses that deliver content and content based services over the Internet. Our enterprise, government, cloud computing and SaaS customers include entities that are dependent on the Internet as well as private networks. For the year ended December 31, 2009, our top ten customers represented 25% of our monthly recurring revenue and our largest customer represented approximately 5% of our total revenue. For the

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nine months ended September 30, 2010, our top ten customers represented 26% of our monthly recurring revenue and our largest customer represented approximately 5% of our total revenue. As of December 31, 2009, we had 763 customers and 95% of our top 20 customers by revenue and 65% of our top 100 customers by revenue had space in multiple Telx facilities. For the nine months ended September 30, 2010, we had 844 customers and 95% of our top 20 customers by revenue and 67% of our top 100 customers by revenue utilized our products and services in multiple facilities.

Our communications service provider customers represented approximately 78% of revenues for the year ended December 31, 2009. Our enterprise customers represented approximately 15% of revenues for the same time period, while our online media, video and content provider customers and government, cloud, SaaS and other customers represented approximately 5% and 1% of revenues, respectively. For the nine months ended September 30, 2010, communications service providers represented approximately 74% of revenues, enterprise customers represented approximately 20% of revenues, online media, video and content providers were approximately 5% of revenues and SaaS, cloud and other customers were approximately 1% of revenues.

With 844 customers and 31,655 total physical interconnections within our facilities as of September 30, 2010, our interconnection-centric model targets customers that value the interconnection density in our secure and reliable environments. The table below is a representative list of those customers.

Communications Service Providers	Enterprises/Institutions	Online Media, Video and Content Providers	Government / Cloud / SaaS / Other
AT&T Clearwire Cogent Equinix Level 3 Communications Qwest Reliance Globalcom Sprint Tata Telecom Telecom Italia Verizon	ACTIV Financial Systems Emory University Hewlett Packard International Securities Exchange (ISE) University of Florida	CBS Justin TV Jahjah Viacom Yahoo!	iLand Internet Solutions NASA (via Arcata Associates) DediPower Managed Hosting SoftLayer Technologies

The majority of our customer agreements are structured as master service agreements that contain all of the general terms and conditions, including payment terms, termination provisions, indemnity provisions and limitations on liability. The master agreements do not have any specific products and related services or associated prices or terms of specific products and services as those terms are all set forth in separate service orders. The services order sets forth the type of service and the monthly, hourly, one-time charge or subscription fee, as applicable, for the service. We typically have the ability to pass through increased power costs to our customers, although we do not always elect to do so. In general, customers may not terminate their agreements without providing advance notice, generally 60 to 90 days, of their intent to terminate and paying all remaining amounts due under the contract. Failure to provide notice of termination typically results in an automatic extension of the contract for an additional year. Our liability is generally limited to amounts paid under the contract, and we are not generally liable for any consequential damages. Furthermore, customers are required to name us as an additional insured with rights of subrogation on their insurance policies.

Sales and Marketing

We sell our products and related services through our direct sales force and through indirect channel sales.

Direct Sales.    As of September 30, 2010, our direct sales organization was comprised of 19 sales representatives and 4 sales engineers. Our direct, commission-based sales team generates leads primarily from

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customer referrals, unsolicited outbound calls and our marketing efforts. Our direct sales effort also includes a strategic accounts sales force to target opportunities with large existing customers. We utilize a combination of sales representatives and sales engineers to efficiently provide our customers with technical solutions tailored to their individual requirements.

Indirect Channel Sales.    As of September 30, 2010, our channel sales organization was comprised of 3 employees who direct and organize our indirect channel sales efforts. Our channel sales program consists of over 170 third-party sales agents worldwide. These third-party sales agents include communications service providers, management and technical consultancies, technology integrators and software application providers. Third-party sales agents are typically paid a percentage of the customer’s monthly recurring fees for the length of the customer contract.

Marketing.    Our marketing efforts communicate the advantages of our products and related services and generate customer demand. Our marketing activities include web-based paid and natural search, participation in technology trade shows, conferences and customer events, web-based and mail-based advertisements, advertisements in business and technology publications, and targeted regional public relations activities. For the benefit of our customers, we operate an online global marketplace with advanced customer portal capabilities that allow our customers to access important information and connect with each other seamlessly and efficiently. We believe our reputation for providing efficient cross connects has generated a significant amount of word-of-mouth recommendations and referrals. In addition, in 2003 we introduced our annual Customer Business Exchange (CBX) tradeshow, which attracted over 700 industry professionals annually for the past four years, including approximately 1,100 industry professionals at the 2010 event. This event serves as an opportunity for us to enhance the value proposition to our customers, as they have the opportunity to exhibit their product portfolio to each other, and enhances our marketing efforts by allowing us to offer additional products to existing customers and/or attract new customers.

Our Facilities

Our corporate headquarters are located in New York, New York. We typically locate our operating facilities in buildings with a significant concentration of communications service providers or buildings located near primary communications sites, which reduce the cost and complexity of connecting our facilities to communications networks. The number of customers and availability of interconnections varies from facility to facility, depending primarily on the market and its potential customer base as well as on the stage of our development in such market.

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As of November 1, 2010, we operated 15 facilities with 604,368 total gross square feet. Due to infrastructure requirements, gross square footage is greater than the total square footage we have available for sale. All of our facilities are leased except our Atlanta facility, which we own. We constantly monitor the space and power utilization of our facilities relative to market opportunity to manage our facilities requirements appropriately. In addition, we continue to review and implement green technologies. The table below shows the number, address, gross square footage and expiration date of our facilities in each of our markets as of November 1, 2010.

Market	Number of Our Facilities		Facilities Addresses	Gross Square Footage		Lease Expiration Dates(1)
New York City Area(2)		4	60 Hudson Street, NY 111 8th Avenue, NY(3) 100 Delawanna Ave., Clifton, NJ 300 Blvd E., Weehawken, NJ (*)		253,133	2022 through 2050
Atlanta		1	56 Marietta St., Atlanta		152,650	Telx owned facility
Dallas(4)		2	2323 Bryan St., Dallas (*) 8435 Stemmons Frwy., Dallas		50,453	2028 through 2046
Chicago		2	600 S. Federal St., Chicago (*) 350 E. Cermak Rd., Chicago (*)		60,640	2046
San Francisco Bay Area		2	200 Paul Ave., San Francisco (*) 1100 Space Park Dr., Santa Clara (*)		30,366	2046
Miami		1	36 N.E. 2nd St., Miami (*)		23,805	2046
Phoenix		1	120 E. Van Buren St., Phoenix (*)		13,484	2046
Los Angeles		1	600 W. 7th St., Los Angeles (*)		18,468	2046
Charlotte		1	113 N. Myers St., Charlotte (*)		1,369	2046
Total		15			604,368

(1) Assumes exercise of all renewal terms.

(2) The lease for approximately 88,790 square feet of space expires in 2022, the lease for approximately 64,766 square feet of space expires in 2032, the colocation agreement for approximately 40,048 square feet of space expires in 2024, the lease for approximately 598 square feet of space expires in 2046, and the lease for approximately 58,931 square feet of space expires in 2050.

(3) We have 64,766 square feet of space under direct lease with the landlord and 40,048 square feet of space under a colocation agreement with Digital Realty Trust.

(4) The lease for approximately 34,901 square feet of space expires in 2033, and the lease for approximately 15,552 square feet of space expires in 2046.

(*) Digital Realty Trust owned facility.

Generally, interconnection and colocation facilities consist of a number of suites, or segmented floorplans, which are leased, managed or utilized by various communications service providers, network neutral interconnection and colocation service providers, and managed service providers, web hosting companies and Internet service providers. While physical interconnections can be implemented intra-suite by the manager of a suite, physical interconnections between multiple suites (which we refer to as inter-suite physical interconnections) generally occur within a specific physical location in the datacenter called an interconnection area. Multiple providers may provide interconnection products within a given interconnection area.

Our relationship with Digital Realty Trust, one of the leading datacenter real estate investment trusts, generally provides us with the exclusive ability to operate the interconnection areas in 10 tier-1 wholesale datacenter buildings across the United States. Subject to certain exceptions described below, these interconnection areas are the primary way in which Digital Realty Trust tenants or subtenants in such buildings interconnect to other tenants within such buildings. In addition to our operation of such interconnection areas, we also lease space from Digital Realty Trust for our own offerings. As a result of these arrangements, we provide both interconnection for customers in Telx facilities as well as inter-suite connections for other colocation providers who have facilities within these buildings. Generally, our interconnection area leases with Digital Realty Trust provide that we pay Digital Realty Trust monthly rental fees along with a certain percentage of facility specific annual gross revenue that exceeds a stipulated threshold.

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Although Digital Realty Trust has designated us as its exclusive interconnection area operator, certain legacy tenants within Digital Realty Trust buildings continue to be able to facilitate certain inter-suite connections that existed prior to our arrangement with Digital Realty Trust. In addition, Digital Realty Trust itself operates its own interconnection facility where it can facilitate inter-suite connections. Typically, the Digital Realty Trust interconnection facilities are used for the purpose of connecting tenants to our interconnection areas and rarely facilitate more than one or two physical interconnections per tenant.

Competition

We operate in a highly competitive market that is evolving rapidly. Our principal competitors include the providers described below. Several of the companies with which we compete are also our customers.

Network Neutral Interconnection and Colocation Providers.    These competitors offer products and services that are similar to ours, including interconnection and colocation products and related services. We consider Equinix, Coresite and Terremark our peers when analyzing our performance against our primary competitors.

The primary competitive factors in our market are:

• market and specific location of facilities;

• density of cross connections;

• customer ecosystems;

• presence of major communications service providers;

• customer service and technical expertise;

• robustness of datacenters;

• breadth of service offered; and

• price.

During the initial stage of the sales cycle, we also compete with the service providers described below.

U.S.-based Communications Service Providers.    Communications service providers, such as AT&T, Level 3 Communications and Verizon, typically provide interconnection products and services through their owned networks. We believe these competitors operate colocation facilities primarily to cross-sell their core services including communications and Internet access and typically benefit from brand recognition and financial resources.

Managed Service Providers, Web Hosting Companies and Internet Service Providers.     Businesses may choose to use a hosting provider other than us to provide products and services and support for their IT systems in addition to the interconnection and colocation products and related services we offer. Our competitors in this category usually take control over a company’s network, and may provide the actual hardware and software. Companies in this category include IBM, Rackspace and SAVVIS.

In addition to the above, we compete with other regional, typically non-network neutral providers. As we expand domestically and internationally, we expect to encounter additional competition in the respective markets we select to enter.

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Intellectual Property

We hold the following trademarks/service marks: Telx Virtual Xchange, telx, TELX | VISION, Managed Hub and TELXVAULT. We consider our trademarks to be materially important to our business and the registered trademarks are renewable for their statutory terms.

Government Regulation

We are not currently subject to industry-specific government regulation.

Employees

As of September 30, 2010, we had 185 employees in the United States. We believe our relations with our employees are good. Our employees are not represented by a labor union and are not covered by a collective bargaining agreement.

Legal Proceedings

From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, operating results or financial condition.

Corporate Information

We were incorporated on August 3, 2000 as a Delaware corporation. We currently conduct certain operations through our wholly owned subsidiaries. We are headquartered in New York, New York. Our principal executive offices are located at 1 State Street, 21st Floor, New York, New York 10004 and our telephone number at this location is (212) 480-3300. Our website address is www.telx.com. Information included or referred to on, or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this prospectus.

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MANAGEMENT

Our Directors and Executive Officers

Set forth below is the name, age and position of each of our directors and executive officers as of November 8, 2010:

Name	Age		Positions
Howard Park		47	Chairman of the Board(1)(2)
Eric Shepcaro		52	Chief Executive Officer and Director
Christopher W. Downie		41	President, Chief Financial Officer, Treasurer
Bradley T. Hokamp		48	Chief Marketing Officer
J. Todd Raymond		42	Senior Vice President, Facility Acquisition
William Kolman		56	Executive Vice President, Sales
Michael Terlizzi		37	Executive Vice President, Engineering and Construction
Clayton J. Mynard		47	Senior Vice President, General Counsel and Secretary
Eric Harrison		47	Director(1)(2)
Daniel H. Schulman		52	Director(2)(3)
Rolla P. Huff		54	Director(1)(3)
Jesper Andersen		47	Director(3)
Thomas J. Fitzpatrick		53	Director(1)

(1) Member of our audit committee.

(2) Member of our compensation committee.

(3) Member of our nominating and corporate governance committee.

Biographical Information

Set forth below is biographical information for our directors and executive officers.

Howard Park

Mr. Park has been a member of our board of directors since April 2009 and our chairman since March 2010. Mr. Park has been a Managing Director at GI Partners since 2003. Prior to joining GI Partners, Mr. Park was an investment banker with SG Cowen, Smith Barney and Nomura Securities. From 1996 to 2002, Mr. Park was with SG Cowen in its leveraged and high-yield finance group covering the West Coast private equity community. Previously, he worked from 1990 to 1996 at Nomura Securities in the High Yield/Principal Finance Group. He has also worked at Booz Allen Hamilton as a strategy consultant from 1988 to 1990. Mr. Park received his B.A. cum laude in Economics from Rice University and his M.B.A from the Amos Tuck School of Business at Dartmouth College. Mr. Park sits on the board of directors of Ladder Capital Finance, AdvoServ, The Planet, Plum Healthcare and PC Helps.

We believe Mr. Park’s qualifications to serve on our board of directors include his expertise in business and corporate strategy and knowledge regarding our company and our industry.

Eric Shepcaro

Mr. Shepcaro has been our chief executive officer and a member of our board of directors since January 2007. Mr. Shepcaro was the chairman of our board of directors from January 2007 until March 2010. Mr. Shepcaro is responsible for leading and directing the strategy, growth and operations of the company. Mr. Shepcaro has over 25 years of experience working in the Network/IT industries. Prior to joining us, Mr. Shepcaro held several positions at AT&T between 2002 and 2007, including Senior Vice President of Business Development and Emerging Services and chairman of the Emerging Technology Customer Board,

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where he was responsible for identifying and launching new lines of business by leveraging new and existing technologies. He also served as Vice President of Business Strategy/Development and Emerging Technologies and Chief Strategist, leading AT&T’s transformation into a premier integrator of enterprise and application network solutions, and as the overall Transformation Officer of AT&T, accountable for programs to build shareholder value and create a framework for the future. Prior to joining AT&T, Mr. Shepcaro managed hosting and applications businesses at Digital Island and Netelligence, and spent 17 years at Sprint in a variety of positions in marketing, sales and operations. Mr. Shepcaro received a B.A. from the State University of New York at Albany and an M.B.A. from San Francisco State University.

We believe Mr. Shepcaro’s qualifications to serve on our board of directors include his three years as our chief executive officer and over 25 years of experience working in the Network/IT industries.

Christopher W. Downie

Mr. Downie has been our president, chief financial officer and treasurer since November 2007. From May 2007 until November 2007, Mr. Downie was our chief financial officer and treasurer. Mr. Downie was a member of our board of directors from April 2009 until March 2010. Mr. Downie is responsible for the company’s finance, human resources, procurement, IT and administration initiatives. Prior to joining us, Mr. Downie was Executive Vice President, Chief Operating Officer and Principal Executive Officer at Motient Corporation from 2004 to 2006, and prior to that served as their Senior Vice President and Chief Financial Officer from 2003 to 2004. Mr. Downie was a financial consultant and interim Chief Financial Officer for Communications Technology Advisors, LLC from 2002 to 2003, Senior Vice President and Chief Financial Officer of BroadStreet Communications Inc. from 2000 to 2002, a Vice President in the Investment Banking Division of Daniels & Associates, LP from 1993 to 2000 and an analyst in the corporate finance/mergers and acquisitions department at Bear Stearns & Co. Inc. from 1991 to 1993. Mr. Downie received a B.A. from Dartmouth College and an M.B.A. from New York University.

J. Todd Raymond

Mr. Raymond serves as our senior vice president, facility acquisition and is responsible for leading our facilities acquisition team. Mr. Raymond served as our senior vice president, general counsel and corporate secretary from November 2007 until March 2010. In addition, Mr. Raymond served as our general counsel and secretary from 2002 until March 2010; president and chief operating officer from March 2007 to November 2007; president and interim chief executive officer from October 2006 to February 2007; and controller from 2001 to 2004. Mr. Raymond was a member of our board of directors from March 2007 until March 2010. Prior to joining us, Mr. Raymond was a founder, General Counsel and Corporate Secretary of Stratus Services Group Inc., a managing attorney at a New Jersey law firm and in-house counsel to a New Jersey accounting firm from 1993 to 2001. Mr. Raymond has a B.S. in finance from Fairfield University, a J.D. from Albany Law School of Union University and is completing a L.L.M. in Finance law from Chicago-Kent College of Law.

William Kolman

Mr. Kolman has been our executive vice president of sales since May 2007 and is responsible for directing and implementing all aspects of our sales strategy. Mr. Kolman has over 31 years in technology-based senior sales management positions and extensive knowledge and experience in the telecom sector managing large sales units and providing services and hardware to global enterprises. Prior to joining us, Mr. Kolman was Vice President of Strategic Accounts at SAVVIS from August 2005 to May 2007, an officer at AT&T from 2000 to 2005, where he was responsible for the large global accounts in the Northeast, and a sector head at Concert, the AT&T and British Telecom joint partnership. Mr. Kolman’s prior experience also includes leading the Nortel Networks organization in New York City, managing multiple sales organizations in the Northeast for Sprint and co-founding Tri-State Telephone, where he marketed customer premise-based communications. Mr. Kolman holds a B.A. in Psychology from Dominican College and was a member of the inaugural Telecom Master’s program at New York University.

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Michael Terlizzi

Mr. Terlizzi has been our executive vice president, engineering and construction since March 2002, and is responsible for facility construction and day-to-day operations. Prior to joining us, Mr. Terlizzi was Director of Operations for ARBROS Communications from September 2000 to February 2002 and Director of Network Planning and Engineering for Network Plus from August 1999 to September 2000. He has also held technical positions at AT&T and WorldCom/MFS. Mr. Terlizzi received a B.S. from the State University of New York at Albany.

Bradley T. Hokamp

Mr. Hokamp has been our Chief Marketing Officer, responsible for product and solution management, corporate and field marketing, strategic business development, and customer support, since March 2010. From March 2005 to March 2010 he was a Senior Vice President at Savvis Inc., holding positions as the General Manager of the Hosting Business Unit, the leader of Global Solutions, and the head of Eastern Area and Federal Sales. Mr. Hokamp began his career at Savvis running the product management and marketing organization. He also spent 15 years in sales and marketing leadership roles at Sprint in their business division focused on Internet and data communications services. Mr. Hokamp holds a Bachelors degree in Economics and Business from Vanderbilt University.

Clayton J. Mynard

Mr. Mynard has served as our senior vice president, general counsel and secretary since August 2010. Prior to joining us, Mr. Mynard served as Vice President, General Counsel and Secretary of Switch & Data Facilities Company, Inc. (formerly Nasdaq: SDXC), or Switch & Data, from June 2003 until the sale of the company to Equinix, Inc. in April 2010. Upon the closing of such acquisition, Mr. Mynard served as Associate General Counsel of Equinix until August 2010. Prior to joining Switch & Data, Mr. Mynard was Of Counsel at the private law firm of Allen Dell, P.A. from February 2003 to June 2003, and in private practice from May 2002 to June 2003. From October 2000 to April 2002 Mr. Mynard served as Vice President, Business Affairs and General Counsel to Communications Equity Associates (CEA), an international investment and merchant bank specializing in the media, communications and Internet industries. Mr. Mynard holds a J.D. from the University of Florida and a Bachelors degree from Florida State University. Mr. Mynard is a member of the Florida Bar Association.

Eric Harrison

Mr. Harrison has been a member of our board of directors since October 2006. Mr. Harrison has been a partner and Portfolio Manager at Luminous Capital since January 2009. Mr. Harrison has spent the vast majority of his career as a principal investor, principally focused on the technology sector. From October 2008 to December 2009, Mr. Harrison was a consultant to GI Partners. From March 2001 to October 2008, Mr. Harrison served as a Managing Director of GI Partners, where he was involved in all aspects of the business, including deal sourcing, structuring, investment management, fund raising, and managing the internal operations of the firm. Prior to working at GI Partners, Mr. Harrison served as a Partner at Crosspoint Venture Partners from 1999 to 2001. Prior to that, he worked at InnoCal Ventures for five years, where he sourced, analyzed, and managed investments. He also previously worked in business development at Hewlett-Packard and corporate development at Ricoh Corporation. Mr. Harrison earned a B.S. in Finance and Accounting from the University of Colorado and an M.B.A. from The UCLA Anderson School of Management. Mr. Harrison currently also serves on the Board of Directors of South Central Scholars and Confianza.

We believe Mr. Harrison’s qualifications to serve on our board of directors include his expertise in business and corporate strategy, knowledge regarding our company and our industry and his expertise in financial accounting matters.

Daniel H. Schulman

Mr. Schulman has been a member of our board of directors since February 2010. Since August 2010, Mr. Schulman has served as Group President — Enterprise Growth of American Express Corporation. Prior to that, Mr. Schulman served as President of the Sprint Prepaid Division beginning in November 2009. Prior to that,

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Mr. Schulman served as Chief Executive Officer of Virgin Mobile USA, LLC since September 2001. Prior to joining Virgin Mobile USA, Mr. Schulman served as the Chief Executive Officer of priceline.com. Prior to that, Mr. Schulman served in various positions for more than 18 years at AT&T, including as a member of the AT&T Operations Group and President of the long distance division. He also currently serves on the board of directors of Symantec Corporation (Nasdaq: SYMC), where he chairs the compensation committee, and Flextronics International Ltd. (Nasdaq: FLEX). In addition, Mr. Schulman serves on the board of Autism Speaks, the advisory committee of Greycroft, an early stage private equity company, and serves on the board of governors of Rutgers, the state university of New Jersey, and is the chair of the intercollegiate athletics committee. Mr. Schulman has a B.A. in economics from Middlebury College and an M.B.A., majoring in finance from New York University.

We believe that Mr. Schulman’s qualifications to serve on our board of directors include his years of executive leadership, his expertise in business and corporate strategy and his experience serving on the board of directors of two other public companies.

Rolla P. Huff

Mr. Huff has been a member of our board of directors since July 2010. He has been a director and the Chief Executive Officer and President of Earthlink, Inc. since June 2007, and the Chairman of the Board of Earthlink, Inc. since January 2008. Mr. Huff was appointed as the Chief Executive Officer of Mpower Holding Corporation in November 1999 and as the Chairman of the Board of Mpower in July 2001 and served in both capacities until its merger with a subsidiary of U.S. TelePacific Holdings Corp. in August 2006. Mpower filed a Voluntary Petition under Chapter 11 of the United States Bankruptcy Code in April 2002 and emerged from bankruptcy protection in July 2002. From March 1999 until its acquisition in September 1999, Mr. Huff served as President and Chief Operating Officer of Frontier Corporation and served as Executive Vice President and Chief Financial Officer of that corporation from May 1998 to March 1999. From July 1997 to May 1998, Mr. Huff was President of AT&T Wireless for the Central U.S. region and Mr. Huff served as Senior Vice President and Chief Financial Officer of that company from 1995 to 1997. From 1994 to 1995, Mr. Huff was Financial Vice President of Mergers and Acquisitions for AT&T.

We believe Mr. Huff’s qualifications to serve on our board of directors include his experience in senior leadership and board positions of public telecommunications companies which has positioned him to bring executive, corporate development, operational and financial experience, as well as industry knowledge, to his position as a member of our board of directors.

Jesper Andersen

Mr. Andersen has been a member of our board of directors since July 2010. Mr. Andersen has been Senior Vice President of Network Management at Cisco Systems, Inc. since September 2008. Prior to joining Cisco, he served as Senior Vice President of Application Strategy of Oracle Corp. from January 2005 to September 2008. From August 2003 to December 2004, he was Group Vice President and General Manager of PeopleTools and the technology department at PeopleSoft, and he served as an Executive Vice President of Products of Pivotal Corp. from April 2002 through August 2003. Prior to joining Pivotal, Mr. Andersen served as Vice President of CRM Online Services at Oracle Corporation from August 1999 to March 2002. Mr. Andersen also served as a Senior Director of Development for Service Products in the Customer Relationship Management division at Oracle Corporation from May 1998 to July 1999. Mr. Andersen holds a Master’s Degree in Computer Science from Aalborg University, Denmark in 1986.

We believe Mr. Andersen’s qualifications to serve on our board of directors include his experience as a senior executive of public telecommunications companies, which has positioned him to bring his executive leadership, industry knowledge and technical expertise to our board of directors.

Thomas J. Fitzpatrick

Mr. Fitzpatrick was elected to our board of directors on October 15, 2010. Mr. Fitzpatrick has served as the Chief Financial Officer of Iridium, Inc. since April 2010. From 2002 to December 2009, Mr. Fitzpatrick was Executive Vice President and Chief Financial Officer of Centennial Communications Corp., a publicly traded

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telecommunications company acquired by AT&T in November 2009. Prior to that, Mr. Fitzpatrick was Chief Financial Officer of several private and publicly traded companies in the telecommunications and technology industries and a Vice President at Bell Atlantic Corporation (now Verizon). He has an M.B.A. from Villanova University and a Bachelor’s degree in business administration from Pennsylvania State University. Mr. Fitzpatrick is also a Certified Public Accountant.

We believe Mr. Fitzpatrick’s qualifications to serve on our board of directors include his experience as a senior executive of public telecommunications companies, which has positioned him to bring his executive leadership, industry knowledge and financial expertise to our board of directors.

Board of Directors

Our board of directors currently has seven members. Pursuant to the existing stockholders agreement between us and our existing stockholders, the GI Partners Funds have the right to elect at least four directors. The GI Partners Funds designated Howard Park and Eric Harrison to our board of directors. We expect that the existing stockholders agreement will be amended in connection with our initial public offering such that the right to elect board members, as referenced above, will no longer exist. Upon completion of this offering, we anticipate that our board of directors will have seven members, a majority of whom will be independent under The Nasdaq Marketplace Rules. In June 2010, our board of directors appointed Daniel Schulman as our lead director.

As of the closing of this offering, our amended and restated certificate of incorporation and amended and restated bylaws will provide for a staggered, or classified, board of directors consisting of three classes of directors, each serving staggered three-year terms, as follows:

• the Class I directors will be                 ,                  and                 , and their terms will expire at the annual meeting of stockholders to be held in 2011;

• the Class II directors will be                  and                 , and their terms will expire at the annual meeting of stockholders to be held in 2012; and

• the Class III directors will be                  and                 , and their terms will expire at the annual meeting of stockholders to be held in 2013.

Upon expiration of the term of a class of directors, directors for that class will be elected for three-year terms at the annual meeting of stockholders in the year in which that term expires. Each director’s term continues until the election and qualification of his successor, or his earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

Board Committees

Our board of directors has established an audit committee and a compensation committee. Prior to the completion of this offering, our board of directors plans to establish a nominating and corporate governance committee. Our board of directors may also establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our amended and restated certificate of incorporation and amended and restated bylaws.

Audit Committee

Our audit committee currently consists of Thomas Fitzpatrick, the committee chairperson, Rolla Huff, Eric Harrison and Howard Park. Upon completion of this offering, we expect that              will serve as the chairperson of the audit committee and expect that our board of directors will determine that             ,              and

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             are “independent” as defined under and required by the federal securities laws and The Nasdaq Marketplace Rules. We also expect that our board of directors will determine that                      is an “audit committee financial expert,” as that term is defined by the SEC. Within one year of the effectiveness of the registration statement of which this prospectus forms a part, we intend that the audit committee will be fully independent as required by the federal securities laws, and The Nasdaq Marketplace Rules. The audit committee has direct responsibility for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm, KPMG LLP. In addition, approval of the audit committee is required prior to our entering into any related-party transaction. It is also responsible for “whistle-blowing” procedures and certain other compliance matters.

Compensation Committee

Our compensation committee currently consists of Daniel Schulman, the committee chairperson, Howard Park and Eric Harrison. All of the directors on this committee will be independent under The Nasdaq Marketplace Rules within one year of the completion of this offering. Among other things, the compensation committee will review, and will make recommendations to the board of directors regarding, the compensation and benefits of our executive officers. The compensation committee will also administer the issuance of stock options and other awards under our equity incentive plans and will establish and review policies relating to the compensation and benefits of our employees and consultants.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee currently consists of Rolla Huff, the committee chairperson, Daniel Schulman and Jesper Andersen. All of the directors on this committee will be independent under The Nasdaq Marketplace Rules within one year of the completion of this offering. The nominating and corporate governance committee will be responsible for, among other things, developing and recommending to our board of directors our corporate governance guidelines, identifying individuals qualified to become board members, overseeing the evaluation of the performance of the board of directors, selecting the director nominees for the next annual meeting of stockholders, and selecting director candidates to fill any vacancies on the board of directors.

Compensation Committee Interlocks and Insider Participation

No member of the compensation committee is an officer or employee of the company. None of our executive officers serves, or has served during the past fiscal year, as a member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a member of our board of directors.

Code of Conduct and Ethics

Our code of conduct and ethics applies to all of our employees, officers and directors, including our chief executive officer and senior financial officers. A full text of the code is posted on our website at www.telx.com under the Corporate Governance section. We intend to disclose future amendments to our code of conduct and ethics, or certain waivers of such provisions, at the same location on our website identified above and also in public filings. The inclusion of our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.

Director Compensation

Prior to March 15, 2010, our directors did not receive any compensation for their service as directors or as board committee members. After March 15, 2010, Mr. Schulman received an advance on his future board retainer

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in the amount of $62,500. Effective in June 2010, we implemented a director compensation policy that will provide for compensation to be paid to our non-employee directors in accordance with the following terms and conditions:

Annual Retainers. Each non-employee director shall be paid an annual retainer of $35,000 for his or her service on our board of directors. In addition, non-employee directors who serve on board committees shall be paid the following annual retainers: $10,000 for service on our audit committee; $10,000 for service on our compensation committee, and $5,000 for service on our nominating and corporate governance committee. Our non-employee chairman of the board or lead director shall be paid an additional annual retainer of $20,000 (or such other amount as determined by our board of directors), and our non-employee directors who serve as chairpersons of board committees shall receive the additional following amounts: $15,000 for chairing our audit committee, $10,000 for chairing our compensation committee, and $8,000 for chairing our nominating and corporate governance committee. No separate meeting fees shall be paid for attendance at any board or committee meetings. Annual cash compensation (retainers) will become payable on January 1 of each year. Payments to directors who join the board during the year shall be pro rated based on the date of the director’s commencement of service as a director chairperson, lead director or committee member, as the case may be.

Equity-based Compensation. Our non-employee directors shall be eligible to receive equity-based compensation awards pursuant to our 2010 Stock Incentive Plan (referred to herein as the 2010 Plan) and pursuant to any other equity-based compensation plan of the company, as follows:

• Initial restricted stock unit, or RSU, grant for new independent directors of $65,000 in equity value, vesting in three equal annual installments on the anniversary of the grant (except as set forth below); provided, however, that such initial grant for our lead director shall be $150,000.

• Annual RSU grants for all non-employee directors (including new directors effective as of their appointment to the board) of $60,000 in equity value, vesting upon the annual anniversary of the grant (except as set forth below).

• The initial RSU grants and first annual RSU grants for all directors who are serving on or prior to the effective date of our initial public offering shall be granted at the time of the closing of the initial public offering.

To the extent the initial public offering is not completed prior to December 31, 2010, the directors shall be provided the initial RSU grant and annual RSU grants on a pro rated basis from election to December 31, 2010 at a valuation approved by our board of directors consistent with a third party assessment by the board.

The vesting period for the RSUs granted to for Mr. Schulman and Mr. Harrison shall be deemed to have commenced on January 21, 2010, and January 1, 2010, respectively.

Annual RSU grants shall be made upon election to our board of directors and thereafter annually on the 5th day after the financial results for the first quarter are made available to stockholders, or the Annual RSU Grant Dates. Annual RSU grants made upon election to our board of directors shall be granted pro rata to the next Annual RSU Grant Date for both amount of grant and vesting, and, with respect to the 2011 Annual Grant, the amount related to the period between January 1, 2011 and the Annual Grant date shall be immediately vested.

• All RSUs granted to non-employee directors shall fully vest upon a change of control as defined in the 2010 Plan.

Travel Expense Reimbursement. Non-employee directors shall be entitled to receive reimbursement for reasonable travel expenses which they properly incur in connection with their functions and duties as a director.

Notwithstanding the above, non-employee directors who are affiliated with GI Partners shall not be entitled to retainers or RSU grants pursuant to this policy.

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EXECUTIVE COMPENSATION

Below is an explanation of how our compensation program was designed and operated in 2009 with respect to the following individuals who, based on applicable securities laws, were our named executive officers, or NEOs, for 2009: (i) Eric Shepcaro, as our principal executive officer, (ii) Christopher W. Downie, as our principal financial officer, and (iii) J. Todd Raymond, William Kolman, and Michael Terlizzi, as our three other most highly compensated executive officers for the fiscal year ended December 31, 2009. For the titles, ages, and biographical information of our NEOs, please refer to “Management” above. The Summary Compensation Table and separate tables below disclose each NEO’s total compensation for fiscal year 2009.

Compensation Discussion and Analysis – 2009 Summary and 2010 Changes

In 2009, our executive compensation program for NEOs reflected our practices as a privately-held company, and accordingly our board of directors made all decisions in the course of regularly-scheduled meetings. Through having Messrs. Shepcaro, Downie and Raymond serving as board members throughout 2009, management participated in board meetings at which executive compensation decisions were made, but no NEO participated in or voted on any compensatory decision that affected him personally. The independent members of our board of directors accordingly controlled all of compensation decisions for our NEOs, although our CEO (and prior to March 2, 2010, the chairman of our board) fully participated (from a discussion and voting perspective) in compensation decisions for our NEOs other than himself. We believe that those decisions, as disclosed below, were appropriate based on our 2009 financial performance, on general economic conditions, and on our board of directors’ subjective assessments of individual and corporate performance as other factors relevant to our board of directors’ annual salary and bonus determinations. In particular, our NEOs received target-level bonuses and total compensation, principally because we achieved financial and other operating results in 2009 that accomplished the principal objectives identified in our business plan. For 2010 and future years, we expect to revise our executive compensation practices in the manner described below under the heading “2010 Changes to Executive Compensation.”

Overview of Executive Compensation Philosophy and Its Key Elements

As a general matter, our board of directors undertakes to provide our NEOs with compensation that is highly performance-based and competitive in our industry. We are engaged in a very competitive industry, and our success depends on attracting and retaining qualified executives through providing them with a subjectively considered balance of fixed and variable (performance-based) compensation. To that end, our board of directors provided our NEOs with total compensation in 2009 through a combination of the following components that reflect our consistent practices for past years:

• a base salary commensurate with each NEO’s experience and length of service with us;

• the opportunity to earn incentive compensation through cash bonuses targeted at up to 100% of base salary, and through the vesting of past stock-based awards;

• severance protections through employment agreements that we entered into with Messrs. Shepcaro, Downie, and Kolman in 2007, and with Messrs. Raymond and Terlizzi in 2006; and

• participation in our broad-based employee benefits programs providing health and life insurance coverage, retirement benefits, and certain perquisites and other nondiscriminatory fringe benefits.

Elements of Executive Compensation

Base Salary.    In general, we provide base salary as fixed compensation for services rendered in the position that the NEO serves. With this in mind, our board of directors determines base salaries in its discretion (subject to the terms of each NEO’s employment agreement), after considering a variety of factors including each NEO’s qualifications and experience, prior employment, industry knowledge, scope of responsibilities, individual

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performance, and general industry practices as informally observed. Specific weightings are not applied to these factors. Base salaries are generally set when an NEO begins employment and are adjusted annually, if necessary in our board of directors’ discretion, and are intended to provide competitive and fair compensation for basic job performance.

Annual Bonus.    For 2009, our board of directors followed its past practice of establishing corporate and individual performance targets based on our business plan, and then making cash bonus awards shortly after year end, in all cases based on our board of directors’ subjective and qualitative assessment of how our financial results and the NEO’s individual performance compared to targeted performance and the NEO’s individual performance-based goals, with further discretionary adjustment for factors such as the NEO’s technical expertise, leadership and management skills over the performance period. As a result, although we follow a general formula as a guide for determining bonuses, our board of directors has made final bonus determinations solely at its discretion. The target bonuses for all NEOs and employees were targeted to fall within a range of 10%-100% of base salary for the years 2007 through 2009. Our board of directors typically has made annual bonus determinations shortly after the end of our fiscal year, with payments made soon afterward, and in 2008 paid an additional mid-year bonus to all employees, including our NEOs, due to generally favorable business conditions and in order to provide our employees with additional motivation by sharing in our success.

Stock-based Awards.    In 2006, 2007 and 2008, our NEOs received stock-based compensation in the form of grants of shares of our Series B Contingent Preferred Stock (referred to herein as restricted stock awards) that generally vest in 48 monthly installments, and that were intended to provide stock-based compensation for the ensuing four years. Our board of directors believes that these awards will have served their intended purpose when we complete this offering, and that regular stock-based awards will occur in 2010 and future years. See “2010 Changes to Executive Compensation.” Immediately prior to our initial public offering, each outstanding share of Series B Contingent Preferred stock will convert into between zero and one share of Series B Convertible Preferred Stock. (The precise rate of conversion will be based on the internal rate of return of the GI Partners Funds investment in Telx as set forth in our current amended and restated certificate of incorporation.) The outstanding shares of Series B Convertible Preferred will then immediately convert into our common stock. However, in the event that the GI Partners Funds does not reach a minimum return threshold as provided for in our current amended and restated certificate of incorporation, the Series B Contingent Preferred Stock will not convert at all.

Executive Loans.    In 2007 and 2008, we made arms-length loans to our NEOs (and certain other employees) in order to enable them to pay the tax liability associated with making tax elections under Section 83(b) of the Internal Revenue Code. These loans bore interest at a fixed rate at the time the loan was made, with 10% of the principal, and accrued interest, being payable in each of the ensuing five years, and with the remaining balance being due in the sixth year. Pursuant to loan termination agreements entered into as of March 2, 2010 by the company and each of Messrs. Shepcaro, Downie, Kolman, Terlizzi and Raymond, loans in the outstanding amounts of $268,833, $149,757, $51,214, $46,816 and $194,670, respectively, were eliminated in connection with our initial public offering in order to comply with the Sarbanes-Oxley Act’s prohibition on such loans. Pursuant to such agreements, each executive repaid 50% of his respective outstanding loan balance and the remaining 50% was cancelled by us. In addition, pursuant to such agreements, each executive agreed that we may, in our sole discretion, take the cancellation of any unpaid indebtedness into account when making future decisions regarding discretionary cash bonuses and stock awards to be made to such executive with respect to his services in 2010.

Perquisites.    In order to provide and to maintain a competitive benefits package to attract and retain our NEOs, we have provided them with life insurance policies upon commencement of employment and adjusted the policies as necessary to meet the changing needs of management for life insurance. We do not otherwise provide our NEOs with any perquisites or other fringe benefits than those available on equivalent terms to our employees generally.

Retirement and Welfare Plan Benefits.    Our NEOs participate in our broad-based 401(k), health, and other welfare plans on the same terms and conditions that apply to other employees. Regarding the 401(k) plan, our

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NEOs are eligible to make before-tax contributions, within the limits imposed under applicable tax laws. We do not currently make any employer matching or other contributions to the 401(k) plan.

Severance Protections.    Each of our NEOs is entitled to severance benefit protections pursuant to an employment agreement entered into at the time of hire for Messrs. Shepcaro, Downie, and Kolman, and at the time of our acquisition in 2006 by the GI Partners Funds in the case of Messrs. Raymond and Terlizzi. These employment agreements are substantially similar, and generally provide that if the NEO’s employment is terminated by us without cause, then the NEO shall receive the following, with no duty to mitigate: (i) 12 months of base salary continuation for NEOs other than Mr. Shepcaro, who is entitled to receive $37,500 per month for 18 months; and (ii) up to twelve months of company-paid health insurance benefits, increased to 18 months for Mr. Shepcaro. Messrs. Shepcaro, Raymond, Kolman, and Terlizzi are entitled to the same severance benefits upon a resignation from employment for “good reason” as defined in their employment agreements. These severance benefits were provided in order to attract or retain our NEOs, and because we understand that severance arrangements are common in our industry. We expect to enter into new employment agreements (that will replace the existing agreements) with all of our NEOs in connection with the consummation of our initial public offering as described under “2010 Changes to Executive Compensation.”

Specific Executive Compensation Decisions for 2009

Our board of directors made the following decisions in 2009 with respect to each distinctive component of executive compensation for our NEOs:

Base Salary.    The annual base salary as of the end of fiscal year 2009 for each NEO is presented in the table below. Salaries for each NEO were the same in 2009 as in 2008, except in the case of Mr. Downie, whose salary was increased by our board of directors due to his increasing responsibilities and workload as our President.

Executive	2009
Eric Shepcaro
Chief Executive Officer and Director	$	300,000
Christopher W. Downie
President, Chief Financial Officer and Treasurer		264,600
J. Todd Raymond
Senior Vice President (SVP), Facility Acquisition		207,000
William Kolman
Executive Vice President (EVP), Sales		200,000
Michael Terlizzi
Executive Vice President (EVP), Engineering and Construction	$	190,800

Annual Bonus.    In 2009, we made cash bonus awards under a program designed to reward the achievements of our NEOs and employees over the fiscal year. For our NEOs, forty percent of their bonuses for 2009 reflected how our Adjusted EBITDA and revenue results ($29.2 million and $98.3 million, respectively), compared to those in our overall business plan ($30.4 million and $98.8 million, respectively, for targeted Adjusted EBITDA and revenues), twenty percent reflected facility specific results detailed below, and forty percent reflected our board of directors’ assessment of personal goals and objectives, as outlined for each NEO on a case by case basis at the start of 2009.

The level of satisfaction of our facility specific bonus goal was determined based on the average percentage attainment of three individual sub-goals. The first sub-goal related to Adjusted EBITDA targets for three of our facilities. We set a target for two of our facilities to have positive Adjusted EBITDA (net of corporate overhead)

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by the end of 2009. The Adjusted EBITDA for one facility in December 2009 was slightly positive, and the Adjusted EBITDA for the other facility in December 2009 was approximately zero. We also set a target for the third facility to beat an Adjusted EBITDA loss of $1.1 million. The actual Adjusted EBITDA loss was $1.5 million, and accordingly this sub-goal was achieved for two of the three individual facilities, representing an overall achievement for this sub-goal of 66.7%.

The second and third sub-goals were related to revenue targets at our Dallas, TX (Stemmons) and Clifton, NJ facilities. The Stemmons facility had revenue of $1.2 million compared to a target of $1.6 million (75% of target), and the Clifton facility had revenue of $1.3 million compared to a target of $3.0 million (44% of target). Accordingly, the average achievement for these three sub-goals was 62%.

The actual bonuses that our NEOs received were based on the following subjective determinations that our board of directors made after receiving recommendations from its members who are NEOs (but with those members abstaining from voting):

• Messrs. Shepcaro, Downie, Raymond, Kolman, and Terlizzi had target cash bonuses of 100%, 100%, 100%, 100%, and 65% of their base salary, respectively, based on our board’s application of the criteria disclosed above.

• The actual bonus for each NEO (other than Mr. Kolman) for 2009 reflected our board of directors’ determinations that (i) the above-mentioned Adjusted EBITDA and revenue goals representing 40% of total bonuses had been satisfied at 100% of the level set forth in our business plan, (ii) the facility specific financial results had been satisfied as detailed above and (iii) the board of directors’ subjective determination regarding each NEO’s individual performance goals as identified by the NEO for the board of directors at the start of 2009. Mr. Kolman’s bonus was based on the above criteria as well as a sales commission component.

• The actual bonus payments are reported in the “Bonus” column of the Summary Compensation Table, with footnote (2) thereof disclosing the individual and company performance components, as determined in each case in the sole discretion of our board of directors after considering the standards described above.

Stock Awards.    As a result of the restricted stock awards that our NEOs received in 2007 and 2008, none of them received, or were considered for, stock-based awards during 2009. This reflects the determinations by our board of directors that each NEO has had sufficient stock-based incentives for the period from 2007 through 2009.

Other Benefits.    Other than to increase the life insurance coverage for our NEOs, there were no changes to our severance, retirement, welfare, or fringe benefit plans or practices in 2009, on the premise that these arrangements satisfied current corporate needs and objectives for retaining employees.

2010 Changes to Executive Compensation

We are currently reevaluating the executive compensation structures and systems that we will provide for our NEOs in 2010, under the supervision of an ad hoc committee that we expect to formalize prior to the completion of this offering. Our compensation committee is expected, in 2010 and future years:

• to oversee a program for annual stock-based awards to our NEOs under our 2010 Stock Incentive Plan, material terms of which are described below,

• to benchmark total compensation and its different elements through consideration of surveys and the services of an outside compensation consultant, and

• to revise our cash and bonus programs to base awards on market data and performance goals, with attention to encouraging long-term sustained performance.

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Philosophy.    Our compensation program for executives will be based on our business needs and challenges in creating shareholder value. To support the achievement of our business strategies and goals, we expect to:

• tie compensation to performance;

• emphasize stock compensation to align executives’ financial interests with those of investors;

• maintain compensation and reward levels that are competitive in both publicly traded and privately held enterprises that enable us to recruit and retain seasoned leadership capable of driving and managing a colocation and interconnection service provider;

• share risk and reward at all levels of the organization;

• simplify compensation design to facilitate ease of administration and communication;

• adhere to the highest legal and ethical standards.

Risk Monitoring.    Our compensation committee will be responsible for assuring that our compensation structures for NEOs and other employees do not encourage excessive or otherwise undesirable risk-taking.

Tax Considerations.    For 2010 and future years, we expect to structure our annual bonus program and stock-based awards in a manner that both exempts them from Internal Revenue Code section 409A, and that maximizes our ability to qualify all awards for an exemption from the limitations imposed by Internal Revenue Code section 162(m), thereby preserving their potential deductibility by us.

2010 Stock Incentive Plan.    We recently adopted a new 2010 Stock Incentive Plan, referred to herein as the 2010 Plan, having the key terms as set out below. See “—Equity Incentive Plans.”

Employment Agreements.    In connection with the consummation of our initial public offering, we intend to enter into new employment or severance agreements with each of our NEOs and other executive officers. These new agreements will supersede the existing agreements that are described below. Pursuant to these new agreements, Messrs. Shepcaro, Downie, Raymond, Kolman, and Terlizzi, as well as Mr. Hokamp, will receive annual base salaries and short and long-term incentives, in the form of cash or equity compensation.

Summary Compensation Table

The following table sets forth summary information concerning certain compensation awarded to, paid to, or earned by, our NEOs for all services rendered to us for fiscal years ended December 31, 2009, 2008 and 2007.

Name and Principal Position(1)	Year		Salary ($)		Bonus ($)		Stock Awards ($)(2)		All Other Compensation ($)(3)		Total ($)
Eric Shepcaro		2009	$	300,000	$	375,000	$	—	$	13,817	$	688,817
CEO and Director		2008		300,000		331,870		—		169		632,039
		2007		292,217		255,279		1,219,904		91		1,767,491
Christopher W. Downie		2009		264,600		265,662		—		10,718		540,980
President, CFO and Treasurer		2008		252,000		176,997		209,950		85		639,032
		2007		134,025		77,418		330,047		21		541,511
J. Todd Raymond		2009		207,000		155,046		—		14,997		377,043
SVP, Facility Acquisition		2008		207,000		195,133		—		91		402,224
		2007		200,000		154,000		91,943		107		446,050
William Kolman(4)		2009		200,000		199,861		—		10,324		410,185
EVP, Sales		2008		200,000		234,974		—		169		435,143
Michael Terlizzi		2009	$	190,800	$	119,557		—	$	8,782	$	319,139
EVP, Engineering and Construction

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(1) Mr. Kolman was not an executive officer at any time during 2007, and Mr. Terlizzi was not an executive officer at any time during 2007 or 2008.

(2) This column reports the grant date fair value of awards computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718) for 2007, 2008, and 2009. A discussion of the assumptions used in calculating the award values may be found in Note 2 to our 2009 audited financial statements included elsewhere in this prospectus.

(3) The figures reported in the “All Other Compensation Column” above include the following items, none of which had a value exceeding $25,000 in any fiscal year: life insurance premiums.

(4) Mr. Kolman’s bonus award is inclusive of sales commissions earned in such years.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information regarding stock awards that were outstanding with respect to our NEOs as of December 31, 2009:

Name	Award Date (1)		Number of shares or units of stock that have not vested (#)(2)		Market value of shares or units of stock that have not vested ($)(3)
Eric Shepcaro		7/8/2007		30,124	$	269,309
Christopher W. Downie		7/8/2007		8,149		117,087
		4/11/2008		4,948
J. Todd Raymond		12/18/2006		9,561		105,769
		7/8/2007		2,270
William Kolman		7/8/2007		5,938		53,086
Michael Terlizzi		12/18/2006		1,840	$	41,294
		7/8/2007		2,779

(1) For a better understanding of our stock-related awards included in this table, we have provided the award date for each restricted stock award that was outstanding on December 31, 2009.

(2) Awards are in the form of restricted stock that generally vest in 48 equal monthly installments following the award date. During the vesting period for restricted shares, the NEOs have full voting and dividend rights. Upon termination of an NEO’s employment for any reason, any restricted stock awards not yet vested are forfeited.

(3) Values for restricted stock awards were computed by multiplying an estimate of the fair market value of our Series B Contingent Preferred Stock at the end of fiscal year 2009 ($8.94 per share) by the number of restricted shares held by the NEO on that date.

Stock Vested

The following table sets forth information regarding stock awards that vested with respect to our NEOs during the fiscal year ended December 31, 2009:

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)		Value Realized on  Vesting ($)
Eric Shepcaro		19,026	$	192,178
Christopher W. Downie		9,700		97,977
J. Todd Raymond		10,993		111,040
William Kolman		3,750		37,878
Michael Terlizzi		3,594	$	36,302

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Other Potential Post-Employment Benefits

The following table sets forth the additional amounts that could have been realized by each NEO if (i) termination of his employment were to occur as of December 31, 2009 under the following circumstances, and (ii) the NEO executes a claims release and abides by applicable post-employment covenants concerning confidentiality, non-competition and non-solicitation.

Name, Principal Position and Reasons for Potential Payments	Cash Severance ($)(1)		Employer- Paid Health Insurance ($)			Stock Awards ($)
Eric Shepcaro, CEO and Director
Disability	$	450,000	$	24,451	(2)	$	—
Retirement, Death, For Cause, or Voluntary Resignation		—		—		$	—
Without Cause or for Good Reason	$	675,000	$	36,676	(3)	$	—
Christopher W. Downie, President, CFO and Treasurer
Disability	$	—	$	—		$	—
Retirement, Death, For Cause, or Voluntary Resignation		—		—		$	—
Without Cause or for Good Reason	$	240,000	$	23,513	(2)	$	—
J. Todd Raymond, SVP, Facility Acquisition
Disability	$	—	$	—		$	—
Retirement, Death, For Cause, or Voluntary Resignation		—		—		$	—
Without Cause or for Good Reason	$	200,000	$	24,451	(2)	$	—
William Kolman, EVP Sales
Disability	$	—	$	—		$	—
Retirement, Death, For Cause, or Voluntary Resignation		—		—		$	—
Without Cause or for Good Reason	$	200,000	$	24,451	(2)	$	—
Michael Terlizzi, EVP Engineering and Construction
Disability	$	—	$	—		$	—
Retirement, Death, For Cause, or Voluntary Resignation		—		—		$	—
Without Cause or for Good Reason	$	160,000	$	24,451	(2)	$	—

(1) Represents the total salary continuation payments that the NEO would collect (12 months of payment for the NEOs other than Mr. Shepcaro who is entitled to receive $37,500 per month for 18 months.).

(2) Represents payment by us of 12 months of COBRA health insurance premiums for family coverage for the NEO and his COBRA qualified beneficiaries.

(3) Represents payment by us of 18 months of COBRA health insurance premiums for family coverage for the NEO and his COBRA qualified beneficiaries.

Employment Agreements

Set forth below are summaries of all of our employment agreements and arrangements with our named executive officers. The following summaries do not contain all of the terms of such agreements, and we refer you to the agreements, which are included as exhibits to this registration statement, of which this prospectus forms a part of, for a complete understanding of the terms thereof. Discussion of the number of shares granted in the summaries below calculates share issuances giving effect to our July 2008 1-for-10 reverse stock split.

Eric Shepcaro.    On January 8, 2007, we entered into an employment agreement with Mr. Shepcaro, whereby he became chairman of our board of directors and our Chief Executive Officer (Mr. Shepcaro is no longer the chairman of our board but is a member of our board of directors). The employment agreement has a term of four years (unless terminated earlier or extended pursuant to the terms therein). Pursuant to this

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employment agreement, Mr. Shepcaro receives an annual base salary of $300,000. Mr. Shepcaro is also entitled to an annual target bonus in an amount up to $300,000 (prorated if less than a full year), payable quarterly, at the discretion of our board of directors. In addition, he shall be eligible to participate in an additional bonus pool of which he will be eligible to earn up to an additional $200,000 annually (prorated if less than a full year) at the discretion of the board of directors. Pursuant to his employment agreement, Mr. Shepcaro was entitled to receive 66,177 shares of our Series B Contingent Preferred Stock although Mr. Shepcaro’s employment agreement was effectively amended when our board of directors agreed to grant him 76,103 shares of our Series B Contingent Preferred Stock pursuant to the terms of a stock award agreement. We agreed to make loans in an amount that would be necessary to pay the tax liability attributable to filing a Section 83(b) election under the Code with respect to the shares of Series B Contingent Preferred Stock Mr. Shepcaro received. If we terminate Mr. Shepcaro’s employment Without Cause (as defined in the employment agreement), or Mr. Shepcaro terminates for Good Reason (as defined in the employment agreement), then we will pay Mr. Shepcaro $675,000 and his COBRA health insurance premiums for 18 months. If we terminate due to Permanent Disability (as defined in the employment agreement) then we will pay Mr. Shepcaro $450,000 and his COBRA health insurance premiums for 12 months. In exchange, Mr. Shepcaro must execute a (i) release of claims agreement and (ii) a non-competition and non-solicitation agreement for 18 months. If Mr. Shepcaro’s employment is terminated by us for Cause (as defined in the employment agreement) or because of Mr. Shepcaro’s death we will have no further obligations, except for payment of any base salary compensation and expense reimbursement accrued and unpaid. Upon termination of Mr. Shepcaro’s employment for any reason, Mr. Shepcaro will also be subject to customary 18-month post-termination non-compete and non-solicitation provisions and restriction on the unauthorized disclosure of confidential and proprietary information. Pursuant to Mr. Shepcaro’s employment agreement, (i) “Without Cause” is generally defined to include the termination for any reason other than for Cause, death or Permanent Disability; (ii) “Good Reason” is generally defined to include (A) a reduction in annual base salary then in effect or the annual target bonus amounts as set forth in his employment agreement, (B) a reduction in job title and position such that Mr. Shepcaro is no longer chief executive officer, no longer reports to the board of directors or is involuntarily removed from the board of directors, or (C) Mr. Shepcaro is required to relocate to an office location outside of Manhattan in New York, New York, in each case, without the prior consent of Mr. Shepcaro and which continues for 30 days following receipt of written notice; (iii) “Permanent Disability” is generally defined to include the inability to perform duties due to a physical or mental condition for a period of 90 consecutive days or an aggregate of 120 days in any 12 month period; and (iv) “Cause” is generally defined to include (A) gross negligence or willful misfeasance in the performance of duties, (B) engagement in fraud or embezzlement that adversely affects us and our affiliates, (C) acts of dishonesty that materially adversely affects us or our affiliates, (D) a material breach of certain provisions in the agreement which is not cured within 30 days after notice, (E) the commitment of a felony or (F) commencement of employment with another company while an employee of the company without prior consent.

Christopher W. Downie.    On May 25, 2007, we entered into an employment agreement with Mr. Downie, whereby he became our Chief Financial Officer. Subsequently, Mr. Downie was appointed President, Chief Financial Officer and Treasurer. Mr. Downie’s employment agreement provided for an annual base salary of $240,000. Mr. Downie’s current annual base salary is $264,600. Pursuant to his employment agreement, Mr. Downie was also entitled to an annual target bonus in an amount up to $160,000 at the discretion of our board of directors. With respect to 2009, Mr. Downie is entitled to an annual target bonus in an amount of up to 100% of his annual base salary at the discretion of our board of directors. In addition, he shall be eligible to participate in an additional bonus pool of which he will be eligible to earn up to an additional $160,000 annually at the discretion of the board of directors. Pursuant to his employment agreement, Mr. Downie was also granted 20,589 shares of our Series B Contingent Preferred Stock and we agreed to make loans in an amount that would be necessary to pay the tax liability attributable to filing a Section 83(b) election under the Code with respect to the Series B Contingent Preferred Stock. Mr. Downie was subsequently awarded an additional 9,500 shares of our Series B Contingent Preferred Stock in April 2008. Mr. Downie’s employment can be terminated at any time, with or without notice. If we terminate Mr. Downie’s employment Without Cause (as defined in the employment agreement), then we will pay Mr. Downie $240,000 and his COBRA health insurance premiums for up to 12 months provided Mr. Downie executes a separation agreement containing a full release of claims in favor of us. If Mr. Downie’s employment is

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terminated by us for Cause (as defined in the employment agreement) or because of Mr. Downie’s permanent disability or death we will have no further obligations, except for payment of any base salary compensation and expense reimbursement accrued and unpaid. Upon termination of Mr. Downie’s employment for any reason, Mr. Downie will also be subject to customary 12-month post-termination non-compete and non-solicitation provisions and restriction on the unauthorized disclosure of confidential and proprietary information. Pursuant to Mr. Downie’s employment agreement, (i) “Without Cause” is generally defined to include the termination for any reason other than for Cause, disability or death and (ii) “Cause” is generally defined to include (A) gross negligence or willful misfeasance or nonfeasance in the performance of his duties, (B) the refusal to perform, or the continued failure to perform, assigned duties (other than by reason of disability), that, in the case of a failure to perform, continues for 30 days following receipt of written notice, (C) engagement in any act of fraud or embezzlement, (D) engagement in any illegal conduct or in any act of dishonesty or moral turpitude, the purpose or effect of which adversely affects us or any of our affiliates, (E) a material breach of any provision of the employment agreement or any employee policy or procedure, which breach is not cured within 30 days after receipt of written notice (provided, however, that breach of certain covenants in the agreement is deemed material and not curable), (F) committing a felony, (G) the violation of any federal, state or local law or regulation applicable to us, any of our affiliates or their respective businesses which causes material injury to us or any of our affiliates or the intentional or knowing violation of any law or regulation applicable to us, (H) conduct that constitutes a breach of any statutory or common law duty of loyalty to us or our affiliates or (I) commencement of employment with another company while an employee of the company without the prior consent.

J. Todd Raymond.    On September 20, 2006, we entered into an employment agreement with Mr. Raymond, whereby he became our Acting Chief Executive Officer, President, General Counsel and Corporate Secretary. Subsequently, Mr. Raymond was appointed Senior Vice President and General Counsel. Mr. Raymond currently serves as our Senior Vice President, Facility Acquisition. Pursuant to this employment agreement, Mr. Raymond receives an annual base salary of $200,000. Mr. Raymond is also entitled to an annual target bonus in an amount up to $200,000 in the discretion of our board of directors. In addition, he shall be eligible to participate in an additional bonus pool of which he will be eligible to earn up to an additional $200,000 annually in the discretion of the board of directors. Pursuant to his employment agreement, Mr. Raymond was granted 38,238 shares of our Series B Contingent Preferred Stock and we agreed to make loans in an amount that would be necessary to pay the tax liability attributable to filing a Section 83(b) election under the Code with respect to the Series B Contingent Preferred Stock. Mr. Raymond was subsequently awarded an additional 5,736 shares of our Series B Contingent Preferred Stock in 2007. Mr. Raymond’s employment can be terminated at any time, with or without notice. If we terminate Mr. Raymond’s employment Without Cause (as defined in the employment agreement), or Mr. Raymond terminates for Good Reason (as defined in the employment agreement), and provided Mr. Raymond executes a separation agreement containing a full release of claims in favor of us, we will pay Mr. Raymond $200,000 and his COBRA health insurance premiums for up to 12 months. If Mr. Raymond’s employment is terminated by us for Cause (as defined in the employment agreement) or because of Mr. Raymond’s permanent disability or death, we will have no further obligations, except for payment of any base salary compensation and expense reimbursement accrued and unpaid. Upon termination of Mr. Raymond’s employment for any reason, Mr. Raymond will also be subject to customary 12-month post-termination non-compete and non-solicitation provisions and a 24-month restriction on the unauthorized disclosure of confidential and proprietary information. Pursuant to Mr. Raymond’s employment agreement, (i) “Without Cause” is generally defined to include any reason other than for Cause, disability or death; (ii) “Good Reason” is generally defined to include (A) any reduction in salary below the base salary amount as set forth in the agreement or failure to timely pay any due and payable portion thereof, (B) any reduction in the maximum target amount of either the annual target bonus or additional bonus, as set forth in the employment agreement, or failure to timely pay any due and payable portion thereof, (C) any material breach by us of the compensation and benefits provisions of the employment agreement, (D) any material breach by us of any indemnification provisions benefiting Mr. Raymond set forth in our bylaws or certificate of incorporation in effect on the date of the employment agreement or any indemnification agreement entered into between us and Mr. Raymond, or (E) any permanent relocation of Mr. Raymond’s principal place of work from Manhattan in New York, New York; and (iii) “Cause” is generally defined to include (A) gross negligence or willful misfeasance in the performance of his duties, (B) the refusal to perform, or the willful and continued failure to perform, assigned duties

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(other than by reason of disability), that, in the case of a failure to perform, continues for 30 days following receipt of written notice, (C) engagement in any act of fraud or embezzlement, (D) engagement in any act of dishonesty or moral turpitude which causes material injury to us or any of our affiliates, (E) a material breach of any material provision of the employment agreement or any material employee policy or procedure, which breach is not cured within 30 days after receipt of written notice (provided, however, that breach of certain covenants in the agreement are deemed material and not curable), (F) committing a felony, or, (G) the violation of any federal, state or local law or regulation applicable to us, any of our affiliates or their respective businesses which causes material injury to us or any of our affiliates.

William J. Kolman.    On May 7, 2007, we entered into an employment agreement with Mr. Kolman, whereby he became our Executive Vice President of Sales. Pursuant to his employment agreement, Mr. Kolman receives an annual base salary of $200,000. Mr. Kolman is also entitled to an annual target bonus in an amount up to $200,000 in the discretion of our board of directors. In addition, he is eligible to participate in an additional bonus pool and receive sales commission up to an additional $200,000 annually. Pursuant to his employment agreement, Mr. Kolman was granted 15,000 shares of our Series B Contingent Preferred Stock and we agreed to make loans in an amount that would be necessary to pay the tax liability attributable to filing a Section 83(b) election under the Code with respect to the Series B Contingent Preferred Stock. Mr. Kolman’s employment can be terminated at any time, with or without notice. If we terminate Mr. Kolman’s employment Without Cause (as defined in the employment agreement) then we will pay Mr. Kolman $200,000 and his COBRA health insurance premiums for up to 12 months provided Mr. Kolman executes a separation agreement containing a full release of claims in favor of us. If Mr. Kolman’s employment is terminated by us for Cause (as defined in the employment agreement) or because of Mr. Kolman’s permanent disability or death, we will have no further obligations, except for payment of any base salary compensation and expense reimbursement accrued and unpaid. Upon termination of Mr. Kolman’s employment for any reason, Mr. Kolman will also be subject to customary 12-month post-termination non-compete and non-solicitation provisions and restriction on the unauthorized disclosure of confidential and proprietary information. Pursuant to Mr. Kolman’s employment agreement, (i) “Without Cause” is generally defined to include any reason other than for Cause, disability or death and (ii) “Cause” is generally defined to include (A) gross negligence or willful misfeasance or nonfeasance in the performance of his duties, (B) the refusal to perform, or the continued failure to perform, assigned duties (other than by reason of disability), that, in the case of a failure to perform, continues for 30 days following receipt of written notice, (C) engagement in any act of fraud or embezzlement, (D) engagement in any illegal conduct or in any act of dishonesty or moral turpitude, the purpose or effect of which adversely affects us or any of our affiliates, (E) a material breach of any provision of the employment agreement or any employee policy or procedure, which breach is not cured within 30 days after receipt of written notice (provided, however, that breach of certain covenants in the agreement is deemed material and not curable), (F) committing a felony, (G) the violation of any federal, state or local law or regulation applicable to us, any of our affiliates or their respective businesses which causes material injury to us or any of our affiliates or the intentional or knowing violation of any law or regulation applicable to us, (H) conduct that constitutes a breach of any statutory or common law duty of loyalty to us or our affiliates or (I) commencement of employment with another company while an employee of the company without the prior consent.

Michael Terlizzi.    On September 20, 2006, we entered into an employment agreement with Mr. Terlizzi, whereby he became our Executive Vice President, Engineering and Construction of the Company. Subsequently, Mr. Terlizzi was appointed Executive Vice President, Engineering and Construction. Mr. Terlizzi’s employment agreement provided for an annual base salary of $160,000. Mr. Terlizzi’s current annual base salary is $190,800. Mr. Terlizzi is also entitled to an annual target bonus in an amount up to $50,000 in the discretion of our board of directors. In addition, he is eligible to participate in an additional bonus pool of which he will be eligible to earn up to an additional $50,000 annually in the discretion of the board of directors. Pursuant to his employment agreement, Mr. Terlizzi’s was granted 7,354 shares of our Series B Contingent Preferred Stock and we agreed to make loans in an amount that would be necessary to pay the tax liability attributable to filing a Section 83(b) election under the Code with respect to the Series B Contingent Preferred Stock. Mr. Terlizzi was subsequently awarded an additional 7,021 shares of our Series B Contingent Preferred Stock in 2007. Mr. Terlizzi’s

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employment can be terminated at any time, with or without notice. If we terminate Mr. Terlizzi’s employment Without Cause (as defined in the employment agreement) or Mr. Terlizzi terminates for Good Reason (as defined in the employment agreement), then we will pay Mr. Terlizzi $160,000 and his COBRA health insurance premiums for up to 12 months provided Mr. Terlizzi executes a separation agreement containing a full release of claims in favor of us. If Mr. Terlizzi’s employment is terminated by us for Cause (as defined in the employment agreement) or because of Mr. Terlizzi’s permanent disability or death, we will have no further obligations, except for payment of any base salary compensation and expense reimbursement accrued and unpaid. Upon termination of Mr. Terlizzi’s employment for any reason, Mr. Terlizzi will be subject to customary 12-month post-termination non-compete and non-solicitation provisions and a 24-month restriction on the unauthorized disclosure of confidential and proprietary information. Pursuant to Mr. Terlizzi’s employment agreement, (i) “Without Cause” is generally defined to include any reason other than for Cause, disability or death; (ii) “Good Reason” is generally defined as (A) any reduction in salary below the base salary amount as set forth in the agreement or failure to timely pay any due and payable portion thereof, (B) any reduction in the maximum target amount of either the annual target bonus or additional bonus, as set forth in the employment agreement, or failure to timely pay any due and payable portion thereof, (C) any material breach by us of the compensation and benefits provisions of the employment agreement, (D) any material breach by us of any indemnification provisions benefiting Mr. Terlizzi set forth in our bylaws or certificate of incorporation in effect on the date of his employment agreement or any indemnification agreement entered into between us and Mr. Terlizzi, or (E) any permanent relocation of Mr. Terlizzi’s principal place of work from Manhattan in New York, New York; and (iii) “Cause” is defined to generally include (A) gross negligence or willful misfeasance in the performance of his duties, (B) the refusal to perform, or the willful and continued failure to perform, assigned duties (other than by reason of disability), that, in the case of a failure to perform, continues for 30 days following receipt of written notice, (C) engagement in any act of fraud or embezzlement, (D) engagement in any act of dishonesty or moral turpitude which causes material injury to us or any of our affiliates, (E) a material breach of any material provision of the employment agreement or any material employee policy or procedure, which breach is not cured within 30 days after receipt of written notice (provided, however, that breach of certain covenants in the agreement are deemed material and not curable), (F) committing a felony, or, (G) the violation of any federal, state or local law or regulation applicable to us, any of our affiliates or their respective businesses which causes material injury to us or any of our affiliates.

Equity Incentive Plans

2010 Stock Incentive Plan

We recently adopted, and received stockholder approval of, The Telx Group, Inc. 2010 Stock Incentive Plan, which we refer to herein as the 2010 Plan. We expect that equity awards will occur only under the 2010 Plan. Stockholder approval of the 2010 Plan will primarily enable us to satisfy Nasdaq listing requirements, and to make awards that qualify as performance-based compensation that is exempt from the deduction limitation set forth under Section 162(m) of the Internal Revenue Code of 1986, as amended, referred to herein as the Code. Section 162(m) generally limits the corporate income tax deduction to $1,000,000 annually for the non performance-based compensation paid to each of the Chief Executive Officer and the three other highest paid executive officers of the Company (other than the CFO).

The 2010 Plan authorizes discretionary awards in the form of stock options, stock appreciation rights, or SARs, restricted shares or units, unrestricted shares, deferred share units, performance awards, and dividend equivalent rights. Our board of directors believes that the 2010 Plan will be an important factor in attracting, retaining and motivating employees, consultants, and directors of the Company and its affiliates, collectively referred to herein as eligible persons. Our board of directors believes that we need the flexibility, acting primarily through our compensation committee, both to have an ongoing reserve of common stock available for future equity-based awards, and to make future awards in a variety of forms.

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Pursuant to the 2010 Plan, we may issue up to 200,000 shares of our common stock provided that such number of shares shall automatically increase to 5.2% of the total shares outstanding immediately after our initial public offering closes (in either case with such total number of shares being adjusted for future stock splits, stock dividends, recapitalizations, and other similar transactions). The shares of our common stock that are subject to any award that expires, or is forfeited, cancelled, settled, or becomes unexercisable without the issuance of shares, will again be available for subsequent awards. In addition, future awards may occur with respect to shares of our common stock that we refrain from otherwise delivering pursuant to an award as payment of either the exercise price of an award or applicable withholding and employment taxes. We receive no cash consideration for the granting of awards under the 2010 Plan. However, if a stock option were to be exercised, we would receive the exercise price for the shares being purchased, unless the exercise occurs pursuant to a cashless alternative that we approve.

Administration of the 2010 Plan will be carried out by our compensation committee or our board of directors if no such committee is appointed; provided that our board may act in lieu of the compensation committee at any time. Either our compensation committee or our board of directors may delegate its authority under the 2010 Plan to one or more officers but it may not delegate its authority with respect to making awards to individuals subject to Section 16 of the Exchange Act. As used in this summary, the term administrator means the compensation committee or the board of directors or its delegate, if any. With respect to decisions involving an award intended to satisfy the requirements of section 162(m) of the Internal Revenue Code, the administrator is to consist solely of two or more directors who are “outside directors” for purposes of that Code section, and with respect to awards to individuals subject to Section 16 of the Exchange Act, the administrator is to consist solely of two or more directors who are “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act. The 2010 Plan provides that we and our affiliates will indemnify members of the administrative committee and their delegates against any claims, liabilities, or costs arising from the good faith performance of their duties under the 2010 Plan. The 2010 Plan will release these individuals from liability for good faith actions associated with the 2010 Plan’s administration.

Subject to the terms of the 2010 Plan, the administrator has express authority to determine the eligible persons who will receive awards, the number of shares of our common stock to be covered by each award, and the terms and conditions of awards. The administrator has broad discretion to prescribe, amend, and rescind rules relating to the 2010 Plan and its administration, to interpret and construe the 2010 Plan and the terms of all award agreements, and to take all actions necessary or advisable to administer the 2010 Plan. Within the limits of the 2010 Plan, the administrator may accelerate the vesting of any awards, allow the exercise of unvested awards, and may modify, replace, cancel, or renew any awards. In addition, the administrator may buy-out, or replace, any award, including (but subject to applicable stockholder approval requirements as set forth in the 2010 Plan) a stock option or SAR having an exercise price that is above the current fair market value of the underlying shares.

The administrator may grant options that are intended to qualify as incentive stock options, which we refer to as ISOs, only to employees, if any, and may grant all other awards to eligible persons. Not more than 200,000 shares shall be issued pursuant to ISOs; provided that any shares that are not issued pursuant to an ISO as a result of its cancellation or expiration shall again be available for future ISO awards. Stock options granted under the 2010 Plan will provide award recipients, or participants, with the right to purchase shares of our common stock at a predetermined exercise price. The administrator may grant stock options that are intended to qualify as ISOs or that are not intended to so qualify, which we refer to as Non-ISOs. The 2010 Plan also provides that ISO treatment may not be available for stock options that become first exercisable in any calendar year to the extent the value of the shares that are the subject of the stock option exceed $100,000, based upon the fair market value of the shares of our common stock on the option grant date.

A SAR generally permits a participant who receives it to receive, upon exercise, cash and/or shares of our common stock equal in value to the excess of the fair market value, on the date of exercise, of the shares of our common stock with respect to which the SAR is being exercised, over the exercise price of the SAR for such shares. The administrator may grant SARs in tandem with options, or independently of them. SARs that are independent of options may limit the value payable on its exercise to a percentage.

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The exercise price of ISOs, Non-ISOs, and SARs may not be less than 100% of the fair market value on the grant date of the shares of our common stock subject to the award, although the exercise price of ISOs may not be less than 110% of the fair market value on the grant date of the underlying shares of our common stock subject to the award for participants who own more than ten percent of our shares of common stock on the grant date. To the extent vested and exercisable in accordance with the agreement granting them, a stock option or SAR may be exercised in whole or in part, and from time to time during its term, subject to earlier termination relating to a holder’s termination of employment or service. With respect to stock options, unless otherwise provided in an award agreement, payment of the exercise price may be made in any of the following forms, or combination of them: cash or check in U.S. dollars, certain shares of our common stock, cashless exercise under a program the administrator approves.

The term over which participants may exercise stock options and SARs may not exceed ten years from the date of grant; five years in the case of ISOs granted to employees who, at the time of grant, own more than 10% of our outstanding shares of common stock. Under the 2010 Plan, no participant may receive stock options and SARs that relate to more than 25% of the maximum number of shares of our common stock that are authorized for awards under the 2010 Plan.

Under the 2010 Plan, the administrator may grant restricted stock that is forfeitable until certain vesting requirements are met, may grant RSUs that represent the right to receive shares of our common stock after certain vesting requirements are met or cash under certain circumstances, and may grant unrestricted stock as to which the participant’s interest is immediately vested. For restricted awards, the 2010 Plan provides the administrator with discretion to determine the terms and conditions under which a participant’s interests in such awards become vested. The 2010 Plan authorizes unrestricted stock awards that vest in full upon the date of a grant or other date determined by the administrator.

The 2010 Plan also authorizes awards of deferred share units in order to permit certain directors, officers, consultants, or select members of management to defer their receipt of compensation payable in cash or shares of our common stock, including shares that would otherwise be issued upon the vesting of restricted stock and RSUs. Deferred share units represent a future right to receive shares of our common stock.

The 2010 Plan authorizes the administrator to grant performance-based awards in the form of performance units that the administrator may, or may not, designate as “performance compensation awards” that are intended to be exempt from Internal Revenue Code Section 162(m) limitations. In either case, performance units will vest and/or become payable based upon the achievement, within the specified period of time, of performance objectives applicable to the individual, us, or any affiliate. Performance units will be payable in shares of common stock, cash, or some combination of the two, subject to an individual participant limit of $2,000,000 (determined at the time of payout) and 25% of the maximum number of shares of our common stock that are authorized for awards under the 2010 Plan. The administrator will decide the length of performance periods, but the periods may not be less than one fiscal year.

With respect to performance compensation awards, the 2010 Plan requires that the administrator specify in writing the performance period to which the award relates, and an objective formula by which to measure whether and the extent to which the award is earned on the basis of the level of performance achieved with respect to one or more performance measures. Once established for a performance period, the performance measures and performance formula applicable to the award may not be amended or modified in a manner that would cause the compensation payable under the award to fail to constitute performance-based compensation under Internal Revenue Code Section 162(m). Under the 2010 Plan, the possible performance measures for performance compensation awards may include one or more of the following, applied in total or on a per share basis:

• basic, diluted or adjusted earnings per share;

• sales or revenue;

• EBITDA, or earnings before interest, taxes and other adjustments;

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• basic or adjusted net income;

• returns on equity, assets, capital, revenue or similar measure;

• economic value added;

• working capital;

• total stockholder return;

• product development, product market share, research, licensing, litigation, human resources, information services, mergers, acquisitions, and sales of assets of affiliates or business units.

Each performance measure will be, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently applied by us, or such other standard applied by the administrator and, if so determined by the administrator, and in the case of a performance compensation award, to the extent permitted under Internal Revenue Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles. Performance measures may vary from performance period to performance period, and from participant to participant, and may be established on a stand-alone basis, in tandem or in the alternative.

As a condition to the issuance of shares of our common stock pursuant to awards, the 2010 Plan requires satisfaction of any applicable federal, state, local, or foreign withholding tax obligations that may arise in connection with the award or the issuance of shares of our common stock.

Finally, the 2010 Plan authorizes the awarding of dividend equivalent rights to any eligible person. These rights may be independent of other awards, or attached to awards (other than stock options and SARs), and in all cases represent the participant’s right to collect any dividends that we declare and pay to our stockholders during the term of the dividend equivalent right. Unless an award agreement provides otherwise, the distributions attributable to dividend equivalent rights that are attached to other awards shall occur when shares of our common stock are issued to settle the underlying award.

Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of other than by will or the laws of descent and distribution, except to the extent the administrator permits lifetime transfers to charitable institutions, certain family members, or related trusts, or as otherwise approved by the administrator.

The administrator will equitably adjust the number of shares covered by each outstanding award, and the number of shares that have been authorized for issuance under the 2010 Plan, but as to which no awards have yet been granted or that have been returned to the 2010 Plan upon cancellation, forfeiture, or expiration of an award, as well as the price per share covered by each such outstanding award, to reflect any increase or decrease in the number of issued shares resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the shares of our common stock, or any other increase or decrease in the number of issued shares effected without receipt of consideration by us. In the event of any such transaction or event, the administrator may provide in substitution for any or all outstanding options under the 2010 Plan such alternative consideration, including securities of any surviving entity, as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all options so replaced. In any case, such substitution of securities will not require the consent of any person who is granted options pursuant to the 2010 Plan.

In addition, in the event or in anticipation of a change in control, as defined in the 2010 Plan, the administrator may at any time in its sole and absolute discretion and authority, without obtaining the approval or consent of our stockholders or any participant with respect to his or her outstanding awards, except to the extent an award provides otherwise, take one or more of the following actions: (i) arrange for or otherwise provide that

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each outstanding award will be assumed or substituted with a substantially equivalent award by a successor corporation or a parent or subsidiary of such successor corporation; (ii) accelerate the vesting of awards for any period, and may provide for termination of unexercised options and SARs at the end of that period, so that awards shall vest (and, to the extent applicable, become exercisable) as to the shares of our common stock that otherwise would have been unvested and provide that our repurchase rights with respect to shares of our common stock issued upon exercise of an award shall lapse as to the shares of our common stock subject to such repurchase right; or (iii) arrange or otherwise provide for payment of cash or other consideration to participants in exchange for the satisfaction and cancellation of outstanding awards.

Notwithstanding the above, an award may provide that in the event a participant holding an award assumed or substituted by the successor corporation in a change in control is involuntarily terminated, as defined in the 2010 Plan, by the successor corporation in connection with, or within 12 months following consummation of, the change in control, then any assumed or substituted award held by the terminated participant at the time of termination shall accelerate and become fully vested, and exercisable in full in the case of options and SARs, and any repurchase right applicable to any shares of our common stock shall lapse in full. The acceleration of vesting and lapse of repurchase rights provided for in the previous sentence shall occur immediately prior to the effective date of the participant’s termination. Finally, if we dissolve or liquidate, all awards will immediately terminate, subject to the ability of our board of directors to exercise any discretion that the board of directors may exercise in the case of a change in control.

The term of the 2010 Plan is ten years from November 1, 2010. Our board of directors may from time to time, amend, alter, suspend, discontinue, or terminate the 2010 Plan; provided that no amendment, suspension, or termination of the 2010 Plan shall materially and adversely affect awards already granted unless it relates to an adjustment pursuant to certain transactions that change our capitalization or it is otherwise mutually agreed between the participant and the administrator. An amendment will not become effective without the approval of our stockholders if it increases the number of shares of common stock that may be issued under the 2010 Plan (other than changes to reflect certain corporate transactions and changes in capitalization as described above). Notwithstanding the foregoing, the administrator may amend the 2010 plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.

2007 Employee Stock Plan

Certain of our employees hold awards that were made and continue to be outstanding under The Telx Group, Inc. 2007 Employee Stock Plan, which we refer to as the 2007 Plan, and which was initially effective May 1, 2007, and thereafter approved by our stockholders. The 2007 Plan has a ten year term, subject to earlier expiration by our board of directors. No awards will occur after November 1, 2010 because the 2010 Plan is the sole source for future equity-based awards.

The 2007 Plan initially authorized grants for 125,000 shares of our common stock, and as of September 30, 2010, awards with respect to 607 shares have been exercised, and 12,308 shares were available for future grant (with each of the foregoing numbers having been adjusted to reflect our July 2008 1-for-10 reverse stock split). All of these awards take the form of options that vest monthly over periods of, normally, 48 months following the employee’s hire date. Terminations of employment for any reason generally result in the forfeiture of all unvested shares. A change in control may result in full vesting of award, their continuation, or their immediate settlement (as determined by our board or the compensation committee).

Our board of directors administers the 2007 Plan except to the extent it delegates that authority to our CEO. Such administration involves broad discretion to interpret the 2007 Plan and to make all determinations that are necessary or advisable for its administration. Our board of directors or an authorized delegate may amend or terminate the 2007 Plan, subject to any applicable stockholder approval requirements. Outstanding awards may also be amended, but such amendments require the consent of any award holder who is adversely affected by the amendment.

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Limitations on Liability; Indemnification of Directors and Officers

Our amended and restated certificate of incorporation, which will be in effect upon the completion of this offering, contains provisions that limit the personal liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:

• any breach of the director’s duty of loyalty to us or our stockholders;

• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

• unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or

• any transaction from which the director derived an improper personal benefit.

Our amended and restated certificate of incorporation and amended and restated bylaws to be in effect upon the completion of this offering provide that we shall indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. Our amended and restated certificate of incorporation and our amended and restated bylaws also provide that, to the fullest extent allowed by applicable law, we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We expect to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. With specified exceptions, these agreements will provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these certificate of incorporation and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In addition to the director and executive officer compensation arrangements discussed above under “Executive Compensation”, the following is a description of transactions since January 1, 2007 to which we have been a party in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers, beneficial holders of more than 5% of our capital stock, or persons or entities affiliated with them, had or will have a direct or indirect material interest.

GI Partners

GI Partners affiliated funds, GI Partners Fund II, L.P. and GI Partners Side Fund II, L.P., which we refer to herein collectively as the GI Partners Funds, own a majority of our outstanding Series A Preferred Stock. The shares of Series A Preferred Stock owned by the GI Partners Funds, together with the shares of common stock owned by the GI Partners Funds, constitute a majority of our outstanding common stock on an as-converted to common stock basis. As of September 30, 2010, GI Partners Funds beneficially owned the substantial majority of our outstanding common stock on an as-converted basis. In connection with our acquisition by the GI Partners Funds in 2006, the GI Partners Funds are parties to several agreements, including, securities purchase agreements, contribution and subscription agreements and/or similar agreements, with us relating to the GI Partners Funds acquisition of our securities.

Howard Park of GI Partners currently serves as the chairman of our board of directors. In addition, Eric Harrison, a former managing director of GI Partners, also serves on our board of directors. Mr. Harrison also served in an uncompensated capacity as a Vice President of the company from January 2007 until February 2007. GI Partners personnel serving, or who have served, as directors and/or officers of us may have certain indemnification rights from us (including, without limitation, under indemnification agreements or other agreements, our certificate of incorporation and/or bylaws).

Management Agreement with GI Manager

On October 3, 2006, we entered into a management agreement with GI Manager L.P., or the GI Manager, an affiliate of both GI Partners Funds, as amended on March 3, 2010 and June 2, 2010, pursuant to which GI Manager agreed to perform certain financial and management consulting and transaction advisory services at the reasonable direction of our board of directors.

Pursuant to the management agreement, as amended, among other things, GI Manager is entitled to a management base fee, as compensation for certain non-transaction related services specifically requested by our board of directors, in an annual amount to be determined by our board of directors during the first calendar quarter of each year during the term of the agreement, but not to exceed $750,000 per year, plus reasonable expenses. For each of the years ended December 31, 2007, 2008 and 2009, our board of directors did not request from GI Manager any non-transaction related services and therefore, a management base fee was never incurred. In addition to this annual management base fee, GI Manager is also entitled to a 1.5% transaction closing fee with respect to any refinancing (other than with respect to the New Credit Facility which GI Manager was entitled to a 0.75% transaction closing fee), restructuring, equity or debt offering, acquisition, merger, consolidation, business combination, sale or divestiture. Under the management agreement, we also have certain indemnification obligations.

In 2007, we paid GI Manager a closing fee of $500,000 for services in connection with the acquisition of certain assets from NYC Connect, LLC. There have been no other fees owed or paid to GI Manager in 2007, 2008 and 2009 under the management agreement. On June 11, 2010, we paid GI Manager a fee of $1.3 million in connection with the New Credit Facility.

The management agreement will terminate immediately upon the date that this registration statement, of which this prospectus forms a part, is declared effective by the SEC.

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Securities Purchase Agreement

On April 11, 2008, we sold an aggregate of 1,524,000 shares (not adjusted for our subsequent 1-for-10 reverse stock split) of Series A Preferred Stock at a per share purchase price of $10 pursuant to a securities purchase agreement. Purchasers of the Series A Preferred Stock were the GI Partners Funds and Telxinvest, LLC. Former and current executive officers and directors, including Mr. Shepcaro, our Chief Executive Officer, Mr. Downie, our President, Chief Financial Officer and Treasurer, Mr. Raymond, our senior vice president, facility acquisition and Mr. Kolman, our executive vice president of sales, collectively own 89% of Telxinvest, LLC. Two of our former employees own the remainder. The following table summarizes purchases of Series A Preferred Stock by the above-listed investors:

Name of Stockholder	Number of Shares  of Series A Preferred Stock*
GI Partners Fund II, L.P.		107,205
GI Partners Side Fund II, L.P.		42,795
Telxinvest, LLC		2,400

* Number of shares adjusted for our July 2008 1-for-10 reverse stock split.

Contribution and Subscription Agreement

On March 15, 2007, we entered into a contribution and subscription agreement with the GI Partners Funds pursuant to which we agreed to issue and sell to the GI Partners Funds, in the aggregate, 5,000,000 shares (not adjusted for our subsequent 1-for-10 reverse stock split) of Series A Preferred Stock at a per share contribution price of $10 for a total of $50,000,000 in cash contribution in connection with the acquisition of certain assets from NYC Connect, LLC. In addition, on April 1, 2007, we entered into a contribution and subscription agreement with Telxinvest, LLC pursuant to which we agreed to issue and sell to Telxinvest, LLC 80,000 shares (not adjusted for our subsequent 1-for-10 reverse stock split) of Series A Preferred Stock at a per share purchase price of $10 for a total of $800,000 in cash contribution. $100,000 of the purchase price was paid in April 2008. The following table summarizes the issues of Series A Preferred Stock to the above-listed investors:

Name of Stockholder	Number of Shares  of Series A Preferred Stock*
GI Partners Fund II, L.P.		357,340
GI Partners Side Fund II, L.P.		142,660
Telxinvest, LLC		8,000

* Number of shares adjusted for our July 2008 1-for-10 reverse stock split.

GI Partners Funds Bridge Loan

In connection with our acquisition by the GI Partners Funds, we executed two notes on October 3, 2006 with the GI Partners Funds for an aggregate loan amount of $98,000,000 at an interest rate of 10% per year. In 2007, we paid GI Partners Funds $103,715,174 (principal and interest) in the aggregate to extinguish both notes.

Loans

In connection with certain 83(b) elections under the Code by former and current executive officers and directors, we extended loans to two of our former executive officers and Messrs. Shepcaro, Downie, Raymond, Kolman and Terlizzi for an aggregate total of $879,155 (as of March 5, 2010). These loans to our current executive officers are no longer outstanding.

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Stockholders Agreement

We are a party to that certain Second Amended and Restated Stockholders Agreement, as amended, effective as of March 15, 2007, among us and certain holders of our common stock and preferred stock, including the GI Partners Funds. The stockholders agreement provides for, among other things, certain rights relating to the registration of the stockholders’ shares of common stock, including those shares issued upon conversion of their preferred stock. See “Description of Capital Stock—Registration Rights” below for additional information.

Digital Realty Trust

As of January 1, 2007, a fund affiliated with GI Partners beneficially owned approximately 12% of Digital Realty Trust. Currently, GI Partners owns 0% of Digital Realty Trust. 10 of our 14 leased facilities are leased to us by Digital Realty Trust, representing 31% of our total facility space as of September 30, 2010. The initial terms of these Digital Realty Trust leases expire in 2026, and we have options to extend them through 2046. Generally, under these Digital Realty Trust leases, we are obligated to pay a certain percentage of facility specific annual gross revenue that exceeds a stipulated threshold. We paid Digital Realty Trust an aggregate total of $9.7 million in 2007, $12.2 million in 2008, $16.0 million in 2009 and $12.8 million for the nine months ended September 30, 2010 in lease payments.

In connection with the lease agreements, we entered into an operating agreement with Digital Realty Trust and its affiliates, effective as of December 1, 2006, pursuant to which we agreed to joint sales and marketing efforts. In addition, Digital Realty Trust agreed to provide us with an option to lease certain newly acquired or converted buildings and provided us with a $2.4 million alteration allowance. This alteration allowance serves to fund any alterations we request to be made in the facilities we lease from Digital Realty Trust. We have agreed to repay the alteration allowance as supplemental rent payments over a 10 year period at an interest rate of 10% per annum compounded monthly upon substantial completion of the requested alteration. In addition, in connection with the lease agreements, we entered into a management agreement with Digital Realty Trust and its affiliates, effective as of December 1, 2007, pursuant to which we agreed to provide Digital Realty Trust with certain management services in exchange for a management fee of one percent of rents actually collected by us.

Pursuant to a stock option agreement effective as of November 20, 2006 and thereafter amended and restated on March 15, 2007, we granted Digital Realty Trust an option, and certain preemptive rights, to acquire approximately 10% of our Series A Preferred Stock. This option, and the preemptive rights, expired unexercised on October 3, 2008.

Indemnification Agreements

We expect to enter into indemnification agreements with each of our directors and officers. The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws will require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. See “Executive Compensation—Limitation on Liability and Indemnification Matters.”

Director Independence

For a discussion of the independence of our directors, please see “Management—Board of Directors” above.

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Other Transactions

ThePlanet.com Internet Services, Inc., or The Planet, provides us with certain IT hosting services pursuant to a service agreement. GI Partners affiliated funds, directly or indirectly, own a supermajority of the outstanding Series A Preferred Stock of The Planet and the shares of Series A Preferred Stock and common stock owned by the GI Partners affiliated funds (directly or indirectly) constitute a majority of The Planet’s outstanding common stock on an as-converted to common stock basis. Our chairman of the board, Howard Park, sits on the board of directors of The Planet. We paid The Planet approximately $124,795, $75,355 and $0 in 2009, 2008 and 2007, respectively, and $132,202 for the nine months ended September 30, 2010.

Policies and Procedures for Related Party Transactions

Pursuant to our audit committee charter, our audit committee is responsible for reviewing and approving any related party transaction. In addition, our code of conduct and ethics includes a formal policy that our executive officers, directors, and principal stockholders, including their immediate family members and affiliates, will not be permitted to enter into a related party transaction with us without the prior consent of our audit committee, or other independent members of our board of directors in the case it is inappropriate for our audit committee to review such transaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director, principal stockholder, or any of such persons’ immediate family members or affiliates, in which the amount involved exceeds $100,000 must first be presented to our audit committee for review, consideration and approval. All of our directors, executive officers and employees will be required to report to our audit committee any such related party transaction. In approving or rejecting the proposed agreement, our audit committee shall consider the relevant facts and circumstances available and deemed relevant to the audit committee, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. All of the transactions described above were entered into prior to the adoption of this policy. The full text of the code is posted on our corporate website at www.telx.com.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information with respect to the beneficial ownership of our common stock as of                     , 2010, subject to certain assumptions set forth in the footnotes and as adjusted to reflect the sale of the shares of our common stock offered in this offering under this prospectus for:

• each stockholder, or group of affiliated stockholders, who we know beneficially owns more than 5% of the outstanding shares of our common stock;

• each of our current directors;

• each of our named executive officers;

• all of our current directors and current executive officers as a group; and

• each of the selling stockholders.

Beneficial ownership is determined in accordance with rules of the SEC and generally includes any shares over which a person exercises sole or shared voting and/or investment power. Shares of common stock subject to options and warrants currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage ownership of the person holding the options but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated, we believe the beneficial owners of the common stock listed below, based on information furnished by them, have sole voting and investment power with respect to the number of shares listed opposite their names.

Applicable percentage ownership in the following table is based on                      shares of common stock outstanding as of                     , 2010, which gives effect to the conversion of all outstanding shares of preferred stock into                      shares of common stock immediately prior to the completion of this offering.

The table and footnotes set forth the number of shares held by, and the percentage beneficial ownership of, each selling stockholder based on                      shares of common stock outstanding upon completion of this offering, assuming no exercise of the underwriters’ option to purchase up to an additional                  shares of our common stock.

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Unless otherwise indicated, the address of each of the individuals named below is The Telx Group, Inc., 1 State Street, 21^st Floor, New York, New York 10004.

	Shares Beneficially Owned Prior to the Offering		Shares Being Offered(1)	Shares Beneficially Owned After the Offering
Name of Beneficial Owner	Number	Percent (%)		Number	Percent (%)
5% Stockholders
GI Partners Fund II, L.P.(2)
GI Partners Side Fund II, L.P.(2)
Named Executive Officers and Directors
Eric Shepcaro(3)
Christopher W. Downie(3)
J. Todd Raymond(3)
William Kolman(3)
Michael Terlizzi(3)
Howard Park(2)
Eric Harrison
Daniel H. Schulman
Rolla P. Huff
Jesper Andersen
Thomas J. Fitzpatrick
All directors and executive officers as a group (13 persons)
Other Selling Stockholders
Telxinvest, LLC(4)

 * less than 1%.

(1) Assumes no exercise of the underwriters’ option to purchase additional shares.

(2) Includes 1,357,896 and 542,103 shares of our Series A Preferred Stock held by GI Partners Fund II, L.P. and GI Partners Side Fund II, L.P., respectively, which will convert into                  and                  shares of our common stock, respectively, immediately prior to the closing of this offering. The general partner of the GI Partners Funds is GI GP I L.P., a Delaware limited partnership. GI GP LLC, a Delaware limited liability company, is the general partner of GI GP I, L.P. GI Manager L.P., a Delaware limited partnership, is the manager of the GI Partners Funds. GI GP LLC is the general partner of GI Manager L.P. Howard Park, our chairman of the board, is a Managing Director at GI Partners. The address for the GI Partners Funds is 2180 Sand Hill Road, Suite 210, Menlo Park, California 94025.

(3) Does not include an aggregate of 179,541 shares of Series B Contingent Preferred Stock beneficially owned by Messrs. Shepcaro, Downie, Raymond, Kolman and Terlizzi. Immediately prior to this offering, each outstanding share of Series B Contingent Preferred Stock will convert into between zero and one share of Series B Convertible Preferred Stock (the precise rate of conversion will be based on the internal rate of return of the GI Partners Funds investment in Telx as set forth in our current amended and restated certificate of incorporation). The outstanding shares of Series B Convertible Preferred Stock will then immediately convert into our common stock. However, in the event that the GI Partners Funds does not reach a minimum return threshold as provided for in our current amended and restated certificate of incorporation, the Series B Contingent Preferred Stock will not convert at all.

(4) Represents 30,400 shares of our Series A Preferred Stock which will convert into              shares of our common stock immediately prior to the closing of this offering. Former and current executive officers and directors, including Mr. Shepcaro, our Chief Executive Officer and member of our board of directors, Mr. Downie, our President, Chief Financial Officer and Treasurer, Mr. Raymond, our senior vice president, facility acquisition, and Mr. Kolman, our executive vice president of sales, collectively own 89% of Telxinvest, LLC. Two of our former employees own the remainder.

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DESCRIPTION OF CAPITAL STOCK

The following is a summary of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws, each of which will be in effect upon the closing of this offering. This summary does not purport to be complete and is qualified in its entirety by the provisions of the amended and restated certificate of incorporation and amended and restated bylaws, copies of which will be filed as exhibits to the registration statement of which this prospectus is a part, and by the provisions of applicable law.

Upon the closing of this offering, our authorized capital stock will consist of              million shares of common stock, $0.0001 par value per share, and              million shares of undesignated preferred stock, $0.0001 par value per share.

Common Stock

As of             , there were             shares of common stock outstanding, held of record by approximately              stockholders after giving effect to the conversion of all of our outstanding shares of preferred stock into shares of common stock. There will be             shares of common stock outstanding (assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of outstanding options) after giving effect to the sale of the shares of common stock offered by this prospectus.

The holders of common stock are entitled to one vote per share on all matters submitted to a vote of our stockholders and do not have cumulative voting rights. Directors shall be elected by a plurality of the votes cast. Except as otherwise required by law or as provided in our amended and restated certificate of incorporation or amended and restated bylaws, holders of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Subject to preferences that may be applicable to any preferred stock outstanding at the time, the holders of outstanding shares of common stock are entitled to receive ratably any dividends declared by our board of directors out of assets legally available. See the section entitled “Dividend Policy.” Upon our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding shares of preferred stock. Holders of common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are, and all shares of common stock to be outstanding upon completion of this offering will be, fully paid and nonassessable.

Preferred Stock

Immediately prior to the closing of this offering, all outstanding shares of our preferred stock will be converted into shares of common stock. Pursuant to our amended and restated certificate of incorporation, our board of directors will have the authority, without further action by the stockholders, to issue from time to time up to              shares of preferred stock, in one or more series. Our board will determine the rights, preferences, privileges, and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of any series, any or all of which may be greater than or senior to the rights of the common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and reduce the likelihood that such holders will receive dividend payments and payments upon liquidation, and the likelihood that holders of preferred stock will receive dividend payments and payments upon liquidation may have the effect of delaying, deterring or preventing a change in control, which could depress the market price of our common stock. We have no current plan to issue any shares of preferred stock.

Warrants

In connection with our acquisition of certain assets of GreatAccess.com, Inc., on May 28, 2008, we issued a warrant to GreatAccess.com, Inc. to purchase 10,000 shares of our common stock at an exercise price of $4.00

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per share (after adjustment for our July 2008 1-for-10 reverse stock split, the warrant is exercisable to purchase 1,000 shares of our common stock at an exercise price of $40.00 per share.) This warrant has an initial term of seven years from the issue date. It is anticipated that these warrants will be exercised prior to the closing of this offering.

In 2001, we issued a warrant to DSR Holdings III, LLC. After adjustments for reverse stock splits and taking into account the impact of our acquisition by the GI Partners Funds, this warrant has no economic value, since the exercise of the warrant, at a cost to the warrantholder of approximately $112,000, would yield less than $100,000 of cash as the warrantholder’s sale proceeds.

Registration Rights

Upon completion of this offering, and after the expiration of the lock-up agreements described in the section entitled “Shares Eligible for Future Sale,” holders of the substantial majority of our common stock will be entitled to rights to register the shares held by them under the Securities Act pursuant to registration rights granted to such holders of these securities. If we propose to register any of our securities under the Securities Act, either for our own account or for the account of others, the holders of these shares are entitled to notice of the registration and are entitled to include, at our expense, their shares of common stock in the registration and any related underwriting, provided, among other conditions and limitations, that the underwriters may limit the number of shares to be included in the registration and in some cases exclude these shares entirely.

In addition, the holders of these shares may require us to file a registration statement under the Securities Act with respect to their shares of common stock, and we will be required to use our best efforts to effect the registration. See the section entitled “Shares Eligible for Future Sale.”

Anti-Takeover Provisions Under Our Charter and Bylaws and Delaware Law

Certain provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws, which will be in effect upon the completion of this offering, contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, may have the effect of discouraging coercive takeover practices and inadequate takeover bids. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquiror outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

Amended and Restated Certificate of Incorporation; Amended and Restated Bylaws

We expect that our amended and restated certificate of incorporation and our amended and restated bylaws, which will be in effect upon the closing of this offering, will contain provisions that could have the effect of delaying, deterring or preventing another party from acquiring control of us. These provisions and certain provisions of Delaware law, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate more favorable terms with an unfriendly or unsolicited acquiror outweigh the disadvantages of discouraging a proposal to acquire us.

Undesignated Preferred Stock.    As discussed above, our board of directors has the ability to issue, without stockholder approval, preferred stock with voting or other rights or preferences as may be fixed by the board of directors that could impede the success of any takeover attempt. This and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.

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Limitations on the Ability of Stockholders to Act by Written Consent or Call a Special Meeting.    We expect to provide in our amended and restated certificate of incorporation that our stockholders may not act by written consent from and after the date upon which GI Partners and its affiliates, collectively, cease to beneficially own at least 50% of our outstanding common stock. The inability of our stockholders to act by written consent under such circumstances may lengthen the amount of time required to take stockholder actions. As a result, a holder controlling a majority of our capital stock would not be able to amend our bylaws or remove directors without holding a meeting of our stockholders called in accordance with our bylaws.

In addition, our amended and restated certificate of incorporation provides that special meetings of the stockholders may be called only by the chairperson of our board of directors, the chief executive officer, the president or the board of directors. A stockholder may not call a special meeting, which may delay the ability of our stockholders to force consideration of a proposal or for holders controlling a majority of our capital stock to take any action, including the removal of directors.

Requirements for Advance Notification of Stockholder Nominations and Proposals.    Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors. These provisions may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed. These provisions may also discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or from otherwise attempting to obtain control of our company.

Board Classification.    Our board of directors is divided into three classes, one class of which is elected each year by our stockholders. The directors in each class will serve for a three-year term. For more information on the classified board, see “Management—Board of Directors.” A third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time-consuming for stockholders to replace a majority of the directors on a classified board.

Board Vacancies Filled Only by Majority of Directors.    Vacancies and newly created seats on our board shall be filled only by a majority of the remaining directors then in office. Only our board of directors may determine the number of directors on our board. The inability of stockholders to determine the number of directors or to fill vacancies or newly created seats on our board of directors makes it more difficult to change the composition of our board of directors, but these provisions promote a continuity of existing management.

No Cumulative Voting.    The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation does not expressly provide for cumulative voting.

Directors Removed Only for Cause.    Our amended and restated certificate of incorporation provides for the removal of directors only for cause and only upon the affirmative vote of the holders of a supermajority of the total voting power of our outstanding capital stock entitled to vote generally in the election of directors.

Amendment of Charter Provisions and Bylaws.    The amendment of certain of the above provisions in our amended and restated certificate of incorporation and of any provision in our amended and restated bylaws requires approval by holders of at least two-thirds of our outstanding capital stock entitled to vote generally in the election of directors.

Delaware Anti-Takeover Statute.    Our amended and restated certificate of incorporation provides that upon the occurrence of a transaction in which GI partners and its affiliates’ beneficial ownership interest in us is reduced to less than 5% of our outstanding shares of common stock, we will be subject to Section 203 of the DGCL, or DGCL Section 203. Accordingly, we are not currently subject to DGCL Section 203. DGCL Section 203 prevents, subject to certain exceptions set forth therein, certain Delaware corporations, including those whose securities are

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listed on The Nasdaq Global Market, from engaging, under certain circumstances, in a business combination with any interested stockholder for three years following the date that such stockholder became an interested stockholder. For purposes of DGCL Section 203, a business combination includes, among other things, a merger or consolidation involving us and the interested stockholder and the sale of 10% or more of our assets. In general, DGCL Section 203 defines an interested stockholder as any entity or person owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person. A Delaware corporation may opt out of DGCL Section 203 with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from amendments approved by the holders of at least a majority of the corporation’s outstanding voting shares. This provision has an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging takeover attempts that might result in a premium over the market price for our shares.

The provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Transfer Agent and Registrar

We expect that the transfer agent and registrar for the common stock will be American Stock Transfer & Trust Company. The transfer agent’s address is 59 Maiden Lane, New York, New York 10038 and its telephone number is (800) 937-5499.

Nasdaq Global Market

We have applied to list our common stock on The Nasdaq Global Market under the symbol “TELX.”

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DESCRIPTION OF INDEBTEDNESS

The key terms of our New Credit Facility are described below. These descriptions are not complete and are qualified in their entirety by reference to the complete texts of the related agreements, copies of which have been filed as exhibits to this registration statement, of which this prospectus forms a part.

Secured Credit Facility

General

On June 17, 2010, we and certain of our subsidiaries entered into a senior secured credit facility, consisting of a $150.0 million term loan and a $25.0 million revolving facility, with Goldman Sachs Lending Partners LLC, as administrative agent and collateral agent, and the other lenders party thereto (the “New Credit Facility”). We used $138.1 million of the proceeds of the term loan to repay indebtedness outstanding under our NY Credit Agreement, the 56 Marietta Loans, other minor indebtedness, and to pay the fees and expenses of the transaction, and we used an additional $1.1 million of proceeds to pay accrued interest on repaid indebtedness. The remaining proceeds from the borrowings will be used to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes. We did not draw upon the revolving facility at closing, but when or if we do so, we will use the proceeds to fulfill our and our subsidiaries’ working capital requirements and for general corporate purposes.

Maturity Date

The term loan matures on June 17, 2015 and the revolving loan matures on June 17, 2014.

Guarantee and Security

The obligations under the credit agreement are guaranteed by all of our current subsidiaries, and certain of our subsidiaries that we may acquire or create in the future (collectively, the “subsidiary guarantors”) and are secured by substantially all of our and the subsidiary guarantors’ assets.

Interest and Fees

The non-default interest rates for the loans under the credit agreement are determined either by (i) LIBOR (for the applicable interest period) plus the applicable margin (a “LIBOR Loan”), or at our election, (ii) a prime-based rate (equal to the greatest of (a) the Federal Funds effective rate plus 0.50%, (b) the prime rate published in the Wall Street Journal and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin (a “Base Rate Loan”). The applicable margin is 5.00% for a Base Rate Loan and 6.00% for a LIBOR Loan. The margins for both LIBOR Loans and Base Rate Loans will increase by 0.25% if we are unable to obtain leasehold mortgages on all of our leases with Digital Realty Trust by November 14, 2010, until we obtain all such leasehold mortgages. Pursuant to the credit agreement, the margin increase will terminate, to the extent it occurs, if our senior secured leverage ratio drops below a threshold set forth in the credit agreement or once leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust have been obtained and the related leases (or memoranda of such leases) have been recorded to give constructive notice of such leasehold mortgages. As of November 4, 2010, leasehold mortgages with respect to all of our leasehold properties with Digital Realty Trust were obtained in accordance with the credit agreement and the related leases (or memoranda of such leases) were delivered for recordation. The credit agreement provides for a LIBOR floor of 2.00% and a Base Rate Loan floor of 3.00%. Under the credit facility, we are required to pay annually an unused revolving commitment fee of 0.625% of the amount by which the revolving loan commitments exceed the average daily balance of the outstanding revolving loan and letter of credit. We are also required to pay Goldman Sachs Lending Partners LLC an annual administration fee of $100,000.

The term loan may be prepaid at any time, and the credit agreement provides for certain mandatory principal prepayments, including certain payments if our consolidated cash flow exceeds certain levels. Any voluntary

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principal prepayments and mandatory principal prepayments required as a result of the incurrence of indebtedness and any repricing of the term loan at a lower interest rate or weighted average yield, shall be subject to a prepayment premium of 2.00% if repaid or repriced prior to June 17, 2011, or 1.00% if repaid or repriced prior to June 17, 2012.

Covenants

The credit agreement contains restrictive covenants, including financial covenants requiring us and the subsidiary guarantors, collectively, to maintain a maximum senior secured leverage ratio and a minimum interest coverage ratio. The credit agreement restricts our and our subsidiaries’ ability to, among other things, make capital expenditures, pay dividends, incur or make payments on debt, grant liens, make investments, merge with or acquire other companies, sell assets or enter into affiliate transactions. The negative covenants in the credit agreement are subject to exceptions described in the credit agreement. We were in compliance with the covenants of the credit agreement as of September 30, 2010.

Events of Default

The events of default under the credit facility include payment defaults; breaches of representations, warranties or covenants; cross defaults to certain other indebtedness; challenging the validity or enforceability of the credit agreement and related documents; insolvency related proceedings; judgments for the payment of money; certain ERISA events; and changes of control. The occurrence of an event of default could result in the termination of the lenders’ obligation to make loans under the revolving facility, acceleration of the obligations under the credit agreement, an increase in the interest rate, a requirement to post cash collateral to secure outstanding letter of credit obligations, and foreclosure on the pledged assets.

Interest Rate Cap and Swap Agreements

On August 2, 2010, we entered into an interest rate cap agreement with a notional amount of $87.5 million with SunTrust Bank as required by the new credit agreement. The term of the agreement is eleven months, beginning on August 3, 2010 and ending on June 30, 2011. The agreement calls for a cap rate of 3% and a floating option of USD-LIBOR-BBA.

Also, on August 2, 2010, we entered into an interest rate swap agreement with a notional amount of $87.5 million with SunTrust Bank. The term of the agreement is two years, beginning on June 30, 2011 and ending on June 30, 2013. The agreement calls for a cap rate of 1.44% and a floating option of USD-LIBOR-BBA.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market could adversely affect the prevailing price of our common stock from time to time or impair our ability to raise equity capital in the future.

Upon completion of this offering, we will have outstanding an aggregate of                      shares of common stock, assuming the conversion of all outstanding shares of preferred stock into common stock immediately prior to the closing of this offering and assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of outstanding options or warrants. Of these shares, all                      of the shares sold in this offering by us and the selling stockholders, plus any shares sold upon exercise of the underwriters’ option to purchase additional shares will be freely tradable without restriction or further registration under the Securities Act, unless these shares are purchased by affiliates. The remaining                      shares of common stock held by existing stockholders are “restricted securities” as that term is defined in Rule 144 under the Securities Act or are subject to the contractual restrictions described below. Restricted securities may be sold in the public market only if registered or if the transaction qualifies for an exemption from registration described below under Rules 144 or 701 promulgated under the Securities Act.

“Restricted” shares and shares subject to the contractual restrictions described below will be available for sale in the public market as follows:

•              shares will be eligible for sale upon completion of this offering; and

•              shares will be eligible for sale upon the expiration of the lock-up agreements, described below, beginning 180 days after the date of this prospectus.

In addition, of the 112,085 shares of our common stock that were subject to stock options outstanding as of September 30, 2010, options to purchase 68,303 shares of common stock were exercisable as of September 30, 2010 and will be eligible for sale 90 days after the date of this prospectus. In addition, as of September 30, 2010, warrants to purchase 1,000 shares of our common stock with a weighted average exercise price of $40.00 were outstanding (excluding warrants without any economic value).

Lock-Up Agreements and Obligations

Certain of our officers, directors and stockholders, who together hold         % of our outstanding common stock as of                     , 2010, have agreed, subject to certain exceptions, not to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into shares or exercisable or exchangeable for shares of our common stock, or enter into any swap or other arrangement for transfer to another, in whole or in part, any of the economic consequences of ownership of our common stock, for a period of at least 180 days after the date of this prospectus. Transfers or dispositions can be made sooner only in certain circumstances or with the prior written consent of Goldman, Sachs & Co. and Deutsche Bank Securities Inc. Goldman, Sachs & Co. and Deutsche Bank Securities Inc. may release any of the shares subject to these lock-up agreements at any time without notice.

Rule 144

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to

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the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

In general, under Rule 144 as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described above, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

• 1% of the number of shares of common stock then outstanding, which will equal approximately              shares immediately after this offering; or

• the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Rule 701 of the Securities Act, as currently in effect, permits any of our employees, officers, directors, consultants or advisors who purchase or receive shares from us pursuant to a written compensatory plan or contract to resell such shares in reliance upon Rule 144, but without compliance with certain restrictions. Subject to any applicable lock-up agreements, Rule 701 provides that affiliates may sell their Rule 701 shares under Rule 144 beginning 90 days after the date of this prospectus without complying with the holding period requirement of Rule 144 and that non-affiliates may sell such shares in reliance on Rule 144 beginning 90 days after the date of this prospectus without complying with the holding period, public information, volume limitation or notice requirements of Rule 144.

Registration Rights

Upon completion of this offering, the holders of an aggregate of              shares of our common stock, or their transferees, will be entitled to rights with respect to the registration of their shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of such registration.

Form S-8 Registration Statements

Following the completion of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register the shares of our common stock that are issuable pursuant to our equity incentive plans. See the section entitled “Management—Equity Benefit Plans.” Subject to the lock-up agreements described above, other contractual lock-up obligations set forth in the grant agreements under each such plan and any applicable vesting restrictions, shares registered under these registration statements will be available for resale in the public market immediately upon the effectiveness of these registration statements, except with respect to Rule 144 volume limitations that apply to our affiliates.

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MATERIAL U.S. FEDERAL TAX CONSIDERATIONS

The following is a general discussion of material U.S. federal income and estate tax considerations relating to the acquisition, ownership and disposition of our common stock that may be relevant to holders who hold shares of our common stock as capital assets. This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect or proposed on the date hereof and all of which are subject to change, possibly with retroactive effect, or different interpretations.

This discussion is for general information only and does not address all of the tax considerations that may be relevant to specific holders in light of their particular circumstances or to holders subject to special treatment under U.S. federal tax laws (such as certain financial institutions, regulated investment companies, real estate investment trusts, partnerships or other pass-through entities, insurance companies, tax-exempt entities, retirement plans, brokers or dealers in securities, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, persons liable for alternative minimum tax, persons owning, actually or constructively, 10% or more of our stock for United States federal income tax purposes, expatriates, persons who hold our common stock as part of a straddle, hedge, conversion transaction or other risk-reduction or integrated investment, controlled foreign corporations, passive foreign investment companies, foreign personal holding companies, companies that accumulate earnings to avoid U.S. federal income tax, taxpayers whose functional currency is not the U.S. dollar, and persons who hold or receive our common stock as compensation).

This discussion does not address the U.S. state and local or non-U.S. tax considerations relating to the acquisition, ownership and disposition of our common stock.

As used in this discussion, the term “U.S. holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes:

• an individual citizen or resident of the United States;

• a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or of any state or political subdivision thereof or therein, including the District of Columbia;

• an estate, the income of which is subject to U.S. federal income tax regardless of the source thereof; or

• a trust, if (a) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions of the trust or (b) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

The term “non-U.S. holder” means a beneficial owner of our common stock that is not a U.S. holder.

An individual may, subject to certain exceptions, be deemed to be a resident of the United States for a calendar year by reason of being present in the United States for at least 31 days in such calendar year and for an aggregate of at least 183 days during a three-year period ending with such current calendar year (counting for such purposes all of the days present in such current calendar year, one-third of the days present in the immediately preceding calendar year, and one-sixth of the days present in the second preceding calendar year).

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common stock, we suggest that you consult your own tax advisor as to the particular U.S. federal income and estate tax consequences applicable to you.

Prospective purchasers are urged to consult their own tax advisors as to the particular tax considerations applicable to them relating to the acquisition, ownership and disposition of our common stock, including the applicability of U.S. federal, state or local tax laws or non-U.S. tax laws, any changes in applicable tax laws and any pending or proposed legislation or regulations.

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U.S. Holders

Dividends

Dividends paid on shares of our common stock will be treated as dividends for United States federal income tax purposes to the extent they are paid by us out of our current or accumulated earnings and profits and will be includible in gross income by a U.S. holder upon receipt. To the extent that the amount of any dividend paid on shares of our common stock exceeds our current and accumulated earnings and profits, such excess will be treated first as a return of capital, which will be applied against and reduce your adjusted tax basis (but not below zero) in such shares of our common stock. This reduction in tax basis will increase any gain, or reduce any loss, realized by you on a subsequent sale, exchange or other disposition of such shares. To the extent that the amount of any dividend paid on shares of our common stock exceeds our current and accumulated earnings and profits, the portion of such excess that is not treated as a return of capital will be taxed as capital gain.

Under current law, any dividend paid will be eligible for the dividends-received deduction, if received by a qualifying corporate U.S. holder that meets the holding period and other requirements for the dividends-received deduction. If you are an individual, dividends received by you on a share of our common stock will generally be subject to a reduced maximum United States federal income tax rate of 15% for taxable years beginning prior to January 1, 2011, after which the rate applicable to dividends is scheduled to return to the tax rate generally applicable to ordinary income. To qualify for such reduced rate, you must have held the shares of common stock for more than 60 days during the 121-day period beginning 60 days prior to the ex-dividend date.

In general, for purposes of meeting the holding period requirements for both the dividends-received deduction and the reduced maximum tax rate on dividends described above, you may not count towards your holding period any period in which you (a) have the option to sell, are under a contractual obligation to sell, or have made (and not closed) a short sale of shares of our common stock or substantially identical stock or securities, (b) are the grantor of an option to buy shares of our common stock or substantially identical stock or securities or (c) otherwise have diminished your risk of loss by holding one or more positions with respect to substantially similar or related property. United States Treasury Regulations provide that a taxpayer has diminished its risk of loss on stock by holding a position in substantially similar or related property if the taxpayer is the beneficiary of a guarantee, surety agreement or similar arrangement that provides for payments that will substantially offset decreases in the fair market value of the stock. In addition, the Code disallows the dividends-received deduction as well as eligibility for the reduced maximum tax rate on dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. You are advised to consult your own tax advisor regarding the implications of these rules in light of your particular circumstances.

If you are a corporation, you should consider the effect of Section 246A of the Code, which reduces the dividends-received deduction allowed with respect to “debt-financed portfolio stock.” The Code also imposes a 20% alternative minimum tax on corporations. In some circumstances, a portion of dividends subject to the dividends-received deduction will serve to increase a corporation’s minimum tax base for purposes of the alternative minimum tax. In addition, a corporate shareholder may be required to reduce its tax basis in stock with respect to certain “extraordinary dividends”, as provided under Section 1059 of the Code, and individual United States holders will be subject to special rules in the event that they receive “extraordinary dividends” that are subject to the reduced maximum rate of tax for dividends. You should consult your own tax advisor in determining the application of these rules in light of your particular circumstances.

Sale, Exchange or Other Disposition

Upon a sale, exchange or other disposition of our common stock, a U.S. holder will recognize capital gain or loss in an amount equal to the difference between the amount realized on the sale, exchange or other disposition and such U.S. holder’s adjusted tax basis in the share of our common stock. Such gain or loss will be capital gain

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or loss and will be long-term capital gain or loss if your holding period for such share of our common stock exceeds one year. Under current law, if you are an individual, net long-term capital gain realized by you is subject to a reduced tax rate for United States federal income tax purposes of 15%. This rate is currently scheduled to increase after 2010. The deduction of capital losses is subject to limitations.

Medicare Tax

For taxable years beginning after December 31, 2012, a U.S. holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) the U.S. holder’s “net investment income” for the relevant taxable year or (2) the excess of the U.S. holder’s adjusted gross income for the taxable year (which in the case of an individual will include foreign earned income) over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A holder’s net investment income will generally include its gross dividend income and its net gains from the disposition of common stock, unless such dividend or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in our common stock.

Information Reporting and Backup Withholding Tax

In general, dividends on our common stock and payments of the proceeds of a sale, exchange or other disposition of our common stock paid to a U.S. holder may be subject to information reporting. Certain U.S. holders may be subject to backup withholding tax (currently at a rate of 28% through 2010) on payments made on or with respect to our common stock if such U.S. holder fails to supply a correct taxpayer identification number or otherwise fails to comply with applicable U.S. information reporting or certification requirements. Certain persons are exempt from backup withholding including, in certain circumstances, corporations and financial institutions.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. holder will be allowed as a refund or a credit against such U.S. holder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the Internal Revenue Service (the “IRS”). U.S. holders should consult their own tax advisors regarding the filing of a U.S. tax return for claiming a refund of such backup withholding.

Non-U.S. Holders

Dividends

We or a withholding agent will have to withhold U.S. federal withholding tax from the gross amount of any dividends paid to a non-U.S. holder at a rate of 30%, unless (a) an applicable income tax treaty reduces or eliminates such tax, and a non-U.S. holder claiming the benefit of such treaty provides to us or such agent proper IRS documentation, or (b) the dividends are effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States and the non-U.S. holder provides to us or such agent proper IRS documentation. In the latter case, such non-U.S. holder generally will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual and corporate rates applicable to U.S. persons. A distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under the Code. Any distribution not constituting a dividend will be treated first as reducing your basis in your shares of common stock and, to the extent it exceeds your basis, as capital gain.

Additionally, a non-U.S. holder that is a corporation could be subject to a branch profits tax on effectively connected dividend income at a rate of 30% (or at a reduced rate under an applicable income tax treaty). Dividends that are effectively connected with your conduct of a trade or business but that under an applicable

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income tax treaty are not attributable to a U.S. permanent establishment maintained by you may be eligible for a reduced rate of U.S. withholding tax under such treaty, provided you comply with certification and disclosure requirements necessary to obtain treaty benefits.

In addition, where dividends are paid to a non-U.S. holder that is a partnership or other pass-through entity, persons holding an interest in the entity may need to provide certification claiming an exemption or reduction in withholding under an applicable income tax treaty. If a non-U.S. holder is eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty, such non-U.S. holder may obtain a refund of any excess amount withheld by filing an appropriate claim for refund with the IRS.

Sale, Exchange or Other Disposition

Generally, a non-U.S. holder will not be subject to U.S. federal income tax on gain realized upon the sale, exchange or other disposition of our common stock unless:

• such non-U.S. holder is an individual present in the United States for 183 days or more in the taxable year of the sale, exchange or other disposition and certain other conditions are met;

• the gain is effectively connected with such non-U.S. holder’s conduct of a trade or business in the United States (and, under certain income tax treaties, is attributable to a U.S. permanent establishment of such non-U.S. holder); or

• we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes (which we believe we are not and have never been, and do not anticipate we will become) and the non-U.S. holder holds or has held, directly or indirectly, at any time within the shorter of the five-year period preceding such sale, exchange or disposition or the period that such non-U.S. holder held our common stock, more than 5% of our common stock).

If the first exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% (or at a reduced rate under an applicable income tax treaty) on the amount by which capital gains allocable to U.S. sources (including gains from the sale, exchange or other disposition of our common stock) exceed capital losses allocable to U.S. sources. If the second or third exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax with respect to such gain in the same manner as a U.S. citizen or corporation, as applicable, unless otherwise provided in an applicable income tax treaty, and a non-U.S. holder that is a corporation could also be subject to a branch profits tax on such gain at a rate of 30% (or at a reduced rate under an applicable income tax treaty). If the gain from the sale or disposition of your shares is effectively connected with your conduct of a trade or business in the United States but under an applicable income tax treaty is not attributable to a permanent establishment you maintain in the United States, your gain may be exempt from U.S. tax under the treaty.

Information Reporting and Backup Withholding Tax

We must report annually to the IRS the amount of dividends or other distributions we pay to you on your shares of common stock and the amount of tax we withhold on these distributions regardless of whether withholding is required. The IRS may make copies of the information returns reporting those distributions and amounts withheld available to the tax authorities in the country in which you reside pursuant to the provisions of an applicable income tax treaty or exchange of information treaty. Backup withholding tax (at a rate equal to 28% through 2010 and 31% after 2010) may also apply to payments made to a non-U.S. holder on or with respect to our common stock, unless the non-U.S. holder certifies as to its status as a non-U.S. holder under penalties of perjury or otherwise establishes an exemption, and certain other conditions are satisfied.

Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale of your shares of common stock outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if you sell your

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shares of common stock through a U.S. broker or the U.S. office of a foreign broker, the broker will be required to report the amount of proceeds paid to you to the IRS and also perform backup withholding on that amount unless you provide appropriate certification to the broker of your status as a non-U.S. holder or you otherwise establish an exemption. Information reporting will also apply if you sell your shares of common stock through a foreign broker deriving more than a specified percentage of its income from U.S. sources or having certain other connections to the United States, unless such broker has documenting evidence in its records that you are a non-U.S. holder and certain other conditions are met or you otherwise establish an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a refund or a credit against such non-U.S. holder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the IRS. Non-U.S. holders should consult their own tax advisors regarding the filing of a U.S. tax return for claiming a refund of such backup withholding.

Recent Legislation

President Obama recently signed into law the Hiring Incentives to Restore Employment (HIRE) Act of 2010, which will impose certain increased certification requirements and information reporting. In the event of noncompliance with the revised certification requirements, 30% withholding tax could be imposed on payments to Non-U.S. Holders of interest, dividends or sales proceeds. We will not pay any additional amounts to Non-U.S. Holders in respect of any amounts withheld. Such provisions will generally apply to payments made after December 31, 2012. It cannot be predicted in what form this legislation will be further implemented. Prospective investors should consult their own tax advisors regarding this new legislation.

Federal Estate Tax

Common stock owned or treated as owned by an individual who is not a citizen or resident (as defined for U.S. federal estate tax purposes) of the United States at the time of his or her death generally will be included in the individual’s gross estate for U.S. federal estate tax purposes and therefore may be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise. Under current law for 2010 only, there is no U.S. federal estate tax. There is a possibility, however, of the retroactive reinstatement of the U.S. federal estate tax for 2010. Under current law, in 2011, the U.S. federal estate tax will be fully reinstated.

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UNDERWRITING

The company, the selling stockholders and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman, Sachs & Co. and Deutsche Bank Securities Inc. are the representatives of the underwriters.

Underwriters	Number of Shares
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
RBC Capital Markets Corporation
Oppenheimer & Co. Inc.
Piper Jaffray & Co
SunTrust Robinson Humphrey, Inc.
Total

The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to              additional shares from the company and/or the selling stockholders. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by the company and the selling stockholders. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional              shares.

Paid by the Company	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Paid by the Selling Stockholders	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $             per share from the initial public offering price. If all the shares are not sold at the initial public offering price, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

At our request, the underwriters have reserved for sale, at the initial public offering price, up to         % of the shares offered hereby for sale to our directors, officers and employees. The number of shares available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered hereby.

The company and its officers, directors, and holders of substantially all of the company’s common stock, including the selling stockholders, have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of common stock

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during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives. This agreement does not apply to any existing equity incentive plans, securities issued upon the exercise of options or upon the exercise, conversion or exchange of exercisable, convertible or exchangeable securities outstanding as of the date hereof, issuances of securities in connection with mergers or acquisitions we may make in an aggregate amount not to exceed 5% of our fully diluted stock outstanding after the closing of this offering and other customary exceptions. See “Shares Eligible for Future Sale” for a discussion of certain transfer restrictions.

The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period the company issues an earnings release or announces material news or a material event; or (2) prior to the expiration of the 180-day restricted period, the company announces that it will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

Prior to this offering, there has been no public market for the shares. The initial public offering price has been negotiated among the company and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be the company’s historical performance, estimates of the business potential and earnings prospects of the company, an assessment of the company’s management and the consideration of the above factors in relation to market valuation of companies in related businesses.

An application has been made to quote the common stock on The Nasdaq Global Market under the symbol “TELX”.

In connection with this offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares from the company and/or the selling stockholders in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option granted to them. “Naked” short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of this offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the company’s stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time.

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These transactions may be effected on The Nasdaq Global Market, in the over-the-counter market or otherwise.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

(d) in any other circumstances which do not require the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the company; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

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This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

The company and the selling stockholders estimate that their share of the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $            .

The company and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the company, for which they received or will receive customary fees and expenses. In particular, the affiliates of each of RBC Capital Markets Corporation and SunTrust Robinson Humphrey, Inc. were lenders under the company’s prior revolving credit facility and term loan and have received fees from the company. In addition, Goldman Sachs Lending Partners LLC, an affiliate of Goldman, Sachs & Co., Deutsche Bank Securities Inc., RBC Capital Markets Corporation and SunTrust Robinson Humphrey, Inc. are joint book runners and syndication agents under the New Credit Facility and have received and will receive fees from us. Moreover, affiliates of Goldman, Sachs & Co. are administrative agent and collateral agent and lender under the New Credit Facility and have received and will receive fees from us. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and such investment and securities activities may involve securities and/or instruments of the issuer. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

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LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of common stock offered hereby will be passed upon for us by Paul, Hastings, Janofsky & Walker LLP, New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriters by Cravath, Swaine & Moore LLP, New York, New York.

EXPERTS

The consolidated financial statements and schedule of The Telx Group, Inc. and subsidiaries as of December 31, 2009 and 2008, and for each of the years in the three-year period ended December 31, 2009, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of such firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock we are offering under this prospectus. As permitted under the rules and regulations of the SEC, this prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedule to the registration statement. You should refer to the registration statement and its exhibits and schedule for additional information. Statements contained in this prospectus as to the contents of any contract, agreement or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract, agreement or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

Copies of the registration statement, including its exhibits and schedule, may be examined without charge at the Public Reference Room of the SEC, 100 F Street, N.E., Washington, D.C. 20549. Information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0300. Copies of all or a portion of the registration statement may be obtained from the Public Reference Room of the SEC upon payment of prescribed fees. Our SEC filings, including our registration statement are also available to you, free of charge, on the SEC’s website at www.sec.gov.

Upon completion of this offering, we will be subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and we will file reports, proxy statements and other information with the SEC. We will make available to our stockholders annual reports containing financial statements audited by our independent registered public accounting firm and quarterly reports for the first three quarters of each fiscal year containing unaudited interim financial information.

131

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

OF THE TELX GROUP, INC.

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

	Page
Report of Independent Registered Public Accounting Firm		F-2
Financial Statements:
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations		F-4
Consolidated Statements of Cash Flows		F-5
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss)		F-6
Notes to Consolidated Financial Statements		F-7
Financial Statement Schedules:
Schedule II — Valuation and Qualifying Accounts		F-48

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

The Telx Group, Inc.:

We have audited the accompanying consolidated balance sheets of The Telx Group, Inc. and subsidiaries (“the Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows for each of the years in the three-year period ended December 31, 2009. In connection with our audits of the consolidated financial statements, we also have audited the consolidated financial statement schedule II. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and the consolidated financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Telx Group, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/    KPMG LLP

New York, New York

March 18, 2010

F-2

THE TELX GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30,			December 31,
	2010			2009			2008
	(unaudited)
Assets
Cash and cash equivalents	$	35,463		$	40,655		$	22,638
Accounts receivable, net of allowance for bad debt of $775, $578 and $349		7,752			5,429			7,801
Current deferred tax asset		315			314			153
Prepaid expenses		1,750			1,375			1,671
Loans due from officers, current		—			102			102
Deferred offering costs		4,143			—			—
Other current assets		3,769			1,988			1,488
Total current assets		53,192			49,863			33,853
Property and equipment, net (Note 9)		99,792			70,078			46,017
Goodwill		149,153			149,153			149,153
Intangible assets, net (Note 8)		19,064			20,834			36,606
Cash—restricted		5,081			4,694			4,713
Prepaid rent		5,894			5,990			6,102
Loans due from officers, non-current		—			828			888
Other assets		10,898			1,982			2,970
Total assets	$	343,074		$	303,422		$	280,302
Liabilities and Stockholders’ Equity
Accounts payable	$	2,919		$	3,414		$	5,551
Accrued expenses		14,708			9,084			6,278
Customer security deposits		1,361			1,268			870
Deferred revenue		3,778			3,709			3,000
Current portion of capital lease and other financing obligations (Note 10)		1,780			916			437
Current portion of mortgage and loans payable (Note 10)		1,500			13,301			9,352
Total current liabilities		26,046			31,692			25,488
Customer security deposits, less current portion		43			270			483
Deferred rent		31,815			24,144			16,341
Deferred revenue, less current portion		4,093			1,750			2,006
Deferred tax liability, net		4,630			3,923			2,774
Capital lease and other financing obligations, less current portion (Note 10)		4,419			4,620			3,104
Mortgage and loans payable, less current portion (Note 10)		148,125			116,693			101,046
Total liabilities		219,171			183,092			151,242
Commitments and contingencies (see Note 18)
Stockholders’ Equity
Preferred stock, Series A, par value $0.0001 per share; 2,300,000 shares authorized at September 30, 2010, December 31, 2009 and 2008; 1,930,399 shares issued and outstanding shares at September 30, 2010, December 31, 2009 and 2008, respectively		—			—			—
Preferred stock, Series B, par value $0.0001 per share; 253,223 shares authorized at September 30, 2010, December 31, 2009 and 2008; 240,354, 240,354 and 248,322 shares issued and outstanding at September 30, 2010, December 31, 2009 and 2008, respectively		—			—			—
Common stock, par value $0.0001 per share; 4,500,000 shares authorized at September 30, 2010, December 31, 2009 and 2008; 706, 706 and 224 shares issued and outstanding at September 30, 2010, December 31, 2009 and 2008, respectively.		—			—			—
Additional paid-in capital		206,084			204,682			203,493
Accumulated deficit		(82,181	)		(84,352	)		(74,433	)
Total stockholders’ equity		123,903			120,330			129,060
Total liabilities and stockholders’ equity	$	343,074		$	303,422		$	280,302

See accompanying notes to the consolidated financial statements

F-3

THE TELX GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

	Nine Months Ended September 30,						Years Ended December 31,
	2010			2009			2009			2008			2007
	(unaudited)
Revenues	$	94,683		$	70,606		$	98,335		$	70,038		$	50,762
Costs and operating expenses
Cost of revenues		56,360			43,313			60,577			41,701			31,766
Sales and marketing		10,189			19,595			23,753			36,826			31,976
General and administrative		15,245			11,509			15,607			14,805			14,321
Total costs and operating expenses		81,794			74,417			99,937			93,332			78,063
Income (loss) from operations		12,889			(3,811	)		(1,602	)		(23,294	)		(27,301	)
Interest income		189			262			374			396			612
Interest expense		(9,516	)		(5,031	)		(7,221	)		(7,380	)		(9,769	)
Other income (expense)		12			(46	)		(12	)		(330	)		(739	)
Income (loss) before income taxes		3,574			(8,626	)		(8,461	)		(30,608	)		(37,197	)
Income tax benefit (expense)		(1,403	)		(1,486	)		(1,458	)		(772	)		811
Net income (loss)		2,171			(10,112	)		(9,919	)		(31,380	)		(36,386	)
Less: preferred dividends		(19,935	)		(18,060	)		(24,452	)		(21,743	)		(17,676	)
Net loss available for common stockholders	$	(17,764	)	$	(28,172	)	$	(34,371	)	$	(53,123	)	$	(54,062	)
Net loss per common share:
Basic and diluted loss per share	$	(25,161	)	$	(57,260	)	$	(63,066	)	$	(290,290	)	$	(540,620	)
Weighted average common shares outstanding:
Basic and diluted		706			492			545			183			100

See accompanying notes to the consolidated financial statements

F-4

THE TELX GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,						Years Ended December 31,
	2010			2009			2009			2008			2007
	(unaudited)
Cash flows from operating activities:
Net income (loss)	$	2,171		$	(10,112	)	$	(9,919	)	$	(31,380	)	$	(36,386	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		6,710			3,900			5,914			2,297			2,911
Amortization of intangibles assets		1,770			13,928			15,772			29,959			28,649
Amortization of deferred financing fees		2,171			729			1,017			1,143			697
Stock-based compensation		1,402			868			1,179			919			379
Bad debt expense		948			693			1,002			1,226			231
Deferred tax liability, net		706			1,488			988			772			(811	)
Changes in operating assets and liabilities:
Accounts receivable		(3,271	)		1,070			1,370			(3,182	)		(4,670	)
Restricted cash		(387	)		7			19			(33	)		(3,351	)
Prepaid expenses, deferred offering costs and other current assets		(3,772	)		(508	)		(32	)		(2,381	)		1,132
Other assets		(1,091	)		1,401			1,498			612			(430	)
Accounts payable		(495	)		(1,727	)		(2,137	)		(602	)		4,941
Customer security deposits		(134	)		240			185			463			27
Accrued expenses		5,624			1,381			2,806			3,191			(2,478	)
Deferred revenue		2,412			735			453			4,666			(578	)
Deferred rent		7,671			5,642			7,803			7,175			5,020
Net cash provided by (used in) operating activities		22,435			19,735			27,918			14,845			(4,717	)
Cash flows from investing activities:
Purchases of property and equipment		(33,715	)		(22,979	)		(28,982	)		(13,595	)		(7,356	)
Purchase of noncontrolling interest		—			—			—			—			(2,250	)
Purchase of NYCC, including transaction costs		—			—			—			—			(46,045	)
Advance payments to vendors for equipment purchases		—			—			—			(907	)		—
Net cash used in investing activities		(33,715	)		(22,979	)		(28,982	)		(14,502	)		(55,651	)
Cash flows from financing activities:
Payments of financing cost		(11,497	)		(1,177	)		(1,527	)		(155	)		(2,457	)
Payments on capital lease obligations		(920	)		(406	)		(578	)		—			—
Proceeds from loans		151,000			16,769			26,769			232			111,000
Debt repayments		(132,495	)		(4,985	)		(5,593	)		(803	)		(98,000	)
Proceeds from issuances of Series A preferred stock		—			—			—			15,213			50,000
Proceeds from subscriptions receivable for Series A preferred stock		—			—			—			100			700
Proceeds from common stock option exercise by employee		—			10			10			3			—
Net cash provided by financing activities		6,088			10,211			19,081			14,590			61,243
Net increase (decrease) in cash and cash equivalents		(5,192	)		6,967			18,017			14,933			875
Cash and cash equivalents at beginning of period		40,655			22,638			22,638			7,705			6,830
Cash and cash equivalents at end of period	$	35,463		$	29,605		$	40,655		$	22,638		$	7,705
Supplemental disclosures of cash flow information:
Interest paid		5,241			4,041			6,056			6,323			8,693
Income taxes paid		652			103			362			407			212
Rents paid		22,213			19,542			24,509			19,139			14,020
Supplemental cash flow information of non-cash activities:
Assets acquired through capital leases		2,709			927			994			1,111			—

See accompanying notes to the consolidated financial statements

F-5

THE TELX GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME (LOSS)

YEARS ENDED DECEMBER 31, 2009, 2008, AND 2007

AND THE NINE MONTHS ENDED SEPTEMBER 30, 2010 (UNAUDITED)

(in thousands, except share data)

	Series A preferred				Series B preferred					Common stock				Additional paid-in capital		Comprehensive income (loss)			Accumulated deficit			Total
	Shares		Amount		Shares			Amount		Shares		Amount
Balances at December 31, 2006		1,269,999	$	—		98,537		$	—		100	$	—	$	134,322	$	—		$	(6,667	)	$	127,655
Issuance of capital stock in NYCC transaction		500,000		—		—			—		—		—		50,000		—			—			50,000
Sale of shares to Telxinvest		8,000		—		—			—		—		—		800		—			—			800
Compensation expense for:
Issuance of Series B preferred stock		—		—		142,686			—		—		—		270		—			—			270
Issuance of common stock options to employees		—		—		—			—		—		—		109		—			—			109
Issuance of stock options for Series A preferred stock in connection with the lease agreement		—		—		—			—		—		—		1,835		—			—			1,835
Net loss for the year ended December 31, 2007		—		—		—			—		—		—		—	$	(36,386	)		(36,386	)		(36,386	)
																$	(36,386	)
Balances at December 31, 2007		1,777,999	$	—		241,223		$	—		100	$	—	$	187,336				$	(43,053	)	$	144,283
Proceeds from issuance of Series A preferred stock, net of related costs		152,400		—		—			—		—		—		15,213		—			—			15,213
Exercise of common stock options		—		—		—			—		124		—		3		—			—			3
Compensation expense for:
Forfeitures of Series B preferred stock		—		—		(4,901	)		—		—		—		—		—			—			—
Issuance of Series B preferred stock		—		—		12,000			—		—		—		588		—			—			588
Issuance of common stock options to employees		—		—		—			—		—		—		331		—			—			331
Issuance of warrants to purchase fixed assets		—		—		—			—		—		—		22								22
Net loss for the year ended December 31, 2008		—		—		—			—		—		—		—	$	(31,380	)		(31,380	)		(31,380	)
																$	(31,380	)
Balances at December 31, 2008		1,930,399	$	—		248,322		$	—		224	$	—	$	203,493				$	(74,433	)	$	129,060
Exercise of common stock options		—		—		—			—		482		—		10		—			—			10
Compensation expense for:
Forfeitures of Series B preferred stock		—		—		(7,968	)		—		—		—		—		—			—			—
Issuance of Series B preferred stock		—		—		—			—		—		—		611		—			—			611
Issuance of common stock options to employees		—		—		—			—		—		—		568		—			—			568
Net loss for the year ended December 31, 2009		—		—		—			—		—		—		—	$	(9,919	)		(9,919	)		(9,919	)
																$	(9,919	)
Balances at December 31, 2009		1,930,399	$	—		240,354		$	—		706	$	—	$	204,682				$	(84,352	)	$	120,330
Compensation expense for:
Issuance of Series B preferred stock		—		—		—			—		—		—		459		—			—			459
Issuance of common stock options to employees and RSU’s to non employee directors		—		—		—			—		—		—		943		—			—			943
Net income for the nine months ended September 30, 2010		—		—		—			—		—		—		—		2,171			2,171			2,171
																$	2,171
Balances at September 30, 2010		1,930,399	$	—		240,354		$	—		706	$	—	$	206,084				$	(82,181	)	$	123,903

See accompanying notes to the consolidated financial statements

F-6

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(1) Organization and Nature of Operations

The Telx Group, Inc. (the Company) operates secure, environmentally controlled facilities in which network providers and bandwidth consumers place their equipment and converge their networks to conduct business with each other (Interconnection Services). As of December 31, 2009 and September 30, 2010, the Company operated leased facilities throughout the United States of America and owns and operates a building in Atlanta, Georgia. The Company’s customers include international and domestic telecommunication companies, Internet service providers, media companies, and enterprises.

The Company was incorporated under the laws of the State of Delaware on August 3, 2000 as CSP Holdings, Inc. (CSP). On December 1, 2000, CSP acquired certain assets of Telx Communications Corporation (renamed CRO Corp.) and began operations as Telx. In May 2004, the Company purchased a 12-story interconnection/datacenter facility in downtown Atlanta, Georgia, and related customer leases and contracts, leasehold improvements, time deposits, and all intellectual property. In September 2006, the holders of the Company’s common stock and Class A Preferred Stock approved and adopted an agreement and plan of merger by and among the Company, GI Partners Fund II, L.P. (GI Fund II), GI Partners Side Fund II, L.P. (Side Fund II and together with GI Fund II, the GI Partners Funds), and a wholly owned subsidiary of the GI Partners Funds created specifically for the merger. On October 3, 2006, the wholly owned subsidiary of the GI Partners Funds merged into the Company and the Company was the surviving entity (the GI Transaction). In connection with this transaction, the GI Partners Funds issued a $98,000 demand note to the Company, which bore an interest rate of 10% per annum and had a maximum one year term. In 2007, this loan was fully repaid with proceeds of debt financing (see Note 10).

Prior to December 1, 2006, the Company’s operating facilities included leased premises at 60 Hudson Street in New York, New York and the Company’s owned building at 56 Marietta Street in Atlanta, Georgia. Effective December 1, 2006, the Company entered into lease agreements with affiliates of Digital Realty Trust, Inc. (Digital Realty Trust), under which the Company’s subsidiaries leased space in certain buildings owned by Digital Realty Trust or its affiliates (the Digital Realty Trust Transaction). Under the terms of each lease agreement, the Company’s subsidiaries became the exclusive Interconnection Services provider for the building covered by such lease and the existing Interconnection customer agreements were assigned by Digital Realty Trust to the Company. Pursuant to this transaction, the Company leases and operates interconnection area facilities in the following Digital Realty Trust properties: 300 JFK Boulevard East, Weehawken, NJ; 113 North Myers Street, Charlotte, NC; 36 NE 2nd Street, Miami, FL; 350 East Cermak Road, Chicago, IL; 600 South Federal, Chicago, IL; 2323 Bryan Street, Dallas, TX; 200 Paul Avenue, San Francisco, CA; 600 West 7th Street, Los Angeles, CA; 1100 Space Park Drive, Santa Clara, CA, and; 120 East Van Buren Street, Phoenix, AZ (see Note 18).

On March 15, 2007, Telx – New York 111 8th, LLC, a wholly owned subsidiary of the Company formed specifically for the purpose, entered into an asset purchase agreement to acquire certain assets and assume certain related liabilities of NYC Connect, LLC located at 111 8th Avenue, New York, New York. The purchase price was $45,190 and was funded through the sale of $50,000 of additional Series A Preferred Stock to the GI Partners Funds (see Note 5).

Various additional leases were entered into during the normal course of business in 2007, 2008, 2009 and the first nine months of 2010 to expand the Company’s business operations (see Note 18).

F-7

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(2) Basis of Presentation and Summary of Significant Accounting Policies

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP). The accompanying consolidated balance sheet as of September 30, 2010, the consolidated statements of income and of cash flows for the nine months ended September 30, 2009 and 2010, and the consolidated statements of stockholders’ equity and comprehensive income for the nine months ended September 30, 2010 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary to state fairly the Company’s financial position as of September 30, 2010, and operating results and cash flows for the nine months ended September 30, 2009 and 2010. The financial data and other information disclosed in these notes to the consolidated financial statements related to the nine month periods are unaudited. The results of the nine months ended September 30, 2010 are not necessarily indicative of the results to be expected for the year ending December 31, 2010 or for any other interim period or for any other future year.

The following is a summary of significant accounting policies used in the preparation of the accompanying consolidated financial statements.

(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect the balances and results of operations of NYC Connect, LLC (acquired by Telx-New York 111 8th, LLC) from the acquisition date in March 2007 (see Note 5).

(b) Use of Estimates

The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets, valuation allowances for receivables, stock based payments, and deferred income taxes. These estimates and assumptions are based on management’s best estimate and judgment. Management evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

(c) Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturity of three months or less from date of purchase to be cash equivalents. Cash equivalents consist of money market instruments.

F-8

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(d) Restricted Cash

Restricted cash represents deposits maintained with financial institutions as collateral for open letters of credit issued on behalf of the Company for certain operating leases and as collateral for its debt (see Note 10). The availability of the funds in those accounts is subject to restrictions for specific use. Deposit amounts held as collateral for debt obligations can vary on an ongoing basis and may require annual budget approval by the lender. The Company’s restricted cash balances were $5,081, $4,694 and $4,713 as of September 30, 2010, December 31, 2009 and 2008, respectively, and are reflected as Cash-restricted in the accompanying consolidated balance sheets.

(e) Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and accounts receivable. The Company maintains cash and cash equivalents primarily with one financial institution, and such deposits may exceed federal deposit insurance limits.

The Company’s customers are concentrated in the United States of America. The Company performs ongoing credit evaluations of its customers and requires collateral from some customers where considered appropriate. Collateral is in the form of customer deposits, payments for services are generally due on the first day of the month to which services relate, and standard customer contracts contain a right to retain customer equipment in case of nonpayment of an accounts receivable balance.

For the nine months ended September 30, 2010 and 2009, and for the years ended December 31, 2009 , 2008 and 2007, the top five customers accounted for 16%, 16%, 15%, 19% and 17% of revenues, respectively, and there was one customer that accounted for more than 5% of revenues and no customer accounted for more than 5% of accounts receivable. No customer accounted for more than 10% of revenues or accounts receivables in any of these periods.

At December 31, 2009 and December 31, 2008, the Company’s New York City operations accounted for 48% and 51% of the accounts receivable, respectively, and for the years ended December 31, 2009, 2008 and 2007, respectively, the Company generated 53%, 56% and 55% of its revenues from its New York City operations, respectively.

As of September 30, 2010, the Company had outstanding commitments of $155,824 due to lenders primarily consisting of its senior secured credit facility. As of December 31, 2009 and 2008, the Company had outstanding commitments of $135,530 and $113,939 due to lenders primarily for its mortgage and term loan, which were repaid in June 2010. As described above, the Company leases ten of its facilities from Digital Realty Trust, which represents the major commitments under operating leases (see Note 18).

(f) Accounts Receivable and Allowance for Doubtful Accounts

Receivables are stated net of the allowance for doubtful accounts of $775, $578 and $349 as of September 30, 2010, December 31, 2009 and 2008, respectively. The Company extends credit to its customers in the normal course of business. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. Bad debt is provided for on the allowance method based on historical experience and management’s periodic evaluation of outstanding

F-9

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

accounts receivable for each individual customer. Management analyzes accounts receivable, bankruptcy filings, historical bad debts, customer credit-worthiness, and changes in customer payment patterns when evaluating revenue recognition and the adequacy of the Company’s reserves. Actual results could differ from these estimates. Receivables are charged against their respective allowance accounts when deemed to be uncollectible.

(g) Customer Security Deposits

The Company collects security deposits from certain customers based on a credit review of the customer. Security deposits are classified as short term when the underlying customer contract is scheduled to renew within the next twelve months or the customer contract has a month-to-month term.

(h) Property and Equipment

Property and equipment are stated at cost or fair value at date of acquisition for acquired property and equipment. Depreciation is calculated when the asset is placed in service on the straight-line method over the estimated useful lives of the assets as shown below. In the case of leasehold improvements, depreciation is calculated on the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Maintenance and repairs are expensed as incurred.

	Estimated useful life
Furniture and fixtures		5 years
Leasehold improvements		2 – 40 years
Building		25 years
Colocation equipment		3 – 15 years

(i) Impairment of Long-Lived Assets

Long-lived assets such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company had no impairments of long-lived assets in any of the periods presented.

(j) Goodwill and Other Intangible Assets

Goodwill represents the amount by which the purchase price, including acquisition costs, exceeds the fair value of identifiable tangible and intangible assets and liabilities acquired in a purchase business combination. The Company accounts for its goodwill and other intangible assets under Accounting Standards Codification (ASC) FASB ASC Topic 350-20 Goodwill and FASB ASC Topic 350-30 General Intangibles Other than Goodwill. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are

F-10

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value amount of these assets might not be fully recoverable. The goodwill impairment test involves a two-step approach. The first step involves a comparison of the fair value of each of the reporting units with its carrying amount. If the carrying amount of a reporting unit exceeds it fair value, the second step is performed. The second step involves a comparison of the implied fair value and carrying value of that reporting unit’s goodwill. To the extent that a reporting unit’s carrying amount exceeds the implied fair value of its goodwill, an impairment loss is recognized. Besides goodwill, the Company has no other intangible assets with indefinite lives. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company completed its annual impairment reviews as of September 30, 2009, 2008 and 2007 and determined that no impairment charge was required.

(k) Deferred Financing Fees

At September 30, 2010, deferred financing costs of $10,729 represent the direct costs related to the Company’s senior secured credit facility (See Note 10), which was entered into on June 17, 2010. Included in these costs was a transaction closing fee of 0.75%, or $1,313 that was paid to GI Manager. The deferred financing costs will be amortized over the term of the respective financing arrangement as additional interest expense. In accordance with FASB ASC Topic 470-50, Modifications and Extinguishments, the unamortized portion of deferred financing costs related to the Company’s previously issued debt in the amount of $1,085 was charged to expense in the consolidated statement of operations. Prior to June 30, 2010, deferred financing costs were direct costs related to the issuance of the UBS Mortgage Debt and the CIT Loans (see Note 10).

The gross and accumulated amortization of deferred financing costs were approximately $11,335 and $606, respectively, as of September 30, 2010, $2,785 and $1,486, respectively, as of December 31, 2009 and $1,258 and $597, respectively, as of December 31, 2008. Interest expense related to the amortization of these costs was $2,171 and $729, for the nine months ended September 30, 2010 and 2009, respectively, and $1,017, $1,143 and $697 and for the years ended December 31, 2009, 2008 and 2007, respectively.

(l) Leases

The Company occupies all but one of its operating facilities and offices under various leases, which are accounted for as operating leases in accordance with FASB ASC Topic 840 Leases. The leases include scheduled base rent increases over the term of the leases. The Company recognizes rent expense from operating leases with periods of free and scheduled rent increases on a straight-line basis over the applicable lease term. The Company considers lease renewals when such renewals are reasonably assured. From time to time, the Company may receive construction allowances from its lessors. In accordance with the requirements of FASB ASC Topic 840, these amounts are recorded as deferred liabilities and amortized over the remaining lease term as an adjustment to rent expense.

In connection with the Digital Realty Trust Transaction, the Company issued an option to purchase the Company’s preferred stock to Digital Realty Trust. This option has been accounted for as a lease incentive. The grant date fair value of the option is being recognized as rent expense over the 20-year term of the Digital Realty Trust leases in accordance with FASB ASC Topic 718 Compensation—Stock Compensation. This option expired unexercised on October 3, 2008.

F-11

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The Company leases certain equipment under capital lease agreements. The assets held under capital leases and the related obligations are recorded at the lesser of the present value of aggregate future minimum lease payments, including estimated bargain purchase options, or the fair value of the assets held under capital lease. The related assets are depreciated over the shorter of the terms of the leases, or the estimated useful lives of the assets.

(m) Accounting for Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, which requires that all stock-based compensation be recognized as an expense in the consolidated financial statements and that such cost be measured as the fair value of the award at the grant dates and also requires that any excess tax benefits related to stock-based compensation exercises be reflected as financing cash flows rather than operating cash flows.

The Company recognizes compensation costs on a straight-line basis over the requisite service period for the entire award. The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value of stock-based awards. The determination of the fair value of stock-based awards is based on a number of complex and subjective assumptions. These assumptions include the dividend yield of the underlying security, the expected volatility of the underlying security, a risk-free interest rate, the expected term of the option, and the forfeiture rate for the award class. The Company engaged a third-party independent valuation specialist to assist the Company in estimating the fair value of the underlying securities for all stock-based awards issued in 2009, 2008 and 2007.

If factors change and if the Company employs different assumptions for estimating stock-based compensation expense in future periods, or if it decides to use a different valuation model in the future, the expense in future periods may differ significantly from what has been recorded in the current period, which may materially affect operating results, net income or loss, and net income or loss per share of common stock.

(n) Derivative Financial Instruments

Derivative instruments are recorded in the consolidated balance sheet as either assets or liabilities and measured at fair value. Changes in fair value are recognized in earnings. Pursuant to the UBS Mortgage Debt and the CIT Loans, the Company utilized interest rate derivatives to manage its interest costs and its balancing of floating rate and fixed rate financings. The counterparties to these agreements in each case were financial institutions with credit ratings acceptable to the lenders. The interest rate differentials to be paid or received under such derivatives and the changes in the fair value of the instruments were recognized and recorded as adjustments to interest expense. The principle objectives of the derivative instruments were to minimize the risks and reduce the expenses associated with financing activities. The Company did not enter into derivative instruments for trading purposes.

A derivative is an instrument whose value is derived from an underlying instrument or index such as a future, forward, swap, option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in other contracts, or embedded derivatives, and for hedging activities.

F-12

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The Company had entered into interest rate cap agreements to lock in a maximum cost of funds for portions of its debt (Interest Rate Cap Agreement). These transactions did not meet the requirements to be accounted for as “hedging”. FASB ASC Topic 815 Derivatives and Hedging (including Hybrid Financial Instruments) establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. At September 30, 2010 and December 31, 2009, the Company had a liability of $443 and an asset of $50, respectively, representing the fair market value of such derivatives.

As required by the new credit agreement, the Company entered into interest rate hedging agreements to reduce interest rate risks and to manage interest expense. These hedging agreements will hedge the interest rate with respect to at least 50% of the outstanding principal amount under the credit agreement on the closing date. See “Events (unaudited) Subsequent to the Date of the Report of the Independent Auditor.”

(o) Advertising Costs

Advertising costs are charged to expense in the period incurred. Advertising costs for the years ended December 31, 2009, 2008 and 2007 and for the nine months ended September 30, 2010 and 2009 were $161, $176, $196, $79 and $139, respectively, and are included in sales and marketing expenses.

(p) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

The Company adopted new accounting principles on accounting for uncertain tax positions in accordance with FASB ASC Topic 740 Income Taxes, which prescribes a recognition threshold and measurement attribute for the financial recognition and measurement of a tax position taken or expected to be taken on a tax return. It requires that the Company determine whether the benefits of its tax positions will more likely than not be sustained upon audit based on the technical merits of its tax position. Guidance is also provided on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure. The adoption of this principal under FASB ASC Topic 740 resulted in no cumulative effect of a change in accounting principle being recorded on the Company’s consolidated financial statements. The Company continued its policy of recognizing penalties and interest related to recognized tax positions, if any, as a component of income tax expense.

(q) Revenue Recognition

The Company generates recurring revenue from providing colocation and interconnection services. More than 90% of its revenues are provided from these recurring revenues. The remaining revenues are nonrecurring and consist of installation services and technical support.

Colocation services are generally governed by the terms and conditions of a master service agreement (MSA). Customers typically execute an MSA for one to three year terms. The Company bills

F-13

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

customers on a monthly basis and recognizes the revenue as those services are performed over the term of the agreement. Installation services for colocation services are recognized on a straight-line basis over the average life of the customer relationship.

Interconnection services are generally provided on either a month-to-month or one or multi-year term under an arrangement separate from those services provided under colocation services. Interconnection services include port and cross connect services. Port services are typically sold on a one year or multi-year term and revenue is recognized in a manner similar to colocation services. Cross connect services are typically sold on a month-to-month basis. These interconnection services are considered as a separate earnings process that is provided and completed on a month-to-month basis. The Company bills customers on a monthly basis and recognizes the revenue in the period the service is provided. Installation service revenue for these cross connect services is recognized in the period when the installation is complete. The earning process from cross connect installation is culminated in the month the installation is complete.

Technical support services are provided on a time and materials basis and are billed and recognized in the period services are provided.

Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection of the receivable is reasonably assured. The Company regularly assesses collectability of accounts receivable from customers based on a number of factors, including prior history with the customer and the credit status of the customer. If the Company determines that collection of revenue from a customer is not reasonably assured, the Company does not recognize revenue until collection becomes reasonably assured, which is generally upon receipt of cash. Sales tax collected from customers on certain services and products are remitted to the applicable taxing authorities and accounted for on a net basis with no impact on revenue.

(r) Loss per share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common stock shares outstanding during the period. Diluted net loss per common share is computed by giving effect to all potential dilutive common shares, including options, common stock subject to repurchase, warrants and convertible preferred stock. Basic and dilutive net loss per common share was the same for all periods as the impact of potentially dilutive securities was anti-dilutive.

(s) Reclassifications

Certain prior year balances were reclassified to conform to current year presentation.

(t) Segment information

The Company manages its business as one reportable segment. Although the Company provides services in several locations throughout the United States, these operations are considered one reportable segment because the chief operating decision maker manages the business and allocates resources as a single reporting unit. The nature of the business activities in each of the Company’s facilities, including the type of products and services provided and the type of customers purchasing such services are substantially the same.

F-14

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(u) Recently Issued Accounting Standards

In March 2008, the Financial Accounting Standards Board (FASB) issued FASB ASC Topic 815, Derivatives and Hedging. FASB ASC Topic 815 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for, and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. FASB ASC Topic 815 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2008. Accordingly, the Company adopted FASB ASC Topic 815 beginning in fiscal 2009. The adoption of FASB ASC Topic 815 did not have a significant impact on the Company’s consolidated financial statements.

In April 2008, the FASB issued FASB ASC Topic 350-30 General Intangibles Other than Goodwill. FASB ASC Topic 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB ASC Topic 350-10. This change is intended to improve the consistency between the useful life of a recognized intangible asset under FASB ASC Topic 350-10 and the period of expected cash flows used to measure the fair value of the asset under FASB ASC Topic 805-10 and other US GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FASB ASC 350-30 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB ASC Topic 350-30 did not have a significant impact on the Company’s consolidated financial statements.

Effective January 1, 2009, the Company adopted the remaining provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, related to fair-value measurements of certain nonfinancial assets and liabilities. The adoption of the remaining provisions of FASB ASC Topic 820 did not have a material impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued new guidance for subsequent events. The new guidance, which is part of FASB ASC Topic 855, Subsequent Events is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its

financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The new guidance is effective for fiscal years and interim periods ended after June 15, 2009 and will be applied prospectively. The adoption of the new guidance did not have a material effect on the Company’s consolidated financial statements. The Company evaluated subsequent events through the date the accompanying consolidated financial statements were issued, which was March 18, 2010.

In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, Measuring Liabilities at Fair Value (ASU 2009-05). ASU 2009-05 amends FASB ASC Topic 820, Fair Value

F-15

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Measurements and Disclosures, by providing additional guidance clarifying the measurement of liabilities at fair value. ASU 2009-05 applies to the fair value measurement of liabilities within the scope of FASB ASC Topic 820 and addresses several key issues with respect to estimating fair value of liabilities. Among other things, ASU 2009-05 clarifies how the price of a traded debt security (an asset value) should be considered in estimating the fair value of the issuer’s liability. ASU 2009-05 is effective for the first reporting period beginning after its issuance. The adoption of ASU 2009-05 did not have a material impact on the Company’s consolidated financial statements.

In September 2009, the Company adopted FASB ASC Topic 105, Generally Accepted Accounting Principles. FASB ASC Topic 105 establishes the FASB Accounting Standards Codification^TM (Codification) to become the source of authoritative U.S. generally accepted accounting principles (U.S. GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. FASB ASC Topic 105 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements. ASU 2009-13 supersedes certain guidance in FASB ASC Topic 605-25, Multiple-Element Arrangements and requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices (the relative-selling-price method). ASU 2009-13 eliminates the use of the residual method of allocation in which the undelivered element is measured at its estimated selling price and the delivered element is measured as the residual of the arrangement consideration, and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables subject to ASU 2009-13. ASU 2009-13 must be adopted no later than the beginning of the first fiscal year beginning on or after June 15, 2010, with early adoption permitted through either prospective application for revenue arrangement entered into, or materially modified, after the effective date or through retrospective application to all revenue arrangement for all periods presented. The adoption of ASU 2009-13 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06 Improving Disclosures about Fair Value Measurements (ASU 2010-06), which amends the use of fair value measures and the related disclosures. ASU 2010-06 requires new disclosures for transfers in and out of Level 1 and Level 2 fair value measurements. ASU 2010-06 is effective for financial statements issued for interim and annual periods ending after December 15, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In February 2010, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2010-09, Subsequent Events (Topic 855) that amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and the Company adopted these new requirements for the period ended March 31, 2010.

F-16

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

In March 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-11, Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives (ASU 2010-11) (codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves disclosures originally required under SFAS No. 161. ASU 2010-11 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

(3) Management Fee

In connection with the GI Transaction, the Company entered into a management agreement with GI Manager L.P. (GI Manager) certain financial and management consulting and transaction advisory services for a term of five years. Pursuant to the management agreement, GI Manager is entitled to a management base fee as compensation for certain non-transaction related services specifically requested by the board of directors, in an annual amount to be determined by the board of directors during the first calendar quarter of each year during the term of the agreement, but not to exceed $750 per year, plus reasonable expenses. For each of the years ended December 2009, 2008 and 2007, the board of directors did not request from GI Manager any non-transaction related services and therefore, a management base fee was never incurred. In addition to this management base fee, under the management agreement, the Company is required to pay a transaction closing fee of 1% (prior to March 2010) of the transaction value for a variety of financial transactions and additional fees if the Company conducts an initial public offering. For the nine months ended September 30, 2010 and 2009, and the years ended December 31, 2009, 2008 and 2007, the Company paid $1,313, $0, $0, $0 and $500, respectively, in transaction closing fees under this agreement. The fees paid in 2007 were in connection with the NYCC Purchase Transaction and were capitalized as part of the NYCC Purchase Transaction (see Note 5).

On March 3, 2010 and June 2, 2010, the Company amended its management agreement with GI Manager to, among other things, provide that GI Manager is entitled to a 1.5% transaction closing fee with respect to, any refinancing (other than with respect to the New Credit Facility (as defined in Note 19) which GI Manager is entitled to a 0.75% transaction closing fee), restructuring, equity or debt offering, acquisition, merger, consolidation, business combination, sale or divestiture. Before the amendment, the Company was required to pay a transaction closing fee of 1% of the transaction value for a variety of financial transactions and additional fees if the Company conducts an initial public offering. As amended, GI Manager is no longer entitled to the accelerated cash payment in an amount equal to the management base fee (as then in effect) for a period of two years that may have otherwise been due upon the effective filing date of a registration statement relating to an initial public offering of shares of the Company’s capital stock or upon the closing date of a sale of the Company.

(4) Fair Value

FASB ASC Topic 820 defines fair value and establishes guidelines for measuring fair value and disclosures regarding fair value measurements. The Company follows the guidelines of FASB ASC Topic 820 for all of its financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. FASB ASC Topic 820 establishes a fair value hierarchy based on the input used in valuation techniques. There are three levels to the fair value hierarchy of inputs to fair value as follows:

• Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

F-17

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

• Level 2: Inputs reflect quoted prices for identical assets in markets that are not active; quoted prices for similar assets in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or collaborated by observable market data by correlation or other means.

• Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The Company endeavors to utilize the best available information in measuring fair value. Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that all of its financial assets and liabilities that are stated at fair value fall in levels 1 and 2 in the fair value hierarchy described above.

All other financial instruments (accounts receivable net of the allowance for doubtful accounts, other current assets, accounts payable, accrued expense and other current liabilities) are not carried at fair value, but are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk. The fair value of the Company’s debt approximates the carrying value as generally, all debt carries interest at variable rates based on LIBOR.

(5) NYCC Purchase Transaction

On March 15, 2007 Telx – New York 111 8th, LLC, a wholly owned subsidiary of the Company formed specifically for the purpose, entered into an asset purchase agreement to acquire certain assets and assume certain related liabilities of NYC Connect, LLC located at 111 8th Avenue, New York, NY (the NYCC Purchase Transaction). The purchase price was $45,190 and was funded through the sale of $50,800 of additional Series A Preferred Stock of the Company to the current Series A Preferred shareholders. The asset purchase agreement contained standard and customary adjustments for working capital and $2,275 of the purchase price was placed into escrow to serve as collateral for the indemnification obligations of the seller until April 1, 2008. Of the $50,800 of Series A Preferred Stock proceeds, $45,190 ($43,225 plus $2,275 less a working capital adjustment of $310) was purchase consideration paid to the sellers or sellers’ escrow for NYC Connect, LLC, $855 for fees and expenses associated with the purchase, and $3,955 was funded to the Company for working capital requirements.

F-18

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The following table summarizes the fair values of assets acquired and liabilities assumed as of the effective date of the acquisition:

Assets acquired:
Net receivables	$	810
Property and equipment		1,188
Other assets		182
Goodwill		31,304
Intangible assets – customer relationships		13,760
Total assets acquired		47,244
Liabilities assumed:
Deferred revenue		65
Other liabilities		1,134
Total liabilities assumed		1,199
Net assets acquired	$	46,045

The assets acquired and liabilities assumed were recorded at estimated fair values as determined by the Company’s management and an external appraisal based on available information and on assumptions as to future operations.

The identified intangible assets include customer relationships amounting to $13,760, which is being amortized based on a 30-month weighted average useful life. The excess of consideration paid over the fair value of net assets acquired of $31,304 is reflected as goodwill and is not subject to amortization. Goodwill is tested for impairment annually and the Company determined no impairment existed as of December 31, 2009.

(6) Noncontrolling Interest Purchase

On January 29, 2007, Telx Real Estate Holdings, LLC, (TREH), a wholly owned subsidiary of the Company, purchased the noncontrolling interest in its subsidiary, CPA Holdings, LLC (CPAH) from Astron Services, Inc. (Astron) for the negotiated purchase price of $2,250. TREH, which owned approximately 99.27% of the membership interests at December 31, 2006, now owns 100% as a result of the acquisition.

In connection with the acquisition of the noncontrolling interest by TREH, management applied the purchase method of accounting under the provisions of FASB ASC Topic 805, Business Combinations, and recorded the consideration paid less the fair value of net assets acquired as additional goodwill of $2,250.

(7) Accounts Receivable

Accounts receivable, net, consists of the following:

	September  30, 2010			December 31,
				2009			2008
Accounts receivable, gross	$	8,527		$	6,007		$	8,150
Allowance for doubtful accounts		(775	)		(578	)		(349	)
Accounts receivable, net	$	7,752		$	5,429		$	7,801

F-19

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Trade receivables are recorded at the invoice price and do not bear interest. Additions (reductions) to the allowance for doubtful accounts were approximately $197, $229 and $131 at September 30, 2010, and December 31, 2009 and 2008. Bad debt expense was $1,002, $1,226, $231, $948 and $693 for the years ended December 31, 2009, 2008 and 2007 and for the nine months ended September 30, 2010 and 2009, respectively.

(8) Intangible Assets

The weighted average useful life, gross carrying value, accumulated amortization, and net carrying value of intangible assets as of September 30, 2010, December 31, 2009 and 2008 are as follows:

			September 30, 2010
	Weighted Average Useful Life		Gross Carrying Amount		Accumulated Amortization			Net
Trademark		15	$	26,000	$	(6,936	)	$	19,064
Customers contracts		2.7		75,260		(75,260	)		—
Covenant not to compete		1		90		(90	)		—
			$	101,350	$	(82,286	)	$	19,064

			December 31, 2009
	Weighted average useful life		Gross carrying amount		Accumulated amortization			Net
Trademark		15	$	26,000	$	(5,636	)	$	20,364
Customers contracts		2.7		75,260		(74,790	)		470
Covenant not to compete		1		90		(90	)		—
			$	101,350	$	(80,516	)	$	20,834
			December 31, 2008
	Weighted average useful life		Gross carrying amount		Accumulated amortization			Net
Trademark		15	$	26,000	$	(3,902	)	$	22,098
Customers contracts		2.7		75,260		(60,752	)		14,508
Covenant not to compete		1		90		(90	)		—
			$	101,350	$	(64,744	)	$	36,606

Aggregate amortization expense for identified intangible assets with definite useful lives for the years ended December 31, 2009, 2008 and 2007 and for the nine months ended September 30, 2010 and 2009, was $15,772, $29,959, $28,649, $1,770 and $13,928, respectively.

F-20

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Estimated amortization expense for the next five years and thereafter as of September 30, 2010 is as follows:

Remainder of 2010	$	433
2011		1,733
2012		1,733
2013		1,733
2014		1,733
Thereafter		11,699
Total	$	19,064

Estimated amortization expense for the next five years and thereafter as of December 31, 2009 is as follows:

2010	$	2,203
2011		1,733
2012		1,733
2013		1,733
2014		1,733
Thereafter		11,699
Total	$	20,834

(9) Property and Equipment

Property and equipment, net consists of the following:

	September  30, 2010			December 31,
				2009			2008
Land	$	1,700		$	1,700		$	1,700
Building and building improvements		24,145			16,545			14,627
Colocation equipment		22,477			12,030			6,129
Assets under capital lease		4,194			2,075			1,110
Leasehold improvements		65,670			49,411			28,220
Total		118,186			81,761			51,786
Less accumulated depreciation and amortization		(18,394	)		(11,683	)		(5,769	)
Property and equipment, net	$	99,792		$	70,078		$	46,017

Approximately $1,000 and $2,342 of fixed asset additions in 2009 and 2008, respectively, were funded through loans from landlords (see Note 10). Total depreciation and amortization expense for property and equipment from years ended December 31, 2009, 2008, and 2007 and for the nine months ended September 30, 2010 and 2009 was $5,914, $2,297, $2,911, $6,710 and $3,900, respectively. Depreciation expense associated with assets under capital leases was $531, $0, $0, $810 and $359 for the years ended December 31, 2009, 2008 and 2007, and for the nine months ended September 30, 2010 and 2009 respectively. Interest costs capitalized for leasehold improvements was $99, $0, $0, $0 and $0 for the nine months ended September 30, 2010 and 2009, and for the years ended December 31, 2009, 2008 and 2007, respectively.

F-21

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(10) Current and Long-Term Debt, Capital Lease, and Other Financing Obligations

Current and long-term debt consists of the following:

	September  30, 2010			December 31,
				2009			2008
Senior Secured Credit Facility (i)	$	149,625		$	—		$	—
UBS Mortgage Loan (ii)		—			60,000			60,000
UBS Mezzanine Loans (ii)		—			20,000			20,000
CIT Term Loan (iii)		—			43,994			24,397
CIT Revolving Loan (iii)		—			6,000			6,000
Digital Realty Trust Alteration Allowance Loan (iv)		2,003			2,132			2,292
New Jersey Facility Tenant Improvement Financing (v)		—			1,969			231
Capital lease and other financing obligations (vi)		4,196			1,435			1,019
Total	$	155,824		$	135,530		$	113,939
Less current portion		(3,280	)		(14,217	)		(9,789	)
	$	152,544		$	121,313		$	104,150

(i) On June 17, 2010, the Company and certain of its subsidiaries entered into a senior secured credit facility, consisting of a $150,000 term loan and a $25,000 revolving facility, with Goldman Sachs Lending Partners LLC, as administrative agent and collateral agent, and the other lenders party thereto (the “New Credit Facility”). The Company used approximately $138,100 of the proceeds of the term loan to repay indebtedness outstanding under its NY Credit Agreement, the 56 Marietta Loans, other minor indebtedness, and to pay the fees and expenses of the transaction, and used an additional $1,100 of proceeds to pay accrued interest on repaid indebtedness. The remaining proceeds from the borrowings will be used to fulfill the Company’s and its subsidiaries’ working capital requirements and for general corporate purposes. The Company did not draw upon the revolving facility at closing, but when or if it does so, the Company will use the proceeds to fulfill the Company’s and its subsidiaries’ working capital requirements and for general corporate purposes. The term loan matures on June 17, 2015 and the revolving loan matures on June 17, 2014.

The obligations under the credit agreement are guaranteed by all of the Company’s current subsidiaries, and certain of its subsidiaries that the Company may acquire or create in the future (collectively, the “subsidiary guarantors”) and are secured by substantially all of the Company’s and the subsidiary guarantors’ assets.

The non-default interest rates for the loans under the credit agreement are determined either by (i) LIBOR (for the applicable interest period) plus the applicable margin (a “LIBOR Loan”), or at the Company’s election, (ii) a prime based rate (equal to the greatest of (a) the Federal Funds effective rate plus 0.50%, (b) the prime rate published in the Wall Street Journal and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin (a “Base Rate Loan”). The applicable margin is 5.00% for a Base Rate Loan and 6.00% for a LIBOR Loan. The margins for both LIBOR Loans and Base Rate Loans will increase by 0.25% if the Company is unable to obtain leasehold mortgages on all of its leases with Digital Realty Trust by November 14, 2010, until the Company obtains all such leasehold mortgages. As of August 12, 2010, the Company has granted leasehold mortgages on each of the leases on five of the Company’s lease locations. Pursuant to the credit agreement, the margin increase will

F-22

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

terminate, to the extent it occurs, if the Company’s senior secured leverage ratio drops below a threshold set forth in the credit agreement or once leasehold mortgages with respect to all of its leasehold properties with Digital Realty Trust have been obtained and the related leases (or memoranda of such leases) have been recorded to give constructive notice of such leasehold mortgages. See Note 19—Subsequent Events. The credit agreement provides for a LIBOR floor of 2.00% and a Base Rate Loan floor of 3.00%.

Under the credit facility, the Company is required to pay annually an unused revolving commitment fee of 0.625% of the amount by which the revolving loan commitments exceed the average daily balance of the outstanding revolving loan and letter of credit. The Company is also required to pay Goldman Sachs Lending Partners LLC an annual administration fee of $100.

The term loan may be prepaid at any time, and the credit agreement provides for certain mandatory principal prepayments, including certain payments if the Company’s consolidated cash flow exceeds certain levels. Any voluntary principal prepayments and mandatory principal prepayments required as a result of the incurrence of indebtedness and any repricing of the term loan at a lower interest rate or weighted average yield, shall be subject to a prepayment premium of 2.00% if repaid or repriced prior to June 17, 2011, or 1.00% if repaid or repriced prior to June 17, 2012.

The credit agreement contains restrictive covenants, including financial covenants requiring the Company and the subsidiary guarantors, collectively, to maintain a maximum senior secured leverage ratio and a minimum interest coverage ratio. The credit agreement restricts the Company and its subsidiaries’ ability to, among other things, make capital expenditures, pay dividends, incur or make payments on debt, grant liens, make investments, merge with or acquire other companies, sell assets or enter into affiliate transactions. The negative covenants in the credit agreement are subject to exceptions described in the credit agreement. The Company was in compliance with the covenants of the credit agreement as of September 30, 2010.

The events of default under the credit facility include payment defaults; breaches of representations, warranties or covenants; cross defaults to certain other indebtedness; challenging the validity or enforceability of the credit agreement and related documents; insolvency related proceedings; judgments for the payment of money; certain ERISA events; and changes of control. The occurrence of an event of default could result in the termination of the lenders’ obligation to make loans under the revolving facility, acceleration of the obligations under the credit agreement, an increase in the interest rate, a requirement to post cash collateral to secure outstanding letter of credit obligations, and foreclosure on the pledged assets.

In accordance with FASB ASC Topic 470-50, Modifications and Extinguishments, the unamortized portion of deferred financing costs related to the Company’s previously issued debt in the amount of $1,085 was charged to expense in the consolidated statement of operations for the nine months ended September 30, 2010. The Company incurred closing fees to obtain the New Credit Facility of approximately $10,700, including a transaction closing fee of 0.75%, or $1,313, paid to GI Manager.

Interest Rate Cap and Swap Agreements

On August 2, 2010, the Company entered into an interest rate cap agreement with a notional amount of $87,500 with SunTrust Bank as required by the new credit agreement. The term of the agreement is eleven months, beginning on August 3, 2010 and ending on June 30, 2011. The agreement calls for a cap rate of 3% and a floating option of USD-LIBOR-BBA.

F-23

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Also, on August 2, 2010, the Company entered into an interest rate swap agreement with a notional amount of $87,500 with SunTrust Bank. The term of the agreement is two years, beginning on June 30, 2011 and ending on June 30, 2013. The agreement calls for a cap rate of 1.44% and a floating option of USD-LIBOR-BBA.

For the three months ended September 30, 2010, the Company recorded interest expense of $443 related to these agreements.

(ii) On March 8, 2007, Colo Properties Atlanta, LLC, a subsidiary of the Company, entered into a $60,000 loan agreement with UBS Real Estate Securities, Inc. (the UBS Mortgage Loan and collectively with the UBS Mezzanine Loan, the UBS Mortgage Debt). On June 17, 2010, this loan was repaid with proceeds from the New Credit Facility. The interest rate was LIBOR plus 142.5 basis points and interest-only payments were due monthly with the full principal balance due upon maturity. The Mortgage Loan had a term of two years with three one-year extension options at the Company’s option. The Company exercised its first option to extend the loan Term for an additional year on March 9, 2009 and its second extension option effective as of March 9, 2010. The Mortgage Loan was secured by a first priority lien in all of the assets of Colo Properties Atlanta, LLC, including a collateral assignment of all customer agreements, title to the property, and security interests in all leasehold improvements.

On March 8, 2007, CP Atlanta, LLC, a subsidiary of the Company (collectively with Colo Properties Atlanta, LLC, the Borrowers), entered into a $20,000 loan agreement with UBS Real Estate Securities, Inc. (the UBS Mezzanine Loan). On August 10, 2007 the UBS Mezzanine Loan was split into two $10,000 loans (UBS Mezzanine Loan A and UBS Mezzanine Loan B, collectively the Mezzanine Loans) and a new subsidiary of the Company, CP Atlanta II, LLC, was formed to be the Borrower of the UBS Mezzanine Loan B. On June 17, 2010, this loan was repaid with proceeds from the New Credit Facility. The interest rate on the UBS Mezzanine Loan A was LIBOR plus 450 basis points and the interest rate on the UBS Mezzanine Loan B was LIBOR plus 375 basis points. In each case interest-only payments are due monthly with the full principal due upon maturity. The Mezzanine Loans have a term of two years with three one-year extension options. The Company exercised its first option to extend the Mezzanine Loans for an additional year on March 9, 2009 and its second extension option effective as of March 9, 2010. The UBS Mezzanine Loan A was secured by a pledge by CP Atlanta, LLC of 100% of the member interests in Colo Properties. The UBS Mezzanine B Loan was secured by a pledge by CP Atlanta II, LLC of 100% of the member interest in CP Atlanta, LLC.

The UBS Mortgage Debt required certain cash balances to be placed in restricted accounts and escrowed for taxes, insurance, and capital expenditures. At December 31, 2009 and 2008, the aggregate balances of those accounts were $216 and $217, respectively, which represented full funding of all requirements. In addition, the UBS Mortgage Debt required the Borrowers to meet certain covenants relating to periodic reporting, budget delivery, and affirmative and negative covenants relating to Borrower good standing, compliance with laws, business purpose, tax payments, material lease approvals, and other normal and customary covenants for mortgage debt of this size and nature. Also, the UBS Mortgage Debt was partially guaranteed by the Company, which had to meet certain leverage and net worth covenants in addition to the normal and customary covenants for the guarantor of a mortgage debt of this size and nature. As of December 31, 2009 and 2008 and for the years ended December 31, 2009 and 2008, the Company and the Borrowers were in compliance with all covenants required under the UBS Mortgage Debt.

F-24

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The following short-term indebtedness of the Company was repaid with the proceeds of the UBS Mortgage Debt in 2007: 1) $55,745 of the $70,039, 10% demand note to GI Fund II due October 2, 2007; and 2) $22,255 of the $27,961 10% demand note to GI Fund II due October 2, 2007. The remaining principal obligation due GI Fund II after the payment date was $17,583, and the remaining principal obligation due to GI Side Fund after the payment date was $7,019. The remaining principal obligations to GI Fund II and Side Fund were fully repaid (with all interest) in 2007 from proceeds of CIT Loans (see section (iii)).

(iii) On September 21, 2007, the Company completed a financing transaction whereby certain subsidiaries (Telx-New York, LLC, Telx-New York 111 8th, LLC, Telx-New York Management, LLC, and Telx-New York Holdings, LLC, collectively, the Borrower Entities) secured a $25,000 Term Loan and a $6,000 Revolving Loan for a total of $31,000 of proceeds from CIT Lending Services Corporation (the “Lender” individually, the CIT Term Loan and the CIT Revolving Loan and collectively, the CIT Loans). The CIT Revolving Loan was fully drawn down on September 21, 2007. $25,715 of the proceeds was utilized to repay the outstanding principal and accrued interest on the GI demand notes. $5,285 of the proceeds was used to pay fees and expenses related to the transaction, fund an escrow account, and provide working capital. On June 17, 2010, this loan was repaid with proceeds from the New Credit Facility.

As part of the transaction, the Company formed three new legal entities, Telx-New York Management, LLC, Telx-New York Holdings, LLC, and Telx-New York, LLC and the ownership of an existing Telx subsidiary, Telx-New York 111 8th, LLC, was transferred to Telx-New York Management, LLC. Telx-New York Management, LLC is a subsidiary of Telx-New York Holdings, LLC which is a direct, wholly owned subsidiary of The Telx Group, Inc. The CIT Loans were secured by all of the assets and equity of the Borrower Entities.

The interest rate was LIBOR plus 400 basis points for the first six months of the loan and then LIBOR plus 350 or 400 basis points based on the Borrower Entities leverage profile; however, this debt was refinanced in March 2009 (see below). As a requirement of the CIT Loans, the Company funded $3,000 into a blocked or restricted cash account put in place specifically to pay the rent due on the 60 Hudson Street and 111 8th Avenue leases. The Company concurrently funds the restricted cash account when the lease payments are made to ensure that the balance does not fall below $3,000. The balance of this restricted cash account was $3,000 as of March 31, 2010, December 31, 2009 and 2008. The maturity of the CIT Loans was March 21, 2010; however, this debt was refinanced in March 2009 (see below). The CIT Term Loan (before the refinancing discussed below) required mandatory principal repayment beginning in September 30, 2008 of $62 per quarter, with the balance of the CIT Term Loan and Revolver loan payable at maturity. The CIT Term Loan included a 1% prepayment fee if prepaid during the first year of its term. In addition, the CIT Term Loan had an excess cash flow payment requirement based on excess cash flows, as defined, beyond a $3,000 minimum cash balance on June 30, 2008 and December 31, 2008, and every six months thereafter until maturity that provides for 50% of excess cash flows to be paid to CIT to reduce the Term Loan and 50% to be distributed to the Telx.

Excess cash flow is defined as for any fiscal quarter or semi-annual period, as applicable, Consolidated EBITDA of the Borrowers for the fiscal quarter or semi-annual period, as applicable, plus any amounts deducted in calculating Consolidated EBITDA for the fiscal quarter or semi-annual period, as applicable, which were paid, incurred or accrued in violation of any of the provisions of the

F-25

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Agreement, minus the sum of (without duplication) (a) scheduled payments of principal on the Term Loan and Revolving Loans, (b) payments with respect to capital lease obligations, (c) payments in respect of capital expenditures, (d) all taxes paid in cash, (e) all interest paid in cash, (f) all upstream payments to the extent not deducted in determining EBITDA, (g) plus or minus the change in working capital during the period, and (h) plus distributions. Consolidated EBITDA is defined as, at any date, the EBITDA of the Company. EBITDA is defined as, for any period, an amount equal to, (a) net income plus (b) to the extent deducted in determining net income, (i) interest expense, (ii) expense for taxes paid, (iii) depreciation, and (iv) amortization of (including, for the avoidance of doubt, the amortization of deferred rent with respect to the facilities securing the loan) depreciation and other non-cash charges for such period, all as determined in conformity with GAAP. The CIT Loans required the Borrower Entities to meet certain financial covenants such as funded debt to consolidated net income plus interest expenses, taxes, depreciation, amortization, amortization of deferred rent and other noncash charges ratio, fixed charge coverage ratio, interest coverage ratio, and consolidated earnings before income tax, depreciation and amortization (EBITDA) and other covenants that are standard and customary in loans of this size and nature. The Borrower Entities were limited by the CIT Loans in making distributions to the Company.

On March 31, 2009 the Borrower Entities entered into an Amended and Restated Loan and Security Agreement with the Lender whereby the Borrower Entities received an additional $15,000, less fees and expenses, and the maturity date on the new balance of the CIT Term and CIT Revolving Loans was extended to December 30, 2011. In addition, Royal Bank of Canada became a Lender to the Company. The interest rate on the CIT Term Loans was increased to LIBOR plus 6.25% for a LIBOR Loan and Base Rate plus 5.25% for a Base Rate Loan, applicable to the entire outstanding balance, with a LIBOR floor of 2.75%. The agreement required principal amortization payments and estimated variable periodic excess cash flow payments over the life of the loan. The Lender also provided the Borrower Entities with an option to request an additional $5,000 on the same terms and conditions. The Borrower Entities exercised the option on April 2, 2009. On October 9, 2009, Telx entered into a Third Amendment to Amended and Restated Loan and Security Agreement (the “Third Amendment”) where the Borrower Entities received an additional $10,000 increase of the Term Loan on the same terms and conditions as the March 31, 2009 financing. Scheduled repayments of the CIT Loans in 2009 were $1,057. In addition, the Company was required to make mandatory prepayments on a semi-annual basis based on the excess cash flows generated by the Borrower Entities. In 2009, the Company made $4,346 of excess cash flow payments for the semi-annual periods of July through December 2008 and January through June 2009, and the Company paid $3,733 in February 2010 for the semi-annual period of July through December 2009.

(iv) On March 31, 2008, the Company and Digital-Bryan Street Partnership, L.P. entered into the Third Amendment to Master Meet-Me-Room (MMR) Lease, which exercised the Company’s option under the December 1, 2006 Operating Agreement between the Company and Digital Realty Trust, L.P., the Parent of Digital-Bryan Street Partnership, L.P., for the utilization of $2,400 of MMR Alteration Allowance. The Third Amendment was effective April 1, 2008. The assets purchased under the MMR Alteration Allowance have been capitalized and the $2,400 is being recognized as a liability as the Company is obligated to repay this loan to Digital Realty Trust (who made payments to the contractors directly) over the term of the agreement of 10 years. The loan carries an interest rate of 10% per annum, and $2,003, $2,132 and $2,292 remained outstanding as of September 30, 2010, December 31, 2009 and 2008, respectively.

F-26

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(v) Effective October 8, 2008, the Company, through its wholly owned subsidiary Telx-Clifton, LLC, entered into a lease to rent space at 100 Delawanna Avenue, Clifton, NJ. The lease has an initial term of 21 years with two 10-year renewal options and provides for a full rent abatement during the first year (and beyond under certain circumstances) of the lease. The landlord is providing $2,000 in tenant improvement financing for which Telx-Clifton, LLC is required to repay, including annual interest of 8%, over the initial term of the lease of 21-years. The assets purchased under the tenant improvement financing were capitalized and the tenant improvement financing has been recognized as a liability. The Company had drawn down $1,959, $1,969 and $231 of the tenant improvement financing as of March 31, 2010, and December 31, 2009 and December 31, 2008, respectively. On June 17, 2010, this loan was repaid with proceeds from the New Credit Facility.

(vi) The Company entered into several equipment leases to finance equipment purchases, under which $3,225, $1,435 and $1,019 remained outstanding as of September 30, 2010, and December 31, 2009 and 2008, respectively. These have been accounted for as a capital lease.

On July 8, 2009, the Company entered into a lease for datacenter space in Chicago, Illinois. In connection with this lease, the Company received from the landlord $1,000 of financing for leasehold improvements in the first quarter of 2010 that was recorded as capital lease and other financing obligations in the consolidated balance sheet at September 30, 2010.

The following table provides the schedule of maturities, excluding capital lease obligations as of September 30, 2010 (see Note 18):

Remainder of 2010	$	435
2011		1,757
2012		1,784
2013		1,815
2014		1,849
Thereafter		144,959
Total	$	152,599

The following table provides the schedule of maturities, excluding capital lease obligations as of December 31, 2009 (see Note 18):

2010	$	13,517
2011		116,931
2012		262
2013		288
2014		317
Thereafter		2,780
Total	$	134,095

F-27

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(11) Income Taxes

The Company is subject to income taxes only in the United States. Provision for income tax expense consists of the following:

	Year Ended December 31,
	2009		2008		2007
Income taxes charged to the consolidated statement of operations
Current:
Federal	$	224	$	—	$	—
State		242		—		—
Total current expense		466		—		—
Deferred:
Federal		713		576		(605	)
State		279		196		(206	)
Total deferred expense (benefit)		992		772		(811	)
Total income tax expense (benefit) to the consolidated statement of operations	$	1,458	$	772	$	(811	)

The difference between income tax expense (benefit) and the amount resulting from applying the federal statutory rate of 34% to net loss before income taxes is attributable to the following:

	Year Ended December 31,
	2009			2008			2007
Federal tax at statutory rate	$	(2,877	)	$	(10,407	)	$	(12,647	)
State taxes, net of federal benefit		(727	)		(2,073	)		(2,545	)
Change in valuation account		4,805			12,988			13,637
Non deductible expenses		340			392			30
Other		(83	)		(128	)		714
	$	1,458		$	772		$	(811	)

F-28

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The components of the Company’s deferred tax assets and liabilities as of December 31, 2009 and 2008 are as follows:

	2009			2008
Current deferred tax assets:
Severance and other compensation	$	40		$	63
Interest rate cap		33			—
Deferred revenue		1,388			903
Allowance for doubtful accounts		241			143
Valuation allowance		(1,388	)		(956	)
Net current deferred tax asset		314			153
Non-current deferred tax assets:
Net operating loss		15,999			19,624
AMT credit		223			—
Intangible assets		6,545			1,490
Deferred revenue		731			627
Loan transaction costs		106			—
Deferred rent		10,083			6,677
Valuation allowance		(28,878	)		(24,506	)
Net noncurrent deferred tax asset		4,809			3,912
Deferred tax liabilities:
Goodwill		(3,613	)		(2,621	)
Stock-based compensation		(52	)		(300	)
Property and equipment		(5,067	)		(3,765	)
Noncurrent deferred tax liabilities		(8,732	)		(6,686	)
Net noncurrent deferred tax liability	$	(3,923	)	$	(2,774	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The valuation allowance increased from $25,462 as of December 31, 2008 to $30,266 as of December 31, 2009.

The Company’s net deferred tax liability increased by $988 and $772, in 2009 and 2008, respectively, primarily due to amortization of goodwill associated with its acquisition of certain assets and liabilities, of NYCC Connect, LLC over a 15-year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the future and cannot be offset against the Company’s deferred tax assets under U.S. GAAP.

For the nine months ended September 30, 2010, the Company recorded deferred and current income tax expense of $909 and $494, respectively. The deferred tax expense for the nine months ended September 30, 2010 of $909 was primarily due to amortization of goodwill associated with its acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability

F-29

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

which is not anticipated to reverse in the foreseeable future and cannot be offset against the Company’s deferred tax assets under GAAP. The $494 current tax expense for the nine months ended September 30, 2010 was due primarily to federal alternative minimum tax and California franchise tax which could not be offset by net operating losses.

Deferred tax expense of $475 for the nine months ended September 30, 2009 was primarily due to amortization of goodwill associated with the Company’s acquisition of certain assets and liabilities of NYC Connect, LLC over a 15 year life for tax purposes. This creates a deferred tax liability which is not anticipated to reverse in the foreseeable future and cannot be offset against the Company’s deferred tax assets under GAAP. The $1,011 current tax expense for the nine months ended September 30, 2009 was due primarily to federal alternative minimum tax and California franchise tax which could not be offset by net operating losses.

At December 31, 2009, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $40,472 and $26,698, respectively, available to reduce future taxable income. The federal net operating loss carryforwards expire in various years from 2021 through 2027. The state net operating loss carryforwards expire in various years from 2021 through 2027.

The Internal Revenue Code of 1986 and applicable state tax laws impose substantial restrictions on the ability of a company to utilize net operating losses and tax credits carryforwards in the event of an ownership change as defined in section 382 of the Internal Revenue Code. The Company experienced ownership changes in 2003 and 2006, which triggered these limitations in its operating loss carryovers.

The Company adopted new accounting principles on accounting for uncertain tax positions in accordance with FASB ASC Topic 740. The adoption of this principle resulted in no cumulative effect of a change in accounting principle being recorded on the Company’s consolidated financial statement for the year ended December 31, 2009. The Company is adopting a policy to recognize interest and penalties related to income tax matters as a component of income tax expense, although it has no unrecognized tax positions upon adoption or additions or reductions regarding unrecognized tax positions for the year.

The Company conducts business in the U.S. and various state jurisdictions and, in the normal course of business, is subject to examination by taxing authorities. The Company’s tax years open for examination are generally 2006 and later for U.S. federal, and 2005 and later for state and local jurisdictions.

(12) Stockholders’ Equity

(a) Reverse Stock Split

On July 1, 2008, the board of directors and the Company’s stockholders approved, by written consent, a 1-for-10 reverse stock split. The Company then filed a Certificate of Amendment to its Fifth Amended and Restated Certificate of Incorporation. The Certificate was approved by the State of Delaware, and the reverse stock split became effective, on July 28, 2008. After the effective date of the reverse stock split the official capitalization table was adjusted, old certificates were collected and new certificates issued, reflecting the new share numbers. In addition, the 2007 Employee Stock Plan (the Plan) was amended to reflect the new share numbers and all holders of Options under the Plan were provided notice as provided for in the Plan. All references in the consolidated financial statements to preferred or common shares par values, and share prices have been adjusted retroactively for all periods presented to reflect this reverse stock split.

F-30

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

The Fifth Amended and Restated Certificate of Incorporation of The Telx Group, Inc. was adopted on April 11, 2008 to increase the number of authorized shares of stock to accommodate the requirements for the sale of $15,240 of Series A Preferred Stock. The total number of shares was increased from 6,743,000 to 7,053,223. Common Shares remained at 4,500,000 but Series A Preferred Stock increased from 2,000,000 to 2,300,000 and Series B Contingent Preferred Stock increased from 243,000 to 253,223.

(b) Series A Preferred Stock

As of September 30, 2010, December 31, 2009 and 2008, the Company had outstanding 1,930,399 shares of Series A Preferred Stock. On March 15, 2007, 500,000 shares of Series A Preferred Stock were issued to the GI Partners Funds for $50,000 which was used to fund the NYCC Purchase Transaction. On April 1, 2007, 8,000 shares of the Series A Preferred Stock were issued to Telxinvest, LLC, an investment group owned by certain current and former members of the Company’s management team, for $800, of which $700 was paid in cash and $100 receivable, which was subsequently paid in full in August 2008. On April 11, 2008, the Company entered into a Securities Purchase Agreement with the GI Partners Funds and Telxinvest, LLC for the purchase of 152,400 shares of Series A Preferred Stock of the Company for $15,240. The purchase price and shares of Series A Preferred Stock are outlined below.

Investor	Purchase Price		Shares of Series A Preferred Stock
GI Partners Fund II, L.P.	$	10,721		107,205
GI Partners Side Fund II, L.P.		4,279		42,795
Telxinvest, LLC		240		2,400
	$	15,240		152,400

The purchase price of the stock was $100.00 per share (par value $0.0001). The equity investment was recorded based on the proceeds received from the sale, which the Company considers to approximate its fair value at the date of the transaction, as agreed between the parties to the transaction. The proceeds of the Series A Preferred Stock purchase was intended for general facility expansion and working capital purposes.

The Series A Preferred Stock is entitled to receive dividends at the rate of $10.00 per share per annum accruing daily, which accrued but unpaid amount shall also accrue additional dividends at the rate of 10% per annum, compounded quarterly. As of September 30, 2010, no dividends have been declared by the board of directors. As of September 30, 2010, December 31, 2009 and 2008, the accumulated balance of Series A Preferred Stock dividends undeclared was $86,891, $66,956 and $42,503, respectively, or $45.01, $34.68 and $22.02 per share outstanding, respectively. Additionally, the Series A Preferred Stock is entitled to participate in dividends paid on the common stock equal to the amount that would have been payable had such share been converted into common stock, carries a $100.00 per share liquidation preference plus any accrued and unpaid dividends and conversion (to common stock) price, and automatically converts to common stock on a 1:1 ratio upon a public offering at a price of $500 or greater per share of common stock and that results in aggregate proceeds of at least $200,000.

F-31

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(c) Series B Contingent Preferred Stock

As of September 30, 2010, December 31, 2009 and 2008, the Company had outstanding 240,354, 240,354 and 248,322 shares, respectively, of Series B Contingent Preferred Stock.

The Series B Contingent Preferred Stock is convertible to common stock pursuant to the calculation of a ratio based upon the Internal Rate of Return (IRR) achieved by the GI Partners, with reference to their cumulative investment made into the Company and the value realized upon certain transaction events, but excluding transaction or management fees. The ratio ranges from no conversion rights at a 10% IRR to a 1:1 conversion ratio at a 45% or greater IRR. The Series B Contingent Preferred Stock is also entitled to receive dividends under limited circumstances and, upon certain trigger events, participates in the proceeds of a liquidation of the Company on the same terms at the common stock. The Series B Contingent Preferred Stock does not have any voting rights.

From time to time, the Company has issued Series B Contingent Preferred Stock to certain of its employees as compensation for services. In 2008 and 2007, 12,000 and 142,686 shares of Series B Preferred Stock were issued to employees of the Company pursuant to employment agreements and as compensation for services. There were no shares of Series B Preferred Stock issued in 2009 or during the nine months ended September 30, 2010. In accordance with FASB ASC Topic 718, the Company records the intrinsic value of the nonvested stock as additional paid in capital. Stock-based compensation expense is recognized ratably over the applicable service period. As of December 31, 2009 and September 30, 2010, the future compensation expense related to Series B stock awards that will be recognized as they vest is approximately $967 and $508, respectively, and is expected to be recognized over a weighted average period of 1.6 and 0.8 years, respectively. The Company recognized approximately $459, $459, $611, $588, and $270 of stock-based compensation expense associated with Series B stock awards, for the nine months ended September 30, 2010 and 2009, and for the years ended December 31, 2009, 2008 and 2007, respectively, and changes for the nine months ended September 30, 2010, and for the years ended December 31, 2009, 2008 and 2007 are presented below:

	Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2006		98,537		$	20.10
Granted		142,686		$	16.03
Forfeited		—		$	—
Outstanding at December 31, 2007		241,223		$	17.69
Granted		12,000		$	22.10
Forfeited		(4,901	)	$	20.10
Outstanding at December 31, 2008		248,322		$	17.86
Granted		—		$	—
Forfeited		(7,968	)	$	20.53
Outstanding at December 31, 2009		240,354		$	17.77
Granted		—		$	—
Forfeited		—		$	—
Outstanding at September 30, 2010		240,354		$	17.77

F-32

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

A summary of the nonvested Series B shares from December 31, 2006 through September 30, 2010 is as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2006		98,537		$	20.10
Granted		142,686		$	16.03
Vested		(31,642	)	$	18.73
Forfeited		—		$	—
Nonvested at December 31, 2007		209,581		$	17.54
Granted		12,000		$	22.10
Vested		(51,646	)	$	19.08
Forfeited		(4,901	)	$	20.10
Nonvested at December 31, 2008		165,034		$	17.31
Granted		—		$	—
Vested		(49,667	)	$	19.38
Forfeited		(7,968	)	$	20.53
Nonvested at December 31, 2009		107,399		$	16.11
Granted		—		$	—
Vested		(33,665	)	$	19.17
Forfeited		—		$	—
Nonvested at September 30, 2010		73,734		$	14.72

(d) Common Stock

As of September 30, 2010, December 31, 2009 and 2008, the Company had outstanding 706, 706 and 224 shares of common stock, par value $0.0001, respectively. Each share of common stock is entitled to one vote. Through September 30, 2010, no dividends have been declared or paid on the common stock.

(13) Stock-Based Compensation

In 2007, the Company established the 2007 Employee Stock Plan (the Plan) and the board of directors authorized the reservation of up to 125,000 shares of the Company’s Common Stock to be issued pursuant to the Plan. The plan provides for the granting of Incentive Stock Options (ISOs), Non-qualified Options (NQOs), Stock Grants and Stock-Based Awards to employees and directors of, and certain consultants to, the Company and its affiliates. The 2007 Plan is administered by the board of directors, and the board of directors may terminate or amend the plan, with approval of the stockholders as may be required by applicable regulations, at any time. To date, the board of directors has only issued ISOs and NQOs under the plan. All options granted generally vest over 48 months with one fourth of the total number of shares subject to the option vesting on the first anniversary of the date of the employee’s hire date and thereafter, in 35 monthly installments of a defined amount in each employee option agreement commencing on the 13th month anniversary of the date of the employee option agreement, and a final installment of an amount defined in each employee agreement on the fourth anniversary of the employee’s hire date. The term of the options generally expire 10 years from the date of grant or 5 years from the date of the grant if the employee

F-33

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

owns more than 10% of the total combined voting power of all classes of capital stock of the Company. No employee owned such amount in 2008 or 2009.

Effective January 2006, the Company adopted the fair market value method of recording stock-based compensation in accordance with FASB ASC Topic 718, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors. Under the fair value recognition provisions of FASB ASC Topic 718, stock-based compensation cost is measured at the grant date based on the fair market value of the award using an option-pricing model and is recognized as an expense over the requisite service period, which is generally the vesting period.

Information regarding the Company’s stock option grants for 2007, 2008, 2009 and the nine months ended September 30, 2010, is summarized as follows:

Grant Dates	Number of Options Granted	Exercise Price	Estimated Fair Market Value of Common Stock	Estimated Fair Value of Common Stock Options
May 1, 2007 – November 12, 2007	64,064	$20.00	$16.90 - $36.20	$11.68 - $25.60
June 2, 2008	41,121	$40.00	$39.70	$25.61
January 1, 2009	25,375	$40.00	$37.26	$23.32 - $24.21
July 1, 2009	11,400	$40.00	$39.65	$26.87 - $27.31
January 8, 2010	19,440	$45.00	$110.00	$89.49

All of the Company’s valuations were performed at or near the grant dates of the awards and there were no material changes to its business or value drivers between the valuation date and the grant dates.

Information regarding the valuations of the Company’s common stock during the period beginning December 31, 2006 and ending on September 30, 2009 is summarized as follows:

Date of Valuation Report	Effective Date of Valuation (as stated in the Valuation Report)	Value of Common Stock
March 27, 2007	December 31, 2006	$16.90
April 8, 2008(1)	September 30, 2007	$36.20
June 11, 2008(1)	May 1, 2008	$39.70
April 2, 2009	September 30, 2008	$37.26
July 14, 2009	May 1, 2009	$39.65
December 22, 2009(2)	September 30, 2009	$36.03

(1) Both of these valuation reports were reviewed in conjunction with determining the fair value of the Company’s common stock for the June 2, 2008 grants.

(2) This valuation was completed before the Company began the initial public offering planning process and reflects a probability-weighted valuation across six scenarios. The Company adjusted this valuation to $110 to reflect a 100% probability scenario for an initial public offering within one year and also considered market value indicators and estimates of pricing provided by its underwriters to determine its grant date fair value for accounting purposes in the first quarter 2010.

In accordance with FASB ASC Topic 718, the Company uses the Black-Scholes option pricing model to determine the fair market value of the stock options on the grant dates for share awards made on or after

F-34

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

January 1, 2006. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions to determine the fair market value of stock-based awards, including the deemed fair market value of the underlying common stock on the date of grant and the expected volatility of the stock over the expected term of the related grants. The value of the award is recognized as expense over the requisite service periods on a straight-line basis in the Company’s consolidated statements of income, and reduced for estimated forfeitures. FASB ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Option Awards

A summary of the Company’s stock option activity as of December 31, 2009 and September 30, 2010, and changes during the year ended December 31, 2009 and the nine months ended September 30, 2010 is as follows.

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value		Weighted Average Grant  Date Fair Value
Outstanding at January 1, 2007		—		$	—		—	$	—	$	—
Granted		64,064		$	20.00		—	$	—	$	12.70
Exercised		—		$	—		—	$	—	$	—
Forfeited		(1,431	)	$	20.00		—	$	—	$	11.70
Outstanding at December 31, 2007		62,633		$	20.00		9.4	$	—	$	—
Granted		41,121		$	40.00		—	$	—	$	25.61
Exercised		(125	)	$	20.00		—	$	—	$	11.68
Forfeited		(21,831	)	$	23.70		—	$	—	$	16.67
Outstanding at December 31, 2008		81,798		$	29.07		8.8	$	—	$	—
Granted		36,775		$	40.00		—	$	—	$	24.74
Exercised		(482	)	$	20.00		—	$	—	$	11.68
Forfeited		(14,128	)	$	33.89		—	$	—	$	20.68
Outstanding at December 31, 2009		103,963		$	32.32		8.2	$	4,613	$	—
Granted		19,440		$	45.00		—	$	—	$	89.49
Exercised		—		$	—		—	$	—	$	—
Forfeited		(11,318	)	$	—		—	$	—	$	58.88
Outstanding at September 30, 2010		112,085		$	33.53		7.7	$	1,286	$	—
Exercisable at December 31, 2009		48,129		$	28.95		7.9	$	2,298	$	—
Exercisable at September 30, 2010		68,303		$	30.24		7.3	$	1,008	$	—

F-35

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

A summary of the nonvested common stock options from December 31, 2006 through September 30, 2010 is as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2007.		—		$	—
Granted		64,064		$	12.70
Vested		—		$	—
Forfeited		(1,431	)	$	11.70
Nonvested at December 31, 2007.		62,633		$	12.70
Granted		41,121		$	25.61
Vested		(24,542	)	$	14.12
Forfeited		(20,221	)	$	16.94
Nonvested at December 31, 2008		58,991		$	19.70
Granted		36,775		$	24.74
Vested		(29,149	)	$	20.45
Forfeited		(10,783	)	$	20.00
Nonvested at December 31, 2009.		55,834		$	22.18
Granted		19,440		$	89.49
Vested		(20,966	)	$	23.29
Forfeited		(10,526	)	$	59.22
Nonvested at September 30, 2010		43,782		$	40.82

As of September 30, 2010 and December 31, 2009, the future compensation expense related to unvested options that will be recognized is approximately $1,774 and $1,053, respectively. The cost is expected to be recognized over a weighted average period of 1.3 and 1.2 years at September 30, 2010 and December 31, 2009, respectively. The Company recognized approximately $765 and $409, $567, $331 and $109 of stock-based compensation expense, associated with options, for the nine months ended September 30, 2010, 2009 and for the years ended December 31, 2009, 2008 and 2007, respectively. The total intrinsic value of stock options exercised for the years ended December 31, 2009, and 2008, was less than $8, and $2 respectively. There were no stock options exercised during the nine months ended September 30, 2010. The intrinsic value is calculated as the amount by which the fair value of the underlying stock exceeds the exercise price. The following tables summarize information about stock options outstanding and exercisable in various price ranges as follows.

At December 31, 2009:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Life In Years		Number of Shares		Weighted Average Exercise Price
$20.00 to $40.00		103,963	$	32.32		8.2		48,129	$	28.95

F-36

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

At September 30, 2010:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Life In Years		Number of Shares		Weighted Average Exercise Price
$20.00 to $45.00		112,085	$	33.53		7.7		68,303	$	30.24

Fair Value Assumptions

The Company uses the Black-Sholes-Merton option pricing model to determine the fair value of stock options granted under the Company’s stock option plan. The determination of fair value of stock-based payment awards on the date of grant using an option pricing model is affected by the estimated fair market value of the Company’s underlying stock as well as assumptions regarding a number of complex and subjective variables. These variables include:

• Actual and projected employee stock option exercise behaviors, which is referred to as expected term;

• The expected price volatility of the Company’s common stock over the term of the awards;

• Risk-free interest rate;

• Expected dividends and

• Forfeiture rate

The Company engaged a third party independent valuation specialist to estimate the fair value of the underlying stock for each grant during 2010, 2009, 2008 and 2007. The Company estimates the expected term of options granted by taking the average of the vesting term and the contractual term of the option. Expected volatility was estimated based on the actual changes in the historical market price for public companies and the Company’s own historical volatility over a given time period. In 2010, 2009, 2008 and 2007, the expected volatility ranged from 60% to 77%. The Company’s risk-free interest rate that it uses in its option-pricing models on the U.S. Treasury Zero Coupon rate based on the expected term on its equity awards. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in its option-pricing models. The estimated forfeiture rate used in 2010, 2009, 2008 and 2007 was 9% based on the Company’s historical forfeiture rate.

The assumptions used to value stock options were as follows:

	Nine Months Ended September 30,						Years Ended December 31,
	2010			2009			2009			2008			2007
Expected stock price volatility		74.94	%		73.24	%		73.24 -77.29	%		66.69	%		59.51 -61.10	%
Expected dividend yield		0	%		0	%		0	%		0	%		0	%
Expected life in years		6.25			5.77-6.31			5.98			6.25			5.54
Risk-free interest rate		3.06	%		1.71-1.79	%		1.71 -2.95	%		4.13	%		3.93 -4.97	%
Expected forfeiture rate		9	%		9	%		9	%		9	%		9	%

F-37

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Restricted Stock Unit Awards

In accordance with the Company’s Non-Employee Director Compensation Policy, the Company’s non-employee directors are eligible to receive equity-based compensation awards pursuant to its 2010 Stock Incentive Plan (2010 Plan), which was adopted and approved by stockholders on November 1, 2010, and pursuant to any other equity-based compensation plan of the Company, as follows:

• Initial restricted stock unit, or RSU, grant for new independent directors of $65,000 in equity value, vesting in three equal annual installments on the anniversary of the grant (except as set forth below); provided, however, that such initial grant for the Company’s lead director shall be $150,000.

• Annual RSU grants for all non-employee directors (including new directors effective as of their appointment to the board) of $60,000 in equity value, vesting upon the annual anniversary of the grant (except as set forth below).

• The initial RSU grants and first annual RSU grants for all directors who are serving on or prior to the effective date of the Company’s initial public offering shall be granted at the time of the closing of the initial public offering.

To the extent the initial public offering is not completed prior to December 31, 2010, the directors shall be provided the initial RSU grant and annual RSU grants on a pro rated basis from election to December 31, 2010 at a valuation approved by the Company’s board of directors consistent with a third party assessment by the board.

The vesting period for the RSUs granted to for Mr. Schulman and Mr. Harrison shall be deemed to have commenced on January 21, 2010, and January 1, 2010, respectively.

Annual RSU grants shall be made upon election to the Company’s board of directors and thereafter annually on the 5th day after the financial results for the first quarter are made available to stockholders, or the Annual RSU Grant Dates. Annual RSU grants made upon election to the Company’s board of directors shall be granted pro rata to the next Annual RSU Grant Date for both amount of grant and vesting, and, with respect to the 2011 Annual Grant, the amount related to the period between January 1, 2011 and the Annual Grant date shall be immediately vested. All RSUs granted to non-employee directors shall fully vest upon a change of control as defined in the 2010 Plan.

Notwithstanding the above, non-employee directors who are affiliated with GI Partners shall not be entitled to retainers or RSU grants pursuant to this policy.

For the nine months ended September 30, 2010 and 2009 and for the years ended December 31, 2009, 2008 and 2007, the Company recorded $178, $0, $0, $0 and $0, respectively, of equity-based compensation expense related to non-employee directors.

F-38

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(14) Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share attributable to common shareholders:

	Nine Months Ended September 30,						Years Ended December 31,
	2010			2009			2009			2008			2007
	(unaudited)
Numerator (basic and diluted)
Net loss available to common stockholders	$	(17,764	)	$	(28,172	)	$	(34,371	)	$	(53,123	)	$	(54,062	)
Denominator (basic and diluted)
Weighted average common shares outstanding		706			492			545			183			100
Basic and diluted loss per share	$	(25,161	)	$	(57,260	)	$	(63,066	)	$	(290,290	)	$	(540,620	)

Dilutive net loss per share does not include the effect of the following antidilutive common equivalent shares:

	Nine Months Ended September 30,				Years Ended December 31,
	2010		2009		2009		2008		2007
Stock options and awards outstanding		112,085		107,086		103,963		81,798		62,633
Common equivalent shares from Series A Preferred Stock		1,930,399		1,930,399		1,930,399		1,930,399		1,777,999
Common equivalent shares from dividends on Series A Preferred Stock		868,909		605,637		669,558		425,034		207,601
Common equivalent shares from Series B Preferred Stock		240,354		248,322		240,354		248,322		241,223
Stock Purchase Warrants Outstanding		1,618		1,618		1,618		1,618		618
		3,153,365		2,893,062		2,945,892		2,687,171		2,290,074

(15) Digital Realty Trust Option

In connection with the Digital Realty Trust transaction (see Note 1), the Company and Digital Realty Trust entered into a stock option agreement, effective December 1, 2006, between the Company and a Digital Realty Trust affiliate, whereby the Digital Realty Trust affiliate was granted the option to purchase 163,399 shares of the Company’s Series A Preferred Stock at $100.00 per share (the Digital Realty Trust Option). The option had a two-year term and was fully vested. The Digital Realty Trust Option also contained preemptive rights that allowed Digital Realty Trust to maintain its percentage of the fully diluted equity of the Company at the level on the date of the original issuance. As a result of the NYCC Purchase Transaction and the further issuance of Series A Preferred Stock, Digital Realty Trust was entitled to an option to purchase an additional 55,593 shares of Series A Preferred Stock, pursuant to the Digital Realty Trust Option. The fair value of the original option was estimated by management to be $5,320 using the Black-Scholes option-pricing model. The following assumptions were used to determine the fair value: volatility of a 60%, risk-free interest rate of 4.52%, dividend yield of 0%, and an expected life of two years. The fair value of the additional option was estimated by management to be $1,835 using the Black-Scholes option-pricing model. The following assumptions were used to determine the fair value: volatility of 61.5%, risk-free interest rate of 4.54%, dividend yield of 0%, and an expected life of 1.71 years. The Digital Realty Trust Option has been accounted for as a lease incentive reflected as prepaid rent in the accompanying consolidated balance sheets and is being recorded as rent expense over the 20-year term of the Digital Realty Trust leases. The Digital Realty Trust Option and preemptive rights expired unexercised on October 3, 2008.

F-39

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

(16) Warrants

As of September 30, 2010, and December 31, 2009 and 2008, the Company had outstanding the following warrants:

Number of warrants at September 30, 2010, and December 31, 2009 and 2008	Exercise price per share		Expiring in
618	$	182.00		2011
1,000	$	40.00		2015
1,618

During the year ended December 31, 2008, the Company issued 1,000 warrants for the purchase of common stock with an exercise price of $40.00 per share, as partial consideration for the purchase of certain fixed assets. The fair value of approximately $22 was accounted for as additional paid in capital based upon the Black-Scholes-Merton option-pricing model using the following assumptions:

Expected volatility	64.37	%
Dividend yield	0	%
Expected term (years)	5.00
Risk-free interest rate (%)	3.41

In connection with the Company’s acquisition by the GI Partners Funds, all outstanding warrants to purchase stock for an exercise price at or in excess of $182 per share were assumed by the Company. If exercised, such warrants are, pursuant to their terms, only entitled to the merger consideration amount provided to the common and the various classes of preferred stock the Company had prior to the acquisition. This merger consideration equates to approximately $150 per share (such merger consideration is less than the exercise price).

During the nine months ended September 30, 2010 and the years ended December 31, 2009 and 2008, no warrants were exercised.

(17) Related Party Transactions

(a) Digital Realty Trust

In December 2006, various wholly-owned subsidiaries of the Company entered into ten leases with Digital Realty Trust pursuant to which the Company provides enhanced meet-me-room services to customers. During each of 2008 and 2009, various wholly-owned subsidiaries of the Company entered into three leases for additional space within certain Digital Realty Trust facilities.

The Company was acquired by the GI Partners Funds in October 2006. The Company’s consolidated statements of operations include rent expense of approximately $14,804, $11,995 and $9,652, which represented 58%, 61% and 69% of total rent expense for the years ended December 31, 2009, 2008 and 2007, respectively, and revenue sharing expense of $1,574, $777 and $120 to Digital Realty Trust for the years ended December 31, 2009, 2008 and 2007, respectively.

F-40

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

On March 31, 2008, the Company entered into a Third Amendment to Master Meet-Me-Room lease dated November 20, 2006 for a loan of $2,400 towards leasehold improvements at 2323 Bryan Street site and other operating expenses. The term of the loan is ten years and is effective April 1, 2008 and expires March 31, 2018.

(b) The Planet

ThePlanet.com Internet Services, Inc., or The Planet, provides the Company with certain IT hosting services pursuant to a Service Agreement. GI Partners affiliated funds, directly or indirectly, own a majority of the outstanding Series A Preferred Stock of The Planet and the shares of Series A Preferred Stock and common stock owned by the GI Partners affiliated funds (directly or indirectly) constitute a majority of The Planet’s outstanding common stock on an as-converted to common stock basis.

The Company’s consolidated statements of operations include IT expense of approximately $132, $109, $125, $75 and $0 to The Planet for the nine months ended September 30, 2010 and 2009, and for the years ended December 31, 2009, 2008 and 2007, respectively.

(c) Officer Loans

The Company made loans to certain executives to pay tax liabilities associated with the issuance of Series B Contingent Preferred Stock in 2008 and 2007. These loans bore interest at a rate fixed when the loan was made, with 10% of the principal, and accrued interest, being payable in each of the ensuing five years, and with the remaining balance being due in the sixth year. As of December 31, 2009 and 2008, there was $930 and $990, respectively, of outstanding loans receivable. Pursuant to loan termination agreements signed in March 2010, 50% of these loans were repaid and the remaining 50% were cancelled in March 2010.

(d) GI Partners

GI Partners affiliated funds, GI Partners Fund II, L.P. and GI Partners Side Fund II, L.P., which the Company refers to herein collectively as the GI Partners Funds, own a majority of its outstanding Series A Preferred Stock (see Note 12).

Howard Park of GI Partners currently serves as the chairman of the Company’s board of directors. In addition, Eric Harrison, a former managing director of GI Partners, also serves on the Company’s board of directors. Mr. Harrison also served in an uncompensated capacity as a Vice President of the Company from January 2007 until February 2007.

Pursuant to the Company’s acquisition by the GI Partners Funds on October 3, 2006, the Company entered into a Management Agreement with GI Manager L.P., or GI Manager, an affiliate of both GI Partners Funds, for certain financial and management consulting and transaction advisory services at the reasonable direction of the Company’s board of directors. Pursuant to the management agreement, GI Manager is entitled to a management base fee as compensation for certain non-transaction related services specifically requested by the board of directors, in an annual amount to be determined by the board of directors during the first calendar quarter of each year during the term of the agreement, but not to exceed $750 per year, plus reasonable expenses. For each of the years ended December 2009,

F-41

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

2008 and 2007, the board of directors did not request from GI Manager any non-transaction related services and therefore, a management base fee was never incurred. In addition to this management base fee, GI Manager is also entitled to (i) a 1.0% transaction closing fee (prior to March 2010) with respect to, in general, any refinancing involving an acquisition or distribution, restructuring, equity or debt offering, acquisition, merger, consolidation, business combination, sale or divestiture, and, (ii) an accelerated cash payment (prior to March 2010) in an amount equal to the annual management base fee (as then in effect) for a period of two years upon the effective filing date of a registration statement relating to an initial public offering of shares of the Company’s capital stock or upon the closing date of a sale of the Company. Under the management agreement, the Company must indemnify GI Manager and its agents, officers, members, employees, principals and directors for any judgments, fines or penalties incurred by such parties related to the performance of their obligations under the Management Agreement.

On March 3, 2010 and June 2, 2010, the Company amended its management agreement with GI Manager to, among other things, provide that GI Manager is entitled to a 1.5% transaction closing fee with respect to any refinancing (other than with respect to the New Credit Facility (as defined in Note 19) for which GI Manager was paid a 0.75%, or $1,313, transaction closing fee), restructuring equity or debt offering, acquisition, merger, consolidation, business combination, sale or divestiture. As amended, GI Manager is no longer entitled to the accelerated cash payment in an amount equal to the management base fee (as then in effect) for a period of two years that may have otherwise been due upon the effective filing date of a registration statement relating to an initial public offering of shares of the Company’s capital stock or upon the closing date of a sale of the Company.

(18) Commitments and Contingencies

(a) Operating Leases and Capital Leases

The Company leases its operating facilities and offices under various lease agreements expiring October 2013 through September 2029 with extension options on certain leases through March 2050.

During the nine months ended September 30, 2010 and the years ended December 31, 2009 and 2008, the Company recorded capital leases in the amounts of $2,709, $994 and $1,111 respectively. Payments under the capital leases are made on either a monthly or quarterly basis depending on the lease and will be made through 2014 at an effective interest rate of 8.25% per annum. Future payments under capital leases at September 30, 2010 and December 31, 2009 are listed below.

F-42

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease, including any periods of free rent. Future minimum lease payments under operating and capital leases that have remaining noncancelable lease terms in excess of one year at September 30, 2010 and December 31, 2009 are listed below.

	September 30, 2010
	Operating leases		Capital leases
Remainder of 2010	$	7,552	$	371
2011		32,713		1,463
2012		35,163		996
2013		35,063		394
2014		35,382		1
Thereafter		695,802		—
Total minimum payments required	$	841,675	$	3,225

	December 31, 2009
	Operating leases		Capital leases
2010	$	27,132	$	700
2011		28,732		650
2012		29,581		85
2013		29,342		—
2014		29,518		—
Thereafter		571,036		—
Total minimum payments required	$	715,341	$	1,435

The operating leases for the Company’s operations facilities at 60 Hudson Street in New York, New York are secured by a $1,450 letter of credit issued for the benefit of 60 Hudson Owner, LLC, the Company’s landlord at 60 Hudson Street. The letter of credit is secured by cash deposits of at least the amount of the letter of credit held in a restricted account and is reflected in the line ‘Cash – restricted’ on the consolidated balance sheet. The Company has also guaranteed the payment obligations of its subsidiaries for the individual leases at the Digital Realty Trust locations, the 111 8th Avenue and 60 Hudson Street, NYC locations, the Clifton location and the Dallas Stemmons Freeway location.

Consolidated rent expense for the years ended December 31, 2009, 2008 and 2007 was $33,276, $26,044 and $14,427 respectively. These amounts are net of sublease income for the years ended December 31, 2009, 2008 and 2007 of approximately $98, $96 and $48, respectively.

On December 28, 2009, Telx-Los Angeles, LLC, a subsidiary of the Company, entered into a Turn Key Datacenter Lease with GIP 7^th Street, LLC, a subsidiary of Digital Realty Trust, at 600 W. 7^th St. in Los Angeles, CA. The Lease commences on June 1, 2010 and the term is 198 months with two ten year extension options. The rest of the terms and conditions are consistent with those that are usual and customary for similar space in Los Angeles, CA and with the Company’s other Turn Key Datacenter leases with Digital Realty Trust.

F-43

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

On March 1, 2010, Telx-New York 111 8th, LLC, a subsidiary of the Company, entered into the Third Amendment of Lease, adding 21,481 square feet to the square footage under lease at 111 8^th Avenue in New York City. The Third Amendment of Lease expires February 28, 2022 and has two five-year extension options. The rest of the terms and conditions are consistent with the Company’s other leases at 111 8^th Avenue. In connection with this lease, the Company was required to maintain a security deposit in the amount of $1,880 secured by a letter of credit and is shown as restricted cash in the consolidated balance sheet.

On March 19, 2010, the Company entered into a Power Base Building lease for approximately 3,840 rentable square feet of datacenter space at 600 South Federal Street, Chicago, Illinois. The lease expires on November 30, 2026 and has two ten-year extension options.

(b) Legal Matters

The Company and its subsidiaries are parties in various lawsuits arising in the ordinary course of business. In the opinion of management, with the advice of its legal counsel, the ultimate disposition of these matters will not have a material adverse effect on the financial position and results of operations of the Company.

(c) Agreement with Human Resources Management Firm

For 2008 and in prior years, the Company relied upon a professional employer organization for its human resources. Such organization provided services, administered payroll, and provided employee benefits. The relationship was terminated on January 1, 2009 and such services are now performed by the Company.

(19) Subsequent Events

(a) Atlanta Mortgage Extension

On January 15, 2010, Colo Properties Atlanta, LLC, CP Atlanta, LLC and CP Atlanta II, LLC gave notice of their intent to exercise their second extension right under the UBS Mortgage Loan and the UBS Mezzanine Loans. The extensions will be effective as of March 9, 2010. In connection with the extensions, Colo Properties Atlanta, LLC, CP Atlanta, LLC, and CP Atlanta II, LLC extended the existing Interest Rate Cap agreements as required under the loan documents.

(b) Company Stock Options

Pursuant to the 2007 Plan, on January 8, 2010, the Company granted to employees an additional 19,440 options to purchase common stock at an exercise price of $45.00 per share.

(c) Interest Rate Cap Agreement

On February 12, 2010, the Company amended its Interest Rate Cap Agreement (see Note 2(n)) to add an additional $2,650 to the terms and conditions as required under the Third Amended and Restated Loan and Security Agreement (see Note 10(ii)).

(d) Management Agreement

On March 3, 2010, the Company amended its management agreement with GI Manager to, among other things, provide that GI Manager is entitled to a 1.5% transaction closing fee with respect to any refinancing, restructuring, equity or debt offering, acquisition, merger, consolidation, business combination, sale or

F-44

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

divestiture. Assuming that the gross proceeds to the Company from its initial public offering is $100,000, GI Manager will be entitled to $1,500 upon the consummation of the initial public offering. As amended, GI Manager is no longer entitled to the accelerated cash payment in an amount equal to the management base fee (as then in effect) for a period of two years that may have otherwise been due upon the effective filing date of a registration statement relating to an initial public offering of shares of the Company’s capital stock or upon the closing date of a sale of the Company.

(e) Officer Loans

The Company made loans to certain executives to pay tax liabilities associated with the issuance of Series B Contingent Preferred Stock in 2008 and 2007. Pursuant to loan termination agreements signed in March 2010, 50% of these loans were repaid and the remaining 50% were cancelled in March 2010.

(f) New Facility Lease

On March 1, 2010, Telx-New York 111 8th, LLC, a subsidiary of the Company, entered into the Third Amendment of Lease, adding 21,481 square feet to the square footage under lease at 111 8th Avenue in New York City. The Third Amendment of Lease expires February 28, 2022 and has two five year extension options. The rest of the terms and conditions are consistent with the Company’s other leases at 111 8th Avenue.

Events (Unaudited) Subsequent to the Date of the Report of the Independent Auditor.

Debt Refinancing

On June 17, 2010, the Company and certain of its subsidiaries entered into a senior secured credit facility, consisting of a $150,000 term loan and a $25,000 revolving facility (the “New Credit Facility”). The term loan matures on June 17, 2015 and the revolving loan matures on June 17, 2014. The credit facility is guaranteed by all of the Company’s current subsidiaries, and certain of its subsidiaries that it may acquire or create in the future, and is secured by substantially all of the Company and such subsidiary guarantors’ assets. The non-default interest rates for the loans under the credit facility are determined by reference to either LIBOR plus 6.00% or, at the Company’s election, a prime-based rate plus 5.00%. These margins are subject to increase if the Company is unable to obtain leasehold mortgages on all of its leases with Digital Realty Trust by November 14, 2010. As of September 30, 2010, the Company has granted leasehold mortgages on five of these leases. Pursuant to the credit agreement, the margin increase will terminate, to the extent it occurs, if the Company’s senior secured leverage ratio drops below a threshold set forth in the credit agreement or once leasehold mortgages with respect to all of its leasehold properties with Digital Realty Trust have been obtained and the related leases (or memoranda of such leases) have been recorded to give constructive notice of such leasehold mortgages. As of November 4, 2010, leasehold mortgages with respect to all of the Company’s leasehold properties with Digital Realty Trust were obtained in accordance with the credit agreement and the related leases (or memoranda of such leases) were delivered for recordation. The credit agreement provides for a floor of 2.00% for LIBOR and a floor of 3.00% for loans based on the prime rate.

The Company used approximately $138,100 of the proceeds of the term loan to repay indebtedness outstanding under the UBS Mortgage Debt and the CIT Loans, other minor indebtedness, and to pay the fees and expenses of the transaction, and the Company used an additional $1,100 of proceeds to pay accrued interest on repaid indebtedness. The Company intends to use the remaining proceeds from the borrowings to

F-45

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

fulfill the Company’s and its subsidiaries’ working capital requirements and for general corporate purposes. The Company did not draw upon the revolving facility at closing, but when or if it does so, such proceeds will be used to fulfill the Company’s and its subsidiaries’ working capital requirements and for general corporate purposes.

In accordance with FASB ASC Topic 470-50, Modifications and Extinguishments, the unamortized portion of deferred financing costs related to the Company’s previously issued debt in the amount of $1,085 will be charged to expense in the consolidated statement of operations. The Company incurred closing fees to obtain the New Credit Facility of $10,685, including a transaction closing fee of 0.75%, or $1,313, paid to GI Manager.

New Facility Leases

On May 25, 2010, the Company entered into a First Amendment to the Turn Key Datacenter lease for approximately 3,750 additional rentable square feet of datacenter space at 200 Paul Avenue, Suite F102, San Francisco, CA dated May 25, 2010. Also, on May 25, 2010, the Company entered into an Office Space Rider for approximately 1,827 additional rentable square feet at 200 Paul Avenue, Suite 140, San Francisco, CA dated May 25, 2010. The base lease term for both the Turn Key Datacenter lease and Office Space Rider lease expire on November 30, 2026, have two ten year extension provisions and have the usual and customary terms and conditions for similar space in San Francisco, CA.

On June 30, 2010, the Company entered into a Turn Key Datacenter lease for approximately 7,977 rentable square feet of datacenter space at 350 East Cermak Road, Suite 820, Chicago, IL dated June 30, 2010. Also, On June 30, 2010, the Company entered into a Power Base Building lease for approximately 5,532 rentable square feet of datacenter space at 350 East Cermak Road, Suite 160, Chicago, IL dated June 30, 2010. The Power Base Lease also includes additional ancillary space of 800 square feet in the basement of the building. The base lease term for both the Turn Key Datacenter lease and the Power Base Building lease expire on November 30, 2026, have two ten year extension provisions and have the usual and customary terms and conditions for similar space in Chicago, IL.

On July 30, 2010, the Company entered into a second amendment to its master meet-me-room lease for rights to use 4 conduits and 2 innerducts at its current space at 600 West 7th Street, Suite 550, Los Angeles, CA. The effective date of this amendment is August 4, 2010. The Company will incur additional costs to its base rent for these rights starting on the effective date and will continue through the lease expiration date of November 30, 2046 (which includes the lease’s two ten year extension provisions).

On September 27, 2010, the Company entered into a colocation agreement for approximately 40,000 rentable square feet of datacenter space at 111 8^th Avenue, New York, New York, Suite 634. The base term of the agreement is for 165 months starting on October 1, 2010 and expiring on June 30, 2024.

On September 23, 2010, the Company entered into Amendment No. 3 to Lease Agreement at its facility at 8435 North Stemmons Freeway, Dallas, Texas to lease an additional 4,992 rentable square feet of datacenter space. The base term of the lease expires on January 9, 2018 and this amendment extends the term of the lease for sixty months, expiring on January 9, 2033.

F-46

THE TELX GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(in thousands, except share and per share data)

(information as of September 30, 2010 and for the nine months ended

September 30, 2009 and 2010 is unaudited)

On September 20, 2010, the Company entered into a Fourth Amendment of its lease agreement at its facility at 100 Delawanna Avenue, Clifton, New Jersey to lease an additional 29,547 rentable square feet of datacenter space. The term for this additional space is for a twenty year period ending January 2030.

Management Agreement

On June 2, 2010, the Company amended its management agreement with GI Manager to provide for a 0.75% transaction closing fee with respect to the New Credit Facility (as defined in Note 19).

Interest Rate Cap and Swap Agreements

On August 2, 2010, the Company entered into an interest rate cap agreement with a notional amount of $87,500 with SunTrust Bank as required by the new credit agreement. The term of the agreement is eleven months, beginning on August 3, 2010 and ending on June 30, 2011. The agreement calls for a cap rate of 3% and a floating option of USD-LIBOR-BBA.

Also, on August 2, 2010, the Company entered into an interest rate swap agreement with a notional amount of $87,500 with SunTrust Bank. The term of the agreement is two years, beginning on June 30, 2011 and ending on June 30, 2013. The agreement calls for a cap rate of 1.44% and a floating option of USD-LIBOR-BBA.

The Telx Group, Inc. 2010 Stock Incentive Plan; Company Stock Options and Restricted Stock Units

On November 1, 2010, the Company adopted, and received stockholder approval of, The Telx Group, Inc. 2010 Stock Incentive Plan (the “2010 Plan”). Pursuant to the 2010 Plan, on November 1, 2010, the Company granted to employees 899 options to purchase shares of common stock at an exercise price of $125 per share and 5,734 restricted stock units.

F-47

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

The table below presents valuation and qualifying accounts for the periods presented.

	Beginning Balance		Additions Charged to Cost and Expenses		Deductions(1)		Ending Balance
Allowance for doubtful accounts:
Year ended December 31, 2009	$	349	$	1,002	$	773	$	578
Year ended December 31, 2008		218		1,226		1,095		349
Year ended December 31, 2007		232		231		245		218

(1) Uncollectible accounts written off, recoveries of billed accounts receivable and fee adjustments recorded against the allowance.

F-48

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representation. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

             Shares

Common Stock

PROSPECTUS

Goldman, Sachs & Co.

Deutsche Bank Securities

RBC Capital Markets

Oppenheimer & Co.

Piper Jaffray

SunTrust Robinson Humphrey

Through and including                      , 2010 ( the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*

The following table sets forth the various fees and expenses, other than the underwriting discounts and commissions, to be paid by us in connection with the sale of the common stock being registered hereby. All amounts are estimates except the SEC registration fee, the Financial Industry Regulatory Authority, or FINRA, filing fee and The NASDAQ Global Market listing fee.

SEC registration fee	$	7,130
FINRA filing fee	$	10,500
The Nasdaq Global Market listing fee		*
Printing and engraving costs		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees and expenses		*
Miscellaneous		*
Total	$	*

* To be completed by amendment.

Approximately $             of the legal fees and expenses set forth above will be borne by the selling stockholders in connection with the sale of the common stock being registered.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the DGCL, authorizes a corporation’s board of directors to grant, and authorizes a court to award, indemnity to officers, directors and other corporate agents.

As permitted by the DGCL, our amended and restated certificate of incorporation which will be in effect upon the completion of this offering contains provisions that limit the personal liability of our directors for monetary damages for breach of their fiduciary duty as directors, except liability for (i) any breach of the director’s duty of loyalty to us or our stockholders; (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (iii) unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or (iv) any transaction for which the director derived an improper personal benefit.

To the extent the DGCL is interpreted, or amended, to allow similar protections for officers of a corporation, such provisions of our amended and restated certificate of incorporation shall also extend to those persons. In addition, as permitted by the DGCL, our amended and restated certificate of incorporation and our amended and restated bylaws to be effective upon completion of this offering provide, among other things, that:

• we shall indemnify our directors and officers to the fullest extend permitted by the DGCL, subject to very limited exceptions;

• we may, in our discretion, indemnify our other employees and agents in those circumstances where indemnification is permitted by applicable law;

• we are required to advance expenses, as incurred, to our directors and officers in connection with defending a legal proceeding to the fullest extent permitted by the DGCL, subject to very limited exceptions;

• we may advance expenses, as incurred, to our employees and agents in connection with a legal proceeding;

II-1

• the rights conferred in the certificate of incorporation and bylaws are not exclusive; and

• we may not retroactively amend the certificate of incorporation and bylaws provisions to reduce our indemnification obligations to directors, officers, employees and agents.

We expect to enter into indemnification agreements with each of our current directors and officers to give these directors and officers additional contractual assurances regarding the scope of the indemnification set forth in our amended and restated certificate of incorporation and our amended and restated bylaws and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving our directors, officers, or employees regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

The indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws and the indemnification agreements we intend to enter into with each of our directors and officers may be sufficiently broad to permit indemnification of our directors and officers for liabilities (including reimbursement of expenses incurred) arising under the Securities Act.

The underwriting agreement to be filed as an exhibit to this registration statement will provide for indemnification of us and our officers and directors by the underwriters for certain liabilities arising under the Securities Act and otherwise to the extent, but only to the extent, that such liability arose from an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to us by such underwriter specifically for use in the prospectus.

We currently maintain liability insurance for our officers and directors. We are seeking to obtain a new directors’ and officers’ liability insurance policy and expect the insurance to include coverage for securities laws matters.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since January 1, 2007, we have sold and issued unregistered securities to a limited number of persons, as described below.

1. Sales of Preferred Stock

• In March 2007, we issued and sold an aggregate of 5,000,000 shares (not adjusted for our July 2008 1-for-10 reverse stock split) of Series A Preferred Stock to a total of three investors, GI Partners Fund II, L.P., GI Partners Side Fund II, L.P. and Telxinvest, LLC at $10 per share, for aggregate proceeds of $50,000,000.

• In April 2008, we issued and sold an aggregate of 1,524,000 shares (not adjusted for our July 2008 1-for-10 reverse stock split) of Series A Preferred Stock to a total of three investors, GI Partners Fund II, L.P., GI Partners Side Fund II, L.P. and Telxinvest, LLC at $10 per share, for aggregate proceeds of $15,240,000.

• Since January 1, 2007, we have issued an aggregate of 1,546,859 shares (not adjusted for our July 2008 1-for-10 reverse stock split) of Series B Contingent Preferred Stock pursuant to employment agreements we entered into with certain of our current and former officers and otherwise in accordance with grants made by our board of directors to certain of these officers. We have issued shares of Series B Contingent Preferred Stock to Eric Shepcaro, Christopher W. Downie, J. Todd Raymond, Michael Terlizzi, William Kolman and two former officers.

2. Warrants

• In May 2008, we issued a warrant to purchase an aggregate of 10,000 shares of our common stock at an exercise price of $4.00 per share (not adjusted for our July 2008 1-for-10 reverse stock split) of our common stock to GreatAccess.com, Inc.

II-2

3. Options and Common Stock Issuances

• From January 1, 2007 through September 30, 2010, we granted to our employees options to purchase an aggregate of 161,400 shares of our common stock at prices ranging from $20.00 to $45.00 per share for an aggregate purchase price of $5,271,920.

• From January 1, 2007 through September 30, 2010, we issued and sold an aggregate of 607 shares of our common stock upon the exercise of options issued to certain employees at an exercise price of $20 per share.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering, and the registrant believes the transactions were exempt from the registration requirements of the Securities Act of 1933 in reliance on Section 4(2) thereof, and the rules and regulations promulgated thereunder, or Rule 701 thereunder, as transactions by an issuer not involving a public offering or transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under such Rule 701. The recipients of securities in such transactions represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the stock certificates and instruments or agreements issued in such transactions. All recipients had adequate access, through their relationships with us, to information about us.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

Exhibit Number	Title
1.1*	Form of Underwriting Agreement
3.1*	Form of Amended and Restated Certificate of Incorporation (to be in effect upon the closing of this offering)
3.2*	Form of Amended and Restated Bylaws (to be in effect upon the closing of this offering)
4.1	Form of Common Stock Certificate of the Registrant
5.1*	Opinion of Paul, Hastings, Janofsky & Walker LLP
10.1**+	Standard Form of Office Lease between Connectech, LLC and Hudson Telegraph Associates, dated June 11, 1997
10.2**+	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated July 8, 2002
10.3**	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated November 1, 2002
10.4**+	Agreement of Sublease between Colo Properties, Inc. and XO Communications Services, Inc., dated July 14, 2006
10.5**+	Consent to Sublease by 60 Hudson Owner LLC dated July 21, 2006
10.6**+	First Amendment of Sublease between telx – New York, LLC and XO Communications Services, Inc., dated January 17, 2008
10.7**+	Amended and Restated Subordination, Attornment and Lease Agreement between telx – New York LLC and 60 Hudson Owner LLC, dated April 16, 2008
10.8**+	Standard Form of Office Lease between Telx Communications Corporation and Hudson Telegraph Associates, L.P., dated July 6, 1999
10.9**	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated August 1, 2003

II-3

Exhibit Number	Title
10.10**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated November 1, 2005
10.11**+	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated May 15, 2006
10.12**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated July 1, 2006
10.13**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated July 1, 2007
10.14**+	Agreement of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 15, 2007
10.15**+	First Amendment of Lease between Telx – New York, 111 8th, LLC and 111 Chelsea Commerce LP, dated July 3, 2008
10.16**+	Second Amendment of Lease between Telx – New York, 111 8th, LLC and 111 Chelsea Commerce LP, dated December 9, 2008
10.17**	Meet-Me-Room Management Agreement among The Telx Group, Inc., Affiliates of The Telx Group, Inc., Digital Realty Trust, L.P. and Affiliates of Digital Realty Trust, L.P., dated December 1, 2007
10.18**+	Operating Agreement between The Telx Group, Inc. and Digital Realty Trust, L.P., dated December 1, 2006
10.19**+	Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated December 1, 2006
10.20**+	First Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated June 29, 2007
10.21**+	Second Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated August 3, 2007
10.22**+	Third Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P. dated March 31, 2008
10.23**	Amended and Restated Loan Agreement, dated August 10, 2007, between Colo Properties Atlanta, LLC and UBS Real Estate Securities Inc.
10.24**	First Amendment to Amended and Restated Loan Agreement, dated December 19, 2007, between Colo Properties Atlanta, LLC and UBS Real Estate Securities Inc.
10.25**	Amended and Restated Mezzanine A Loan Agreement, dated August 10, 2007, between CP Atlanta, LLC and UBS Real Estate Securities Inc.
10.26**	First Amendment to Amended and Restated Mezzanine A Loan Agreement, dated December 19, 2007, between CP Atlanta, LLC and UBS Real Estate Securities Inc.
10.27**	Mezzanine B Loan Agreement, dated August 10, 2007, between CP Atlanta II, LLC and UBS Real Estate Securities Inc.
10.28**	Loan Extension Agreement, dated March 9, 2009, between Colo Properties Atlanta, LLC and Wells Fargo Bank, N.A., as Trustee
10.29**	Amended and Restated Loan and Security Agreement, dated March 31, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
10.30**	First Amendment to Amended and Restated Loan and Security Agreement, dated June 11, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent

II-4

Exhibit Number	Title
10.31**	Second Amendment to Amended and Restated Loan and Security Agreement, dated September 1, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
10.32**	Third Amendment to Amended and Restated Loan and Security Agreement, dated October 9, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
10.33**	Employment Agreement, dated January 8, 2007, between The Telx Group, Inc. and Eric Shepcaro
10.34**	Employment Agreement, dated May 25, 2007, between The Telx Group, Inc. and Christopher W. Downie
10.35**	Employment Agreement, dated September 20, 2006, between The Telx Group, Inc. and J. Todd Raymond
10.36**	Employment Agreement, dated May 7, 2007, between The Telx Group, Inc. and William Kolman
10.37**	Employment Agreement, dated September 20, 2006, between The Telx Group, Inc. and Michael Terlizzi
10.38**	The Telx Group, Inc. 2007 Employee Stock Plan
10.39**	Form of Incentive Stock Option Agreement under the 2007 Employee Stock Plan
10.40**	Form of Non-Qualified Stock Option Agreement under the 2007 Employee Stock Plan
10.41	The Telx Group, Inc. 2010 Stock Incentive Plan
10.42.a	Form of Stock Option Award Agreement under the 2010 Stock Incentive Plan
10.42.b	Form of Stock Option Award Agreement under the 2010 Stock Incentive Plan
10.43.a	Form of Restricted Stock Unit Award Agreement under the 2010 Stock Incentive Plan
10.43.b	Form of Restricted Stock Unit Award Agreement under the 2010 Stock Incentive Plan
10.44**	Non-Employee Director Compensation Policy (as amended)
10.45**	Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and J. Todd Raymond
10.46**	Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Michael Terlizzi
10.47**	Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Christopher Downie
10.48**	Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and William Kolman
10.49**	Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Eric Shepcaro
10.50**+	Third Amendment of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 1, 2010
10.51**	Fourth Amendment of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 1, 2010
10.52**	Credit and Guarantee Agreement, dated as of June 17, 2010, by and among The Telx Group, Inc., as Borrower, certain of its subsidiaries, as Subsidiary Guarantors, Goldman Sachs Lending Partners LLC, as Administrative Agent and Collateral Agent, Goldman Sachs Lending Partners LLC and Deutsche Bank Securities Inc., as Arrangers, Goldman Sachs Lending Partners LLC, Deutsche Bank Securities Inc., RBC Capital Markets Corporation and Suntrust Robinson Humphrey, Inc., as Joint Bookrunners and Syndication Agents, and ING Capital, LLC as Documentation Agent

II-5

Exhibit Number	Title
10.53**	Pledge and Security Agreement, dated as of June 17, 2010, by and among the grantors party thereto and Goldman Sachs Lending Partners LLC, as Collateral Agent
10.54	Employment Agreement, dated August 23, 2010, between The Telx Group, Inc. and Clayton Mynard
10.55	Employment Agreement, dated March 1, 2010, between The Telx Group, Inc. and Bradley Hokamp
10.56+	Colocation Agreement, dated as of September 27, 2010, between Digital Chelsea, LLC and Telx – New York 111 8th, LLC
21.1**	List of subsidiaries of the Registrant
23.1	Consent of KPMG LLP, Independent Registered Public Accounting Firm
23.2*	Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1)
24.1***	Powers of Attorney

* To be filed by amendment.

** Previously filed.

*** Previously filed, supplemented hereby.

+ Confidential treatment has been requested for certain portions which are omitted in the copy of the exhibit electronically filed with the SEC. The omitted information has been filed separately with the SEC pursuant to our application for confidential treatment.

(b) Financial Statement Schedules.

See Schedule II—“Valuation and Qualifying Accounts” contained on page F-42. All other schedules are omitted as the information is not required or is included in the Registrant’s financial statements and related notes.

ITEM 17. UNDERTAKINGS.

The registrant hereby undertakes to provide to the underwriters, at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

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

The undersigned registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

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

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York, State of New York, on this 8th day of November, 2010.

The Telx Group, Inc.
By:	/S/    ERIC SHEPCARO
Name:	Eric Shepcaro
Title:	Chief Executive Officer

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

Signature	Title	Date
* Howard Park	Chairman of the Board	November 8, 2010
/s/    ERIC SHEPCARO         Eric Shepcaro	Chief Executive Officer and Director (principal executive officer)	November 8, 2010
/s/    CHRISTOPHER W. DOWNIE         Christopher W. Downie	President, Chief Financial Officer, and Treasurer (principal financial and accounting officer)	November 8, 2010
* Eric Harrison	Director	November 8, 2010
* Daniel H. Schulman	Director	November 8, 2010
* Rolla P. Huff	Director	November 8, 2010
* Jesper Andersen	Director	November 8, 2010
* Thomas J. Fitzpatrick	Director	November 8, 2010

*	By:	/S/    ERIC SHEPCARO
		Eric Shepcaro Attorney-in-fact

II-7

EXHIBIT INDEX

Exhibit Number			Title
	1.1	*	Form of Underwriting Agreement
	3.1	*	Form of Amended and Restated Certificate of Incorporation (to be in effect upon the closing of this offering)
	3.2	*	Form of Amended and Restated Bylaws (to be in effect upon the closing of this offering)
	4.1		Form of Common Stock Certificate of the Registrant
	5.1	*	Opinion of Paul, Hastings, Janofsky & Walker LLP
	10.1	**+	Standard Form of Office Lease between Connectech, LLC and Hudson Telegraph Associates, dated June 11, 1997
	10.2	**+	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated July 8, 2002
	10.3	**	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated November 1, 2002
	10.4	**+	Agreement of Sublease between Colo Properties, Inc. and XO Communications Services, Inc., dated July 14, 2006
	10.5	**+	Consent to Sublease by 60 Hudson Owner LLC dated July 21, 2006
	10.6	**+	First Amendment of Sublease between telx – New York, LLC and XO Communications Services, Inc., dated January 17, 2008
	10.7	**+	Amended and Restated Subordination, Attornment and Lease Agreement between telx – New York LLC and 60 Hudson Owner LLC, dated April 16, 2008
	10.8	**+	Standard Form of Office Lease between Telx Communications Corporation and Hudson Telegraph Associates, L.P., dated July 6, 1999
	10.9	**	Amendment of Lease between Colo Properties, Inc. and Hudson Telegraph Associates, L.P., dated August 1, 2003
	10.10	**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated November 1, 2005
	10.11	**+	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated May 15, 2006
	10.12	**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated July 1, 2006
	10.13	**	Amendment of Lease between Colo Properties, Inc. and 60 Hudson Owner LLC, dated July 1, 2007
	10.14	**+	Agreement of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 15, 2007
	10.15	**+	First Amendment of Lease between Telx – New York, 111 8th, LLC and 111 Chelsea Commerce LP, dated July 3, 2008
	10.16	**+	Second Amendment of Lease between Telx – New York, 111 8th, LLC and 111 Chelsea Commerce LP, dated December 9, 2008
	10.17	**	Meet-Me-Room Management Agreement among The Telx Group, Inc., Affiliates of The Telx Group, Inc., Digital Realty Trust, L.P. and Affiliates of Digital Realty Trust, L.P., dated December 1, 2007
	10.18	**+	Operating Agreement between The Telx Group, Inc. and Digital Realty Trust, L.P., dated December 1, 2006
	10.19	**+	Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated December 1, 2006

Exhibit Number			Title
	10.20	**+	First Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated June 29, 2007
	10.21	**+	Second Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P., dated August 3, 2007
	10.22	**+	Third Amendment to Master Meet-Me-Room Lease between telx – Dallas, LLC and Digital – Bryan Street Partnership, L.P. dated March 31, 2008
	10.23	**	Amended and Restated Loan Agreement, dated August 10, 2007, between Colo Properties Atlanta, LLC and UBS Real Estate Securities Inc.
	10.24	**	First Amendment to Amended and Restated Loan Agreement, dated December 19, 2007, between Colo Properties Atlanta, LLC and UBS Real Estate Securities Inc.
	10.25	**	Amended and Restated Mezzanine A Loan Agreement, dated August 10, 2007, between CP Atlanta, LLC and UBS Real Estate Securities Inc.
	10.26	**	First Amendment to Amended and Restated Mezzanine A Loan Agreement, dated December 19, 2007, between CP Atlanta, LLC and UBS Real Estate Securities Inc.
	10.27	**	Mezzanine B Loan Agreement, dated August 10, 2007, between CP Atlanta II, LLC and UBS Real Estate Securities Inc.
	10.28	**	Loan Extension Agreement, dated March 9, 2009, between Colo Properties Atlanta, LLC and Wells Fargo Bank, N.A., as Trustee
	10.29	**	Amended and Restated Loan and Security Agreement, dated March 31, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
	10.30	**	First Amendment to Amended and Restated Loan and Security Agreement, dated June 11, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
	10.31	**	Second Amendment to Amended and Restated Loan and Security Agreement, dated September 1, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
	10.32	**	Third Amendment to Amended and Restated Loan and Security Agreement, dated October 9, 2009, among Telx – New York 111 8th, telx – New York, LLC, telx – New York Management, LLC and telx – New York Holdings, LLC, as the Borrowers, the institutions party thereto from time to time as Lenders, Royal Bank of Canada, as the Syndicating Agent and CIT Lending Services Corporation, as the Agent
	10.33	**	Employment Agreement, dated January 8, 2007, between The Telx Group, Inc. and Eric Shepcaro
	10.34	**	Employment Agreement, dated May 25, 2007, between The Telx Group, Inc. and Christopher W. Downie
	10.35	**	Employment Agreement, dated September 20, 2006, between The Telx Group, Inc. and J. Todd Raymond
	10.36	**	Employment Agreement, dated May 7, 2007, between The Telx Group, Inc. and William Kolman
	10.37	**	Employment Agreement, dated September 20, 2006, between The Telx Group, Inc. and Michael Terlizzi

2

Exhibit Number		Title
10.38	**	The Telx Group, Inc. 2007 Employee Stock Plan
10.39	**	Form of Incentive Stock Option Agreement under the 2007 Employee Stock Plan
10.40	**	Form of Non-Qualified Stock Option Agreement under the 2007 Employee Stock Plan
10.41		The Telx Group, Inc. 2010 Stock Incentive Plan
10.42.a		Form of Stock Option Award Agreement under the 2010 Stock Incentive Plan
10.42.b		Form of Stock Option Award Agreement under the 2010 Stock Incentive Plan
10.43.a		Form of Restricted Stock Unit Award Agreement under the 2010 Stock Incentive Plan
10.43.b		Form of Restricted Stock Unit Award Agreement under the 2010 Stock Incentive Plan
10.44**		Non-Employee Director Compensation Policy (as amended)
10.45**		Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and J. Todd Raymond
10.46**		Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Michael Terlizzi
10.47**		Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Christopher Downie
10.48**		Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and William Kolman
10.49**		Loan Cancellation and Release Agreement, dated as of March 2, 2010, by and between The Telx Group, Inc. and Eric Shepcaro
10.50**+		Third Amendment of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 1, 2010
10.51**		Fourth Amendment of Lease between Telx – New York 111 8th, LLC and 111 Chelsea Commerce LP, dated March 1, 2010
10.52**		Credit and Guarantee Agreement, dated as of June 17, 2010, by and among The Telx Group, Inc., as Borrower, certain of its subsidiaries, as Subsidiary Guarantors, Goldman Sachs Lending Partners LLC, as Administrative Agent and Collateral Agent, Goldman Sachs Lending Partners LLC and Deutsche Bank Securities Inc., as Arrangers, Goldman Sachs Lending Partners LLC, Deutsche Bank Securities Inc., RBC Capital Markets Corporation and Suntrust Robinson Humphrey, Inc., as Joint Bookrunners and Syndication Agents, and ING Capital, LLC as Documentation Agent
10.53**		Pledge and Security Agreement, dated as of June 17, 2010, by and among the grantors party thereto and Goldman Sachs Lending Partners LLC, as Collateral Agent
10.54		Employment Agreement, dated August 23, 2010, between The Telx Group, Inc. and Clayton Mynard
10.55		Employment Agreement, dated March 1, 2010, between The Telx Group, Inc. and Bradley Hokamp
10.56+		Colocation Agreement, dated as of September 27, 2010, between Digital Chelsea, LLC and Telx – New York 111 8th, LLC
21.1**		List of subsidiaries of the Registrant
23.1		Consent of KPMG LLP, Independent Registered Public Accounting Firm
23.2*		Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1)
24.1***		Powers of Attorney

* To be filed by amendment.

** Previously filed.

*** Previously filed, supplemented hereby.

+ Confidential treatment has been requested for certain portions which are omitted in the copy of the exhibit electronically filed with the SEC. The omitted information has been filed separately with the SEC pursuant to our application for confidential treatment.

3

EX-4.1

Exhibit 4.1

Exhibit 4.1

COMMON STOCK

INCORPORATED UNDER THE LAWS

OF THE STATE OF DELAWARE

The Telx Group, Inc.

COMMON STOCK

CUSIP 87973Q 10 2

SEE REVERSE FOR CERTAIN DEFINITIONS

THIS CERTIFIES THAT

is the record holder of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $0.0001 PAR VALUE PER SHARE, OF

THE TELX GROUP, INC.

transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed.

This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.

Dated:

TREASURER

CHAIRMAN OF THE BOARD OF DIRECTORS

COUNTERSIGNED AND REGISTERED:

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

(New York, NY)

TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED SIGNATURE

The Corporation will furnish without charge to each shareholder who so requests, a summary of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock of the Corporation and the qualifications, limitations or restrictions of such preferences and rights, and the variations in rights, preferences and limitations determined for each series. Such request may be made to the office of the Corporate Secretary of the Corporation or to the Transfer Agent

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM – as tenants in common UNIF GIFT MIN ACT– Custodian

TEN ENT – as tenants by the entireties(Cust)(Minor)

JT TEN – as joint tenants with right of under Uniform Gifts to Minors

survivorship and not as tenants Act

in common(State)

Additional abbreviations may also be used though not in the above list.

For Value Received, hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

Shares of Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said shares on the books of the within-named Corporation with full power of substitution in the premises.

Dated

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF

THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed

By

THE SIGNATURES(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR

INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND

CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE

MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

EX-10.41

Exhibit 10.41

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Document

1. Introduction.

(a) Purpose. The Telx Group, Inc. (the “Company”) hereby establishes this equity-based incentive compensation plan to be known as the “The Telx Group, Inc. 2010 Stock Incentive Plan” (the “Plan”), for the following purposes: (i) to enhance the Company’s ability to attract highly qualified personnel; (ii) to strengthen its retention capabilities; (iii) to enhance the long-term performance and competitiveness of the Company; and (iv) to align the interests of Plan participants with those of the Company’s shareholders. This Plan is intended to serve as the sole source for all future equity-based awards to those eligible for Plan participation.

(b) Effective Date. This Plan shall become effective on November 1, 2010 (the “Effective Date”); provided that no Awards shall occur either before the Effective Date or before the Plan has received shareholder approval in accordance with the Company’s governing instruments.

(c) Definitions. Terms in the Plan and any Appendix that begin with an initial capital letter have the defined meaning set forth in Appendix I or elsewhere in this Plan, in either case unless the context of their use clearly indicates a different meaning.

(d) Effect on Other Plans, Awards, and Arrangements. This Plan is not intended to affect and shall not affect any stock options, equity-based compensation, or other benefits that the Company or its Affiliates may have provided, or may separately provide in the future, pursuant to any agreement, plan, or program that is independent of this Plan. Notwithstanding the foregoing, no further awards of any kind shall occur under any other Company plan or program that entails the issuance of Share-settled awards (including but not limited to the Company’s 2007 Employee Stock Option Plan), and any Shares that are currently reserved for awards under any such plans (as well as any Shares that in the future would have become available for awards under those plans) shall be added to the reserve of Shares that are authorized and available for issuance pursuant to this Plan.

(e) Appendices. Incorporated by reference, and thereby part of the Plan, are the terms set forth in Appendix I (Definitions).

2. Types of Awards. The Plan permits the granting of the following types of Awards according to the Sections of the Plan listed here:

Section 5	Stock Options
Section 6	Share Appreciation Rights (“SARs”)
Section 7	Restricted Shares, Restricted Share Units (“RSUs”), and Unrestricted Shares
Section 8	Deferred Share Units (“DSUs”)
Section 9	Performance and Cash-settled Awards
Section 10	Dividend Equivalent Rights

3. Shares Available for Awards.

(a) Generally. A total of 200,000 Shares shall be available for issuance under the Plan; provided that such total number of Shares shall (i) automatically increase to five point two percent (5.2%) of the total number of Shares that are outstanding immediately after the closing date of an initial public offering of the Company’s Shares, and (ii) be adjusted from time to time pursuant to Section 13 below. The Shares deliverable pursuant to Awards shall be authorized but unissued Shares, or Shares that the Company otherwise holds in treasury or in trust. Not more than 200,000 Shares shall be issued pursuant to ISOs; provided that any Shares that are not issued pursuant to an ISO as a result of its cancellation or expiration shall again be available for future ISO Awards.

(b) Replenishment; Counting of Shares. Any Shares reserved for Plan Awards will again be available for future Awards if the Shares for any reason will never be issued to a Participant or Beneficiary pursuant to an Award (for example, due to its settlement in cash rather than in Shares, or the Award’s forfeiture, cancellation, expiration, or net settlement without the issuance of Shares). Further, and to the extent permitted under Applicable Law, the maximum number of Shares available for delivery under the Plan shall not be reduced by any Shares issued under the Plan through the settlement, assumption, or substitution of outstanding awards or obligations to grant future awards as a condition of the Company’s or an Affiliate’s acquiring another entity. On the other hand, Shares that a Person owns and tenders in payment of all or part of the exercise price of an Award or in satisfaction of applicable Withholding Taxes shall not increase the number of Shares available for future issuance under the Plan.

(c) Vesting Limitation. Notwithstanding any other provision of the Plan to the contrary, Awards shall become vested over a period of not less than four years (or, in the case of vesting with respect to Performance Awards, over a period of not less than one year measured from the commencement of the period over which performance is evaluated) following the Grant Date; provided, however, that, notwithstanding the foregoing, Awards that result in the issuance of an aggregate of up to 10% of the Shares available pursuant to Section 3(a) may be granted to any one or more Eligible Persons without respect to such minimum vesting provisions.

4. Eligibility.

(a) General Rule. Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons those Persons to whom Awards may be granted. Each Award shall be evidenced by an Award Agreement that sets forth its Grant Date and all other terms and conditions of the Award, that is signed on behalf of the Company (or delivered by an authorized agent through an electronic medium), and that, if required by the Committee, is signed by the Eligible Person as an acceptance of the Award. The grant of an Award shall not obligate the Company or any Affiliate to continue the employment or service of any Eligible Person, or to provide any future Awards or other remuneration at any time thereafter.

(b) Option and SAR Limits per Person. During the term of the Plan, no Participant may receive Options and SARs that relate to more than 25% of the maximum number of Shares issuable under the Plan as of its Effective Date, as such number may be adjusted pursuant to Section 13 below.

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(c) Replacement Awards. Subject to Applicable Law (including any associated shareholder approval requirements), the Committee may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Award to a Participant that the Participant, with the Participant’s consent, surrender for cancellation some or all of the Awards or other grants that the Participant has received under this Plan or otherwise. An Award conditioned upon such surrender may or may not be the same type of Award, may cover the same (or a lesser or greater) number of Shares as such surrendered Award, may have other terms that are determined without regard to the terms or conditions of such surrendered Award, and may contain any other terms that the Committee deems appropriate. In the case of Options and SARs, these other terms may not involve an exercise price that is lower than the exercise price of the surrendered Option or SAR unless the Company’s shareholders approve the grant itself or the program under which the grant is made pursuant to the Plan.

5. Stock Options.

(a) Grants. Subject to the special rules for ISOs set forth in the next paragraph, the Committee may grant Options to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan, that may be immediately exercisable or that may become exercisable in whole or in part based on future events or conditions, that may include vesting or other requirements for the right to exercise the Option, and that may differ for any reason between Eligible Persons or classes of Eligible Persons, provided in all instances that:

(i) the exercise price for Shares subject to purchase through exercise of an Option shall not be less than 100% of the Fair Market Value of the underlying Shares on the Grant Date; and

(ii) no Option shall be exercisable for a term ending more than ten years after its Grant Date.

(b) Special ISO Provisions. The following provisions shall control any grants of Options that are denominated as ISOs; provided that ISOs may not be awarded unless the Plan receives shareholder approval within twelve (12) months after its Effective Date.

(i) Eligibility. The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary corporation” within the meaning of Code Section 424.

(ii) Documentation. Each Option that is intended to be an ISO must be designated in the Award Agreement as an ISO, provided that any Option designated as an ISO will be a Non-ISO to the extent the Option fails to meet the requirements of Code Section 422. In the case of an ISO, the Committee shall determine on the Date of Grant the acceptable methods of paying the exercise price for Shares, and it shall be included in the applicable Award Agreement.

(iii) $100,000 Limit. To the extent that the aggregate Fair Market Value of Shares with respect to which ISOs first become exercisable by a Participant in any

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calendar year (under this Plan and any other plan of the Company or any Affiliate) exceeds U.S. $100,000, such excess Options shall be treated as Non-ISOs. For purposes of determining whether the U.S. $100,000 limit is exceeded, the Fair Market Value of the Shares subject to an ISO shall be determined as of the Grant Date. In reducing the number of Options treated as ISOs to meet the U.S. $100,000 limit, the most recently granted Options shall be reduced first. In the event that Code Section 422 is amended to alter the limitation set forth therein, the limitation of this paragraph shall be automatically adjusted accordingly.

(iv) Grants to 10% Holders. In the case of an ISO granted to an Employee who is a Ten Percent Holder on the Grant Date, the ISO’s term shall not exceed five years from the Grant Date, and the exercise price shall be at least 110% of the Fair Market Value of the underlying Shares on the Grant Date. In the event that Code Section 422 is amended to alter the limitations set forth therein, the limitation of this paragraph shall be automatically adjusted accordingly.

(v) Substitution of Options. In the event the Company or an Affiliate acquires (whether by purchase, merger, or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or in the event of any reorganization or other transaction qualifying under Code Section 424, the Committee may, in accordance with the provisions of that Section, substitute ISOs for ISOs previously granted under the plan of the acquired company provided (A) the excess of the aggregate Fair Market Value of the Shares subject to an ISO immediately after the substitution over the aggregate exercise price of such shares is not more than the similar excess immediately before such substitution, and (B) the new ISO does not give additional benefits to the Participant, including any extension of the exercise period.

(vi) Notice of Disqualifying Dispositions. By executing an ISO Award Agreement, each Participant agrees to notify the Company in writing immediately after the Participant sells, transfers or otherwise disposes of any Shares acquired through exercise of the ISO, if such disposition occurs within the earlier of (A) two years of the Grant Date, or (B) one year after the exercise of the ISO being exercised. Each Participant further agrees to provide any information about a disposition of Shares as may be requested by the Company to assist it in complying with any applicable tax laws.

(c) Method of Exercise. Each Option may be exercised, in whole or in part (provided that the Company shall not be required to issue fractional shares) at any time and from time to time prior to its expiration, but only pursuant to the terms of the applicable Award Agreement, and subject to the times, circumstances and conditions for exercise contained in the applicable Award Agreement. Exercise shall occur by delivery of both written notice of exercise to the secretary of the Company, and payment of the full exercise price for the Shares being purchased. The methods of payment that the Committee may in its discretion accept or commit to accept in an Award Agreement include:

(i) cash or check payable to the Company (in U.S. dollars);

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(ii) other Shares that (A) are owned by the Participant who is purchasing Shares pursuant to an Option, (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is being exercised, (C) are all, at the time of such surrender, free and clear of any and all claims, pledges, liens and encumbrances, or any restrictions which would in any manner restrict the transfer of such shares to or by the Company (other than such restrictions as may have existed prior to an issuance of such Shares by the Company to such Participant), and (D) are duly endorsed for transfer to the Company;

(iii) a net exercise by surrendering to the Company Shares otherwise receivable upon exercise of the Option;

(iv) a cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant may elect to concurrently provide irrevocable instructions (A) to such Participant’s broker or dealer to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the exercise price of the Option plus all applicable taxes required to be withheld by the Company by reason of such exercise, and (B) to the Company to deliver the certificates for the purchased Shares directly to such broker or dealer in order to complete the sale; or

(v) any combination of the foregoing methods of payment.

The Company shall not be required to deliver Shares pursuant to the exercise of an Option until the Company has received sufficient funds to cover the full exercise price due and all applicable Withholding Taxes required by reason of such exercise.

Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

(d) Exercise of an Unvested Option. The Committee in its sole discretion may allow a Participant to exercise an unvested Option, in which case the Shares then issued shall be Restricted Shares having analogous vesting restrictions to the unvested Option.

(e) Termination of Continuous Service. The Committee may establish and set forth in the applicable Award Agreement the terms and conditions on which an Option shall remain exercisable, if at all, following termination of a Participant’s Continuous Service. The Committee may waive or modify these provisions at any time. To the extent that a Participant is not entitled to exercise an Option at the date of his or her termination of Continuous Service, or if the Participant (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Award Agreement or below (as applicable), the Option shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the Plan and become available for future Awards.

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The following provisions shall apply to the extent an Award Agreement does not specify the terms and conditions upon which an Option shall terminate when there is a termination of a Participant’s Continuous Service:

Reason for terminating Continuous Service	Option Termination Date
(I) By the Company for Cause, or what would have been Cause if the Company had known all of the relevant facts.	Termination of the Participant’s Continuous Service, or when Cause first existed if earlier.
(II) Disability of the Participant.	Within one year after termination of the Participant’s Continuous Service.
(III) Retirement of the Participant.	Within one year after termination of the Participant’s Continuous Service.
(IV) Death of the Participant during Continuous Service or within 90 days thereafter.	Within one year after termination of the Participant’s Continuous Service.
(V) Any other reason.	Within 90 days after termination of the Participant’s Continuous Service.

If there is a Securities and Exchange Commission blackout period (or a Committee-imposed blackout period) that prohibits the buying or selling of Shares during any part of the ten day period before the expiration of any Option based on the termination of a Participant’s Continuous Service (as described above), the period for exercising the Options shall be extended until ten days beyond when such blackout period ends. Notwithstanding any provision hereof or within an Award Agreement, no Option shall ever be exercisable after the expiration date of its original term as set forth in the Award Agreement.

(f) Buyout. The Committee may at any time offer to buy out an Option, in exchange for a payment in cash or Shares, based on such terms and conditions as the Committee shall establish and communicate to the Participant at the time that such offer is made. In addition, but subject to Applicable Law, if the Fair Market Value for Shares subject to any Option or Options is more than 33% below their exercise price for more than 30 consecutive business days, the Committee may unilaterally declare such Option to be terminated, effective on the date on which the Committee provides written notice to the Participant or other Option holder. The Committee may take such action with respect to any or all Options granted under the Plan and with respect to any individual Option holder or class or classes of Option holders, and the Committee shall not have any obligation to be uniform, consistent, or nondiscriminatory between classes of similarly-situated Option holders, except as required by Applicable Law (including any applicable shareholder approval requirements for a re-pricing or similar option cancellation program).

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6. SARs.

(a) Grants. The Committee may grant SARs to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan; provided that:

(i) the exercise price for the Shares subject to each SAR shall not be less than 100% of the Fair Market Value of the underlying Shares on the Grant Date;

(ii) no SAR shall be exercisable for a term ending more than ten years after its Grant Date; and

(iii) each SAR shall, except to the extent an SAR Award Agreement provides otherwise, be subject to the provisions of Section 5(e) relating to the effect of a termination of Participant’s Continuous Service and Section 5(f) relating to buyouts, in each case with “SAR” being substituted for “Option.”

(b) Settlement. Subject to the Plan’s terms, an SAR shall entitle the Participant, upon exercise of the SAR, to receive Shares having a Fair Market Value on the date of exercise equal to the product of the number of Share as to which the SAR is being exercised, and the excess of (i) the Fair Market Value, on such date, of the Shares covered by the exercised SAR, over (ii) an exercise price designated in the SAR Award Agreement. Notwithstanding the foregoing, an SAR Award Agreement may limit the total settlement value that the Participant will be entitled to receive upon the SAR’s exercise, and may provide for settlement either in cash or in any combination of cash or Shares that the Committee may authorize pursuant to an Award Agreement. If, on the date on which an SAR or portion thereof is to expire, the Fair Market Value of the underlying Shares exceeds their aggregate exercise price of such SAR, then the SAR shall be deemed exercised and the Participant shall within ten days thereafter receive the Shares that would have been issued on such date if the Participant had affirmatively exercised the SAR on that date.

(c) SARs related to Options. The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option, and shall have an exercise price that is not less than the exercise price of the related Option. An SAR shall entitle the Participant who holds the related Option, upon exercise of the SAR and surrender of the related Option, or portion thereof, to the extent the SAR and related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 6(b) above. Any SAR granted in tandem with an ISO will contain such terms as may be required to comply with the provisions of Code Section 422.

(d) Effect on Available Shares. At each time of a exercise of an SAR that is settled in Shares, only those Shares that are issued or delivered in settlement of the exercise shall be counted against the number of Shares available for Awards under the Plan.

7. Restricted Shares, RSUs, and Unrestricted Share Awards.

(a) Grant. The Committee may grant Restricted Share, RSU, or Unrestricted Share Awards to Eligible Persons, in all cases pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan. The Committee shall establish as to each Restricted Share or RSU Award the number of Shares deliverable or subject to the Award (which number may be determined by a written formula), and the period or periods of time (the “Restriction Period”) at the end of which all or some restrictions specified in the Award Agreement shall lapse, and the Participant shall receive unrestricted Shares (or cash to the extent provided in the Award Agreement) in settlement of the Award. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability, and such restrictions may lapse separately or

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in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Committee, including, without limitation, criteria based on the Participant’s duration of employment, directorship or consultancy with the Company, individual, group, or divisional performance criteria, Company performance, or other criteria selection by the Committee. The Committee may make Restricted Share and RSU Awards with or without the requirement for payment of cash or other consideration. In addition, the Committee may grant Awards hereunder in the form of Unrestricted Shares which shall vest in full upon the Grant Date or such other date as the Committee may determine or which the Committee may issue pursuant to any program under which one or more Eligible Persons (selected by the Committee in its sole discretion) elect to pay for such Shares or to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.

(b) Vesting and Forfeiture. The Committee shall set forth, in an Award Agreement granting Restricted Shares or RSUs, the terms and conditions under which the Participant’s interest in the Restricted Shares or the Shares subject to RSUs will become vested and non-forfeitable. Except as set forth in the applicable Award Agreement or as the Committee otherwise determines, upon termination of a Participant’s Continuous Service for any reason, the Participant shall forfeit his or her Restricted Shares and RSUs to the extent the Participant’s interest therein has not vested on or before such termination date; provided that if a Participant purchases Restricted Shares and forfeits them for any reason, the Company shall return the purchase price to the Participant to the extent either set forth in an Award Agreement or required by Applicable Laws.

(c) Certificates for Restricted Shares. Unless otherwise provided in an Award Agreement, the Company shall hold certificates representing Restricted Shares and dividends (whether in Shares or cash) that accrue with respect to them until the restrictions lapse, and the Participant shall provide the Company with appropriate stock powers endorsed in blank. The Participant’s failure to provide such stock powers within ten days after a written request from the Company shall entitle the Committee to unilaterally declare a forfeiture of all or some of the Participant’s Restricted Shares.

(d) Section 83(b) Elections. A Participant may make an election under Code Section 83(b) (the “Section 83(b) Election”) with respect to Restricted Shares. A Participant who has received RSUs may, within ten days after receiving the RSU Award, provide the Committee with a written notice of his or her desire to make Section 83(b) Election with respect to the Shares subject to such RSUs. The Committee may in its discretion convert the Participant’s RSUs into Restricted Shares, on a one-for-one basis, in full satisfaction of the Participant’s RSU Award. The Participant may then make a Section 83(b) Election with respect to those Restricted Shares; provided that the Participant’s Section 83(b) Election will be invalid if not filed with the Company and the appropriate U.S. tax authorities within 30 days after the Grant Date of the RSUs replaced by the Restricted Shares.

(e) Deferral Elections for RSUs. To the extent specifically provided in an Award Agreement, a Participant may irrevocably elect, in accordance with Section 8 below, to defer the receipt of all or a percentage of the Shares that would otherwise be transferred to the Participant both more than 12 months after the date of the Participant’s deferral election and upon the vesting of an RSU Award. If the Participant makes this election, the Company shall credit the Shares subject to the election, and any associated Shares attributable to Dividend Equivalent Rights attached to the Award, to a DSU account established pursuant to Section 8 below on the date such Shares would otherwise have been delivered to the Participant pursuant to this Section.

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(f) Issuance of Shares upon Vesting. As soon as practicable after vesting of a Participant’s Restricted Shares (or of the right to receive Shares underlying RSUs), the Company shall deliver to the Participant, free from vesting restrictions, one Share for each surrendered and vested Restricted Share (or deliver one Share free of the vesting restriction for each vested RSU), unless an Award Agreement provides otherwise and subject to Section 11 regarding Withholding Taxes. No fractional Shares shall be distributed, and cash shall be paid in lieu thereof.

8. DSUs.

(a) Elections to Defer. The Committee may make DSU awards to Eligible Persons pursuant to Award Agreements (regardless of whether or not there is a deferral of the Eligible Person’s compensation), and may permit select Eligible Persons to irrevocably elect, on a form provided by and acceptable to the Committee (the “Election Form”), to forego the receipt of cash or other compensation (including the Shares deliverable pursuant to any RSU Award) and in lieu thereof to have the Company credit to an internal Plan account a number of DSUs having a Fair Market Value equal to the Shares and other compensation deferred. These credits will be made at the end of each calendar quarter (or other period determined by the Committee) during which compensation is deferred. Notwithstanding the foregoing sentence, a Participant’s Election Form will be ineffective with respect to any compensation that the Participant earns before the date on which the Election Form takes effect. For any Participant who is subject to U.S. income taxation, the Committee shall only authorize deferral elections under this Section (i) pursuant to written procedures, and using written Election Forms, that satisfy the requirements of Code Section 409A, and (ii) only by Eligible Persons who are Directors, Consultants, or members of a select group of management or highly compensated Employees (within the meaning of ERISA).

(b) Vesting. Unless an Award Agreement expressly provides otherwise, each Participant shall be 100% vested at all times in any Shares subject to DSUs.

(c) Issuances of Shares. Unless an Award Agreement expressly provides otherwise, the Company shall settle a Participant’s DSU Award, by delivering one Share for each DSU, in five substantially equal annual installments that are issued before the last day of each of the five calendar years that end after the date on which the Participant’s Continuous Service ends for any reason, subject to –

(i) the Participant’s right to elect a different form of distribution, only on a form provided by and acceptable to the Committee, that permits the Participant to select any combination of a lump sum and annual installments that are triggered by, and completed within ten years following, the last day of the Participant’s Continuous Service, and

(ii) the Company’s acceptance of the Participant’s distribution election form executed at the time the Participant elects to defer the receipt of cash or other compensation pursuant to Section 8(a), provided that the Participant may change a distribution election through any subsequent election that (A) the Participant delivers to the Company at least one year before the date on which distributions are otherwise scheduled to commence pursuant to the Participant’s initial distribution election, and (B) defers the commencement of distributions by at least five years from the originally scheduled distribution commencement date.

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Fractional shares shall not be issued, and instead shall be paid out in cash.

(d) Emergency Withdrawals. In the event that a Participant suffers an unforeseeable emergency within the contemplation of this Section, the Participant may apply to the Committee for an immediate distribution of all or a portion of the Participant’s DSUs. The unforeseeable emergency must result from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent (within the meaning of Code Section 152) of the Participant, casualty loss of the Participant’s property, or other similar extraordinary and unforeseeable conditions beyond the control of the Participant. The Committee shall, in its sole and absolute discretion, determine whether a Participant has a qualifying unforeseeable emergency, may require independent verification of the emergency, and may determine whether or not to provide the Participant with cash or Shares. Examples of purposes which are not considered unforeseeable emergencies include post-secondary school expenses or the desire to purchase a residence. In no event will a distribution be made to the extent the unforeseeable emergency could be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the Participant’s nonessential assets to the extent such liquidation would not itself cause a severe financial hardship. The amount of any distribution hereunder shall be limited to the amount necessary to relieve the Participant’s unforeseeable emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution. The number of Shares subject to the Participant’s DSU Award shall be reduced by any Shares distributed to the Participant and by a number of Shares having a Fair Market Value on the date of the distribution equal to any cash paid to the Participant pursuant to this Section. For all DSUs granted to Participants who are U.S. taxpayers, the term “unforeseeable emergency” shall be interpreted in accordance with Code Section 409A.

(e) Termination of Service. For purposes of this Section, a Participant’s “Continuous Service” shall only end when the Participant incurs a “separation from service” within the meaning of Treasury Regulations § 1.409A-1(h). A Participant shall be considered to have experienced a termination of Continuous Service when the facts and circumstances indicate that either (i) no further services will be performed for the Company or any Affiliate after a certain date, or (ii) that the level of bona fide services the Participant will perform after such date (whether as an Employee, Director, or Consultant) are reasonably expected to permanently decrease to no more than 50% of the average level of bona fide services performed by such Participant (whether as an Employee, Director, or Consultant) over the immediately preceding 36-month period (or full period of services to the Company and its Affiliates if the Participant has been providing such services for less than 36 months).

9. Performance and Cash-Settled Awards.

(a) Performance Units. Subject to the limitations set forth in paragraph (b) hereof, the Committee may in its discretion grant Performance Awards, including Performance Units to any Eligible Person, including Performance Unit Awards that (i) have substantially the same financial benefits and other terms and conditions as Options, SARs, RSUs, or DSUs, but (ii) are settled only in cash. All Awards hereunder shall be made pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan.

(b) Performance Compensation Awards. Subject to the limitations set forth in this Section, the Committee may, at the time of grant of a Performance Unit, designate such Award as a “Performance Compensation Award” (payable in cash or Shares) in order that such Award

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constitutes, and has terms and conditions that are designed to qualify as, “qualified performance-based compensation” under Code Section 162(m). With respect to each such Performance Compensation Award, the Committee shall establish, in writing within the time required under Code Section 162(m), a “Performance Period,” “Performance Measure(s)”, and “Performance Formula(e)” (each such term being defined below). Once established for a Performance Period, the Performance Measure(s) and Performance Formula(e) shall not be amended or otherwise modified to the extent such amendment or modification would cause the compensation payable pursuant to the Award to fail to constitute qualified performance-based compensation under Code Section 162(m).

A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that the Performance Measure(s) for such Award is achieved and the Performance Formula(e) as applied against such Performance Measure(s) determines that all or some portion of such Participant’s Award has been earned for the Performance Period. As soon as practicable after the close of each Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Measure(s) for the Performance Period have been achieved and, if so, determine and certify in writing the amount of the Performance Compensation Award to be paid to the Participant and, in so doing, may use negative discretion to decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon such performance

(c) Limitations on Awards. The maximum Performance Award and the maximum Performance Compensation Award that any one Participant may receive for any one Performance Period, without regard to time of vesting or exercisability, shall not together exceed the limitation set forth in Section 3(b) above, as adjusted pursuant to Section 13 below (or, for Performance Units to be settled in cash, U.S. $2,000,000. The Committee shall have the discretion to provide in any Award Agreement that any amounts earned in excess of these limitations will be credited as DSUs or as deferred cash compensation under a separate plan of the Company (provided in the latter case that such deferred compensation either bears a reasonable rate of interest or has a value based on one or more predetermined actual investments). Any amounts for which payment to the Participant is deferred pursuant to the preceding sentence shall be paid to the Participant in a future year or years not earlier than, and only to the extent that, the Participant is either not receiving compensation in excess of these limits for a Performance Period, or is not subject to the restrictions set forth under Code Section 162(b).

(d) Definitions.

(i) “Performance Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes of determining whether or the extent to which an Award has been earned based on the level of performance attained or to be attained with respect to one or more Performance Measure(s). Performance Formulae may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

(ii) “Performance Measure” means one or more of the following selected by the Committee to measure Company, Affiliate, and/or business unit performance for a Performance Period, whether in absolute or relative terms (including, without limitation, terms relative to a peer group or index): basic, diluted,

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or adjusted earnings per share; sales or revenue; earnings before interest, taxes, and other adjustments (in total or on a per share basis); basic or adjusted net income; returns on equity, assets, capital, revenue or similar measure; economic value added; working capital; total shareholder return; and product development, product market share, research, licensing, litigation, human resources, information services, mergers, acquisitions, sales of assets of Affiliates or business units. Each such measure shall be, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently applied by the Company (or such other standard applied by the Committee) and, if so determined by the Committee, and in the case of a Performance Compensation Award, to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles. Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative.

(iii) “Performance Period” means one or more periods of time (of not less than one fiscal year of the Company), as the Committee may designate, over which the attainment of one or more Performance Measure(s) will be measured for the purpose of determining a Participant’s rights in respect of an Award.

(e) Deferral Elections. At any time prior to the date that is both at least six months before the close of a Performance Period (or shorter or longer period that the Committee selects) with respect to a Performance Award and at which time vesting or payment is substantially uncertain to occur, the Committee may permit a Participant who is a member of a select group of management or highly compensated employees (within the meaning of ERISA) to irrevocably elect, on a form provided by and acceptable to the Committee, to defer the receipt of all or a percentage of the cash or Shares that would otherwise be transferred to the Participant upon the vesting of such Award. If the Participant makes this election, the cash or Shares subject to the election, and any associated interest and dividends, shall be credited to an account established pursuant to Section 8 hereof on the date such cash or Shares would otherwise have been released or issued to the Participant pursuant to this Section.

10. Dividend Equivalent Rights. The Committee may grant Dividend Equivalent Rights to any Eligible Person, and may do either pursuant to an Award Agreement that is independent of any other Award, or through a provision in another Award (other than an Option or SAR) that Dividend Equivalent Rights attach to the Shares underlying the Award. For example, and without limitation, the Committee may grant a Dividend Equivalent Right in respect of each Share subject to a Restricted Stock Award, Restricted Stock Unit Award, Deferred Stock Unit, or Performance Share Award.

(a) Nature of Right. Each Dividend Equivalent Right shall represent the right to receive amounts based on the dividends declared on Shares as of all dividend payment dates during the term of the Dividend Equivalent Right as determined by the Committee. Unless otherwise determined by the Committee, a Dividend Equivalent Right shall expire upon termination of the Participant’s Continuous Service, provided that a Dividend Equivalent Right that is granted as part of another Award shall expire only when the Award is settled or otherwise forfeited.

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(b) Settlement. Unless otherwise provided in an Award Agreement, Dividend Equivalent Rights shall be paid out on the (i) on the record date for dividends if the Award occurs on a stand-alone basis, and (ii) on the vesting or later settlement date for another Award if the Dividend Equivalent Right is granted as part of it. Payment of all amounts determined in accordance with this Section shall be in Shares, with cash paid in lieu of fractional Shares, provided that the Committee may instead provide in an Award Agreement for cash settlement of all or part of the Dividend Equivalent Rights. Only the Shares actually issued pursuant to Dividend Equivalent Rights shall count against the limits set forth in Section 3 above.

(c) Other Terms. The Committee may impose such other terms and conditions on the grant of a Dividend Equivalent Right as it deems appropriate in its discretion as reflected by the terms of the Award Agreement. The Committee may establish a program under which Dividend Equivalent Rights may be granted in conjunction with other Awards. The Committee may also authorize, for any Participant or group of Participants, a program under which the payments with respect to Dividend Equivalent Rights may be deferred pursuant to the terms and conditions determined under Section 9 above.

11. Taxes; Withholding.

(a) General Rule. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards, and neither the Company, nor any Affiliate, nor any of their employees, directors, or agents shall have any obligation to mitigate, indemnify, or to otherwise hold any Participant harmless from any or all of such taxes. The Company’s obligation to deliver Shares (or to pay cash) to Participants pursuant to Awards is at all times subject to their prior or coincident satisfaction of all required Withholding Taxes. Except to the extent otherwise either provided in an Award Agreement or thereafter authorized by the Committee, the Company or any Affiliate will satisfy required Withholding Taxes that the Participant has not otherwise arranged to settle before the due date thereof –

(i) first from withholding the cash otherwise payable to the Participant pursuant to the Award;

(ii) then by withholding and cancelling the Participant’s rights with respect to a number of Shares that (A) would otherwise have been delivered to the Participant pursuant to the Award, and (B) have an aggregate Fair Market Value equal to the Withholding Taxes (such withheld Shares to be valued on the basis of the aggregate Fair Market Value thereof on the date of the withholding); and

(iii) finally, withholding the cash otherwise payable to the Participant by the Company.

The number of Shares withheld and cancelled to pay a Participant’s Withholding Taxes will be rounded up to the nearest whole Share sufficient to satisfy such taxes, with cash being paid to the Participant in an amount equal to the amount by which the Fair Market Value of such Shares exceeds the Withholding Taxes.

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(b) U.S. Code Section 409A. To the extent that the Committee determines that any Award granted under the Plan is subject to Code Section 409A, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Code Section 409A. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate (i) to exempt the Award from Code Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) to comply with the requirements of Code Section 409A and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

(c) Unfunded Tax Status. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Person pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Person any rights that are greater than those of a general creditor of the Company or any Affiliate, and a Participant’s rights under the Plan at all times constitute an unsecured claim against the general assets of the Company for the collection of benefits as they come due. Neither the Participant nor the Participant’s duly-authorized transferee or Beneficiaries shall have any claim against or rights in any specific assets, Shares, or other funds of the Company.

12. Non-Transferability of Awards.

(a) General. Except as set forth in this Section, or as otherwise approved by the Committee, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a death Beneficiary by a Participant will not constitute a transfer. An Award may be exercised, during the lifetime of the holder of an Award, only by such holder, by the duly-authorized legal representative of a holder who is Disabled, or by a transferee permitted by this Section.

(b) Limited Transferability Rights. The Committee may in its discretion provide in an Award Agreement that an Award in the form of a Non-ISO, Share-settled SAR, Restricted Shares, or Performance Shares may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

(c) Death. In the event of the death of a Participant, any outstanding Awards issued to the Participant shall automatically be transferred to the Participant’s Beneficiary (or, if no Beneficiary is designated or surviving, to the person or persons to whom the Participant’s rights under the Award pass by will or the laws of descent and distribution).

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13. Change in Capital Structure; Change in Control; Etc.

(a) Changes in Capitalization. The Committee shall equitably adjust the number of Shares covered by each outstanding Award, and the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation, forfeiture, or expiration of an Award, as well as the exercise or other price per Share covered by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock-split, reverse stock-split, stock dividend, combination, recapitalization or reclassification of the Shares, merger, consolidation, change in form of organization, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company. In the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards such alternative consideration (including cash or securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Awards so replaced. In any case, such substitution of cash or securities shall not require the consent of any person who is granted Awards pursuant to the Plan. Except as expressly provided herein, or in an Award Agreement, if the Company issues for consideration shares of stock of any class or securities convertible into shares of stock of any class, the issuance shall not affect, and no adjustment by reason thereof shall be required to be made with respect to the number or price of Shares subject to any Award.

(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company other than as part of a Change of Control, each Award will terminate immediately prior to the consummation of such dissolution or liquidation, subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.

(c) Change in Control. In the event of a Change in Control but subject to the terms of any Award Agreements or employment-related agreements between the Company or any Affiliates and any Participant, each outstanding Award shall be assumed or a substantially equivalent award shall be substituted by the surviving or successor company or a parent or subsidiary of such successor company (in each case, the “Successor Company”) upon consummation of the transaction. Notwithstanding the foregoing, instead of having outstanding Awards be assumed or replaced with equivalent awards by the Successor Company, the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of the Company’s shareholders or any Participant with respect to his or her outstanding Awards, take one or more of the following actions (with respect to any or all of the Awards, and with discretion to differentiate between individual Participants and Awards for any reason):

(i) accelerate the vesting of Awards so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise would have been unvested and provide that repurchase rights of the Company with respect to Shares issued pursuant to an Award shall lapse as to the Shares subject to such repurchase right;

(ii) arrange or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation of outstanding Awards (with the Committee determining the amount payable to each Participant based on the Fair Market Value, on the date of the Change in Control, of the Award being cancelled, based on any reasonable valuation method selected by the Committee);

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(iii) terminate all or some Awards upon the consummation of the transaction, provided that the Committee shall provide for vesting of such Awards in full as of a date immediately prior to consummation of the Change in Control. To the extent that an Award is not exercised prior to consummation of a transaction in which the Award is not being assumed or substituted, such Award shall terminate upon such consummation;

(iv) make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate, subject however to the terms of Section 13 above.

To the extent expressly provided in an Award Agreement or in any employment-related agreement between the Company or any Affiliate and the Participant, in the event a Participant is Involuntarily Terminated on or within 12 months (or other period either set forth in an Award Agreement) following a Change in Control, then any Award that is assumed or substituted pursuant to this Section above shall accelerate and become fully vested (and become exercisable in full in the case of Options and SARs), and any repurchase right applicable to any Shares shall lapse in full, unless an Award Agreement provides for a more restrictive acceleration or vesting schedule or more restrictive limitations on the lapse of repurchase rights or otherwise places additional restrictions, limitations and conditions on an Award. The acceleration of vesting and lapse of repurchase rights provided for in the previous sentence shall occur immediately prior to the effective date of the Participant’s Involuntary Termination, unless an Award Agreement provides otherwise.

14. Termination, Rescission and Recapture of Awards.

(a) Each Award under the Plan is intended to align the Participant’s long-term interests with those of the Company. Accordingly, to the extent provided in an Award Agreement, the Company may terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards (“Termination”), rescind any exercise, payment or delivery pursuant to the Award (“Rescission”), or recapture any Shares (whether restricted or unrestricted) or proceeds from the Participant’s sale of Shares issued pursuant to the Award (“Recapture”), if the Participant does not comply with the conditions of subsections (b), (c), and (e) hereof (collectively, the “Conditions”).

(b) A Participant shall not, without the Company’s prior written authorization, disclose to anyone outside the Company, or use in other than the Company’s business, any proprietary or confidential information or material, as those or other similar terms are used in any applicable patent, confidentiality, inventions, secrecy, or other agreement between the Participant and the Company with regard to any such proprietary or confidential information or material.

(c) Pursuant to any agreement between the Participant and the Company with regard to intellectual property (including but not limited to patents, trademarks, copyrights, trade secrets, inventions, developments, improvements, proprietary information, confidential business and personnel information), a Participant shall promptly disclose and assign to the Company or its designee all right, title, and interest in such intellectual property, and shall take all reasonable steps necessary to enable the Company to secure all right, title and interest in such intellectual property in the United States and in any foreign country.

(d) Upon exercise, payment, or delivery of cash or Common Stock pursuant to an Award, the Participant shall certify on a form acceptable to the Company that he or she is in compliance with

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the terms and conditions of the Plan and, if a severance of Continuous Service has occurred for any reason, shall state the name and address of the Participant’s then-current employer or any entity for which the Participant performs business services and the Participant’s title, and shall identify any organization or business in which the Participant owns a greater-than-five-percent equity interest.

(e) If the Company determines, in its sole and absolute discretion, that (i) a Participant has violated any of the Conditions or (ii) during his or her Continuous Service, or within one year after its termination for any reason, a Participant (x) has rendered services to or otherwise directly or indirectly engaged in or assisted, any organization or business that, in the judgment of the Company in its sole and absolute discretion, is or is working to become competitive with the Company; (y) has solicited any non-administrative employee of the Company to terminate employment with the Company; or (z) has engaged in activities which are materially prejudicial to or in conflict with the interests of the Company, including any breaches of fiduciary duty or the duty of loyalty, then the Company may, in its sole and absolute discretion, impose a Termination, Rescission, and/or Recapture with respect to any or all of the Participant’s relevant Awards, Shares, and the proceeds thereof.

(f) Within ten days after receiving notice from the Company of any such activity described in Section 14(e) above, the Participant shall deliver to the Company the Shares acquired pursuant to the Award, or, if Participant has sold the Shares, the gain realized, or payment received as a result of the rescinded exercise, payment, or delivery; provided, that if the Participant returns Shares that the Participant purchased pursuant to the exercise of an Option (or the gains realized from the sale of such Common Stock), the Company shall promptly refund the exercise price, without earnings, that the Participant paid for the Shares. Any payment by the Participant to the Company pursuant to this Section shall be made either in cash or by returning to the Company the number of Shares that the Participant received in connection with the rescinded exercise, payment, or delivery. It shall not be a basis for Termination, Rescission or Recapture if after termination of a Participant’s Continuous Service, the Participant purchases, as an investment or otherwise, stock or other securities of such an organization or business, so long as (i) such stock or other securities are listed upon a recognized securities exchange or traded over-the-counter, and (ii) such investment does not represent more than a five percent (5%) equity interest in the organization or business.

(g) Notwithstanding the foregoing provisions of this Section, the Company has sole and absolute discretion not to require Termination, Rescission and/or Recapture, and its determination not to require Termination, Rescission and/or Recapture with respect to any particular act by a particular Participant or Award shall not in any way reduce or eliminate the Company’s authority to require Termination, Rescission and/or Recapture with respect to any other act or Participant or Award. Nothing in this Section shall be construed to impose obligations on the Participant to refrain from engaging in lawful competition with the Company after the termination of employment that does not violate subsections (b), (c), or (e) of this Section, other than any obligations that are part of any separate agreement between the Company and the Participant or that arise under Applicable Law.

(h) All administrative and discretionary authority given to the Company under this Section shall be exercised by the most senior human resources executive of the Company or such other person or committee (including without limitation the Committee) as the Committee may designate from time to time.

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(i) If any provision within this Section is determined to be unenforceable or invalid under any Applicable Law, such provision will be applied to the maximum extent permitted by Applicable Law, and shall automatically be deemed amended in a manner consistent with its objectives and any limitations required under Applicable Law. Notwithstanding the foregoing, but subject to any contrary terms set forth in any Award Agreement, this Section shall not be applicable to any Participant from and after his or her termination of Continuous Service after a Change in Control.

15. Recoupment of Awards. Unless otherwise specifically provided in an Award Agreement, and to the extent permitted by Applicable Law, the Committee may in its sole and absolute discretion, without obtaining the approval or consent of the Company’s shareholders or of any Participant, require that any Participant reimburse the Company for all or any portion of any Awards granted under this Plan (“Reimbursement”), or the Committee may require the Termination or Rescission of, or the Recapture associated with, any Award, if and to the extent—

(a) the granting, vesting, or payment of such Award was predicated upon the achievement of certain financial results that were subsequently the subject of a material financial restatement;

(b) in the Committee’s view the Participant either benefited from a calculation that later proves to be materially inaccurate, or engaged in fraud or misconduct that caused or partially caused the need for a material financial restatement by the Company or any Affiliate; and

(c) a lower granting, vesting, or payment of such Award would have occurred based upon the conduct described in clause (b) of this Section.

In each instance, the Committee will, to the extent practicable and allowable under Applicable Laws, require Reimbursement, Termination or Rescission of, or Recapture relating to, any such Award granted to a Participant; provided that the Company will not seek Reimbursement, Termination or Rescission of, or Recapture relating to, any such Awards that were paid or vested more than three years prior to the first date of the applicable restatement period.

16. Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

17. Administration of the Plan. The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in lieu of the Committee on any matter. The Committee shall hold meetings at such times and places as it may determine and shall make such rules and regulations for the conduct of its business as it deems advisable. In the absence of a duly appointed Committee, the Board shall function as the Committee for all purposes of the Plan.

(a) Committee Composition. The Board shall appoint the members of the Committee. If and to the extent permitted by Applicable Law, the Committee may authorize one or more executive officers to make Awards to Eligible Persons other than themselves. The Board may at any time appoint additional members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies on the Committee however caused.

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(b) Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:

(i) to grant Awards and to determine Eligible Persons to whom Awards shall be granted from time to time, and the number of Shares, units, or dollars to be covered by each Award;

(ii) to determine, from time to time, the Fair Market Value of Shares;

(iii) to determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or purchase price, the installments and conditions under which an Award shall become vested (which may be based on performance), terminated, expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions, and other restrictions and limitations;

(iv) to approve the forms of Award Agreements and all other documents, notices and certificates in connection therewith which need not be identical either as to type of Award or among Participants;

(v) to construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe, amend, and rescind rules and procedures relating to the Plan and its administration;

(vi) to the extent consistent with the purposes of the Plan and without amending the Plan, to modify, to cancel, or to waive the Company’s rights with respect to any Awards, to adjust or to modify Award Agreements for changes in Applicable Law, and to recognize differences in foreign law, tax policies, or customs;

(vii) to require, as a condition precedent to the grant, vesting, exercise, settlement, and/or issuance of Shares pursuant to any Award, that a Participant agree to execute a general release of claims (in any form that the Committee may require, in its sole discretion, which form may include any other provisions, e.g. confidentiality and restrictions on competition, that are found in general claims release agreements that the Company utilizes or expects to utilize);

(viii) in the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting, settlement, or exercise of Award, such as a system using an internet website or interactive voice response, to implement paperless documentation, granting, settlement, or exercise of Awards by a Participant may be permitted through the use of such an automated system; and

(ix) to make all interpretations and to take all other actions that the Committee may consider necessary or advisable to administer the Plan or to effectuate its purposes.

Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Directors or Employees.

(d) Local Law Adjustments and Sub-plans. To facilitate the making of any grant of an Award under this Plan, the Committee may adopt rules and provide for such special terms for Awards to

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Participants who are located within the United States, foreign nationals, or who are employed by the Company or any Affiliate outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Without limiting the foregoing, the Company is specifically authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures and handling of stock certificates which vary with the customs and requirements of particular countries. The Company may adopt sub-plans and establish escrow accounts and trusts, and settle Awards in cash in lieu of shares, as may be appropriate, required or applicable to particular locations and countries.

(c) Action by Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by an officer or other employee of the Company or any Affiliate, the Company’s independent certified public accounts, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

(d) Deference to Committee Determinations. The Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be appropriate in its sole discretion, and to make any findings of fact needed in the administration of the Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction of any provision of the Plan, or of any Award or Award Agreement, and all determination the Committee makes pursuant to the Plan shall be final, binding, and conclusive. The validity of any such interpretation, construction, decision or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly made in bad faith or materially affected by fraud.

(e) No Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect to the Plan, any Award or any Award Agreement. The Company and its Affiliates shall pay or reimburse any member of the Committee, as well as any Director, Employee, or Consultant who in good faith takes action on behalf of the Plan, for all expenses incurred with respect to the Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties on behalf of the Plan. The Company and its Affiliates may, but shall not be required to, obtain liability insurance for this purpose.

(f) Expenses. The expenses of administering the Plan shall be borne jointly and severally by the Company and its Affiliates.

18. Modification of Awards and Substitution of Options. Within the limitations of the Plan, the Committee may modify an Award to accelerate the rate at which an Option or SAR may be exercised, to accelerate the vesting of any Award, to extend or renew outstanding Awards, to accept the cancellation of outstanding Awards to the extent not previously exercised, or to make any change that the Plan would permit for a new Award. However, except in connection with a Change in

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Control or as approved by the Company’s shareholders for any period during which it is subject to the reporting requirements of the Exchange Act, the Committee may not cancel an outstanding Option or SAR whose exercise price is greater than Fair Market Value at the time of cancellation for the purpose of reissuing the Option or SAR to the Participant at a lower exercise price, or granting a replacement award of a different type, or otherwise allowing for a “repricing” within the meaning of applicable federal securities laws. Notwithstanding the foregoing, no modification of an outstanding Award may materially and adversely affect a Participant’s rights thereunder unless either (i) the Participant provides written consent to the modification, or (ii) before a Change in Control, the Committee determines in good faith that the modification is not materially adverse to the Participant.

19. Plan Amendment and Termination. The Board may amend or terminate the Plan as it shall deem advisable; provided that no change shall be made that increases the total number of Shares reserved for issuance pursuant to Awards (except pursuant to Section 13 above) unless such change is authorized by the shareholders of the Company. A termination or amendment of the Plan shall not materially and adversely affect a Participant’s vested rights under an Award previously granted to him or her, unless the Participant consents in writing to such termination or amendment. Notwithstanding the foregoing, the Committee may amend the Plan to comply with changes in tax or securities laws or regulations, or in the interpretation thereof. Furthermore, neither the Company nor the Committee shall, without shareholder approval, either (a) allow for a “repricing” within the meaning of federal securities laws applicable to proxy statement disclosures, or (b) cancel an outstanding Option whose exercise price is greater than Fair Market Value at the time of cancellation for the purpose of reissuing the Option to the Participant at a lower exercise price or granting a replacement award of a different type.

20. Term of Plan. If not sooner terminated by the Board, this Plan shall terminate at the close of business on the date ten years after its Effective Date as determined under Section 1(b) above. No Awards shall be made under the Plan after its termination, and no ISOs shall be granted later than ten years after the earlier of Board approval of the Plan or its Effective Date.

21. Governing Law. The terms of this Plan shall be governed by the laws of the State of Delaware, within the United States of America, without regard to the State’s conflict of laws rules.

22. Laws and Regulations.

(a) General Rules. This Plan, the granting of Awards, the exercise of Options and SARs, and the obligations of the Company hereunder (including those to pay cash or to deliver, sell or accept the surrender of any of its Shares or other securities) shall be subject to all Applicable Law. In the event that any Shares are not registered under any Applicable Law prior to the required delivery of them pursuant to Awards, the Company may require, as a condition to their issuance or delivery, that the persons to whom the Shares are to be issued or delivered make any written representations and warranties (such as that such Shares are being acquired by the Participant for investment for the Participant’s own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares) that the Committee may reasonably require, and the Committee may in its sole discretion include a legend to such effect on the certificates representing any Shares issued or delivered pursuant to the Plan.

(b) Black-out Periods. Notwithstanding any contrary terms within the Plan or any Award Agreement, the Committee shall have the absolute discretion to impose a “blackout” period on the

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exercise of any Option or SAR, as well as the settlement of any Award, with respect to any or all Participants (including those whose Continuous Service has ended) to the extent that the Committee determines that doing so is either desirable or required in order to comply with applicable securities laws.

23. No Shareholder Rights. Neither a Participant nor any transferee or Beneficiary of a Participant shall have any rights as a shareholder of the Company with respect to any Shares underlying any Award until the date of issuance of a share certificate to such Participant, transferee, or Beneficiary for such Shares in accordance with the Company’s governing instruments and Applicable Law. Prior to the issuance of Shares or Restricted Shares pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or any other rights as a shareholder with respect to the Shares underlying the Award (unless otherwise provided in the Award Agreement for Restricted Shares), notwithstanding its exercise in the case of Options and SARs. No adjustment will be made for a dividend or other right that is determined based on a record date prior to the date the stock certificate is issued, except as otherwise specifically provided for in this Plan or an Award Agreement.

Appendix I: Definitions

As used in the Plan, the following terms have the meanings indicated when they begin with initial capital letters within the Plan:

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, “control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or the power to elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

“Applicable Law” means the legal requirements relating to the administration of options and share-based plans under any applicable laws of the United States, any other country, and any provincial, state, or local subdivision, any applicable stock exchange or automated quotation system rules or regulations, as such laws, rules, regulations and requirements shall be in place from time to time.

“Award” means any award made pursuant to the Plan, including awards made in the form of an Option, an SAR, a Restricted Share, a RSU, an Unrestricted Share, a DSU, a Performance Award, or Dividend Equivalent Rights, or any combination thereof, whether alternative or cumulative.

“Award Agreement” means any written document setting forth the terms of an Award that has been authorized by the Committee. The Committee shall determine the form or forms of documents to be used, and may change them from time to time for any reason.

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“Beneficiary” means the person or entity designated by the Participant, in a form approved by the Company, to exercise the Participant’s rights with respect to an Award or receive payment or settlement under an Award after the Participant’s death.

“Board” means the Board of Directors of the Company.

“Cause” has the meaning set forth in any unexpired employment agreement between the Company and the Participant. In the absence of such an agreement, “Cause” means (i) gross negligence, willful misconduct, insubordination, or other material malfeasance or non-feasance by the Participant in the performance of his duties; (ii) the Participant’s unauthorized disclosure of confidential information about the Company; (iii) the Participant’s material breach of any employment, consulting, confidentiality, non-disclosure, non-competition or similar agreement between the Participant and the Company; (iv) the Participant’s conviction of, plea of nolo contendere to, or written admission of the commission of, a felony; (v) any act by the Participant involving fraud or misrepresentation with respect to his duties for the Company, which has resulted or likely will result in material damage to the Company; (vi) any act by the Participant constituting a failure to follow the directions of the either the Company’s Chief Executive Officer or the Board, provided that, the Board provides written notice of such failure to the Participant and the failure continues for fifteen (15) days after the Executive’s receipt of such notice; (vii) the Participant’s material breach of any provision of the Plan or any Award Agreement; (viii) any act of Participant involving moral turpitude that adversely affects Participant’s ability to serve the Company; (ix) Participant’s violation of any federal, state or local law or regulation applicable to the Company or its businesses that causes material injury to the Company (including, without limitation, the reputation of the Company) or Participant’s intentional or knowing violation of any law or regulation applicable to the Company; or (x) Participant’s conduct that constitutes a material breach of any statutory or common law duty of loyalty to the Company. For purpose of this paragraph, no act or failure to act by the Participant shall be considered “willful” if such act or failure to act was in good faith and with the reasonable belief that the act or omission was in the best interests of the Company, or occurred at the direction of the Board. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted herein to include any Affiliate or successor thereto, if appropriate. Furthermore, a Participant’s Continuous Service shall be deemed to have terminated for Cause within the meaning hereof if, at any time (whether before, on, or after termination of the Participant’s Continuous Service), facts or circumstances are discovered that would have justified a termination for Cause.

“Change in Control” means, unless another definition is set forth in an Award Agreement, the first of the following to occur after the Effective Date:

(i) Acquisition of Controlling Interest. Any Person (other than Persons who are Employees at any time more than one year before a transaction) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities. In applying the preceding sentence, (i) securities acquired from the Company by or for the Person shall not be taken into account, and (ii) an agreement to vote securities shall be disregarded unless its ultimate purpose is to cause what would otherwise be a Change in Control, as reasonably determined by the Board.

(ii) Change in Board Control. During any consecutive two-year period commencing after the date of adoption of this Plan, individuals who constituted the Board at the beginning of the period (or

23

their approved replacements, as defined in the next sentence) cease for any reason to constitute a majority of the Board. A new Director shall be considered an “approved replacement” Director if his or her election (or nomination for election) was approved by a vote of at least a majority of the Directors then still in office who either were Directors at the beginning of the period or were themselves approved replacement Directors, but in either case excluding any Director whose initial assumption of office occurred as a result of an actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board.

(iii) Merger. The Company consummates a merger, or consolidation of the Company with the any other corporation unless: (a) the voting securities of the Company outstanding immediately before the merger or consolidation would continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; and (b) no Person (other than Persons who are Employees at any time more than one year before the transaction) becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities.

(iv) Sale of Assets. The stockholders of the Company approve an agreement for the sale of disposition by the Company of all, or substantially all, of the Company’s assets.

(v) Liquidation or Dissolution. The stockholders of the Company approve a plan or proposal for liquidation or dissolution of the Company.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of either an initial public offering of Shares or the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in any entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board or its successor, provided that the term “Committee” means (i) the Board when acting at any time in lieu of the Committee, (ii) with respect to any decision involving an Award intended to satisfy the requirements of Code Section 162(m), a committee consisting of two or more Directors of the Company who are “outside directors” within the meaning of Code Section 162(m), and (iii) with respect to any decision relating to a Reporting Person, a committee consisting of solely of two or more Directors who are disinterested within the meaning of Rule 16b-3.

“Company” means The Telx Group, Inc., a Delaware corporation; provided that in the event the Company reincorporates to another jurisdiction, all references to the term “Company” shall refer to the Company in such new jurisdiction.

“Company Stock” means common stock, $0.0001 par value, of the Company. In the event of a change in the capital structure of the Company affecting the common stock (as provided in Section 13), the Shares resulting from such a change in the common stock shall be deemed to be Company Stock within the meaning of the Plan.

24

“Consultant” means any person (other than an Employee or Director), including an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services.

“Continuous Service” means a Participant’s period of service in the absence of any interruption or termination, as an Employee, Director, or Consultant. Continuous Service shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; (iv) changes in status from Director to advisory director or emeritus status; or (iv) transfers between locations of the Company or between the Company and its Affiliates. Changes in status between service as an Employee, Director, and a Consultant will not constitute an interruption of Continuous Service if the individual continues to perform bona fide services for the Company. The Committee shall have the discretion to determine whether and to what extent the vesting of any Awards shall be tolled during any paid or unpaid leave of absence; provided, however, that in the absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave (but not for a paid leave).

“Deferred Share Units” or “DSUs” mean Awards pursuant to Section 8 of the Plan.

“Director” means a member of the Board, or a member of the board of directors of an Affiliate.

“Disabled” means (i) for an ISO, that the Participant is disabled within the meaning of Code section 22(e)(3), and (ii) for other Awards, a condition under which that the Participant –

(a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or

(b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, received income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company.

“Dividend Equivalent Rights” means Awards pursuant to Section 10 of the Plan, which may be attached to other Awards.

“Eligible Person” means any Consultant, Director, or Employee and includes non-Employees to whom an offer of employment has been or is being extended.

“Employee” means any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes, whether or not that classification is correct. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

25

“Employer” means the Company and each Subsidiary and Affiliate that employs one or more Participants.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means the fair market value of the Company Stock as of such date based on the then prevailing prices of the Company Stock on the New York Stock Exchange, the American Stock Exchange, NASDAQ or such other stocks exchange as the Company Stock is then listed for trading (and, if none, as determined by the Committee in good faith based on relevant facts and circumstances).

“Grant Date” means the later of (i) the date designated as the “Grant Date” within an Award Agreement, and (ii) date on which the Committee determines the key terms of an Award, provided that as soon as reasonably practical thereafter the Committee both notifies the Eligible Person of the Award and enters into an Award Agreement with the Eligible Person.

“Incentive Stock Option” (or “ISO”) means, an Option that qualifies for favorable income tax treatment under Code Section 422.

“Involuntary Termination” means termination of a Participant’s Continuous Service under the following circumstances occurring on or after a Change in Control:

(i) termination without Cause by the Company or an Affiliate or successor thereto, as appropriate; or

(ii) voluntary resignation by the Participant through the following actions: (1) the Participant provides the Company with written notice of the existence of one of the events, arising without the Participant’s consent, listed in clauses (A) through (C), below within thirty (30) days of the initial existence of such event; (2) the Company fails to cure such event within thirty (30) days following the date such notice is given; and (3) the Participant elects to voluntarily terminate employment within the ninety (90) day period immediately following such event. The events include: (A) a material reduction in the Participant’s authority, duties, and responsibilities , (B) the Participant being required to relocate his place of employment, other than a relocation within fifty (50) miles of the Participant’s principal work site at the time of the Change in Control, or (C) a material reduction in the Participant’s Base Salary other than any such reduction consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company.

“Non-ISO” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Award Agreement.

“Option” means a right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.

“Participant” means any Eligible Person who holds an outstanding Award.

“Performance Awards” mean Awards granted pursuant to Section 9.

26

“Performance Unit” means an Award granted pursuant to Section 9(a) of the Plan which may be paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole discretion shall determine.

“Person” means any natural person, association, trust, business trust, cooperative, corporation, general partnership, joint venture, joint-stock company, limited partnership, limited liability company, real estate investment trust, regulatory body, governmental agency or instrumentality, unincorporated organization or organizational entity.

“Plan” means this The Telx Group, Inc. 2010 Stock Incentive Plan.

“Recapture” and “Rescission” have the meaning set forth in Section 14 of the Plan.

“Reimbursement” has the meaning set forth in Section 15 of the Plan.

“Reporting Person” means an Employee, Director, or Consultant who is subject to the reporting requirements set forth under Rule 16b-3.

“Restricted Share” means a Share of Company Stock awarded with restrictions imposed under Section 7.

“Restricted Share Unit” or “RSU” means a right granted to a Participant to receive Shares or cash upon the lapse of restrictions imposed under Section 7.

“Retirement” means a Participant’s termination of employment after age 65.

“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

“Share” means a share of Common Stock of the Company, as adjusted in accordance with Section 13 of the Plan.

“SAR” or “Share Appreciation Right” means a right to receive amounts awarded under Section 6.

“Ten Percent Holder” means a person who owns (within the meaning of Code Section 422) stock representing more than ten percent (10%) of the combined voting power of all classes of stock of the Company.

“Unrestricted Shares” mean Shares (without restrictions) awarded pursuant to Section 7 of the Plan.

“Withholding Taxes” means the aggregate minimum amount of federal, state, local and foreign income, payroll and other taxes that the Company and any Affiliates are required to withhold in connection with any Award.

27

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

As approved by:

the shareholders of

The Telx Group, Inc.

on November 1, 2010.

28

EX-10.42.(A)

Exhibit 10.42.a

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Stock Option Award Agreement: Executives

You are hereby awarded this stock option (the “Option”) to purchase Shares of The Telx Group, Inc. (the “Company”), subject to the terms and conditions set forth in this Stock Option Award Agreement (the “Award Agreement”) and in The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”). A copy of the Plan is attached as Exhibit A. Terms below that begin with capital letters have the special meaning set forth in the Plan (or in this Award Agreement, if defined herein).

This Award is conditioned on your execution of this Award Agreement within twenty (20) days after the Grant Date specified in Section 1 below. By executing this Award Agreement, you will be irrevocably agreeing that all of your rights under this Award will be determined solely and exclusively by reference to the terms and conditions of the Plan, subject to the provisions set forth below. As a result, you should not execute this Award Agreement until you have (i) carefully considered the terms and conditions of the Plan and this Award (including all of the attached Exhibits), and (ii) consulted with your personal legal and tax advisors about all of these documents.

1. Specific Terms. Your Option has the following terms:

Name of Participant
Type of Option	¨ Incentive Stock Option (ISO) 1 ¨ Non-Incentive Stock Option (non-ISO)
Grant Date	, 20    .
Exercise Price	U.S. $        .         per Share. 2
Number of Shares subject to this Award	.
Vesting	Your Award will vest with respect to twenty-five percent (25%) of the number of Shares designated above on each the first four annual anniversary dates (each a “Vesting Date”) of the Grant Date, provided that your Continuous Service has not ended before the particular Vesting Date (subject to the terms of any employment agreement between you and the Company).
Accelerated Vesting	You will become 100% vested in your right to exercise this Award if your Continuous Service ends (i) due to your death or your Disability, or (ii) due to your Involuntary Termination upon or after a Change in Control.

¹ Only Employees may receive ISOs. If you directly or indirectly own more than 10% of the voting power of all classes of Common Stock, then the exercise price for your ISO must be at least 110% of the Fair Market Value of such Shares on the Grant Date, and the term of your ISO cannot exceed 5 years.

² The exercise price must be at least 100% of the Fair Market Value of the underlying Shares, subject to the special rule noted in footnote 1 for certain ISOs.

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

Dividend Equivalent Rights	Not applicable to this Award.
Expiration Date	years after Grant Date, at 5:00 p.m. (E.D.T. or E.S.T., as applicable) on the Expiration Date.
Recapture and Recoupment	¨ Section 14 of the Plan shall apply re Termination, Rescission, and Recapture of this Award. ¨ Section 15 shall apply re Recoupment of this Award.

2. Manner of Exercise. This Option shall be exercised in the manner set forth in the Plan, using the exercise form attached hereto as Exhibit B. The amount of Shares for which this Option may be exercised is cumulative; that is, if you fail to exercise this Option for all of the Shares vested under this Option during any period set forth above, then any Shares subject hereto that are not exercised during such period may be exercised during any subsequent period, until the expiration or termination of this Option pursuant to Sections 1 and 4 of this Award Agreement and the terms of the Plan. Fractional Shares may not be purchased.

3. Special ISO Provisions. If designated as an ISO, this Option shall be treated as an ISO to the extent allowable under Section 422 of the Code, and shall otherwise be treated as a Non-ISO. If you sell or otherwise dispose of Shares acquired upon the exercise of an ISO within 1 year from the date such Shares were acquired or 2 years from the Grant Date, you agree to deliver a written report to the Company within 10 days following the sale or other disposition of such Shares detailing the net proceeds of such sale or disposition.

4. Termination of Continuous Service. Subject to the terms of any employment agreement between you and the Company (and/or any Affiliate) that is in effect when your Continuous Service terminates, this Award shall be canceled and become automatically null and void immediately after termination of your Continuous Service for any reason, but only to the extent your rights under this Option have not become vested, pursuant to the terms of Section 1 above, on or before your Continuous Service ends.

5. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein or in the Plan, following the execution of this Award Agreement, you may expressly designate a death beneficiary (the “Beneficiary”) to your interest if any, in this Award and any underlying Shares. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as Exhibit C (the “Designation of Death Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company. To the extent you do not duly designate a beneficiary who survives you, your estate will automatically be your beneficiary.

6. Restrictions on Transfer of Award. Your rights under this Award Agreement may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee, except as hereinafter provided.

7. Taxes. Except to the extent otherwise specifically provided in an employment or consulting agreement between you and your employer, by signing this Award Agreement, you acknowledge that you shall be solely responsible for the satisfaction of any taxes that may arise pursuant to this Award

Page 2

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

(including taxes arising under Sections 409A (regarding deferred compensation) or 4999 (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay such taxes or to otherwise indemnify or hold you harmless from any or all of such taxes. The Committee shall have the sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of the Plan and this Award Agreement.

8. Not a Contract of Employment. By executing this Award, you acknowledge and agree that (i) any person who is terminated before full vesting of an award, such as the one granted to you by this Award Agreement, could claim that he or she was terminated to preclude vesting; (ii) you promise never to make such a claim; (iii) nothing in this Award Agreement or the Plan confers on you any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way your right or the Company’s right to terminate your employment, service, or consulting relationship at any time, with or without Cause; and (iv) the Company would not have granted this Award to you but for these acknowledgements and agreements.

9. Investment Purposes. By executing this Award Agreement, you represent and warrant that any Shares issued to you pursuant to your Option will be held for investment purposes only for your own account, and not with a view to, for resale in connection with, or with an intent in participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act of 1933, as amended.

10. Securities Law Prospectus and Restrictions. By executing this Award Agreement you acknowledge that you have received a copy of the Prospectus describing the Plan. A copy of the Plan’s Prospectus is attached as Exhibit D. Regardless of whether the offering and sale of this Option or Shares under the Plan have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act or the securities laws of any state or any other law or to enforce the intent of this Award.

11. Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.

12. Severability. Every provision of this Award Agreement and of the Plan is intended to be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement.

13. Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

14. Notices. Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered electronically, personally, or sent by certified mail, return receipt requested, addressed to you at the last address that the Company had for you on its records. Each party may, from time to time, by notice to the

Page 3

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be deemed to be given as of the date such notice is personally or electronically delivered or properly mailed.

15. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

16. Modifications. This Award Agreement may be modified or amended at any time, in accordance with Section 18 of the Plan and provided that you must consent in writing to any modification that adversely and materially affects any rights or obligations under this Award Agreement.

17. Plan Governs. By signing this Award Agreement, you acknowledge that you have received a copy of the Plan, and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

18. Governing Law. The laws of the Delaware shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto.

BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the Company agree that this Award is made under and governed by the terms and conditions of this Award Agreement and the Plan.

THE TELX GROUP, INC.
By:
	Name:
	Title:
PARTICIPANT

The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.

By:

Name of Participant:

Page 4

Exhibit A

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Document

(attached under this page)

Page 5

Exhibit B

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Form of Exercise of Stock Option Award Agreement

The Telx Group, Inc.

[Company Address]

            Attention:

Dear Sir or Madam:

The undersigned elects to exercise his/her Option to purchase              shares of Common Stock of The Telx Group, Inc. (the “Company”) under and pursuant to a Stock Option Agreement dated as of                     .

1. Method of Exercise (Choose One)

¨ Delivered herewith is a certified or bank cashier’s or teller’s check and/or shares of Common Stock owned by the undersigned, valued at the closing sale price of the stock on the business day prior to the date of exercise, as follows:

$	in cash or check
$	in the form of              shares of Common Stock,
	valued at $         per share
$	Total

¨ Subject to written consent of the Committee, the undersigned elects a net exercise, hereby authorizing the Company to withhold from the shares otherwise subject to this Option a number of shares sufficient to cover the exercise price and minimum statutory withholding taxes payable pursuant to this exercise.

2. Issuance of Shares. The name or names to be on the stock certificate or certificates and the address and Social Security Number of such person(s) is as follows:

Name:

Address:

Social Security Number  

	Very truly yours,
Date	Optionee

Page 6

Exhibit C

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Designation of Death Beneficiary

In connection with the Awards designated below that I have received pursuant to the The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”), I hereby designate the person specified below as the beneficiary upon my death of my interest in such Awards. This designation shall remain in effect until revoked in writing by me.

Name of Beneficiary:

Address:

Social Security No.:

This beneficiary designation relates to any and all of my rights under the following Award or Awards:

¨ any Award that I have received or ever receive under the Plan.

¨ the              Award that I received pursuant to an award agreement dated                  ,      between myself and the Company.

I understand that this designation operates to entitle the above named beneficiary, in the event of my death, to any and all of my rights under the Award(s) designated above from the date this form is delivered to the Company until such date as this designation is revoked in writing by me, including by delivery to the Company of a written designation of beneficiary executed by me on a later date.

Date:
By:
	Name of Participant

Sworn to before me this

             day of             , 20    

________________________

Notary Public

County of    _______________________

State of _________________

Page 7

Exhibit D

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Prospectus

(attached under this page)

Page 8

EX-10.42.(B)

Exhibit 10.42.b

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Stock Option Award Agreement: Employees

You are hereby awarded this stock option (the “Option”) to purchase Shares of The Telx Group, Inc. (the “Company”), subject to the terms and conditions set forth in this Stock Option Award Agreement (the “Award Agreement”) and in The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”). A copy of the Plan is attached as Exhibit A. Terms below that begin with capital letters have the special meaning set forth in the Plan (or in this Award Agreement, if defined herein).

This Award is conditioned on your execution of this Award Agreement within twenty (20) days after the Grant Date specified in Section 1 below. By executing this Award Agreement, you will be irrevocably agreeing that all of your rights under this Award will be determined solely and exclusively by reference to the terms and conditions of the Plan, subject to the provisions set forth below. As a result, you should not execute this Award Agreement until you have (i) carefully considered the terms and conditions of the Plan and this Award (including all of the attached Exhibits), and (ii) consulted with your personal legal and tax advisors about all of these documents.

1. Specific Terms. Your Option has the following terms:

Name of Participant
Type of Option	¨ Incentive Stock Option (ISO) 1    ¨ Non-Incentive Stock Option (non-ISO)
Grant Date	, 20    .
Exercise Price	U.S. $        .         per Share. 2
Number of Shares subject to this Award	.
Vesting	Your Award will vest with respect to twenty-five percent (25%) of the number of Shares designated above on each the first four annual anniversary dates (each a “Vesting Date”) of the Grant Date, provided that your Continuous Service has not ended before the particular Vesting Date (subject to the terms of any employment agreement between you and the Company).
Accelerated Vesting	You will become 100% vested in your right to exercise this Award if your Continuous Service ends due to your death or your Disability.

¹ Only Employees may receive ISOs. If you directly or indirectly own more than 10% of the voting power of all classes of Common Stock, then the exercise price for your ISO must be at least 110% of the Fair Market Value of such Shares on the Grant Date, and the term of your ISO cannot exceed 5 years.

² The exercise price must be at least 100% of the Fair Market Value of the underlying Shares, subject to the special rule noted in footnote 1 for certain ISOs.

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

Dividend Equivalent Rights	Not applicable to this Award.
Expiration Date	years after Grant Date, at 5:00 p.m. (E.D.T. or E.S.T., as applicable) on the Expiration Date.
Recapture and Recoupment	¨ Section 14 of the Plan shall apply re Termination, Rescission, and Recapture of this Award. ¨ Section 15 shall apply re Recoupment of this Award.

2. Manner of Exercise. This Option shall be exercised in the manner set forth in the Plan, using the exercise form attached hereto as Exhibit B. The amount of Shares for which this Option may be exercised is cumulative; that is, if you fail to exercise this Option for all of the Shares vested under this Option during any period set forth above, then any Shares subject hereto that are not exercised during such period may be exercised during any subsequent period, until the expiration or termination of this Option pursuant to Sections 1 and 4 of this Award Agreement and the terms of the Plan. Fractional Shares may not be purchased.

3. Special ISO Provisions. If designated as an ISO, this Option shall be treated as an ISO to the extent allowable under Section 422 of the Code, and shall otherwise be treated as a Non-ISO. If you sell or otherwise dispose of Shares acquired upon the exercise of an ISO within 1 year from the date such Shares were acquired or 2 years from the Grant Date, you agree to deliver a written report to the Company within 10 days following the sale or other disposition of such Shares detailing the net proceeds of such sale or disposition.

4. Termination of Continuous Service. Subject to the terms of any employment agreement between you and the Company (and/or any Affiliate) that is in effect when your Continuous Service terminates, this Award shall be canceled and become automatically null and void immediately after termination of your Continuous Service for any reason, but only to the extent your rights under this Option have not become vested, pursuant to the terms of Section 1 above, on or before your Continuous Service ends.

5. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein or in the Plan, following the execution of this Award Agreement, you may expressly designate a death beneficiary (the “Beneficiary”) to your interest if any, in this Award and any underlying Shares. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as Exhibit C (the “Designation of Death Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company. To the extent you do not duly designate a beneficiary who survives you, your estate will automatically be your beneficiary.

6. Restrictions on Transfer of Award. Your rights under this Award Agreement may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee, except as hereinafter provided.

7. Taxes. Except to the extent otherwise specifically provided in an employment or consulting agreement between you and your employer, by signing this Award Agreement, you acknowledge that you shall be solely responsible for the satisfaction of any taxes that may arise pursuant to this Award

Page 2

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

(including taxes arising under Sections 409A (regarding deferred compensation) or 4999 (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay such taxes or to otherwise indemnify or hold you harmless from any or all of such taxes. The Committee shall have the sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of the Plan and this Award Agreement.

8. Not a Contract of Employment. By executing this Award, you acknowledge and agree that (i) any person who is terminated before full vesting of an award, such as the one granted to you by this Award Agreement, could claim that he or she was terminated to preclude vesting; (ii) you promise never to make such a claim; (iii) nothing in this Award Agreement or the Plan confers on you any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way your right or the Company’s right to terminate your employment, service, or consulting relationship at any time, with or without Cause; and (iv) the Company would not have granted this Award to you but for these acknowledgements and agreements.

9. Investment Purposes. By executing this Award Agreement, you represent and warrant that any Shares issued to you pursuant to your Option will be held for investment purposes only for your own account, and not with a view to, for resale in connection with, or with an intent in participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act of 1933, as amended.

10. Securities Law Prospectus and Restrictions. By executing this Award Agreement you acknowledge that you have received a copy of the Prospectus describing the Plan. A copy of the Plan’s Prospectus is attached as Exhibit D. Regardless of whether the offering and sale of this Option or Shares under the Plan have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act or the securities laws of any state or any other law or to enforce the intent of this Award.

11. Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.

12. Severability. Every provision of this Award Agreement and of the Plan is intended to be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement.

13. Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

14. Notices. Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered electronically, personally, or sent by certified mail, return receipt requested, addressed to you at the last address that the Company had for you on its records. Each party may, from time to time, by notice to the

Page 3

Stock Option Award Agreement

The Telx Group. Inc.

2010 Stock Incentive Plan

other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be deemed to be given as of the date such notice is personally or electronically delivered or properly mailed.

15. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

16. Modifications. This Award Agreement may be modified or amended at any time, in accordance with Section 18 of the Plan and provided that you must consent in writing to any modification that adversely and materially affects any rights or obligations under this Award Agreement.

17. Plan Governs. By signing this Award Agreement, you acknowledge that you have received a copy of the Plan, and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

18. Governing Law. The laws of the Delaware shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto.

BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the Company agree that this Award is made under and governed by the terms and conditions of this Award Agreement and the Plan.

THE TELX GROUP, INC.
By:
	Name:
	Title:
PARTICIPANT

The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.

By:

Name of Participant:

Page 4

Exhibit A

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Document

(attached under this page)

Page 5

Exhibit B

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Form of Exercise of Stock Option Award Agreement

The Telx Group, Inc.

[Company Address]

            Attention:

Dear Sir or Madam:

The undersigned elects to exercise his/her Option to purchase              shares of Common Stock of The Telx Group, Inc. (the “Company”) under and pursuant to a Stock Option Agreement dated as of             .

1. Method of Exercise (Choose One)

¨    Delivered herewith is a certified or bank cashier’s or teller’s check and/or shares of Common Stock owned by the undersigned, valued at the closing sale price of the stock on the business day prior to the date of exercise, as follows:

$	in cash or check
$	in the form of              shares of Common Stock,
	valued at $         per share
$	Total

¨    Subject to written consent of the Committee, the undersigned elects a net exercise, hereby authorizing the Company to withhold from the shares otherwise subject to this Option a number of shares sufficient to cover the exercise price and minimum statutory withholding taxes payable pursuant to this exercise.

2. Issuance of Shares. The name or names to be on the stock certificate or certificates and the address and Social Security Number of such person(s) is as follows:

Name:

Address:

Social Security Number  

	Very truly yours,
Date	Optionee

Page 6

Exhibit C

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Designation of Death Beneficiary

In connection with the Awards designated below that I have received pursuant to the The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”), I hereby designate the person specified below as the beneficiary upon my death of my interest in such Awards. This designation shall remain in effect until revoked in writing by me.

Name of Beneficiary:

Address:

Social Security No.:

This beneficiary designation relates to any and all of my rights under the following Award or Awards:

¨ any Award that I have received or ever receive under the Plan.

¨ the              Award that I received pursuant to an award agreement dated                  ,      between myself and the Company.

I understand that this designation operates to entitle the above named beneficiary, in the event of my death, to any and all of my rights under the Award(s) designated above from the date this form is delivered to the Company until such date as this designation is revoked in writing by me, including by delivery to the Company of a written designation of beneficiary executed by me on a later date.

Date:
By:
	Name of Participant

Sworn to before me this

             day of             , 20    

________________________

Notary Public

County of    _______________________

State of _________________

Page 7

Exhibit D

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Prospectus

(attached under this page)

Page 8

EX-10.43.(A)

Exhibit 10.43.a

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Restricted Stock Unit Award Agreement: Executives

You are hereby awarded Restricted Share Units (the “RSUs”) subject to the terms and conditions set forth in this Restricted Share Unit Award Agreement (the “Award Agreement” or “Award”) and in The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”). A copy of the Plan is attached as Exhibit A. Terms beginning with initial capital letters within this Agreement have the special meaning defined in the Plan (or in this Award Agreement, if defined herein).

This Award is conditioned on your execution of this Award Agreement within twenty (20) days after the Grant Date specified in Section 1 below. By executing this Award Agreement, you will be irrevocably agreeing that all of your rights under this Award will be determined solely and exclusively by reference to the terms and conditions of the Plan, subject to the provisions set forth below. As a result, you should not execute this Award Agreement until you have (i) carefully considered the terms and conditions of the Plan and this Award (including all of the attached Exhibits), and (ii) consulted with your personal legal and tax advisors about all of these documents.

1. Specific Terms. Your RSUs have the following terms:

Name of Participant
Number of Shares Subject to Award
Purchase Price per Share (if applicable)	Not applicable.
Grant Date	, 20    .
Vesting	Your Award will vest with respect to twenty-five percent (25%) of the number of Shares designated above on each the first four annual anniversary dates (each a “Vesting Date”) of the Grant Date, provided that your Continuous Service has not ended before the particular Vesting Date (subject to the terms of any employment agreement between you and the Company).
Accelerated Vesting	You will become 100% vested in this Award if your Continuous Service ends (i) due to your death or your Disability, or (ii) due to your Involuntary Termination upon or after a Change in Control.
Deferral Elections	Allowed, if you make an election using the form attached as Exhibit D.
Recapture and Recoupment	¨Section 14 of the Plan shall apply re Termination, Rescission, and Recapture of this Award. ¨Section 15 shall apply re Recoupment of this Award.

2. Termination of Continuous Service. Subject to the terms of any employment agreement between you and the Company (and/or any Affiliate) that is in effect when your Continuous Service terminates, this Award shall be canceled and become automatically null and void immediately after termination of your Continuous Service for any reason, but only to the extent you have not become vested, pursuant to terms of Section 1 above, on or before your Continuous Service ends.

3. Satisfaction of Vesting Restrictions. No Shares will be issued before you complete the requirements that are necessary for you to vest in the Shares underlying your RSUs. As soon as practicable after the later of (i) the date on which your RSUs vest in whole or in part, or (ii) the distribution date or dates set forth in your deferral and distribution election forms (if allowed under Section 1 and made by you), the Company will issue to you or your duly-authorized transferee, free from vesting restrictions (but subject to such legends as the Company determines to be appropriate), one Share for each vested RSU with such number of Shares issued to you being reduced by a number of Shares having a fair market value equal to the sum of the par value per Share issued (as payment thereof) plus the minimum statutory tax withholding required in connection with the vesting of your RSUs, and with cash being withheld from your pay for any additional withholding and employment taxes that applicable tax laws may require. Certificates shall not be delivered to you unless all applicable employment and tax-withholding obligations have been satisfied.

4. Dividends. You shall have Dividend Equivalent Rights with respect to this Award, and Section 10 of the Plan shall accordingly determine your right to collect any cash dividends or Share dividends that are declared and paid to the holders of Shares between the Grant Date and each vesting or deferred settlement date upon which you are entitled to receive Shares to settle this Award. To the extent that your Continuous Service ends before full vesting of the RSUs subject to this Award, you will forfeit all cash and Share-based dividends that are attributable to all of your non-vested RSUs.

5. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein or in the Plan, following the execution of this Award Agreement, you may expressly designate a death beneficiary (the “Beneficiary”) to your interest, if any, in this Award and any underlying Shares. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as Exhibit B (the “Designation of Death Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company. To the extent you do not duly designate a beneficiary who survives you, your estate will automatically be your beneficiary.

6. Restrictions on Transfer of Award. Your rights under this Award Agreement may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee.

7. Taxes. Except to the extent otherwise specifically provided in an employment or consulting agreement between you and the Company, by signing this Award Agreement, you acknowledge that you shall be solely responsible for the satisfaction of any applicable taxes that may arise pursuant to this Award (including taxes arising under Code Section 409A (regarding deferred compensation) or 4999 (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay

such taxes or to otherwise indemnify or hold you harmless from any or all of such taxes. The Committee shall have the sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of the Plan and this Award Agreement.

8. Not a Contract of Employment. By executing this Award Agreement you acknowledge and agree that (i) nothing in this Award Agreement or the Plan confers on you any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way your right or the Company’s right to terminate your employment, service, or consulting relationship at any time, with or without Cause; and (ii) the Company would not have granted this Award to you but for these acknowledgements and agreements.

9. Investment Purposes. By executing this Award, you represent and warrant to the Company that any Shares issued to you pursuant to your RSUs will be for investment for your own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act of 1933, as amended.

10. Securities Law Restrictions. By executing this Award Agreement you acknowledge that you have received a copy of the Prospectus describing the Plan. A copy of the Plan’s Prospectus is attached as Exhibit C. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act or the securities laws of any state or any other law or to enforce the intent of this Award.

11. Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.

12. Severability. Every provision of this Award Agreement and of the Plan is intended to be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement.

13. Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

14. Notices. Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered electronically, personally, or sent by mail, addressed to you at the last address that the Company had for you on its records. Each party may, from time to time, by notice to the other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be deemed to be given as of the date such notice is personally or electronically delivered or properly mailed.

15. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and

inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

16. Modifications. This Award Agreement may be modified or amended at any time, in accordance with Section 18 of the Plan and provided that you must consent in writing to any modification that adversely and materially affects any rights or obligations under this Award Agreement.

17. Plan Governs. By signing this Award Agreement, you acknowledge that you have received a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

18. Governing Law. The laws of the State of Delaware shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto.

BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the Company agree that this Award is made under and governed by the terms and conditions of this Award Agreement and the Plan.

THE TELX GROUP, INC.
By:
	Name:
	Title:
PARTICIPANT
The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.
Signature:________________________________________
Printed Name of Participant:________________________________

Exhibit A

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Document

(attached under this page)

Exhibit B

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Designation of Death Beneficiary

In connection with the Awards designated below that I have received pursuant to the Plan, I hereby designate the person specified below as the beneficiary upon my death of my interest in such Awards. This designation shall remain in effect until revoked in writing by me.

Name of Beneficiary:

Address:

Social Security No.:

This beneficiary designation relates to any and all of my rights under the following Award or Awards:

¨	any Award that I have received or ever receive under the Plan.
¨     the              Award that I received pursuant to an award agreement dated                  ,      between myself and the Company.

I understand that this designation operates to entitle the above named beneficiary, in the event of my death, to any and all of my rights under the Award(s) designated above from the date this form is delivered to the Company until such date as this designation is revoked in writing by me, including by delivery to the Company of a written designation of beneficiary executed by me on a later date.

Date:
By:
	Name of Participant

Sworn to before me this

             day of             , 200_

________________________

Notary Public

County of    _______________________

State of _________________

Exhibit C

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Prospectus

(attached under this page)

Exhibit D

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Deferral and Distribution Election

(if allowed under Section 1 of the RSU Award Agreement)

DEFERRAL AND DISTRIBUTION ELECTION (the “Election”), made this             day of             ,             , by me, as the undersigned participant in the above-referenced plan (the “Plan”) that is sponsored by The Telx Group, Inc. (the “Company”).

WHEREAS, I have received an Award of RSUs pursuant to an Award Agreement dated                  , 2010 (my “2010 RSU Award”) that permits me to make a deferral election pursuant to Section 7(e) of the Plan, and I desire to make such an election subject to the terms and conditions hereof.

NOW, THEREFORE, I hereby elect as follows, and the Company agrees to be bound by the terms of my elections herein effective immediately, provided that, within 30 days after the Grant Date set forth in my 2010 RSU Award, I provide an executive officer of the Company (other than myself) with an original copy of my completed and fully-executed Election herein:

1. Defined Terms. Terms beginning with initial capital letters within this Election have the special meaning defined in the Plan or my 2010 RSU Award (or in this Election for definitions set forth herein).

2. Provisions Incorporated by Reference. The terms of my 2010 RSU Award are incorporated herein by reference.

3. Term of Election. This Election and the provisions of my 2010 RSU Award and the Plan constitute the entire agreement between me and the Company regarding this matter, and will continue in full force and effect until and unless I execute a superseding distribution election pursuant to Section 8(c)(ii) of the Plan.

4. RSUs being Deferred. I hereby elect to defer the receipt of             percent (__%) of the Shares that would otherwise be transferred to me more than 12 months after the date of this deferral election (or upon my earlier death). I understand and recognize that pursuant to this Election, the Company agrees to credit me on its books and records with DSUs pursuant to the terms and conditions of Section 8 of the Plan.

5. Settlement of DSUs. The Company agrees to settle my DSUs through issuing unrestricted Shares (with cash being paid in lieu of fractional Shares) in accordance with the earliest to occur of the events determined pursuant to my elections in the following schedule:

Deferral and Distribution Election

Page 2 of 3

Event	Form of Distribution		Time of Distribution
My Death	¨     ¨	One lump sum distribution. Substantially equal annual payments over a period of      years (up to 10).	¨     ¨     ¨	As soon as practicable. The next January 1st. Other:                     .
My Disability	¨     ¨	One lump sum distribution. Substantially equal annual payments over a period of      years (up to 10).	¨     ¨     ¨	As soon as practicable. The next January 1st. Other:                     .
My Other Separation from Service	¨     ¨	One lump sum distribution. Substantially equal annual payments over a period of      years (up to 10).	¨     ¨     ¨	As soon as practicable. The next January 1st. Other:                     .
Change in Control	¨     ¨	One lump sum distribution. Substantially equal annual payments over a period of      years (up to 10).	¨     ¨     ¨	As soon as practicable. The next January 1st. Other:                     .
Specified Date	¨     ¨	One lump sum distribution. Substantially equal annual payments over a period of      years (up to 10).	Date:                          ,         .

Note: the term “Separation from Service” means the first to occur of a termination of your Continuous Service, or your “separation from service” within the meaning of Code Section 409A and associated rulings and regulations (with such separation being presumed to occur if based on a 50% or more reduction in your service, as determined thereunder).

6. Taxes. By signing this Election, you acknowledge that you shall be solely responsible for the satisfaction of any taxes that may arise pursuant to this Award (including taxes arising under Sections 409A or 4999 of the Code), and that neither the Company nor any of its officers, directors, employees, or other service providers shall have any obligation whatsoever to pay such taxes or to otherwise indemnify or hold you harmless from any or all of such taxes.

The Committee shall nevertheless have the discretion (i) to condition any issuance of Shares on my satisfaction of applicable employment and withholding taxes; and (ii) to unilaterally interpret this Election in any manner that (i) conforms with the requirements of Section 409A of the Code, (ii) that modifies or voids any election of mine to the extent it would violate Section 409A of the Code, and (iii) for any distribution election that would violate Section 409A of the Code, that

Deferral and Distribution Election

Page 3 of 3

defers distributions pursuant hereto until the earliest to occur of a distribution event that is allowable under Section 409A of the Code or any distribution event that is both allowable under Section 409A of the Code and is duly elected by me.

7. Effect of This Election. I recognize and agree that the Company will honor the terms and conditions of this Election, subject to any provisions of the Plan or my 2010 RSU Award that are not patently inconsistent herewith.

IN WITNESS WHEREOF, I have made this election on the day and year first above-written.

PARTICIPANT
My	Signature:
My	Printed Name:

EX-10.43 (B)

Exhibit 10.43.b

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Restricted Stock Unit Award Agreement: Employees

You are hereby awarded Restricted Share Units (the “RSUs”) subject to the terms and conditions set forth in this Restricted Share Unit Award Agreement (the “Award Agreement” or “Award”) and in The Telx Group, Inc. 2010 Stock Incentive Plan (the “Plan”). A copy of the Plan is attached as Exhibit A. Terms beginning with initial capital letters within this Agreement have the special meaning defined in the Plan (or in this Award Agreement, if defined herein).

This Award is conditioned on your execution of this Award Agreement within twenty (20) days after the Grant Date specified in Section 1 below. By executing this Award Agreement, you will be irrevocably agreeing that all of your rights under this Award will be determined solely and exclusively by reference to the terms and conditions of the Plan, subject to the provisions set forth below. As a result, you should not execute this Award Agreement until you have (i) carefully considered the terms and conditions of the Plan and this Award (including all of the attached Exhibits), and (ii) consulted with your personal legal and tax advisors about all of these documents.

1. Specific Terms. Your RSUs have the following terms:

Name of Participant
Number of Shares Subject to Award
Purchase Price per Share (if applicable)	Not applicable.
Grant Date	, 20    .
Vesting	Your Award will vest with respect to twenty-five percent (25%) of the number of Shares designated above on each the first four annual anniversary dates (each a “Vesting Date”) of the Grant Date, provided that your Continuous Service has not ended before the particular Vesting Date (subject to the terms of any employment agreement between you and the Company).
Accelerated Vesting	You will become 100% vested in this Award if your Continuous Service ends due to your death or your Disability.
Deferral Elections	Not allowed.
Recapture and Recoupment	¨ Section 14 of the Plan shall apply re Termination, Rescission, and Recapture of this Award. ¨ Section 15 shall apply re Recoupment of this Award.

2. Termination of Continuous Service. Subject to the terms of any employment agreement between you and the Company (and/or any Affiliate) that is in effect when your Continuous Service terminates, this Award shall be canceled and become automatically null and void immediately after termination of your Continuous Service for any reason, but only to the extent you have not become vested, pursuant to terms of Section 1 above, on or before your Continuous Service ends.

3. Satisfaction of Vesting Restrictions. No Shares will be issued before you complete the requirements that are necessary for you to vest in the Shares underlying your RSUs. As soon as practicable after the later of (i) the date on which your RSUs vest in whole or in part, or (ii) the distribution date or dates set forth in your deferral and distribution election forms (if allowed under Section 1 and made by you), the Company will issue to you or your duly-authorized transferee, free from vesting restrictions (but subject to such legends as the Company determines to be appropriate), one Share for each vested RSU with such number of Shares issued to you being reduced by a number of Shares having a fair market value equal to the sum of the par value per Share issued (as payment thereof) plus the minimum statutory tax withholding required in connection with the vesting of your RSUs, and with cash being withheld from your pay for any additional withholding and employment taxes that applicable tax laws may require. Certificates shall not be delivered to you unless all applicable employment and tax-withholding obligations have been satisfied.

4. Dividends. You shall have Dividend Equivalent Rights with respect to this Award, and Section 10 of the Plan shall accordingly determine your right to collect any cash dividends or Share dividends that are declared and paid to the holders of Shares between the Grant Date and each vesting or deferred settlement date upon which you are entitled to receive Shares to settle this Award. To the extent that your Continuous Service ends before full vesting of the RSUs subject to this Award, you will forfeit all cash and Share-based dividends that are attributable to all of your non-vested RSUs.

5. Designation of Beneficiary. Notwithstanding anything to the contrary contained herein or in the Plan, following the execution of this Award Agreement, you may expressly designate a death beneficiary (the “Beneficiary”) to your interest, if any, in this Award and any underlying Shares. You shall designate the Beneficiary by completing and executing a designation of beneficiary agreement substantially in the form attached hereto as Exhibit B (the “Designation of Death Beneficiary”) and delivering an executed copy of the Designation of Beneficiary to the Company. To the extent you do not duly designate a beneficiary who survives you, your estate will automatically be your beneficiary.

6. Restrictions on Transfer of Award. Your rights under this Award Agreement may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee.

7. Taxes. Except to the extent otherwise specifically provided in an employment or consulting agreement between you and the Company, by signing this Award Agreement, you acknowledge that you shall be solely responsible for the satisfaction of any applicable taxes that may arise pursuant to this Award (including taxes arising under Code Section 409A (regarding deferred compensation) or 4999 (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay such taxes or to otherwise indemnify or hold you harmless from any or all of such taxes.

The Committee shall have the sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of the Plan and this Award Agreement.

8. Not a Contract of Employment. By executing this Award Agreement you acknowledge and agree that (i) nothing in this Award Agreement or the Plan confers on you any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way your right or the Company’s right to terminate your employment, service, or consulting relationship at any time, with or without Cause; and (ii) the Company would not have granted this Award to you but for these acknowledgements and agreements.

9. Investment Purposes. By executing this Award, you represent and warrant to the Company that any Shares issued to you pursuant to your RSUs will be for investment for your own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act of 1933, as amended.

10. Securities Law Restrictions. By executing this Award Agreement you acknowledge that you have received a copy of the Prospectus describing the Plan. A copy of the Plan’s Prospectus is attached as Exhibit C. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act or the securities laws of any state or any other law or to enforce the intent of this Award.

11. Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.

12. Severability. Every provision of this Award Agreement and of the Plan is intended to be severable. If any term hereof is illegal or invalid for any reason, such illegality or invalidity shall not affect the validity or legality of the remaining terms of this Award Agreement.

13. Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

14. Notices. Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered electronically, personally, or sent by mail, addressed to you at the last address that the Company had for you on its records. Each party may, from time to time, by notice to the other party hereto, specify a new address for delivery of notices relating to this Award Agreement. Any such notice shall be deemed to be given as of the date such notice is personally or electronically delivered or properly mailed.

15. Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and

inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.

16. Modifications. This Award Agreement may be modified or amended at any time, in accordance with Section 18 of the Plan and provided that you must consent in writing to any modification that adversely and materially affects any rights or obligations under this Award Agreement.

17. Plan Governs. By signing this Award Agreement, you acknowledge that you have received a copy of the Plan and that your Award Agreement is subject to all the provisions contained in the Plan, the provisions of which are made a part of this Award Agreement and your Award is subject to all interpretations, amendments, rules and regulations which from time to time may be promulgated and adopted pursuant to the Plan. In the event of a conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan shall control.

18. Governing Law. The laws of the State of Delaware shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto.

BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the Company agree that this Award is made under and governed by the terms and conditions of this Award Agreement and the Plan.

THE TELX GROUP, INC.
By:
	Name:
	Title:
PARTICIPANT
The undersigned Participant hereby accepts the terms of this Award Agreement and the Plan.
Signature: __________________________________________
Printed Name of Participant:  ______________________________

Exhibit A

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Document

(attached under this page)

Exhibit B

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Designation of Death Beneficiary

In connection with the Awards designated below that I have received pursuant to the Plan, I hereby designate the person specified below as the beneficiary upon my death of my interest in such Awards. This designation shall remain in effect until revoked in writing by me.

Name of Beneficiary:

Address:

Social Security No.:

This beneficiary designation relates to any and all of my rights under the following Award or Awards:

¨	any Award that I have received or ever receive under the Plan.
¨    the                                 Award that I received pursuant to an award agreement dated                 ,         between myself and the Company.

I understand that this designation operates to entitle the above named beneficiary, in the event of my death, to any and all of my rights under the Award(s) designated above from the date this form is delivered to the Company until such date as this designation is revoked in writing by me, including by delivery to the Company of a written designation of beneficiary executed by me on a later date.

Date:
By:
	Name of Participant

Sworn to before me this

        day of                         , 200_

_________________________

Notary Public

County of        _________________

State of__________________

Exhibit C

THE TELX GROUP, INC.

2010 STOCK INCENTIVE PLAN

Plan Prospectus

(attached under this page)

EX-10.54

Exhibit 10.54

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into between The Telx Group, Inc., a Delaware corporation (the “Company”), and Clayton Mynard (“Executive”) and shall be effective as of August 23, 2010 (the “Effective Date”).

1.0 RECITALS.

1.1 The Company desires to employ the Executive, and the Executive desires to be so employed by the Company, on the terms and subject to the conditions set forth in this Agreement.

1.2 As an executive officer of the Company, Executive shall have access to valuable confidential and proprietary information used in the business of the Company, including financial data, customer data, operational data, trade secrets and other intellectual property that if disclosed to or used by competitors or potential competitors would cause irreparable harm to the Company, and as a result, Executive and the Company desire to provide the Company with adequate protection from the unauthorized disclosure or use of the Company’s confidential and proprietary information.

NOW, THEREFORE, in consideration of the foregoing facts, the mutual covenants and agreements contained herein and other good and valuable consideration, the Company and Executive agree as follows:

2.0 DEFINITIONS.

2.1 Affiliate: “Affiliate” means, with respect to any party, any corporation, limited liability company, partnership, joint venture, firm and/or other entity which Controls, is Controlled by or is under common Control with such party.

2.2 Board of Directors: “Board of Directors” shall mean the board of directors of the Company.

2.3 Business: “Business” means the operation of “MEET ME ROOMs” and network interconnection facilities for “Layer One” or “Layer Two” interconnectivity.

2.4 Change in Control: “Change in Control” shall mean the first of the following to occur after the IPO Closing:

(i) Acquisition of Controlling Interest. Any person or entity (other than persons who are employees at any time more than one year before a transaction) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities. In applying the preceding sentence, (I) securities acquired from the Company by or for the person or entity shall not be taken into account, and (II) an agreement to vote securities shall be disregarded unless its ultimate purpose is to cause what would otherwise be a Change in Control, as reasonably determined by the Board.

(ii) Change in Board Control. During any consecutive two-year period commencing after the IPO Closing, individuals who constituted the Board of Directors at the beginning of the period (or their approved replacements, as defined in the next sentence) cease for any reason to constitute a majority of the Board of Directors. A new Director shall be considered an “approved replacement” Director if his or her election (or nomination for election) was approved by a vote of at least a majority of the Directors then still in office who either were Directors at the beginning of the period or were themselves approved replacement Directors, but in either case excluding any Director whose initial assumption of office occurred as a result of an actual or threatened solicitation of proxies or consents by or on behalf of any person or entity other than the Board of Directors.

(iii) Merger. The Company consummates a merger, or consolidation of the Company with any other corporation unless: (a) the voting securities of the Company outstanding immediately before the merger or consolidation would continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; and (b) no person or entity (other than persons who are employees at any time more than one year before the transaction) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities.

(iv) Sale of Assets. The stockholders of the Company approve an agreement for the sale of disposition by the Company of all, or substantially all, of the Company’s assets.

(v) Liquidation or Dissolution. The stockholders of the Company approve a plan or proposal for liquidation or dissolution of the Company.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in any entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

In addition, for the avoidance of doubt, notwithstanding the foregoing or anything to the contrary in this Agreement, a “Change in Control” shall not be deemed to have occurred until after the occurrence of the IPO Closing.

2.5 Code: “Code” means the Internal Revenue Code of 1986, as amended.

2.6 Common Stock: “Common Stock” means common stock, par value $0.0001 per share, of the Company.

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2.7 Compensation Committee: “Compensation Committee” shall mean a committee of the Board of Directors which has been delegated responsibility for employee compensation matters or, in the absence thereof, the entire Board of Directors.

2.8 Confidential and Proprietary Information: “Confidential and Proprietary Information” means all proprietary trade secrets and/or proprietary information and any information, concept or idea in whatever form, tangible or intangible, pertaining in any manner to the business of the Company or any Affiliate of the Company, or to the Company’s (or any of the Company’s Affiliates’) customers, clients, consultants, Referral Sources (as defined below) or business associates, unless the information is or becomes publicly known through lawful means (other than disclosure by Executive, unless such disclosure by Executive is made in good faith in the course of performing Executive’s duties under this Agreement, or with the express written consent of the Board of Directors). As used herein, “Referral Source” means any person or entity that, directly or indirectly, refers customers or business to the Company.

2.9 Control: “Control” means (i) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or participating assets entitled to vote for the election of directors; and (ii) in the case of non-corporate entities (such as individuals, limited liability companies, partnerships or limited partnerships), either (A) direct or indirect ownership of at least fifty percent (50%) of the equity interest, or (B) the power to direct the management and policies of the noncorporate entity.

2.10 Covered Entity: “Covered Entity” means every Affiliate of Executive, and every business, association, trust, corporation, partnership, limited liability company, proprietorship or other entity in which Executive has invested in (whether through debt or equity securities), or has contributed any capital or made any advances to, or in which any Affiliate of Executive has an ownership interest or profit sharing percentage, or a firm from which Executive or any Affiliate of Executive receives or is entitled to receive income, compensation or consulting fees in which Executive or any Affiliate of Executive has an interest as a lender (other than solely as a trade creditor for the sale of goods or provision of services that do not otherwise violate the provisions of this Agreement). The agreements of Executive contained herein specifically apply to each entity which is presently a Covered Entity or which becomes a Covered Entity subsequent to the date of this Agreement. Notwithstanding anything contained in the foregoing provisions to the contrary, the term “Covered Entity” shall not include the Company, any subsidiary of the Company, or any Affiliate of the Company or any such subsidiary.

2.11 Discharge For Cause: “Discharge For Cause” shall mean termination of employment for any one or more of the following: (i) gross negligence or willful misfeasance demonstrated by Executive in the performance of his duties; (ii) refusal by Executive to perform ethical and lawful duties assigned by the Board of Directors or the Company’s Chief Executive Officer that continues uncured for fifteen (15) days following receipt of written notice from a majority of the Board of Directors, the Company’s Chief Executive Officer, or the Compensation Committee; (iii) Executive engaging in any act of fraud or embezzlement which adversely affects the Company or any of its Affiliates (including, without limitation, the reputation of the Company or any of its Affiliates); (iv) Executive engaging in any act of dishonesty the purpose or effect of which adversely affects the Company or any of its Affiliates (including, without limitation, the reputation of the Company or any of its Affiliates); (v) Executive breaching in any material

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respect any provision contained in Section 3.2, 4.7 or 4.8 of this Agreement, which such breach is not cured within thirty (30) days after receipt of written notice from the Board of Directors (provided, however, such cure period shall not apply to any breaches of Sections 4.7 or 4.8); (vi) Executive’s commitment of a felony or entering into a plea of guilty or nolo contendere (or its equivalent) to a felony; (vii) Executive’s commencement of employment with another company while he is an employee of the Company without the prior consent of the Board of Directors, (vii) any act of Executive involving moral turpitude that adversely affects Executive’s ability to serve the Company, (viii) Executive’s violation of any federal, state or local law or regulation applicable to the Company, an Affiliate or their respective businesses that causes material injury to the Company or any of its Affiliates (including, without limitation, the reputation of the Company or any of its Affiliates) or Employee’s intentional or knowing violation of any law or regulation applicable to the Company; or (ix) Executive’s conduct that constitutes a material breach of any statutory or common law duty of loyalty to the Company or any of its Affiliates.

2.12 Discharge Without Cause: “Discharge Without Cause” shall mean the Company’s termination of Executive’s employment hereunder during the Term (as defined in Section 4.1 below) for any reason other than a Discharge For Cause or due to Executive’s death or Permanent Disability.

2.13 IPO Closing: “IPO Closing” means the closing of an initial public offering of the Company’s common stock pursuant to a registration statement declared effective by the Securities and Exchange Commission after the Effective Date.

2.14 Permanent Disability: “Permanent Disability” shall mean Executive’s inability to perform Executive’s duties hereunder due to a physical or mental condition for (a) a period of ninety (90) consecutive days or (b) an aggregate of one hundred twenty (120) days in any twelve (12) month period.

2.15 Pro Rated Bonus: “Pro Rated Bonus” shall mean a bonus payment for the year during which Executive’s employment terminates, pro-rated based on the number of days Executive was employed during such bonus period. Such bonus shall be determined based on the same criteria that would have applied absent Executive’s cessation of employment and shall be payable at such time as the bonus would have normally been paid. Notwithstanding the foregoing, in the event Executive’s employment ceases due to a Discharge Without Cause, or Termination For Good Reason, in connection with a Change in Control or during the twenty four (24) month period following a Change in Control, then Executive shall instead receive a prorated bonus based on the most recent bonus the Company paid to Executive prior to the date of such cessation of employment, and such bonus shall be payable within 10 days following such termination.

2.16 Subsidiary: “Subsidiary” shall mean any corporation, trust, general or limited partnership, limited liability company, limited liability partnership, firm, company or other business enterprise which is Controlled by the Company through direct ownership of the stock or other proprietary interests of such business enterprise or indirectly through the ownership of stock or other proprietary interests in one (1) or more other business enterprises which are connected with the Company by means of one (1) or more chains of business enterprises that are connected by ownership of stock or other proprietary interests.

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2.17 Termination For Good Reason: “Termination For Good Reason” shall mean voluntary resignation by Executive through the following actions: (1) the Executive provides the Company with written notice of the existence of any one of the events, arising without the Executive’s consent, listed in clauses (A) through (D) below, within thirty (30) days of the initial existence of such event; (2) the Company fails to cure such event within thirty (30) days following the date such notice is received; and (3) the Executive elects to voluntarily terminate employment within the ninety (90) day period immediately following such event. The events are any one of the following: (A) a material reduction in the Executive’s authorities, duties, and responsibilities such that Executive is no longer a senior executive of the Company, (B) the Executive being required to relocate his permanent residence or place of employment, other than a relocation of his place of employment within the greater New York City metropolitan area, or (C) a material reduction in the Executive’s Base Salary other than any such reduction consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company, or (D) in the event of the sale of substantially all of the assets of the Company, the purchaser of such assets does not assume the obligations of the Company set forth in this Agreement.

2.18 Territory: “Territory” means each and every state, county, city or other political subdivision or geographic location in the United States.

3.0 CAPACITIES AND DUTIES; INDEMNIFICATION.

3.1 Positions: Executive is hereby employed in the capacity of Senior Vice President, General Counsel and Secretary of the Company. Executive shall report to the Company’s Chief Executive Officer. Executive shall have the same status, privileges and responsibilities normally inherent in such capacity in corporations of similar size and character. Executive will at all times abide by the Company’s written personnel policies applicable to similarly situated employees of the Company as in effect from time to time and previously provided to Executive, and will faithfully and to the best of Executive’s ability, experience and talents perform all of the duties that may be required of and from Executive pursuant to the terms hereof, consistent with Executive’s position.

3.2 Exclusive Services; Other Representations: During the Term, Executive agrees to devote Executive’s best efforts and full business time to rendering services to the Company; provided, however, that Executive shall be permitted to serve on the board of directors of various for-profit and non-profit organizations, from time to time, provided (i) such organizations do not compete with the Business in the Territory and (ii) the time expended by Executive in rendering service to such organizations does not, in the aggregate, materially impair Executive’s performance of his duties under this Agreement. Executive is specifically restricted from being employed by any other company, other than a Subsidiary or an Affiliate of the Company, while under the Company’s employ pursuant to this Agreement.

3.3 Indemnification Agreement: The Company will be required, as a condition of Executive’s employment with the Company, to sign the form of indemnification agreement attached hereto as Exhibit A.

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3.4 Proprietary Information and Inventions Assignment: Executive will be required, as a condition of his employment with the Company, to sign the form of proprietary information and inventions assignment agreement attached hereto as Exhibit B.

4.0 EMPLOYMENT, TERM, TERMINATION, CONFIDENTIAL INFORMATION, NON-COMPETE AND NON-SOLICITATION.

4.1 Term: Subject to Sections 4.2, 4.3, 4.4, 4.5 and 4.6, the term of this Agreement shall be three (3) years commencing on the Effective Date, unless terminated earlier pursuant to the terms herein (the “Initial Term”); provided that the Initial Term may be extended for additional periods (each, a “Renewal Term”) on or prior to the expiration of the Initial Term or any such Renewal Term with the mutual agreement in writing of the Company and Executive. The Initial Term or, in the event that Executive’s employment hereunder is terminated earlier pursuant to the terms herein or extended pursuant to this Section 4.1, such shorter or longer period, as the case may be, is referred to herein as the “Term.” Notwithstanding the foregoing or anything to the contrary in this Agreement, (a) Executive’s employment under this Agreement may be terminated by the Company or Executive, for any reason or no reason, at any time prior to the date that is six (6) months after the Effective Date (the “Initial Six Month Period”), (b) in the event that, during the Initial Six Month Period, Executive’s employment under this Agreement is terminated by Executive, for any reason or no reason (including, without limitation, a Termination For Good Reason), or by the Company pursuant to a Discharge For Cause, then Executive shall not be entitled to any severance payments or other benefits (including, without limitation, the Good Reason Severance Package or any other severance payments or other benefits under this Agreement), and (c) in the event that, during the Initial Six Month Period, Executive’s employment under this Agreement is terminated by the Company pursuant to a Discharge Without Cause (an “Initial Six Month Period Without Cause Termination”), then the Without Cause Severance Package shall be reduced and modified as follows: (A) the references to “twelve (12) months” in clauses (i) and (iii) of the definition of Without Cause Severance Package in Section 4.3 below shall be deemed to be “six (6) months”, as provided therein, and (B) the reference to “twelve (12) months” in the second to last sentence of Section 4.3 below shall be deemed to be “six (6) months”, as provided therein.

4.2 Discharge For Cause: Executive’s employment under this Agreement may be terminated by the Company (subject to the notice and cure period set forth in Section 2.11, if applicable), without further obligation by the Company, except for payment of any base salary compensation and expense reimbursement accrued and unpaid to the effective date of termination and except as otherwise required by law, upon written notice to Executive of a Discharge For Cause. Such notification from the Company shall include such facts as shall be reasonably necessary to apprise Executive of the basis for such Discharge For Cause and for Executive to exercise Executive’s right to cure under Section 2.11, if applicable.

4.3 Discharge Without Cause: Executive’s employment under this Agreement may be immediately terminated by the Company upon written notice to Executive of a Discharge Without Cause. Upon termination pursuant to this Section 4.3, for good consideration (including the non-competition agreement described below), Executive shall be entitled to the following benefits (the “Without Cause Severance Package”): (i) continued monthly base salary payments (at the rate in effect at the time of his Discharge Without Cause) for a period of twelve (12)

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months (or, in the case of an Initial Six Month Period Without Cause Termination, six (6) months) from the date of such termination, (ii) a Pro Rated Bonus and (iii) reimbursement for COBRA health insurance costs for twelve (12) months (or, in the case of an Initial Six Month Period Without Cause Termination, six (6) months) or, if shorter, until Executive becomes covered by the group health plan of another employer. Other than the foregoing, Executive shall not be entitled to any payment hereunder for subsequent periods upon Executive’s Discharge Without Cause. The Without Cause Severance Package (other than the Pro Rated Bonus) shall be payable to Executive in accordance with the Company’s general payroll practices as the same may exist from time to time following a Discharge Without Cause. Notwithstanding the forgoing, in the event of Executive’s Discharge Without Cause in connection with a Change of Control or during the twenty four (24) month period following a Change in Control, such twelve (12) months (or, in the case of an Initial Six Month Period Without Cause Termination, six (6) months) of base salary severance shall be payable in a lump sum on the third business day following the expiration of the seven (7) day revocation period applicable to the Release attached hereto as Exhibit C (the “Release”). As a condition to receiving the Without Cause Severance Package, Executive shall execute within 30 days after terminating employment (i) the Release and (ii) a non-competition and non-solicitation agreement having a term of at least twelve (12) months, and with terms and subject to conditions substantially similar to those contained in Section 4.8 of this Agreement.

4.4 Termination For Good Reason: Executive’s employment under this Agreement may be terminated by Executive (subject to the notice and cure period set forth in Section 2.17) upon written notice to the Company of a Termination For Good Reason. Upon termination pursuant to this Section 4.4, for good consideration (including the non-competition agreement described below), Executive shall be entitled to the following benefits (the “Good Reason Severance Package”): (i) Executive shall receive continued monthly base salary payments (at the rate in effect at the time of his Termination for Good Reason) for a period of twelve (12) months from the date of such termination, (ii) a Pro Rated Bonus, and (iii) reimbursement for COBRA health insurance costs for twelve (12) months (or, if shorter, until Executive becomes covered by the group health plan of another employer). Other than the foregoing, Executive shall not be entitled to any payment hereunder for subsequent periods upon Executive’s Termination For Good Reason. The Good Reason Severance Package (other than the Pro Rated Bonus) shall be payable to Executive in accordance with the Company’s general payroll practices as the same may exist from time to time following Executive’s termination of employment upon a Termination For Good Reason. Notwithstanding the foregoing, in the event of Executive’s Termination For Good Reason in connection with a Change of Control or during the twenty four (24) month period following a Change in Control, such twelve (12) months of base salary severance shall be payable in a lump sum on the third business day following the expiration of the seven (7) day revocation period applicable to the Release. As a condition to receiving the Good Reason Severance Package, Executive shall execute within 30 days after terminating employment (i) the Release and (ii) a non-competition and non-solicitation agreement having a term of at least twelve (12) months, and with terms and subject to conditions substantially similar to those contained in Section 4.8 of this Agreement.

4.5 Termination Upon Death: This Agreement shall immediately terminate without action or notice by either party upon the death of Executive and without further obligation by the Company, except for (i) payment of all amounts of base salary compensation and expense reimbursement accrued and unpaid to the effective date of termination, (ii) a Pro Rated Bonus and (iii) as otherwise required by law.

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4.6 Termination Upon Permanent Disability: Executive’s employment under this Agreement may be immediately terminated by the Company upon written notice to Executive of a termination for the Permanent Disability of Executive and without further obligation by the Company, except for (i) payment of all amounts of base salary compensation and expense reimbursement accrued and unpaid to the effective date of termination (ii) a Pro Rated Bonus and (iii) as otherwise required by law.

4.7 Confidential and Proprietary Information: Executive agrees that he will not, either directly or indirectly, and Executive will not permit any Covered Entity which is Controlled by Executive to, either directly or indirectly, divulge to any person or entity or use any of the Confidential and Proprietary Information, except (i) as required in connection with the performance of such Executive’s duties to the Company, (ii) as required to be included in any report, statement or testimony requested by any municipal, state or national regulatory body having jurisdiction over Executive or any Covered Entity which is Controlled by Executive, (iii) as required in response to any summons or subpoena or in connection with any litigation, (iv) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to Executive or any Covered Entity which is Controlled by Executive, (v) as required in connection with an audit by any taxing authority, or (vi) is made with the express written consent of the Board of Directors. In the event that Executive or any such Covered Entity which is Controlled by Executive is required to disclose Confidential and Proprietary Information pursuant to the foregoing exceptions, Executive shall promptly notify the Company of such pending disclosure and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential and Proprietary Information. If the Company does not obtain such relief after a period that is reasonable under the circumstances, Executive (or such Covered Entity) may disclose that portion of the Confidential and Proprietary Information that such party is advised by counsel that it is legally compelled to disclose or else stand liable for contempt or suffer censure or penalty. In such cases, Executive shall promptly provide the Company with a copy of the Confidential and Proprietary Information so disclosed. Executive further agrees to execute the Company’s standard proprietary information and inventions assignment agreement or similar agreement.

4.8 Non-Compete and Non-Solicitation:

(a) Except as otherwise explicitly permitted by the last sentence of this Section 4.8(a) of this Agreement, during the Term and for a period of six (6) months thereafter, Executive shall not, either directly or indirectly, individually or by or through any Covered Entity, participate in, assist, aid or advise in any way, any business or enterprise that competes with the Business in the Territory (including, without limitation, providing services to any customer or other person or entity in the Territory). Except as otherwise explicitly permitted by the last sentence of this Section 4.8(a) of this Agreement, during the Term and for a period of six (6) months thereafter, Executive shall not, either directly or indirectly, individually or by or through any Covered Entity, invest in (whether through debt or equity securities), contribute any capital or make any advances to, take an ownership interest or profit-sharing percentage in, seek to purchase

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or acquire, or receive income, compensation or consulting fees from, any entity or person involved in the Business in the Territory. Notwithstanding the foregoing, nothing contained in this Section 4.8(a) prohibits Executive or any Affiliate of Executive from owning (i) less than five percent (5%) of any class of voting securities publicly held and quoted on a recognized securities exchange or inter-deal quotation system, of any issuer, and (ii) an immaterial amount of a Covered Entity as a result of a purchase decision made by a third party after the Effective Date without the knowledge of Executive and no such issuer shall be considered a Covered Entity solely by virtue of such ownership or the incidents thereof.

(b) During the Term and for a period of six (6) months thereafter, Executive will not, either directly or indirectly and will not permit any Covered Entity which is Controlled by Executive to, either directly or indirectly, (i) solicit, or take any other action that is intended to solicit, the business of any customers or Referral Sources with which the Company or any of its Affiliates conducts business or receives referrals or has conducted business or received referrals within the 12 months preceding such solicitation or other action; or (ii) hire, solicit, take away, or attempt to hire, solicit or take away (either on such Executive’s behalf or on behalf of any other person or entity) any person (1) who is then an employee of the Company or any Affiliate of the Company; or (2) who has terminated his or her employment with the Company or any Affiliate of the Company within the 12 months preceding such hiring, solicitation or other action.

(c) Executive agrees that the payment of any amount of any Without Cause Severance Package or Good Reason Severance Package is conditioned on Executive’s compliance with this Section 4.8 and that the Company will have the right to cease making further payments if Executive breaches this Section 4.8. In the event the Company makes any payment(s) with respect to a Without Cause Severance Package or Good Reason Severance Package after Executive has breached this Section 4.8 and the Company is unaware of such breach at the time such payment(s) are made (the “Post-Breach Payments”), then Executive shall promptly return the Post-Breach Payments to the Company.

4.9 Enforcement; Remedies: Executive agrees and acknowledges that the Company has a valid and legitimate business interest in protecting the Business in the Territory from any activity prohibited by Section 4.7 or 4.8 of this Agreement. Executive acknowledges that Executive’s expertise in the Business is of a special and unique character which gives this expertise a particular value, and that a breach of Section 4.7 or 4.8 of this Agreement by Executive will cause serious and potentially irreparable harm to the Company. Executive therefore acknowledges that a breach of Section 4.7 or 4.8 of this Agreement by Executive cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the Company from a violation of this Agreement and from the harm which this Agreement is intended to prevent. By reason thereof, Executive acknowledges that the Company is entitled, in addition to any other remedies it may have under this Agreement or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach of this Agreement without any requirement to post bond. Executive acknowledges, however, that no specification in this Agreement of a particular legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Executive.

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4.10 Tolling. In the event of a breach by Executive of any covenant set forth in Section 4.8 hereof, the running of the period of restriction shall be automatically tolled and suspended for the amount of time that the breach continues, and shall automatically recommence when the breach is remedied so that the Company shall receive the full benefit of Executive’s compliance with the covenants.

5.0 COMPENSATION AND BENEFITS. For Executive’s services, the Company agrees to pay Executive compensation as follows:

5.1 Salary: Base compensation equal to an annual salary of $200,000 is to be paid according to the Company’s general payroll practices as same may exist from time to time. Executive’s base compensation will be subject to annual reviews and increases as approved by the Board of Directors or Compensation Committee.

5.2 Annual Bonus: Executive shall be eligible to receive an annual target bonus of $170,000, payable annually in the discretion of the Board of Directors. Any annual bonus payments shall be prorated based on Executive’s duration of service in such year; provided, however, no bonus will be payable to Executive in the event of a Discharge for Cause or the resignation by Executive (other than resignation upon expiration of the Term or through Termination For Good Reason).

5.3 Equity Awards.

(a) If the IPO Closing occurs prior to December 31, 2010, then, in connection with the IPO Closing, Executive will be granted (A) a number of restricted share units (“RSUs”) with an aggregate value of approximately $200,000 (which such value will be based on the price per share at which the Company’s common stock is sold to the public in connection with the IPO Closing) and (B) a number of options to purchase the Company’s common stock (“Options”) with an aggregate value of approximately $200,000 (which shall be based upon the value used by the Company with respect to such options for purposes of the Company’s financial statements). Each of the RSUs and Options described above (X) will vest with respect to twenty-five percent (25%) of the number of shares subject to such award on each of the first four anniversary dates of the grant date of such award (subject to Executive continuing to be employed by the Company as of each such vesting date) and (Y) shall be subject to (1) the terms and conditions of an equity or stock incentive plan approved and adopted by the Company, (2) in the case of the RSUs, the terms and conditions of a restricted unit award agreement or similar agreement approved by the Board of Directors and/or Compensation Committee, and (3) in the case of the Options, the terms and conditions of a stock option award agreement or similar agreement approved by the Board of Directors and/or Compensation Committee.

(b) If the IPO Closing does not occur prior to December 31, 2010, then, Executive will be granted (A) a number of RSUs (or shares of restricted stock) with an aggregate value of approximately $200,000 (which such value shall be based on a valuation approved by the Board of Directors and/or the Compensation Committee) and (B) a number of Options with an aggregate value of approximately $200,000 (which shall be based upon the value used by the Company with respect to such options for purposes of the Company’s financial statements). Each of the RSUs (or shares of restricted stock) and Options described above (X) will vest with respect

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to twenty-five percent (25%) of the number of shares subject to such award on each of the first four anniversary dates of the grant date of such award (subject to Executive continuing to be employed as of each such vesting date) and (Y) shall be subject to (1) the terms and conditions of an equity or stock incentive plan approved and adopted by the Company, (2) in the case of the RSUs (or shares of restricted stock), the terms and conditions of a restricted unit award or stock agreement or similar agreement approved by the Board of Directors and/or Compensation Committee, and (3) in the case of the Options, the terms and conditions of a stock option award agreement or similar agreement approved by the Board of Directors and/or Compensation Committee.

(c) In addition, at the discretion of the Board of Directors and/or the Compensation Committee, Executive may receive annual grants of stock options and/or RSUs (or restricted stock).

5.4 Reimbursement of Expenses: The Company shall reimburse Executive for any reasonable business expenses (including reasonable expenses for travel and lodging in connection with Executive’s travel to the Company’s offices from Executive’s permanent residence in the State of Florida for purposes of Executive performing his duties to the Company hereunder) incurred by Executive in the ordinary course of the Company’s business in accordance with the Company’s reimbursement policies then in effect. These expenses shall be substantiated by invoices and receipts, to be submitted by Executive within thirty (30) days after incurrence, with all reimbursements so submitted within such 30-day period being made within ninety (90) days after Executive incurs the underlying expense.

5.5 Benefits: During the Term, Executive shall be entitled to receive all benefits of employment generally available to the Company’s other executive employees to the extent Executive is eligible for them, including, at a minimum, medical, dental and disability insurance and participation in the Company’s 401(k) plan, except to the extent that such participation in any benefits plan would, in the opinion of the Board of Directors, alter the intended tax treatment of such plan.

5.6 Vacation: Executive shall be entitled to five weeks of vacation per each calendar year of service.

5.7 Withholding: Executive authorizes the Company to make any and all applicable withholdings of federal and state taxes and other items the Company may be required to deduct, as such items may exist under this Agreement or otherwise from time to time.

6.0 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, successors and assigns, except that Executive shall not have any right to assign or otherwise transfer this Agreement or any of Executive’s rights, duties or any other interest herein (except in connection with any assignment of rights to receive consideration hereunder by or to Executive’s estate made upon the death of Executive) to any party without the prior written consent of the Company, and any such purported assignment shall be null and void. Notwithstanding the foregoing, the Company may without obtaining the consent of Executive, assign any or all of its rights and obligations under this Agreement to any of its Affiliates or to its lenders as collateral security. To the extent that the Company assigns its rights and obligations hereunder, the Company shall not be relieved of its obligations hereunder in respect of any such assignment.

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7.0 SURVIVAL OF RIGHTS AND OBLIGATIONS. The rights and obligations of the parties as stated herein shall survive the termination of this Agreement.

8.0 ENTIRE AGREEMENT.

8.1 Sole Agreement: This Agreement (including any attachments and exhibits hereto) contains the parties’ sole and entire agreement regarding the subject matter hereof, and supersedes any and all other agreements, understandings, statements and representations of the parties, including, but not limited to, any employment agreement or other agreement regarding Executive’s compensation or terms of employment entered into prior to the Effective Date.

8.2 No Other Representations: The parties acknowledge and agree that, except for those representations specifically referenced herein, no party has made any representations (a) concerning the subject matter hereof or (b) inducing the other party to execute and deliver this Agreement. The parties have relied on their own judgment in entering into this Agreement.

9.0 MODIFICATIONS OR WAIVERS. Waivers or modifications of this Agreement, or of any covenant, condition, or limitation contained herein, are valid only if in writing duly executed by the parties hereto.

10.0 GOVERNING LAW. This Agreement shall be governed pursuant to the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.

11.0 SEVERABILITY. In the event that any provision or term of this Agreement, or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographic and temporal restrictions and provisions contained in this Agreement) is held to be unenforceable or invalid for any reason, such provision or portion thereof will be modified or deleted in such a manner as to make this Agreement, as modified, legal and enforceable to the fullest extent permitted under applicable laws.

12.0 INTERPRETATION; SECTION HEADINGS. The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

13.0 NOTICES. All notices and other communications under or in connection with this Agreement shall be in writing and shall be deemed given (i) if delivered personally, upon delivery, (ii) if delivered by registered or certified mail (return receipt requested), upon the earlier of actual delivery or three (3) days after being mailed, (iii) if given by overnight courier with receipt acknowledgment requested, the next business day following the date sent, or (iv) if given by facsimile or telecopy, upon confirmation of transmission by facsimile or telecopy, in each case to the parties at the following addresses:

To the Company:	The Telx Group, Inc.
	1 State Street
	21st Floor
	New York, NY 10004
	Attention: Chief Executive Officer

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	and to
	Dan Schulman
	27 Valley View Road
	Warren, NJ 07059
	Facsimile: (908) 604-4636
with a copy to:	GI Partners Fund II, L.P.
	GI Partners Side Fund II, L.P.
	2730 Sand Hill Road, Suite 280
	Menlo Park, CA 94025
	Facsimile: (650) 233-3601
	Attention: Howard Park
	and to
	Paul, Hastings, Janofsky & Walker LLP
	875 15th Street, N.W.
	Washington, D.C., 20005
	Facsimile: (202) 551-0180
	Attention: Mark Poerio, Esq.
To Executive:	Clayton Mynard
with a copy to:	Phelps Dunbar LLP
	100 S, Ashley Drive, Suite 1900
	Tampa, FL 33602
	Facsimile: (813) 472-7570
	Attention: John Mullen, Esq.

14.0 JOINT PREPARATION. All parties to this Agreement have negotiated it at length, and have had the opportunity to consult with and be represented by their own competent counsel. This Agreement is therefore deemed to have been jointly prepared by the parties, and any uncertainty or ambiguity existing in it shall not be interpreted against any party, but rather shall be interpreted according to the rules generally governing the interpretation of contracts.

15.0 THIRD-PARTY BENEFICIARIES. No term or provision of this Agreement is intended to be, or shall be, for the benefit of any person, firm, organization, corporation or entity not a party hereto, and no such other person, firm, organization, corporation or entity shall have any right or cause of action hereunder.

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16.0 ARBITRATION.

(a) Any controversy, claim or dispute involving the parties (or their affiliated persons or entities) directly or indirectly concerning this Agreement, or the subject matter thereof, shall be finally settled by arbitration held in New York, New York by one (1) arbitrator in accordance with the rules of employment arbitration then followed by the American Arbitration Association or any successor to the functions thereof. The arbitrator shall apply New York law in the resolution of all controversies, claims and disputes and shall have the right and authority to determine how his or her decision or determination as to each issue or matter in dispute may be implemented or enforced. Any decision or award of the arbitrator shall be final and conclusive on the parties to this Agreement and their respective Affiliates, and there shall be no appeal therefrom other than from gross negligence or willful misconduct. Notwithstanding the foregoing, claims regarding worker’s compensation and unemployment compensation benefits shall not be subject to arbitration under this Agreement. The Company shall bear all costs of the arbitrator in any action brought under this Section 16.0.

(b) The parties hereto agree that any action to compel arbitration pursuant to this Agreement may be brought in any appropriate state court in New York, and in connection with such action to compel, the laws of New York shall control. Application may also be made to such court for confirmation of any decision or award of the arbitrator, for an order of the enforcement and for any other remedies which may be necessary to effectuate such decision or award. The parties hereto hereby consent to the jurisdiction of the arbitrator and of such court and waive any objection to the jurisdiction of such arbitrator and court.

(c) Notwithstanding the foregoing, the Company shall be entitled to seek injunctive relief, in any court of competent jurisdiction, to enforce this Agreement and this Section 16.0 shall not limit the right of the Company to seek judicial relief pursuant to Section 4.9 of this Agreement without prior arbitration.

17.0 COOPERATION AND FURTHER ACTIONS. The parties agree to perform any and all acts and to execute and deliver any and all documents necessary or convenient to carry out the terms of this Agreement. Both during and following the termination of Executive’s employment with the Company, for no additional consideration, Executive agrees to assist the Company and its Affiliates with respect to litigation or other third party claims relating to the period of Executive’s employment. The Company shall pay any out of pocket expenses incurred by Executive in connection with his rendering of such assistance.

18.0 ATTORNEYS’ FEES. In the event of any dispute related to or based upon this Agreement, the prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees and costs.

19.0 COUNTERPARTS. This Agreement may be executed in one or more counterparts, including electronically transmitted counterparts, each of which shall be deemed an original and all of which shall be considered one and the same instrument.

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20.0 INTERNAL REVENUE CODE SECTION 409A. Notwithstanding any provision of this Agreement to the contrary, if all or any portion of the payments and/or benefits under this Agreement are determined to be “nonqualified deferred compensation” subject to Section 409A of the United States Internal Revenue Code of 1986, as amended (the “Code”), and the Company determines that Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the final regulations promulgated thereunder (the “Treasury Regulations”) and other guidance issued thereunder, then such payments and/or benefits (or portion thereof) shall be paid no earlier than the first day of the seventh month following Executive’s termination of employment, with any affected payments being made within ten business days after the end of such period of delay. For purposes of the Without Cause Severance Pay, a termination of employment shall only be deemed to occur if such termination constitutes a “separation from service”, as defined in Section 1.409A-1(h) of the Treasury Regulations, including the default presumptions thereunder. The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and the parties agree to use their best efforts to achieve timely compliance with, Section 409A of the Code, and the Department of Treasury Regulations and other interpretive guidance issued thereunder (“Section 409A”), including without limitation any such regulations or other guidance that may be issued after the Effective Date.

21.0 INTERNAL REVENUE CODE SECTION 280G. To the extent that due to the application of Internal Revenue Code Section 280G, reducing the benefits payable to Executive hereunder would increase the overall after tax proceeds to Executive, such benefits shall be reduced in a manner designed to produce the maximum after tax proceeds for Executive (including, if applicable, reducing Executive’s cash payments prior to canceling equity or option acceleration benefits).

22.0 MITIGATION WITH RESPECT TO SEVERANCE AMOUNTS. Subject to the terms and conditions of this Agreement, in the event that Executive is entitled under this Agreement to receive the Without Cause Severance Package or Good Reason Severance Package, as applicable, such severance amounts to which Executive is entitled (subject to the terms and conditions of this Agreement, including, without limitation, Section 4.8(c) hereof) shall not be reduced as a result of any duty to mitigate damages or by the amount of compensation Executive receives from other employers during the period in which such severance amounts are paid.

[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly authorized representatives to execute, this Agreement as of the date first set forth above.

The Telx Group, Inc.
a Delaware corporation
By:	/s/ Eric Shepcaro
Name:	Eric Shepcaro
Title:	CEO

Executive

/s/ Clayton Mynard

Clayton Mynard

EXHIBIT A

FORM OF INDEMNIFICATION AGREEMENT

EXHIBIT B

FORM OF PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

EXHIBIT C

FORM OF RELEASE

RELEASE

In exchange for good and valuable consideration set forth in that certain Executive Employment Agreement (the “Executive Employment Agreement”) between the undersigned, Clayton Mynard (“Executive”), and The Telx Group, Inc., a Delaware corporation (“Telx”), the sufficiency of which is hereby acknowledged, Executive, on behalf of himself, his executors, heirs, administrators, assigns and anyone else claiming by, through or under Executive, irrevocably and unconditionally, releases, and forever discharges Telx, GI Partners Fund II, L.P., GI Partners Side Fund II, L.P. and their respective predecessors, successors and related and affiliate entities, including parents and subsidiaries, and each of their respective directors, officers, employees, attorneys, insurers, agents and representatives (collectively, the “Company”), from, and with respect to, any and all debts, demands, actions, causes of action, suits, covenants, contracts, wages, bonuses, damages and any and all claims, demands, liabilities, and expenses (including, without limitation, attorneys’ fees and costs) whatsoever of any name or nature both in law and in equity (severally and collectively, “Claims”) that Executive now has, ever had or may in the future have against the Company by reason of any matter, cause or thing that has happened, developed or occurred, and any Claims that have arisen, before the signing of this Release, including but not limited to, any and all Claims in tort or contract, whether by statute or common law, and any Claims relating to salary, wages, bonuses and commissions, the breach of an oral or written contract, unjust enrichment, promissory estoppel, misrepresentation, defamation, and interference with prospective economic advantage, interference with contract, wrongful termination, intentional and negligent infliction of emotional distress, negligence, breach of the covenant of good faith and fair dealing, and Claims arising out of, based on, or connected with Executive’s employment by the Company and the termination of that employment as set forth in the Executive Employment Agreement, including, without limitation, any Claims for unlawful employment discrimination of any kind, whether based on age, race, sex, disability or otherwise, including specifically and without limitation, claims arising under or based on Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act, as amended; the Civil Rights Act of 1991; the Family and Medical Leave Act; the Americans with Disabilities Act; the Fair Labor Standards Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act of 1963; and any other local, state or federal equal employment opportunity or anti-discrimination law, statute, policy, order, ordinance or regulation affecting or relating to Claims that Executive ever had, now has, or claims to have against the Company.

Executive understands and agrees that the releases provided above extend to all Claims released above whether known or unknown, suspected or unsuspected. Executive expressly waives and releases any rights and benefits which he has or may have under any law or rule of any jurisdiction pertaining to the matters released herein. It is the intention of Executive through this Agreement and with the advice of counsel to fully, finally and forever settle and release the Claims set forth above. In furtherance of such intention, the releases herein given shall be and remain in effect as full and complete releases of such matters notwithstanding the discovery of any additional Claims or facts relating thereto

Executive warrants and represents that Executive has not assigned or transferred to any person or entity any of the Claims released by this Release, and Executive agrees to defend (by counsel of the Company’s choosing), and to indemnify and hold harmless, the Company from and against any claims based on, in connection with, or arising out of any such assignment or transfer made, purported or claimed.

Notwithstanding anything to the contrary in this Release or the Executive Employment Agreement, the foregoing release shall not cover, and Executive does not intend to release, (i) any rights of indemnification under Telx’s certificate of incorporation, as amended (the “Certificate”), bylaws, as amended (the “Bylaws”) or any indemnification agreement entered into between the Company and Executive ( the “Indemnification Agreement”), as applicable, (ii) any obligations of Telx to pay Executive pursuant to the Without Cause Severance Package (as defined in the Executive Employment Agreement) or Good Reason Severance Package (as defined in the Executive Employment Agreement), as applicable, pursuant to Sections 4.3 or 4.4, as applicable, of the Executive Employment Agreement, or (iii) Executive’s rights with respect to Executive’s accrued salary since Telx’s last payroll, accrued bonus rights with respect to a completed year, accrued business expenses reimbursement or existing group insurance plans or ERISA plans of Telx, in each case to the extent provided in Telx’s applicable policies and not previously paid. Executive further acknowledges that Telx’s obligations under the Certificate or Bylaws are conditioned upon receipt by Telx of an undertaking by Executive to repay the amount if it shall be determined by a court of competent jurisdiction that Executive is not entitled to be indemnified by Telx under the Certificate, Bylaws or Indemnification Agreement.

EXECUTIVE HAS READ THIS RELEASE AND BEEN PROVIDED A FULL AND AMPLE OPPORTUNITY TO STUDY IT, AND EXECUTIVE UNDERSTANDS THAT THIS IS A FULL, COMPREHENSIVE AND RELEASE AND INCLUDES ANY CLAIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED IN WRITING TO CONSULT WITH LEGAL COUNSEL BEFORE SIGNING THIS RELEASE AND THE EXECUTIVE EMPLOYMENT AGREEMENT, AND EXECUTIVE HAS CONSULTED WITH AN ATTORNEY. EXECUTIVE WAS GIVEN A PERIOD OF AT LEAST TWENTY-ONE DAYS TO CONSIDER SIGNING THIS RELEASE, AND EXECUTIVE HAS SEVEN DAYS FROM THE DATE OF SIGNING TO REVOKE EXECUTIVE’S ACCEPTANCE BY DELIVERING TIMELY NOTICE OF HIS REVOCATION TO THE BOARD OF DIRECTORS OF THE TELX GROUP, INC. AT ITS PRINCIPAL PLACE OF BUSINESS. EXECUTIVE IS SIGNING THIS RELEASE VOLUNTARILY, WITHOUT COERCION, AND WITH FULL KNOWLEDGE THAT IT IS INTENDED, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AS A COMPLETE AND FINAL RELEASE AND WAIVER OF ANY AND ALL CLAIMS. EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE PAYMENTS SET FORTH IN THE EXECUTIVE EMPLOYMENT AGREEMENT ARE CONTINGENT UPON EXECUTIVE SIGNING THIS RELEASE AND WILL BE PAYABLE ONLY IF AND AFTER THE REVOCATION PERIOD HAS EXPIRED.

[SIGNATURE PAGE(S) TO FOLLOW]

Executive has read this Release, fully understand it and freely and knowingly agree to its terms.

Dated this              day of             , 20    .

  Signature

  Printed Name

AGREED AND ACCEPTED:

The Telx Group, Inc.

By:

Title:

Date:

EX-10.55

Exhibit 10.55

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into between The Telx Group, Inc., a Delaware corporation (the “Company”), and Brad Hokamp (“Employee”), and shall be effective as of March 1, 2010 (the “Effective Date”).

1.0 RECITALS.

1.1 The Company desires to employ Employee, and Employee desires to be so employed by the Company, on the terms and subject to the conditions set forth in this Agreement; and

1.2 As an employee of the Company, Employee shall have access to valuable confidential and proprietary information used in the business of the Company, including financial data, customer data, operational data, trade secrets and other intellectual property that if disclosed to or used by competitors or potential competitors would cause irreparable harm to the Company, and as a result, Employee and the Company desire to provide the Company with adequate protection from the unauthorized disclosure or use of the Company’s confidential and proprietary information.

NOW, THEREFORE, in consideration of the foregoing facts, the mutual covenants and agreements contained herein and other good and valuable consideration, the Company and Employee agree as follows:

2.0 DEFINITIONS.

2.1 Affiliate: “Affiliate” means, with respect to any party, any corporation, Limited Liability Company, partnership, joint venture, firm and/or other entity which Controls, is Controlled by or is under common Control with such party.

2.2 Board of Directors: “Board of Directors” shall mean the board of directors of the Company.

2.3 Business: “Business” means the operation of “MEET-ME-ROOMs”, colocation facilities, and network interconnection facilities and providing peering and interconnection services.

2.4 Code: “Code” means the Internal Revenue Code of 1986, as amended.

2.5 Common Stock: “Common Stock” means common stock, par value $0.0001 per share, of the Company.

2.6 Confidential and Proprietary Information: “Confidential and Proprietary Information” means all proprietary trade secrets and/or proprietary information and any information, concept or idea in whatever form, tangible or intangible, pertaining in any manner to the business of the Company or any Affiliate of the Company, or to the Company’s (or any of the Company’s Affiliates’) customers, clients, consultants, Referral Sources (as defined below) or business associates, unless the information is or becomes publicly known through lawful means (other than disclosure by Employee, unless such disclosure by Employee is made in good faith in the course of performing Employee’s duties under this Agreement, or with the express written consent of the Board of Directors). As used herein, “Referral Source” means any person or entity that, directly or indirectly, refers customers or business to the Company.

2.7 Control: “Control” means (i) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or participating assets entitled to vote for the election of directors; and (ii) in the case of non-corporate entities (such as individuals, limited liability companies, partnerships or limited partnerships), either (A) direct or indirect ownership of at least fifty percent (50%) of the equity interest, or (B) the power to direct the management and policies of the noncorporate entity.

2.8 Covered Entity: “Covered Entity” means every Affiliate of Employee, and every business, association, trust, corporation, partnership, limited liability company, proprietorship or other entity in which Employee has invested in (whether through debt or equity securities), or has contributed any capital or made any advances to, or in which any Affiliate of Employee has an ownership interest or profit sharing percentage, or a firm from which Employee or any Affiliate of Employee receives or is entitled to receive income, compensation or consulting fees or in which Employee or any Affiliate of Employee has an interest as a lender (other than solely as a trade creditor for the sale of goods or provision of services that do not otherwise violate the provisions of this Agreement). The agreements of Employee contained herein specifically apply to each entity which is presently a Covered Entity or which becomes a Covered Entity subsequent to the date of this Agreement. Notwithstanding anything contained in the foregoing provisions to the contrary, the term “Covered Entity” shall not include the Company, any subsidiary of the Company, or any Affiliate of the Company or any such subsidiary.

2.9 Disability: “Disability” shall mean a good faith determination by the Board of Directors that Employee is unable to perform Employee’s duties and responsibilities contemplated by this Agreement as a result of physical or mental incapacity, illness or other condition, whether total or partial, which inability continues for a period exceeding 90 consecutive days or shorter periods exceeding 90 days in the aggregate during any twelve (12) month period. This definition should be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.

2.10 Discharge For Cause: “Discharge For Cause” shall mean termination of Employee’s employment by the Company for any one or more of the following: (i) gross negligence or willful misfeasance or nonfeasance by Employee in the performance of his duties (which includes, without limitation, willful failure to follow the directions of the Board of Directors or the Chief Executive Officer); (ii) Employee engaging in any act of fraud or embezzlement; (iii) Employee engaging in any illegal conduct or in any act of dishonesty or moral turpitude, the purpose or effect of which adversely affects the Company or any of its Affiliates (including, without limitation, the reputation of the Company or any of its Affiliates); (iv) Employee breaching in any material respect any material provision of this Agreement or any material employee policy or procedure of the Company, which breach is not cured within thirty (30) days after receipt of written notice from the Company (provided, however, it being understood that (x) any breach of any provision of Section 5 shall be deemed material and (y) such cure period shall not apply to any breach of any provision of Section 5); (v) Employee committing, or entering a plea of guilty or nolo contendere (or its equivalent) to, a felony; (vi) Employee’s willful violation of any federal, state or local law or regulation applicable to the Company, an Affiliate or their respective businesses which causes material injury to the Company or any of its Affiliates (including, without limitation, the reputation of the Company or any of its Affiliates) or Employee’s intentional or knowing violation of any law or regulation applicable to the Company; (vii) Employee’s conduct that constitutes a breach of any statutory or common law duty of loyalty to the Company or any of its Affiliates; or (viii) Employee’s commencement of employment with another company while he is an employee of the Company without the prior consent of the Board of Directors.

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2.11 Discharge Without Cause: “Discharge Without Cause” shall mean the Company’s termination of Employee’s employment hereunder for any reason other than a (i) Discharge For Cause, (ii) termination for Disability or (iii) due to Employee’s death.

2.12 Subsidiary: “Subsidiary” shall mean any corporation, trust, general or limited partnership, limited liability company, limited liability partnership, firm, company or other business enterprise which is Controlled by the Company through direct ownership of the stock or other proprietary interests of such business enterprise or indirectly through the ownership of stock or other proprietary interests in one (1) or more other business enterprises which are connected with the Company by means of one (1) or more chains of business enterprises that are connected by ownership of stock or other proprietary interests.

2.13 Termination For Good Reason: “Termination For Good Reason” shall mean voluntary termination of this Agreement by Employee if any of the following occurs without the prior consent of Employee and in each case which continues uncured for 30 days following receipt by the Company of written notice thereof from Employee: (i) there is a reduction by the Company in (A) Executive’s annual base salary then in effect or (B) the annual target bonus set forth in the first sentence of Section 6.2 hereof (“Bonus Target Amount”) provided, however, Employee acknowledges and agrees that (1) the criteria for achieving such bonuses shall be determined (and may be changed) in the discretion of the Board of Directors and may be based on objective or subjective criteria (or any combination thereof) and (2) the failure of Employee to earn all or any portion of such Bonus Target Amounts shall not be deemed a reduction of such Bonus Target Amounts or provide the basis for a Termination For Good Reason); (ii) the Company reduces Employee’s job title and position such that (A) Employee is no longer Chief Marketing Officer of the Company, (B) Employee no longer reports to the Chief Executive Officer or (C) Employee’s duties, authority and responsibilities is materially diminished (iii) Employee is required to relocate to an office location outside of the Northern Virginia area or (iv) there is a change in Control.

2.14 Territory: “Territory” means each and every state, county, city or other political subdivision or geographic location in the United States.

3.0 CAPACITIES AND DUTIES.

3.1 Positions: Employee is hereby employed in the capacity of Chief Marketing Officer of the Company. Employee will at all times abide by the Company’s written personnel policies applicable to similarly situated employees of the Company as in effect from time to time and previously provided to Employee, and will faithfully and to the best of Employee’s ability, experience and talents perform all of the duties that may be required of and from Employee pursuant to the terms hereof, provided that such duties are consistent with Employee’s positions and level of authority with the Company.

3.2 Exclusive Services: While employed hereunder, Employee agrees to devote Employee’s reasonable best efforts and full business time to rendering services to the Company. Employee is specifically restricted from being employed by any other company, other than a Subsidiary or an Affiliate of the Company, while under the Company’s employ pursuant to this Agreement.

3.3 Proprietary Information and Inventions Assignment: Employee will be required, as a condition of his continued employment with the Company, to sign the proprietary information and inventions assignment agreement attached hereto as Annex A.

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4.0 EMPLOYMENT AND TERMINATION.

4.1 Employment at Will: Subject to the notice and other applicable provisions set forth in this Agreement, both the Company and Employee shall have the right to terminate Employee’s employment with the Company at any time, whether or not as a result of a Discharge For Cause, and without prior notice. If Employee’s employment with the Company is terminated, Employee will be eligible to receive severance benefits only to the extent provided in this Agreement.

4.2 Discharge For Cause: Employee’s employment under this Agreement may be terminated by the Company (subject to the notice and cure period set forth in Section 2.10, if applicable) upon written notice from the Company to Employee of a Discharge For Cause. Such notification from the Company shall include such facts as shall be reasonably necessary to apprise Employee of the basis for such Discharge For Cause. Upon a Discharge For Cause, the Company shall have no further obligation to Employee except for payment of any Base Salary and expense reimbursement accrued and unpaid to the effective date of termination and except as otherwise required by law (the “Accrued Obligations”). The date of Discharge For Cause shall be the date specified in the written notice of Discharge For Cause from the Company to Employee.

4.3 Discharge Without Cause: Employee’s employment under this Agreement may be immediately terminated by the Company upon written notice to Employee of a Discharge Without Cause. Upon a Discharge Without Cause: (a) Employee shall be entitled to receive payment of his Accrued Obligations to the effective date of termination; and (b) subject to Employee’s delivery and nonrevocation of an executed, effective general release in the form that is attached hereto as Annex B and continued compliance with the provisions of Section 5 hereof, Employee shall be entitled to receive (i) an amount equal to twelve (12) months of the Employee’s Base Salary which shall be payable in twelve (12) equal installments during the twelve (12) month period commencing on the date of Discharge Without Cause, (ii)Employee’s Bonus Target Amount for the twelve (12) month period commencing on the date of Discharge Without Cause paid pursuant to the Company’s bonus payment schedule; and (iii) reimbursement for COBRA health insurance costs for twelve (12) months (the “Severance Package”). Other than the foregoing, Employee shall not be entitled to any payment hereunder for subsequent periods upon Employee’s termination of employment upon a Discharge Without Cause. The payments payable under this Section shall be payable to Employee in accordance with the Company’s general payroll practices as the same may exist from time to time following a Discharge Without Cause. The date of Employee’s Discharge Without Cause shall be the date specified in the written notice of termination to Employee.

4.4 Termination Due to Disability: In the event of Employee’s Disability, the Company shall be entitled to immediately terminate his employment upon written notice by the Company to Employee. In the case that the Company terminates Employee’s employment due to Disability, the Company shall have no further obligations to Employee, except for payment of the Accrued Obligations to the effective date of termination. The date of Employee’s termination of employment due to Disability shall be the date specified in the written notice of termination to Employee.

4.5 Termination For Good Reason: Employee’s employment under this Agreement may be terminated by Employee (subject to the notice and cure period set forth in Section 2.15) upon written notice to the Company of a Termination For Good Reason. Upon termination pursuant to this Section 4.4, in return for the non-competition agreement described below, Executive shall be entitled to the Severance Package. Other than the foregoing, Executive shall not be entitled to any payment hereunder for subsequent periods upon Executive’s termination of employment upon a Termination For Good Reason. As a condition to receiving the Termination For Good Reason Severance Package,

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Employee shall execute (i) a release of claims (other than a release of Executive’s claims for amounts required to be paid pursuant to this Section 4.4) in the form attached hereto as Annex B and Employee will confirm that Employee is subject to the non-competition and non-solicitation provisions of this Agreement.

4.6 Termination Upon Death: This Agreement shall immediately terminate without action or notice by either party upon the death of Employee and without further obligation by the Company, except for payment of the Accrued Obligations to the effective date of termination.

5.0 COVENANTS OF EMPLOYEE

5.1 Confidential and Proprietary Information: Employee agrees that he will not, either directly or indirectly, and Employee will not permit any Covered Entity which is Controlled by Employee to, either directly or indirectly, divulge to any person or entity or use any of the Confidential and Proprietary Information, except (i) as required in connection with the performance of such Employee’s duties to the Company, (ii) as required in response to any summons or subpoena or in connection with any litigation, (iii) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to Employee or any Covered Entity which is Controlled by Employee, or (iv) with the express written consent of the Board of Directors. In the event that Employee or any such Covered Entity which is Controlled by Employee is required to disclose Confidential and Proprietary Information pursuant to the foregoing exceptions, Employee shall promptly notify the Company of such pending disclosure and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential and Proprietary Information. If the Company does not obtain such relief prior to the date on which Employee is required to make the disclosure, Employee (or such Covered Entity) may disclose that portion of the Confidential and Proprietary Information that such he is is legally compelled to disclose. In such cases, Employee shall promptly provide the Company with a copy of the Confidential and Proprietary Information so disclosed. Employee shall return all tangible evidence of Confidential and Proprietary Information to the Company prior to or at the termination of his employment.

5.2 Non-Compete and Non-Solicitation:

(a) Except as otherwise explicitly permitted by the last sentence of this Section 5.2(a), while employed with the Company or any of its Affiliates and for a period of twelve (12) months thereafter, Employee shall not, either directly or indirectly, individually or by or through any Covered Entity, participate in, assist, aid or advise in any way, any business or enterprise that competes with the Business in the Territory (including, without limitation, providing services to any customer or other person or entity in the Territory). Except as otherwise explicitly permitted by the last sentence of this Section 5.2(a), while employed with the Company or any of its Affiliates and for a period of twelve (12) months thereafter, Employee shall not, either directly or indirectly, individually or by or through any Covered Entity, invest in (whether through debt or equity securities), contribute any capital or make any advances to, take an ownership interest or profit-sharing percentage in, seek to purchase or acquire, or receive income, compensation or consulting fees from, any entity or person involved in the Business in the Territory. For the avoidance of doubt, an entity whose primary business is not colocation, interconnection, Meet-Me-Room services or peering services, shall not be deemed a competitor with the Company for purposes of this provision. Furthermore, an entity that is primarily in the business of providing telecommunications services or managed hosting services shall also be excluded from the above prohibitions. Notwithstanding the foregoing, nothing contained in this Section 5.2(a) shall prohibit Employee or any Affiliate of Employee from owning less than five percent (5%) of any class of voting securities registered under the Securities Exchange Act of 1934, as amended, and publicly held and quoted on a recognized securities exchange or inter-deal quotation system, of any issuer, and no such issuer shall be considered a Covered Entity solely by virtue of such ownership or the incidents thereof.

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(b) While employed with the Company or any of its Affiliates and for a period of twelve (12) months thereafter, Employee shall not, either directly or indirectly and shall not permit any Covered Entity which is Controlled by Employee to, either directly or indirectly, (i) solicit, or take any other action that is intended to solicit, the business of any customers or Referral Sources with whom Employee had direct or indirect contact or whose identity Employee learned as a result of his employment with the Company and with which the Company or any of its Affiliates conducts business or receives referrals or has conducted business or received referrals within the 12 months preceding such solicitation or other action; or (ii) hire, solicit, take away, or attempt to hire, solicit or take away (either on such Employee’s behalf or on behalf of any other person or entity) any person (A) who is then an employee of the Company or any Affiliate of the Company or (B) who has terminated his or her employment with the Company or any Affiliate of the Company within the 12 months preceding such hiring, solicitation or other action.

(c) Employee hereby acknowledges and agrees that the payment of any amount under the Severance Package is conditioned upon Employee’s compliance with the provisions of this Section 5, and that the Company will have the right to withhold payment if Employee is in breach of any of the provisions of this Section 5.

5.3 Enforcement; Remedies: Employee agrees and acknowledges that the Company has a valid and legitimate business interest in protecting the Business in the Territory from any activity prohibited by this Section 5. Employee acknowledges that Employee’s expertise in the Business is of a special and unique character which gives this expertise a particular value, and that a breach of this Section 5 by Employee will cause serious and irreparable harm to the Company. Employee therefore acknowledges that a breach of this Section 5 by Employee cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the Company from a violation of this Agreement and from the harm which this Agreement is intended to prevent. By reason thereof, Employee acknowledges that the Company is entitled, in addition to any other remedies it may have under this Agreement or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach of this Agreement without any requirement to prove actual damages or post a bond. Employee acknowledges, however, that no specification in this Agreement of a particular legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Employee.

5.4 Severability and Modification of Any Unenforceable Covenant. It is the parties’ intent that each of the covenants under this Section 5 be read and interpreted with every reasonable inference given to its enforceability. However, it is also the parties’ intent that if any term, provision or condition of the covenants is held to be invalid, void or unenforceable, the remainder of the provisions thereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is also the parties’ intent that if it is determined any of the covenants are unenforceable because of overbreadth, then the covenants shall be modified so as to make it enforceable to the fullest extent permitted under applicable laws.

5.5 Tolling. In the event of the breach by Employee of any covenant set forth in Section 5.2 hereof, the running of the period of restriction shall be automatically tolled and suspended for the amount of time that the breach continues, and shall automatically recommence when the breach is remedied so that the Company shall receive the benefit of Employee’s compliance with the covenants.

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6.0 COMPENSATION AND BENEFITS. For Employee’s services, the Company agrees to pay Employee compensation as follows:

6.1 Salary: Base salary equal to an annual salary of not less than $225,000 (“Base Salary”) shall be paid to Employee according to the Company’s general payroll practices as same may exist from time to time.

6.2 Annual Bonus and Sales Commission:

(a) Employee shall be eligible to earn additional compensation in an aggregate amount of up to $200,000 annually, consisting of a bonus, if the Company and the Employee achieves certain minimum performance objectives to be determined by the Board of Directors and the Company in its discretion. The foregoing notwithstanding, for the 2010 bonus Employee will be entitled to the full amount of the bonus as if he was an Employee the entire year and to 50% of the annual bonus paid out quarterly. The remainder of bonus in 2010 will be tied to company financial performance and customer satisfaction results as determined by the Board of Directors and the CEO;

6.3 Stock Bonus: The Company shall grant Employee 6,000 options to purchase Common Stock pursuant to the terms and conditions of the Company’s 2007 Stock Plan (the “Options”) and the agreement evidencing the grant, a copy of substantially the form of which is attached hereto as Annex C.

6.4 Reimbursement of Expenses: The Company shall reimburse Employee for any reasonable business expenses incurred by Employee in the ordinary course of the Company’s business in accordance with the Company’s reimbursement policies then in effect. These expenses shall be substantiated by invoices and receipts, to be submitted by Employee within thirty (30) days after incurrence.

6.5 Benefits: While employed with the Company or any of its Affiliates, Employee shall be entitled to receive all benefits of employment generally available to the Company’s other same level employees to the extent Employee is eligible to receive them, including, medical, dental and disability insurance and participation in the Company’s 401(k) plan, except to the extent that such participation in any benefits plan would, in the reasonable opinion of the Board of Directors, materially alter the intended tax treatment of such plan.

6.6 Vacation: Employee shall be entitled to 20 days of vacation per each calendar year of service, which shall be accrued and used in accordance with the policies of the Company as in effect from time to time.

6.7 Tax Matters: Employee authorizes the Company to make any and all applicable withholdings of federal and state taxes and other items the Company may be required to deduct, as such items may exist under this Agreement or otherwise from time to time.

7.0 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the benefit of and be enforceable by Employee and his heirs, executors, administrators, and permitted assigns and the Company and its successors and permitted assigns. Except for any assignment of rights to receive consideration hereunder by or to Employee’s estate made upon the death of Employee (“Employee Permitted Assignment”), Employee shall not have any right to assign or otherwise transfer this Agreement or any of Employee’s rights, duties or any other interest herein to any party without the prior written consent of the Company, and any such purported assignment (other than an Employee Permitted

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Assignment) shall be null and void. Except for the assignment by the Company of any or all of its rights and obligations under this Agreement to (i) any of its Affiliates, (ii) its lenders as collateral security or (iii) any person or entity that acquires (whether by merger, purchase of stock, purchase of assets or otherwise), or is the successor or surviving entity in any such acquisition, merger or other transaction involving, the Company (each a “Company Permitted Assignment”), the Company shall not have any right to assign or otherwise transfer this Agreement or any of the Company’s rights, duties or any other interest herein to any party without the prior written consent of Employee, and any such purported assignment (other than a Company Permitted Assignment) shall be null and void. To the extent that the Company assigns its rights and obligations hereunder pursuant to a Company Permitted Assignment, the Company shall not be relieved of its obligations hereunder in respect of any such assignment.

8.0 SURVIVAL OF RIGHTS AND OBLIGATIONS. The rights and obligations of the parties as stated herein shall survive the termination of this Agreement to the extent set forth herein.

9.0 ENTIRE AGREEMENT.

9.1 Sole Agreement: This Agreement (including any attachments, annexes and exhibits hereto) contains the parties’ sole and entire agreement regarding the subject matter hereof, and supersedes any and all other agreements, understandings, statements and representations of the parties, including, but not limited to, any employment agreement or other agreement regarding Employee’s compensation or terms of employment entered into prior to the Effective Date.

9.2 No Other Representations: The parties acknowledge and agree that, except for those representations specifically referenced herein, no party has made any representations (a) concerning the subject matter hereof or (b) inducing the other party to execute and deliver this Agreement. The parties have relied on their own judgment in entering into this Agreement.

10.0 MODIFICATIONS OR WAIVERS. Waivers or modifications of this Agreement, or of any covenant, condition, or limitation contained herein, are valid only if in writing duly executed by the parties hereto.

11.0 GOVERNING LAW. This Agreement shall be governed pursuant to the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.

12.0 SEVERABILITY. In the event that any provision or term of this Agreement, or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographic and temporal restrictions and provisions contained in this Agreement) is held to be unenforceable or invalid for any reason, such provision or portion thereof will be modified or deleted in such a manner as to make this Agreement, as modified, legal and enforceable to the fullest extent permitted under applicable laws.

13.0 INTERPRETATION; SECTION HEADINGS. The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

14.0 NOTICES. All notices and other communications under or in connection with this Agreement shall be in writing and shall be deemed given (i) if delivered personally, upon delivery, (ii) if delivered by registered or certified mail (return receipt requested), upon the earlier of actual delivery or three (3) days after being mailed, (iii) if given by nationally recognized overnight courier with receipt acknowledgment requested, the next business day following the date sent, or (iv) if given by facsimile or

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telecopy, upon confirmation of transmission by facsimile or telecopy, in each case to the parties at the following addresses:

To the Company:	The Telx Group, Inc. 1 State Street, 21st Floor New York, NY 10004 Attention: General Counsel
To Employee:
with a copy to:

15.0 JOINT PREPARATION. All parties to this Agreement have negotiated it at length, and have had the opportunity to consult with and be represented by their own competent counsel. This Agreement is therefore deemed to have been jointly prepared by the parties and any uncertainty or ambiguity existing in it shall not be interpreted against any party, but rather shall be interpreted according to the rules generally governing the interpretation of contracts.

16.0 THIRD-PARTY BENEFICIARIES. Except as provided in Section 7.0, no term or provision of this Agreement is intended to be, or shall be, for the benefit of any person, firm, organization, corporation or entity not a party hereto, and no such other person, firm, organization, corporation or entity shall have any right or cause of action hereunder.

17.0 ARBITRATION.

17.1 Any controversy, claim, cause of action, in law or equity, or dispute involving the parties (or their affiliated persons or entities) directly or indirectly concerning this Agreement, or the subject matter thereof, including its enforcement, performance, breach, or interpretation, shall be resolved solely and exclusively by final and binding arbitration held in New York, New York by one (1) arbitrator in accordance with the rules of employment arbitration then followed by the American Arbitration Association or any successor to the functions thereof. The arbitrator shall apply New York law in the resolution of all controversies, claims and disputes and shall have the right and authority to determine how his or her decision or determination as to each issue or matter in dispute may be implemented or enforced. Any decision or award of the arbitrator shall be final and conclusive on the parties to this Agreement and their respective Affiliates, and there shall be no appeal therefrom other than from gross negligence or willful misconduct. Notwithstanding the foregoing, claims regarding worker’s compensation and unemployment compensation benefits shall not be subject to arbitration under this Agreement. Each party in any such arbitration shall be responsible for its own attorneys’ fees, costs and necessary disbursement; provided, however, that if one party refuses to arbitrate and the other party seeks to compel arbitration by court order, if such other party prevails, it shall be entitled to recover its reasonable attorneys’ fees, costs and necessary disbursements.

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17.2 The parties hereto agree that any action to compel arbitration pursuant to this Agreement may be brought in any appropriate state court in New York County, New York, and in connection with such action to compel, the laws of New York shall control. Application may also be made to such court for confirmation of any decision or award of the arbitrator, for an order of the enforcement and for any other remedies which may be necessary to effectuate such decision or award. The parties hereto hereby consent to the jurisdiction of the arbitrator and of such court and waive any objection to the jurisdiction of such arbitrator and court.

17.3 Notwithstanding the foregoing, (a) the Company shall be entitled to seek injunctive relief, in any court of competent jurisdiction, to enforce this Agreement, and (b) this Section 17.0 shall not limit the right of the Company to seek judicial relief pursuant to Section 5.3 of this Agreement without prior arbitration.

18.0 COOPERATION AND FURTHER ACTIONS. The parties agree to perform any and all acts and to execute and deliver any and all documents necessary or convenient to carry out the terms of this Agreement.

19.0 COUNTERPARTS. This Agreement may be executed in counterparts, including electronically transmitted counterparts, each of which shall be deemed an original and both of which shall be considered one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly authorized representatives to execute, this Agreement as of the Effective Date.

The Telx Group, Inc.
a Delaware corporation
By:	/s/ Eric Shepcaro
Name:
Title:
EMPLOYEE
/s/ Brad Hokamp

ANNEX A

FORM OF PROPRIETARY INFORMATION AND INVENTIONS ASSIGNMENT

AGREEMENT

ANNEX B

GENERAL RELEASE

ANNEX C

INCENTIVE STOCK OPTION AGREEMENT

EX-10.56

Exhibit 10.56

Confidential Treatment Requested

by The Telx Group, Inc.

Colocation Agreement For Multiple

Single-User Datacenter Rooms

111 8^th AVENUE, SIXTH (6^th) FLOOR

COLOCATION AGREEMENT

Between

DIGITAL CHELSEA, LLC

as Grantor

and

TEL^X – NEW YORK 111 8TH, LLC

as Grantee

Dated

September 27, 2010

111 8^th AVENUE, SIXTH (6^th) FLOOR

COLOCATION AGREEMENT

This Colocation Agreement (this “Agreement”) is entered into as of the Effective Date specified in Item 4 of the Basic Colocation Information (the “Effective Date”), by and between Grantor (defined in Item 1 of the Basic Colocation Information, below) and Grantee (defined in Item 2 of the Basic Colocation Information, below):

RECITALS

A. 111 Chelsea Commerce LP (together with its successors and assigns, “111 Chelsea”) is the owner of the Land (defined in Item 20 of the Basic Colocation Information, below). The Land is improved with, among other things, the Building (defined in Item 21 of the Basic Colocation Information, below). The Land and the Building may be referred to herein as the “Property.”

B. AboveNet Communications, Inc. (“Original Tenant”), as tenant, and 111 Eighth Avenue LLC (“Original Landlord”), as landlord, entered into that certain Agreement of Lease dated January 25, 1999 (as amended from time to time, the “Underlying Lease”), which Underlying Lease covers certain space (collectively, the “Demised Premises”) on the 2^nd and 6^th floors of the Building. Grantor has succeeded to Original Tenant’s interest in and to the Underlying Lease and 111 Chelsea has succeeded to Original Landlord’s interest in and to the Underlying Lease.

C. Grantor and Grantee desire to enter into this Agreement with respect to a portion of the Demised Premises.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, Grantor and Grantee agree as follows:

BASIC COLOCATION INFORMATION

1.  Grantor:	Digital Chelsea, LLC, a Delaware limited liability company (“Grantor”)
2.  Grantee:	telx – New York 111 8th, LLC, a Delaware limited liability company (“Grantee”) Grantee represents that it has been validly formed or incorporated under the laws of the State of Delaware.

3.  Grantee Address: telx – New York 111 8th, LLC c/o The Telx Group, Inc. 1 State Street, 21^st Floor New York, New York 10004 Contact Name: J. Todd Raymond Phone No:                                  Facsimile No: (212) 480-8384 with a copy to   GI Manager L.P. 2730 Sand Hill Road, Suite 280 Menlo Park, California 94025 Contact Names: Eric Harrison and Alexander Fraser Phone No:                                  Facsimile: (650) 233-3601

4.  Critical Dates:
	Effective Date:     (Sign Date)	September 27, 2010 (being the latest date of the parties’ execution dates, as set forth on the signature page of this Agreement)
	Commencement Date:	Being the same date as the Effective Date (the “Commencement Date”).

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Target Phase II Expansion Date:	December 1, 2010 (the “Target Phase II Expansion Date”)
Phase II Expansion Date:	As defined in Section 2.2.2 of the Standard Colocation Provisions.
Target Phase III Expansion Date:	April 1, 2011 (the “Target Phase III Expansion Date”)
Phase III Expansion Date:	As defined in Section 2.2.3 of the Standard Colocation Provisions.
5.   Term:	Approximately one hundred sixty-five (165) months (commencing on the Commencement Date and expiring on June 30, 2024).
6.   Intentionally Deleted.	Intentionally Deleted.
7.   Grantee Space:	The Colocation Premises described in Item 7(a), below, and the Pathway described in Item 7(b), below
(a)   Colocation Premises:	Grantor and Grantee acknowledge and agree that the “Colocation Premises” will consist of five (5) spaces (being Conditioned Space-A, Conditioned Space-B, Conditioned Space-C, Unconditioned Space-A and Unconditioned Space-B, each as defined below), collectively comprising approximately 40,048 square feet of space within the Datacenter (as defined in Item 22, below), and shall be delivered to Grantee in three (3) phases, as follows:
	1. Phase I. For the period commencing on the Commencement Date and continuing until the occurrence of the Phase II Expansion Date (the “Phase I Period”), the Colocation Premises shall consist of (a) approximately 4,068 rentable square feet of conditioned space within the Datacenter (as depicted on Exhibit “A”, attached hereto, “Conditioned Space-A”), and (b) approximately 1,030 rentable square feet of unconditioned space within the Datacenter (as depicted on Exhibit “A”, “Unconditioned Space-A”; together with Conditioned Space-A, collectively, the “Phase I Space”).
	2. Phase II. As of the Phase II Expansion Date, the Colocation Premises shall be deemed expanded to include the Phase I Space, together with (a) approximately 23,930 rentable square feet of conditioned space within the Datacenter (as depicted on Exhibit “A”, “Conditioned Space-B”, and (b) approximately 1,872 rentable square feet of unconditioned space within the Datacenter (as depicted on Exhibit “A”, “Unconditioned Space-B”; together with the Phase I Space, collectively, the “Phase II Space”). The period commencing on the Phase II Expansion Date and continuing until the occurrence of the Phase III Expansion Date is referred to as the “Phase II Period”.
	3. Phase III. As of the Phase III Expansion Date, the Colocation Premises shall be deemed expanded to include the Phase II Space, together with approximately 9,148 rentable square feet of conditioned space within the Datacenter (as depicted on Exhibit “A”, “Conditioned Space-C”). The period commencing on the Phase III Expansion Date and continuing through the balance of the Term of the Agreement is referred to herein as the “Phase III Period”. Conditioned Space-C, together with the Phase II Space, is referred to herein, collectively, as the “Phase III Space”.
	“Conditioned Premises” shall mean and refer to Conditioned Space-A, together with Conditioned Space-B during the Phase II Period, and together with Conditioned Space-B and Conditioned Space-C during the Phase III Period.

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(b)Pathway:	As described on Exhibit “C” (the “Pathway”).
8.Intentionally Deleted.	Intentionally Deleted.
9.Base Colocation Fees:	[***] per month (pro rated for any partial calendar month), commencing on the Commencement Date through November 30, 2010.
	[***] per month for the period December 1, 2010 through December 31, 2010.
	[***] per month for the period January 1, 2011 through December 31, 2011.
	[***] per month for period January 1, 2012 through March 31, 2012.
	[***] per month for period April 1, 2012 through March 31, 2013.
	[***] per month for period April 1, 2013 through March 31, 2014.
	[***] per month for the period April 1, 2014 through June 30, 2014.
	[***] per month for period July 1, 2014 through June 30, 2015.
	[***] per month for period July 1, 2015 through June 30, 2016.
	[***] per month for period July 1, 2016 through June 30, 2017.
	[***] per month for period July 1, 2017 through June 30, 2018.
	[***] per month for period July 1, 2018 through June 30, 2019.
	[***] per month for period July 1, 2019 through June 30, 2020.
	[***] per month for period July 1, 2020 through June 30, 2021.
	[***] per month for period July 1, 2021 through June 30, 2022.
	[***] per month for period July 1, 2022 through June 30, 2023.
	[***] per month for period July 1, 2023 through June 30, 2024.
	Grantor and Grantee acknowledge that the foregoing schedule of Base Colocation Fees is structured on the premise that the Phase II Period will actually occur on the Target Phase II Expansion Date, and the Phase III Period will actually occur on the Target Phase III Expansion Date. As such, in the event that the Phase II Period does not occur on the Target Phase II Expansion Date, or the Phase III Period does not occur on the Target Phase III Expansion Date, Grantor shall memorialize an equitable adjustment of such schedule within the relevant expansion date notice delivered by Grantor to Grantee.
10.CR Installation Fees:	The actual cost (each, a “CR Installation Fee”) of all Capital Replacement Installations (as defined on Exhibit “E”).

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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11.Intentionally Deleted.	Intentionally Deleted.
12.Rules and Regulations:
(a)Datacenter Rules and Regulations:	This term shall mean Grantor’s rules and regulations for the Datacenter (the “Datacenter Rules and Regulations”), as such Datacenter Rules and Regulations may be amended from time to time by Grantor in accordance with Section 6.2 of the Standard Colocation Provisions. The current version of the Datacenter Rules and Regulations is attached hereto as Exhibit “H”.
(b)Building Rules and Regulations:	This term shall mean Grantor’s rules and regulations for the Demised Premises (the “Building Rules and Regulations”; together with the Datacenter Rules and Regulations, collectively, the “Rules and Regulations”), as such Building Rules and Regulations may be amended from time to time by Grantor in accordance with Section 6.2 of the Standard Colocation Provisions. The current version of the Building Rules and Regulations is attached hereto as Exhibit “H-1”.
13.Intentionally Deleted.	Intentionally Deleted.
14.Intentionally Deleted.	Intentionally Deleted.
15.Eligibility Period:	The Eligibility Period is equal to “any part of any twenty-four (24) consecutive hour period”.
	For example, if the Interruption of Grantor’s Service continues for 1 minute, one day’s Base Colocation Fees shall be abated; and if such interruption continues for a consecutive period of 24 hours and 3 minutes, two days’ Base Colocation Fees shall be abated.
	The maximum Base Colocation Fees abatement for any twenty-four (24) hour period regardless of the number or length of interruptions in such twenty-four (24) hour period shall not exceed one day’s Base Colocation Fees. For example, if such interruption occurs for 53 minutes, service is restored but such interruption occurs again within the same twenty-four (24) hour period, the Base Colocation Fees abatement for such twenty-four (24) hour period shall be one day’s Base Colocation Fees.

16.Grantor’s Address for Notices:	Digital Chelsea, LLC c/o Digital Realty Trust 111 8th Avenue, Suite 209 New York, NY 10011 Attention: General Manager Facsimile No. (212) 627-2962 E-mail: leaseadministration@digitalrealtytrust.com	With copies to: Digital Realty Trust, L.P. 451 D Street, Suite 912 Boston, MA 02210 Attn: Asset Manager Facsimile No. (857) 366-9998
		And: Stutzman, Bromberg, Esserman & Plifka, A Professional Corporation 2323 Bryan Street, Suite 2200 Dallas, TX 75201 Attention: Noah K. Hansford
		Facsimile No. (214) 969-4999 E-mail: hansford@sbep-law.com

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17.Grantor’s Address for Payment of Colocation Fees:	ACH Payments: Bank of America NT&SA 1850 Gateway Blvd. Concord, CA 94520-3282
	Routing Number: Account Number: Account Name: Regarding/Reference:
	Wire Payments:
	Bank of America NT&SA 100 West 33rd St. New York, NY 10001
	Routing Number: Account Number: Account Name: Regarding/Reference:
	Check Payments: Digital Chelsea, LLC P.O. Box 414015 Boston, MA 02241-4015
	Overnight Address: Bank of America Lockbox Services Digital Chelsea, LLC - 414015 MA5-527-02-07 2 Morrissey Blvd. Dorchester, MA 02125
	Contact Information: Director of Cash Management Digital Realty Trust 560 Mission Street, Suite 2900 San Francisco, CA 94105 P: (415) 738-6509 F: (415) 495-3687
18.Brokers:
(a)  Grantor’s Broker:	None.
(b)  Grantee’s Broker:	None.

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19.Common Area:	That part of the Datacenter designated by Grantor from time to time for the common use of all users of the Datacenter, lighting facilities, mechanical and electrical rooms, janitors’ closets, halls, lobbies, delivery passages, drinking fountains, meeting rooms, public toilets, and other common rooms and common facilities (the “Common Area”). Grantor and Grantee agree that in no event shall any portion of the Colocation Premises, as it exists from time to time, be deemed to be a part of the “Common Area”.
20.Land:	The land (“Land”) located at: 111 8th Avenue, New York, New York
21.Building:	That certain building and associated improvements located on the Land at 111 8th Avenue, New York, New York (the “Building”)
22.Datacenter.	Approximately 58,340 square feet located on the sixth (6th) floor of the Building, known as Suite 634, which is being leased by Grantor under and pursuant to the Underlying Lease, as shown on Exhibit “A” (the “Datacenter”).
23.Carrier Room Area:	The Carrier Room Area, as set forth on Exhibit “A”, serves as a common interconnection area for the Building’s datacenter occupants and grantees (the “Carrier Room Area”).
24.Grantor Group:	Grantor, Digital Above, LLC, Digital Services, Inc., and their respective directors, officers, shareholders, members, employees, agents, constituent partners, affiliates, beneficiaries, trustees and representatives (the “Grantor Group”).
25.Grantee Parent/ Guarantor:	The Telx Group, Inc., a Delaware corporation (“Grantee Parent”; also referred to herein as “Guarantor”).
26.Intentionally Deleted.
27.Maximum Structural Load:	200 pounds of live load per square foot.
28.Labor Rates Base Amount:	[***] per annum ([***] per month).

This Agreement shall consist of the foregoing Basic Colocation Information, and the provisions of the Standard Colocation Provisions (the “Standard Colocation Provisions”) (consisting of Sections 1 through 17 which follow) and Exhibits “A” through “L”, inclusive, all of which are incorporated herein by this reference as of the Effective Date. In the event of any conflict between the provisions of the Basic Colocation Information and the provisions of the Standard Colocation Provisions, the Standard Colocation Provisions shall control. Any initially capitalized terms used herein and not otherwise defined in the Basic Colocation Information shall have the meanings set forth in the Standard Colocation Provisions.

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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STANDARD COLOCATION PROVISIONS

1. USE OF GRANTEE SPACE.

1.1 Grantee Space. In consideration of the covenants and agreements to be performed by Grantee, and upon and subject to the terms and conditions of this Agreement, Grantor hereby grants Grantee the right for the Term (defined in Section 2.1, below) to collocate its equipment in the Colocation Premises (as defined in Item 7(a) of the Basic Colocation Information) and the Pathway (as defined in Item 7(b) of the Basic Colocation Information). The Colocation Premises and the Pathway are referred to herein collectively as the “Grantee Space.”

1.2 Condition of Grantee Space. Grantee has inspected the Grantee Space and agrees to accept (a) the Conditioned Space-A and the Unconditioned Space-A in their “AS IS, WHERE IS” condition on the Commencement Date, (b) the Conditioned Space-B and the Unconditioned Space-B in their “AS IS, WHERE IS” condition on the Phase II Expansion Date, and (c) the Conditioned Space-C in its “AS IS, WHERE IS” condition on the Phase III Expansion Date. Grantee acknowledges and agrees that (i) no representation or warranty (express or implied) has been made by Grantor as to the condition of the Property, the Datacenter or the Grantee Space, or their suitability or fitness for the conduct of Grantee’s Permitted Use, its business or for any other purpose and (ii) except as specifically set forth herein, Grantor shall have no obligation to construct or install any improvements in or to make any other alterations or modifications to the Grantee Space. The installation of equipment in the Grantee Space by Grantee shall conclusively establish that the Grantee Space and the Datacenter were at such time in good order and clean condition.

1.3 Intentionally Deleted.

1.4 Intentionally Deleted.

1.5 Quiet Enjoyment; Access. Subject to all of the terms and conditions of this Agreement, Grantee shall quietly have, hold and enjoy the Grantee Space without hindrance from Grantor or any person or entity claiming by, through or under Grantor. Subject to the terms and conditions of this Agreement (including, without limitation, the Rules and Regulations) and Grantor’s Access Control Systems (defined in Section 7.1, below) and Force Majeure (as defined in Section 17.14 below), Grantee shall have access to the Grantee Space twenty-four (24) hours per day, seven (7) days per week.

1.6 Common Area. The Common Area, as defined in Item 19 of the Basic Colocation Information hereof, shall be subject to Grantor’s sole management and control and shall be operated and maintained in such manner as Grantor in Grantor’s reasonable discretion shall determine. Grantor reserves the right to change from time to time the dimensions and location of the Common Area, provided, however, that such changes shall not have a material adverse effect on Grantee’s use of the Grantee Space for the Permitted Use. Grantee, and Grantee’s employees, invitees and Permitted Licensees shall have the nonexclusive right to use the Common Area as constituted from time to time, such use to be in common with Grantor, other users of the Datacenter and other persons entitled to use the same, and subject to such reasonable rules and regulations governing use of the Common Areas as Grantor may from time to time prescribe. Grantor may temporarily close any part of the Common Area for such periods of time as may be necessary to make repairs or alterations; provided, however, at all times Grantee shall have access to the Colocation Premises via some portion of the Common Area.

2. TERM.

2.1 Term. The term of this Agreement, and Grantee’s obligation to pay Colocation Fees under this Agreement, shall commence on the Commencement Date and shall continue in effect for the period specified in Item 5 of the Basic Colocation Information (the “Term”), unless this Agreement is earlier terminated as provided herein.

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2.2 Delivery of Grantee Space.

2.2.1 Delivery of Phase I Space. Grantee’s right to use the Phase I Space shall commence on the Commencement Date.

2.2.2 Delivery of Phase II Space. Grantee’s right to use the Phase II Space shall commence on the date (i) all third parties occupying the Phase II Space as of the Effective Date have vacated the Phase II Space, and (ii) Grantor has delivered possession of the Phase II Space to Grantee (the “Phase II Expansion Date”). Grantor shall use commercially reasonable efforts to cause the Phase II Expansion Date to occur on the Target Phase II Expansion Date, provided that if any present occupant or user of the Phase II Space holds over and Grantor cannot acquire possession thereof prior to the Target Phase II Expansion Date, then Grantor shall not be deemed in default hereunder, and Grantee agrees to accept possession of the Phase II Space at such time as Grantor is able to tender the same and, in such event, the date of such tender by Grantor shall be deemed to be the Phase II Expansion Date. Grantor shall deliver a notice to Grantee substantially in the form attached hereto as Exhibit “K” (the “Phase II Expansion Date Notice”) memorializing Grantor’s delivery of the Phase II Space to Grantee and confirming the actual Phase II Expansion Date.

2.2.3 Delivery of Phase III Space. Grantee’s right to use the Phase III Space shall commence on the date (i) all third parties occupying the Phase III Space as of the Effective Date have vacated the Phase III Space, and (ii) Grantor has delivered possession of the Phase III Space to Grantee (the “Phase III Expansion Date”). Grantor shall use commercially reasonable efforts to cause the Phase III Expansion Date to occur on the Target Phase III Expansion Date, provided that if any present occupant or user of the Phase III Space holds over and Grantor cannot acquire possession thereof prior to the Target Phase III Expansion Date, then Grantor shall not be deemed in default hereunder, and Grantee agrees to accept possession of the Phase III Space at such time as Grantor is able to tender the same and, in such event, the date of such tender by Grantor shall be deemed to be the Phase III Expansion Date. Grantor shall deliver a notice to Grantee substantially in the form attached hereto as Exhibit “K” (the “Phase III Expansion Date Notice”) memorializing Grantor’s delivery of the Phase III Space to Grantee and confirming the actual Phase III Expansion Date.

3. BASE COLOCATION FEES AND OTHER CHARGES.

3.1 Base Colocation Fees. Commencing on the Commencement Date, Grantee shall pay to Grantor base colocation fees (the “Base Colocation Fees”) for the Grantee Space in the amount set forth in Item 9 of the Basic Colocation Information. All such Base Colocation Fees shall be paid to Grantor in monthly installments in advance on the first day of each and every month throughout the Term of this Agreement; provided, however, that (a) the first monthly installment of Base Colocation Fees shall be payable upon Grantee’s execution of this Agreement, and (b) if the Term of this Agreement (or the Phase II Period or the Phase III Period) does not commence on the first day of a calendar month, the Base Colocation Fees for such partial calendar month shall (i) be calculated on a per diem basis determined by dividing the Base Colocation Fees above by the total number of days in such calendar month and multiplying such amount by the number of days remaining in such calendar month from and after (and including) the Commencement Date (or the Phase II Expansion Date or Phase III Expansion Date, as applicable), and (ii) be paid by Grantee to Grantor on the Commencement Date (or the Phase II Expansion Date or Phase III Expansion Date, as applicable). Except as set forth in this Section 3.1, Grantee shall not pay any installment of Colocation Fees (defined in Section 3.3, below) more than one (1) month in advance.

3.2 CR Installation Fees; Labor Rates Recovery.

3.2.1 CR Installation Fees. Grantee shall pay each CR Installation Fee to Grantor within thirty (30) days after Grantee’s receipt of an invoice for same from Grantor.

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3.2.2 Labor Rates Recovery.

3.2.2.1 The term “Labor Rates Amount” shall mean, to the extent payable by Grantor (whether directly or as reimbursement to 111 Chelsea under the Underlying Lease), all amounts (foreseen or unforeseen) attributable to the Datacenter, its operation, or Grantor’s leasehold interest in the Underlying Lease, related to the wages paid to persons and/or entities who are engaged in the general maintenance and operation of the Building, including, but not limited to Tenant’s Labor Rate Payment, as defined in the Underlying Lease.

3.2.2.2 The term “Labor Rates Base Amount” is stipulated to be the Labor Rates Base Amount stated in Item 28 of the Basic Colocation Information, above.

3.2.2.3 The term “Actual Labor Rates Amount” shall mean, with respect to each calendar year (or portion thereof) during the Phase III Period, the actual Labor Rates Amount for such year (or portion thereof) attributable to the Datacenter. The term “Actual Labor Rates Amount Excess” shall mean, with respect to each calendar year (or portion thereof) during the Phase III Period, an amount equal to the positive difference (if any) obtained by subtracting the Labor Rates Base Amount from the Actual Labor Rates Amount applicable to such calendar year (or portion thereof).

3.2.2.4 If the Actual Labor Rates Amount for any calendar year (or portion thereof) occurring during the Phase III Period is greater than the Labor Rates Base Amount (prorated for any partial calendar year), Grantee shall be obligated to pay to Grantor as Additional Colocation Fees an amount equal to the Actual Labor Rates Amount Excess applicable to such calendar year to the extent that such calendar year occurs during the Phase III Period.

3.2.2.5 On or before the Phase III Expansion Date (or as soon thereafter as reasonably possible), and on January 1 (or as soon thereafter as reasonably possible) of each subsequent calendar year during the balance of the Term, Grantor shall provide to Grantee a statement of the projected annual Labor Rates Amount for the Datacenter (the “Projected Labor Rates Amount”). Grantee shall pay to Grantor on the first day of each month commencing on the Phase III Expansion Date and continuing during the balance of the Term of the Agreement, an amount (each, a “Projected Labor Rates Installment”) equal to one-twelfth (1/12) of the positive difference (if any) obtained by subtracting the Labor Rates Base Amount from the Projected Labor Rates Amount for such calendar year. Until Grantee has received the statement of the Projected Labor Rates Amount from Grantor, Grantee shall continue to pay Projected Labor Rates Installments to Grantor in the same amount (if any) as required for the last month of the prior calendar year. Upon Grantee’s receipt of such statement of the Projected Labor Rates Amount, Grantee shall pay to Grantor, or Grantor shall pay to Grantee (whichever is appropriate), the difference between the amount paid by Grantee as Projected Labor Rates Installments prior to receiving such statement and the amount payable by Grantee therefor as set forth in such statement. Grantor shall provide Grantee a statement on or before June 15 (or as soon thereafter as reasonably possible) after the end of each calendar year, showing the Actual Labor Rates Amount Excess applicable to such calendar year (or portion thereof), as compared to the total of the Projected Labor Rates Installments for such calendar year (or portion thereof). If the Actual Labor Rates Amount Excess for such calendar year (or portion thereof) exceeds the aggregate of the Projected Labor Rates Installments collected by Grantor from Grantee with regard to such calendar year (or portion thereof), Grantee shall pay to Grantor, within thirty (30) days following Grantee’s receipt of such statement, the amount of such excess. However, if the Actual Labor Rates Amount Excess for such calendar year (or portion thereof) is less than the aggregate of the Projected Labor Rates Installments collected by Grantor from Grantee with regard to such calendar year (or portion thereof), Grantor shall pay to Grantee, within thirty (30) days following Grantee’s receipt of such statement, the amount of such excess. Grantor shall have the right from time to time during each calendar year (or portion thereof) to revise the Projected Labor Rates Amount and provide Grantee with a revised statement thereof; and, thereafter, Grantee shall pay Projected Labor Rates Installments on the basis of the revised statement. If the Phase III Expansion Date is not the first day of a calendar year, or the expiration or termination date of this Agreement is not the last day of a calendar year, then the Actual Labor Rates Amount Excess for which Grantee would otherwise be responsible hereunder shall be prorated. The foregoing adjustment provisions shall survive the expiration or termination of the Term of this Agreement.

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3.3 Payments Generally. Base Colocation Fees, all forms of Additional Colocation Fees (defined in this Section 3.3, below) payable hereunder by Grantee and all other amounts, fees, payments or charges payable hereunder by Grantee shall (i) sometimes collectively be referred to herein as “Colocation Fees”), (ii) be payable to Grantor when due without any prior notice or demand therefor in lawful money of the United States without any abatement, offset or deduction whatsoever (except as specifically provided otherwise herein), and (iii) be payable to Grantor at the address of Grantor specified in Item 17 of the Basic Colocation Information (or to such other person or to such other place as Grantor may from time to time designate in writing to Grantee). No receipt of money by Grantor from Grantee after the termination of this Agreement, the service of any notice, the commencement of any suit, or a final judgment for possession shall reinstate, continue or extend the Term of this Agreement or affect any such notice, demand, suit or judgment. No partial payment by Grantee shall be deemed to be other than on account of the full amount otherwise due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and Grantor shall be entitled to accept such payment without compromise or prejudice to any of the rights of Grantor hereunder or under any Applicable Laws (defined in Section 6.3.1, below). In the event that the Commencement Date or the expiration of the Term (or the date of any earlier termination of this Agreement) falls on a date other than the first or last day of a calendar month, respectively, the Colocation Fees payable for such partial calendar month shall be prorated based on a per diem basis. For purposes of this Agreement, all amounts (other than Base Colocation Fees) payable by Grantee to Grantor pursuant to this Agreement, whether or not denominated as such, shall constitute “Additional Colocation Fees.”

3.3.1 Invoices for Colocation Fees. Grantor agrees to provide Grantee an invoice for each payment of Additional Colocation Fees due from Grantee. Grantor and Grantee agree that each payment of Additional Colocation Fees shall be due no sooner than thirty (30) days after Grantor has so provided such invoice. Additionally, Grantor shall use commercially reasonable efforts to provide Grantee an invoice for each payment of Base Colocation Fees that comes due hereunder (which may be the same as the Additional Colocation Fees invoice). The foregoing notwithstanding, however (a) in no event shall Grantor’s failure to provide any such invoice be deemed to be a default by Grantor hereunder; and (b) in no event shall Grantor’s failure to provide a Base Colocation Fees invoice be deemed to alleviate Grantee’s obligation to pay Base Colocation Fees when due hereunder.

3.4 Late Payments. Grantee hereby acknowledges and agrees that the late payment by Grantee to Grantor of Base Colocation Fees or Additional Colocation Fees (or any other sums due hereunder) will cause Grantor to incur administrative costs not contemplated under this Agreement and other damages, the exact amount of which would be extremely difficult or impractical to fix. Grantor and Grantee agree that if Grantor does not receive any such payment on or before the date that is five (5) days after the date on which such payment is due (a “Late Charge Delinquency”), Grantee shall pay to Grantor, as Additional Colocation Fees, (i) a late charge (“Late Charge”) equal to five percent (5%) of the amount overdue to cover such additional administrative costs and damages, and (ii) interest on all such delinquent amounts at an interest rate (the “Default Rate”) equal to the lesser of (a) one and one-half percent (1 ¹/2 %) per month or (b) the maximum lawful rate from the date such amounts are first delinquent until the date the same are paid. In no event, however, shall the charges permitted under this Article 3 or elsewhere in this Agreement, to the extent the same are considered to be interest under applicable law, exceed the maximum lawful rate of interest. Grantor’s acceptance of any Late Charge, or interest pursuant to this Section 3.4, shall not be deemed to constitute a waiver of Grantee’s default with respect to the overdue amount, nor prevent Grantor from exercising any of the other rights and remedies available to Grantor hereunder or under any Applicable Laws. Notwithstanding anything herein to the contrary, Grantor agrees to waive the default interest and late charges for one (1) late payment hereunder during any consecutive twelve (12) calendar month period during the Term provided such late payment is paid in full within five (5) business days after written notice to Grantee of such failure.

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3.5 Utilities. Grantee shall pay for all electricity and/or other utilities (e.g., chilled water) serving, provided to and/or used in the Grantee Space, and for all utility capacity, reservation or similar charges (e.g., all “use it or lose it” fees related to the reservation of electrical capacity) payable by Grantor under the Underlying Lease with regard to the Datacenter. Grantor has, or on or before the Commencement Date, will, cause the installation of an electrical metering device (the “Electrical Metering Equipment-I”), compatible with Grantor’s energy management system for monitoring electricity serving, provided to and/or used in the Phase I Space. Grantor has, or on or before the Phase II Expansion Date, will, cause the installation of an electrical metering device (the “Electrical Metering Equipment-II”), compatible with Grantor’s energy management system for monitoring electricity serving, provided to and/or used in the Phase II Space. Grantor has, or on or before the Phase III Expansion Date, will, cause the installation of an electrical metering device (the “Electrical Metering Equipment-III”; together with the Electrical Metering Equipment-I and Electrical Metering Equipment-III, collectively, the “Electrical Metering Equipment”), compatible with Grantor’s energy management system for monitoring electricity serving, provided to and/or used in the Phase III Space. As of the Commencement Date, (a) the electricity usage of certain equipment within the Colocation Premises, and/or equipment located outside the Colocation Premises but serving the such space, is commercially impractical of being separately metered to the Colocation Premises because it utilizes equipment and/or facilities designed to serve more area of the Datacenter than just the Colocation Premises, including without limitation cooling (the “Shared Electrical Equipment”), and (b) there are certain utility-related charges that are passed through to Grantor under the Underlying Lease that are not wholly based on utility usage, but, rather, are based on the reservation of utility capacity. The formula described in Section 3.5.1., below, has been designed to capture (a) Grantee’s pro-rata share of Grantor’s actual electrical costs for such Shared Electrical Equipment, and (b) Grantee’s pro-rata share of all utility capacity related charges (e.g., “use it or lose it” fees related to the reservation of electrical capacity) (collectively, the “Grantee’s Shared Electrical Payment”), together with (c) Grantor’s actual cost of all electricity measured by the Electrical Metering Equipment (collectively, “Grantee’s Utility Payments” – being further defined in Section 3.5.1, below). Grantee shall pay all portions of Grantee’s Utility Payments to Grantor, as Additional Colocation Fees, within thirty (30) days of receipt of each such Grantee’s Utility Payment invoice. For the avoidance of doubt, it is the intent of the parties that this Section 3.5 represents a mechanism only for Grantor’s cost recovery with regard to electricity and/or other utilities serving, provided to and/or used in the Grantee Space, as it exists from time to time, and that there is no intent for Grantee’s Utility Payments to include any element of profit to Grantor in connection therewith.

3.5.1 Grantee’s Pro Rata Utility Payments.

(a) For the purposes of this Section 3.5.1:

(1) the term “Datacenter Utility” shall mean and refer to a utility type for which usage is billed on a “datacenter-by-datacenter” basis.

(2) the term “Datacenter Utility Costs” shall mean and refer to Grantor’s actual utility costs for the entirety of the Datacenter (i.e., based on the metering equipment that measures all electrical and mechanical power [UPS, HVAC and other mechanical power] being used by the Datacenter, together with any utility capacity, reservation or similar charges payable by Grantor under the Underlying Lease, including, but not limited to the “use it or lose it” fees with regard to reservation of electrical capacity that are payable by Grantor under the Underlying lease), as set forth on the applicable Datacenter Utility bill(s), and/or on any invoices received by Grantor for the Datacenter in connection with the Underlying Lease (each such Datacenter Utility bill or invoice, a “Datacenter Utility Bill”) for the billing period covered by such Datacenter Utility Bill(s);

(3) the term “Premises UPS kW-hr” shall mean and refer to the number of kilowatt-hours on the UPS plant(s) serving the Colocation Premises during the same billing period as the applicable Datacenter Utility Bill for the Datacenter;

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(4) the term “Other UPS kW-hr” shall mean and refer to the number of kilowatt-hours on the UPS plant(s) serving all other portions of the Datacenter during the same billing period as the applicable Datacenter Utility Bill for the Datacenter;

(5) the term “Total Datacenter UPS kW-hr” shall mean and refer to the number of kilowatt-hours on the UPS plant(s) serving the Datacenter during the same billing period as the applicable Datacenter Utility Bill for the Datacenter, being represented by the sum of the “Premises UPS kW-hr” plus the “Other UPS kW-hr”; and

(6) the term “Grantee’s Pro Rata Utility Payment” shall mean and refer to Grantee’s pro rata portion of the applicable Datacenter Utility Costs, during the same billing period as the applicable Datacenter Utility Bill for the Datacenter, being allocated to the Colocation Premises based on the amount of the Premises UPS kW-hr during such billing period, as compared to the Total Datacenter UPS kW-hr during the same billing period.

(b) For the purposes of the following equation:

(1) the applicable “Datacenter Utility Costs” are represented by the letter “N”;

(2) the applicable “Premises UPS kW-hr” is represented by the letter “A”;

(3) the applicable “Total Datacenter UPS kW-hr” is represented by the letter “B”; and

(4) “Grantee’s Pro Rata Utility Payment”, related to the applicable utility bill, is represented by the letter “G”.

For the purposes of this Section 3.5.1, the term “Grantee’s Pro Rata Utility Payment”, as it relates to each of the Datacenter Utility Bills for the Datacenter, shall mean the result of the following equation:

G = N x (A / B)

3.5.2 Periods of Colocation Premises Underutilization. Grantee acknowledges that costs for the Shared Electrical Equipment will be incurred for the operation of the Datacenter, regardless of whether there is any power being drawn in the Colocation Premises. As such, Section 3.5.1, above, notwithstanding, Grantor and Grantee hereby agree that, during those periods during which none of Grantee’s Personal Property is operating in the Colocation Premises (i.e., periods during which there is no electrical power being drawn by Grantee’s Personal Property), Grantee’s Shared Electrical Payment shall be a reasonable proration of the costs attributable to the operation of the Shared Electrical Equipment, based on the ratio that the square footage of the Colocation Premises bears to the square footage of the conditioned spaces within the Datacenter.

3.5.3 Generator Fuel. Additionally, Grantee shall pay the cost of all fuel used by the Back-up Power (defined in Section 7.2) systems serving, providing electricity to, and/or generating electricity which is used in, for or serving, the Grantee Space (“BUP Fuel”), except to the extent that such BUP Fuel is used (i) during the Phase I Period and the Phase II Period, for and during the course of the performance of Grantor’s maintenance obligations hereunder (such fuel usage is referred to herein as “Non-Maintenance BUP Fuel Usage”), or (ii) as a result of the gross negligence or willful misconduct of Grantor or any other member of the Grantor Group. Grantor shall bill Grantee not more frequently than monthly for Grantor’s actual cost of all Non-Maintenance BUP Fuel Usage (the “BUP Fuel Payment”). Grantee shall pay the BUP Fuel Payment to Grantor, as Additional Colocation Fees, within thirty (30) days of delivery of such BUP Fuel Payment invoice. For the avoidance of doubt, it is the intent of the parties

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that this Section 3.5.3 represents a mechanism only for Grantor’s cost recovery with regard to fuel provided to and/or used by or for the Back-up Power systems serving the Grantee Space, and that there is no intent for Grantee’s BUP Fuel Payment to include any element of profit to the Grantor in connection therewith.

4. TAX ON GRANTEE’S EQUIPMENT; OTHER TAXES.

4.1 Equipment Taxes. Grantee shall be liable for and shall pay before delinquency (and Grantee hereby indemnifies and holds Grantor harmless from and against any Claims (defined in Section 14.2, below) arising out of, in connection with, or in any manner related to) all governmental fees, taxes, tariffs and other charges levied directly or indirectly against any personal property, fixtures, machinery, equipment, apparatus, systems, connections, interconnections and appurtenances located in or used by Grantee in or in connection with the Grantee Space. If any such taxes for which Grantee is liable are levied or assessed against Grantor or Grantor’s property, and if Grantor elects to pay the same, Grantee shall pay to Grantor as Additional Colocation Fees, within thirty (30) days of Grantor’s demand therefor, that part of such taxes for which Grantee is liable hereunder, after Grantor provides Grantee with reasonable documentation evidencing such taxes.

4.2 Additional Taxes. Grantee shall pay to Grantor, as Additional Colocation Fees and within thirty (30) days of Grantor’s demand therefor, and in such manner and at such times as Grantor shall direct from time to time by written notice to Grantee, any excise, sales, privilege or other tax, assessment or other charge (other than income or franchise taxes) imposed, assessed or levied by any governmental or quasi-governmental authority or agency upon Grantor on account of (i) the Colocation Fees (and other amounts) payable by Grantee hereunder (or any other benefit received by Grantor hereunder), including, without limitation, any gross receipts tax, license fee or excise tax levied by any governmental authority, (ii) this Agreement, Grantor’s business as a licensor hereunder, and the possession, operation, management, maintenance, alteration, repair, use or occupancy of any portion of the Grantee Space (including, without limitation, any applicable possessory interest taxes), (iii) this transaction or any document to which Grantee is a party creating or transferring an interest or an estate in the Grantee Space, or (iv) otherwise in respect of or as a result of the agreement or relationship of Grantor and Grantee hereunder; provided, however, that the foregoing taxes shall not include taxes paid by Grantee or other users of the Datacenter as a separate charge on the value of their equipment and fixtures, death taxes, excess profits taxes, franchise taxes and state and federal income taxes, except to the extent imposed in substitution for or in lieu of all or any portion of such taxes.

4.2.1 Real Property Taxes.

4.2.1.1 The term “Real Property Taxes” shall mean, to the extent payable by Grantor (whether directly or as reimbursement to 111 Chelsea under the Underlying Lease), all taxes, assessments and governmental charges (foreseen or unforeseen, general or special, ordinary or extraordinary) whether federal, state, county or municipal and whether levied by taxing districts or authorities presently taxing the Property (or any part thereof) or by others subsequently created or otherwise, and any other taxes and assessments attributable to the Datacenter, its operation or Grantor’s leasehold interest in the Underlying Lease, and all taxes of whatsoever nature that are imposed in substitution for or in lieu of any of the taxes, assessments or other charges herein defined; provided, however, Real Property Taxes shall not include taxes paid by occupants of the Datacenter as a separate charge on the value of their improvements, fixtures or equipment, death taxes, excess profits taxes, franchise taxes and state and federal income taxes, except to the extent imposed in substitution for or in lieu of all or any portion of Real Property Taxes.

4.2.1.2 The term “Real Property Tax Base Year” is stipulated to be the calendar year within which the Effective Date occurs.

4.2.1.3 The term “Actual Real Property Taxes” shall mean, with respect to each calendar year (or portion thereof) during the Phase III Period, the actual Real Property Taxes for

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such year (or portion thereof) attributable to the Datacenter. The term “Actual Real Property Taxes Excess” shall mean, with respect to each calendar year (or portion thereof) during the Phase III Period, an amount equal to the positive difference (if any) obtained by subtracting the Actual Real Property Taxes applicable to the Real Property Tax Base Year from the Actual Real Property Taxes applicable to such calendar year (or portion thereof).

4.2.1.4 If the Actual Real Property Taxes during any calendar year (or portion thereof) occurring during the Phase III Period are greater than the Actual Real Property Taxes applicable to the Real Property Tax Base Year (prorated for any partial calendar year), Grantee shall be obligated to pay to Grantor as Additional Colocation Fees an amount equal to the Actual Real Property Taxes Excess applicable to such calendar year to the extent that such calendar year occurs during the Phase III Period.

4.2.1.5 On or before the Phase III Expansion Date (or as soon thereafter as reasonably possible), and on January 1 (or as soon thereafter as reasonably possible) of each subsequent calendar year during the balance of the Term, Grantor shall provide to Grantee a statement of the projected annual Real Property Taxes for the Datacenter (the “Projected Real Property Taxes”). Grantee shall pay to Grantor on the first day of each month commencing the Phase III Expansion Date and continuing during the balance of the Term of the Agreement, an amount (each, a “Projected Real Property Tax Installment”) equal to one-twelfth (1/12) of the positive difference (if any) obtained by subtracting the Actual Real Property Taxes applicable to the Real Property Tax Base Year from the Projected Real Property Taxes for such calendar year. Until Grantee has received the statement of the Projected Real Property Taxes from Grantor, Grantee shall continue to pay Projected Real Property Tax Installments to Grantor in the same amount (if any) as required for the last month of the prior calendar year. Upon Grantee’s receipt of such statement of the Projected Real Property Taxes, Grantee shall pay to Grantor, or Grantor shall pay to Grantee (whichever is appropriate), the difference between the amount paid by Grantee as Projected Real Property Tax Installments prior to receiving such statement and the amount payable by Grantee therefor as set forth in such statement. Grantor shall provide Grantee a statement on or before June 15 (or as soon thereafter as reasonably possible) after the end of each calendar year, showing the Actual Real Property Taxes Excess applicable to such calendar year (or portion thereof), as compared to the total of the Projected Real Property Tax Installments for such calendar year (or portion thereof). If the Actual Real Property Taxes Excess for such calendar year (or portion thereof) exceeds the aggregate of the Projected Real Property Tax Installments collected by Grantor from Grantee with regard to such calendar year (or portion thereof), Grantee shall pay to Grantor, within thirty (30) days following Grantee’s receipt of such statement, the amount of such excess. However, if the Actual Real Property Taxes Excess for such calendar year (or portion thereof) is less than the aggregate of the Projected Real Property Tax Installments collected by Grantor from Grantee with regard to such calendar year (or portion thereof), Grantor shall pay to Grantee, within thirty (30) days following Grantee’s receipt of such statement, the amount of such excess. Grantor shall have the right from time to time during each calendar year (or portion thereof) to revise the Projected Real Property Taxes and provide Grantee with a revised statement thereof; and, thereafter, Grantee shall pay Projected Real Property Tax Installments on the basis of the revised statement. If the Phase III Expansion Date is not the first day of a calendar year, or the expiration or termination date of this Agreement is not the last day of a calendar year, then the Actual Real Property Taxes Excess for which Grantee would otherwise be responsible hereunder shall be prorated. The foregoing adjustment provisions shall survive the expiration or termination of the Term of this Agreement.

5. GUARANTY. The payment and performance of the Colocation Fees, the Additional Colocation Fees and the other liabilities and obligations of Grantee hereunder are guaranteed by Guarantor (defined in Item 25 of the Basic Colocation Information) under the guaranty (the “Guaranty”) in the form attached hereto as Exhibit “J”.

6. USE.

6.1 Permitted Use. Grantee shall have the right to install telecommunications equipment in Grantor’s facilities therefor in the Grantee Space (the “Permitted Use”). Any other use of the Grantee Space is subject to Grantor’s prior written consent, which consent may be withheld or conditioned in Grantor’s sole and absolute discretion.

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6.2 Rules and Regulations. During the Term of this Agreement, Grantee’s Permitted Use shall be subject to, and Grantee, and Grantee’s agents, employees and invitees shall comply fully with all requirements of the Rules and Regulations. Grantor shall at all times have the right to change such rules and regulations or to amend or supplement them in such manner as may be deemed (by Grantor in the exercise of its sole but good faith discretion) advisable for the safety, care and cleanliness of the Grantee Space, the Demised Premises, the Datacenter and/or the Building and for preservation of good order therein, all of which Rules and Regulations, as changed, amended, and/or supplemented from time to time, shall be fully carried out and strictly observed by Grantee; provided, however, that such changes to the Rules and Regulations may not increase Grantee’s monetary obligations under this Agreement or materially adversely affect Grantee’s or the Permitted Licensees’ access to or the beneficial use of the Grantee Space for the Permitted Use. In the event of a conflict between the Rules and Regulations and the terms of this Agreement, the terms of this Agreement shall govern. Grantee shall further be responsible for the compliance with such Rules and Regulations (as the same may be changed, amended and/or supplemented from time to time as provided in this Section 6.2) by the employees, agents and invitees of Grantee. Grantor shall apply the Rules and Regulations uniformly to the occupants of the Datacenter.

6.3 Compliance with Laws; Hazardous Materials.

6.3.1 Compliance with Laws. Except as otherwise expressly provided in Section 8.1, Grantee, at Grantee’s sole cost and expense, shall timely take all action required to cause the Grantee Space to comply at all times during the Term of this Agreement in all respects with all laws, ordinances, building codes, rules, regulations, orders and directives of any governmental authority having jurisdiction (including without limitation any certificate of occupancy), and all covenants, conditions and restrictions affecting the Property now or in the future applicable to the Grantee Space and with all rules, orders, regulations and requirements of any applicable fire rating bureau or other organization performing a similar function (collectively, “Applicable Laws”). Grantee shall not use the Grantee Space, or permit the Grantee Space to be used, in any manner, or do or suffer any act in or about the Grantee Space which: (i) violates or conflicts with any Applicable Law; (ii) causes or is reasonably likely to cause damage to the Property, the Building, the Grantee Space or the Building and/or Property systems and equipment, including, without limitation, all fire/life safety, electrical, HVAC, plumbing or sprinkler, access control (including, without limitation, Grantor’s Access Control Systems), mechanical, telecommunications, elevator and escalator systems and equipment (collectively, the “Building Systems”); (iii) will invalidate or otherwise violates a requirement or condition of any fire, extended coverage or any other insurance policy covering the Property, the Building, and/or the Grantee Space, or the property located therein, or will increase the cost of any of the same (unless, at Grantor’s election, Grantor permits an activity which will cause an increase in any such insurance rates on the condition that Grantee shall agree in writing to pay any such increase to Grantor immediately upon demand as Additional Colocation Fees); (iv) constitutes or is reasonably likely to constitute a nuisance, annoyance or inconvenience to other tenants or occupants of the Building or the Property, or any equipment, facilities or systems of any such tenant; (v) interferes with, or is reasonably likely to interfere with, the transmission or reception of microwave, television, radio, telephone, or other communication signals by antennae or other facilities located at the Property; (vi) amounts to (or results in) the commission of waste in the Grantee Space, the Building or the Property; (vii) violates any of the rules and regulations from time to time promulgated by 111 Chelsea or Grantor applicable to the Grantee Space, the Building or the Property (including, without limitation, the Rules and Regulations); or (viii) other than the Permitted Use. Grantee shall be responsible for any losses, costs or damages in the event that unauthorized parties gain access to the Grantee Space or the Building through access cards, keys or other access devices provided to Grantee by Grantor. Grantee shall promptly upon demand reimburse Grantor as Additional Colocation Fees for any additional premium charged for any insurance policy by reason of Grantee’s failure to comply with the provisions of this Section 6.3.

6.3.2 Hazardous Materials. No Hazardous Materials (defined below) shall be Handled (defined below) upon, about, in, at, above or beneath the Grantee Space or any portion of the

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Building or the Property by or on behalf of Grantee, its Transferees (defined in Section 10.1, below) or partners, or their respective contractors, clients, officers, directors, partners, employees, servants, representatives, licensees, agents, or invitees (collectively, the “Grantee Parties”). Additionally, Grantee shall not use the Grantee Space, or permit the Grantee Space to be used, in any manner which may directly or indirectly lead to any non-compliance with any Environmental Law. Notwithstanding the foregoing, normal quantities of those Hazardous Materials customarily used in the conduct of the Permitted Use may be used at the Grantee Space without Grantor’s prior written consent, but only in compliance with all applicable Environmental Laws (defined below) and only in a manner consistent with Institutional Owner Practices (defined in Section 8.3, below). “Environmental Laws” shall mean and include all now and hereafter existing Applicable Laws regulating, relating to, or imposing liability or standards of conduct concerning public health and safety or the environment. “Hazardous Materials” shall mean and include: (1) any material or substance: (i) which is defined or becomes defined as a “hazardous substance,” “hazardous waste,” “infectious waste,” “chemical mixture or substance,” or “air pollutant” under Environmental Laws; (ii) containing petroleum, crude oil or any fraction thereof; (iii) containing polychlorinated biphenyls (PCB’s); (iv) asbestos, asbestos-containing materials or presumed asbestos-containing materials (collectively, “ACM”); (v) which is radioactive; (vi) which is infectious; or (2) any other material or substance displaying toxic, reactive, ignitable or corrosive characteristics, and are defined, or become defined by any Environmental Law. “Handle,” “Handled,” or “Handling” shall mean any installation, handling, generation, storage, treatment, use, disposal, discharge, release, manufacture, refinement, presence, migration, emission, abatement, removal, transportation, or any other activity of any type in connection with or involving Hazardous Materials.

6.4 Electricity Consumption Threshold. Grantee’s actual electricity consumption for the Colocation Premises, as determined by the Electrical Metering Equipment or such other measurement method or methods as Grantor and Grantee may agree upon in writing, shall not at any time, exceed the number of watts for the Colocation Premises specified in (i) Item 1 of Exhibit “F-I” during the Phase I Period (the “ECT-I”), (ii) Item 1 of Exhibit “F-II” during the Phase II Period (the “ECT-II”), and Item 1 of Exhibit “F-III” during the Phase III Period (the “ECT-III”). The term “Electricity Consumption Threshold” shall mean and refer to the ECT-I during the Phase I Period, the ECT-II during the Phase II Period, and the ECT-III during the Phase III Period. All equipment (belonging to Grantee or otherwise) located within the Colocation Premises shall be included in the calculation of Grantee’s actual electricity consumption for the Colocation Premises. For the avoidance of doubt, Grantor and Grantee acknowledge that the Electricity Consumption Threshold exists, so that Grantor is better able to (a) budget the amount of power available to the Demised Premises among the existing and future users and occupants of the Demised Premises, (b) enhance the safeguarding, in accordance with National Electrical Code Guidelines, of person and property in the Colocation Premises, and (c) operate the Colocation Premises consistent with Institutional Owner Practices. As such, Grantee agrees that it will actively monitor the electricity consumption for the Colocation Premises to ensure that such consumption does not exceed the Electricity Consumption Threshold. Additionally, in the event that the electricity consumption in the Colocation Premises does exceed the Electricity Consumption Threshold (each such event, an “ECT Overage”), Grantee agrees to take immediate action (regardless of whether Grantee has received notice of such ECT Overage from Grantor) to power down items of equipment in the Grantee Space in order to cause power consumption in the Colocation Premises to be at or below the Electricity Consumption Threshold. Additionally, in the event that (i) Grantee receives a notice from Grantor related to any ECT Overage, and (ii) Grantee has not remedied such ECT Overage within seventy-two (72) hours after its receipt of such notice from Grantor (or, in the event that, despite Grantee’s attempt at remedying the ECT Overage, Grantee exceeds the Electricity Consumption Threshold three (3) times in any thirty (30) day period), then such occurrence shall be deemed to be an Event of Default hereunder.

6.5 Structural Load. Grantee shall not place a load upon the Colocation Premises exceeding the number of pounds of live load per square foot specified in Item 27 of the Basic Colocation Information.

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7. SERVICES TO BE PROVIDED TO THE GRANTEE SPACE.

7.1 Access Control. Grantor will provide access control as follows: (i) Grantor will operate a check-in desk at the Datacenter’s main entrance twenty-four (24) hours per day, seven (7) days per week (ii) Grantor has installed an electronic “key card” system to control access to the Colocation Premises, and (iii) Grantor has installed a video surveillance system in the Datacenter (collectively, “Grantor’s Access Control Systems”). Grantor disclaims any and all other responsibility or, obligation to provide additional access control (or any security) to the Datacenter, the Grantee Space, or any portion of any of the above. Grantor reserves the right, to be exercised by Grantor in its sole and absolute discretion, but without assuming any duty, to institute additional access control measures in order to further control and regulate access to the Datacenter or any part thereof. Grantor shall not, under any circumstances, be responsible for providing or supplying security services to the Grantee Space or any part of the Datacenter in excess of the Grantor’s Access Control Systems expressly set forth in this Section 7.1 (and Grantor shall not under any circumstances be deemed to have agreed to provide any services in excess of the above specified Grantor’s Access Control Systems). Subject to Grantor’s approval of the plans and specifications therefor and the contractors who will perform such work, Grantee may install, at its sole cost and expense, its own security system (“Grantee’s Security System”) for the Colocation Premises. Grantee shall furnish Grantor with a copy of all key codes, access cards and other entry means and ensure that Grantor shall have access to the Colocation Premises at all times. Additionally, Grantee shall ensure that Grantee’s Security System shall comply with all applicable laws, ordinances, rules and regulations, including all fire safety laws, and in no event shall Grantor be liable for the malfunctioning thereof, and Grantee shall indemnify Grantor therefrom. Grantee acknowledges and agrees that it understands that all persons in the Colocation Premises and the activities of all such persons are and shall be subject to surveillance by video camera and/or otherwise by Grantor’s agents and employees.

7.2 Electricity. Grantor shall furnish electricity to (a) the Phase I Space during the Phase I Period in accordance with the specifications set forth in Item 1 of Exhibit “F-I” attached hereto, (b) the Phase II Space during the Phase II Period in accordance with the specifications set forth in Item 1 of Exhibit “F-II” attached hereto, and (c) the Phase III Space during the Phase III Period in accordance with the specifications set forth in Item 1 of Exhibit “F-III” attached hereto. The obligation of Grantor to provide electricity to the Grantee Space shall be subject to the rules, regulations and requirements of the supplier of such electricity and of any governmental authorities regulating providers of electricity and shall be limited to providing the Electricity Consumption Threshold (as defined in Section 6.4). Grantee shall be solely responsible for all emergency, supplemental or back-up power systems (“Back-Up Power”) for use in the Grantee Space, except, during the Phase I Period, the Phase II Period and the Phase III Period, as expressly set forth in Item 3 of Exhibit “F-I”, Exhibit “F-II”, and Exhibit “F-III”, respectively.

7.3 Interruption of Services.

7.3.1 Grantor shall not be liable or responsible to Grantee for any loss, damage or expense of any type which Grantee may sustain or incur if the quantity or character of the utility provided electric service is changed or is no longer suitable for Grantee’s requirements. Except as otherwise expressly set forth herein, no interruption or malfunction of any electrical or other service (including, without limitation, heating ventilation and air conditioning “HVAC”) to the Colocation Premises (or to any other portion of the Datacenter or Building) shall, in any event, (i) constitute an eviction or disturbance of Grantee’s use and possession of the Grantee Space, (ii) constitute a breach by Grantor of any of Grantor’s obligations under this Agreement, (iii) render Grantor liable for damages of any type or entitle Grantee to be relieved from any of Grantee’s obligations under this Agreement (including the obligation to pay Base Colocation Fees, Additional Colocation Fees, or other charges), (iv) grant Grantee any right of setoff or recoupment, (v) provide Grantee with any right to terminate this Agreement, or (vi) make Grantor liable for any injury to or interference with Grantee’s business or any punitive, incidental or consequential damages (of any type), whether foreseeable or not, whether arising from or relating to the making of or failure to make any repairs, alterations or improvements, or whether arising from or related to the provision of or failure to provide for or to restore any service in or to any portion of the Property or the Building. In the event of any interruption, however, Grantor shall employ commercially reasonable efforts to restore such service or cause the same to be restored in any circumstances in which such restoration is within the reasonable control of Grantor and the interruption at issue was not caused in whole or in part by any action of Grantee.

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7.3.2 Equitable Abatement of Base Colocation Fees. Notwithstanding the foregoing, in the event that (a) there is an interruption of Grantor’s services, including, but not limited to (i) any interruption of any electrical or other service (including, without limitation, HVAC) to the Conditioned Premises, or (ii) a violation of the service levels described in Exhibit “F-I”, Exhibit “F-II”, or Exhibit “F-III”, attached hereto, (b) such interruption of Grantor’s services is not caused by any act or omission of Grantee or Grantee’s employees, agents, invitees or contractors, nor by a Casualty (as defined in Section 9.1.1, below), nor by an ECT Overage, (c) Grantee is prevented from using (and actually does not use) the Conditioned Premises, or any portion thereof, in the ordinary course of Grantee’s business (which, for the avoidance of doubt, and for the purposes of this Agreement, means the operation of Grantee’s business in the affected portion of the Grantee Space is adversely impacted), as determined by Grantee, for a period in excess of the timeframe specified in Item 15 of the Basic Colocation Information (the “Eligibility Period”) as a result of such interruption of Grantor’s services (such an interruption, an “Interruption of Grantor’s Services”), Grantee shall, as its exclusive remedy therefor, be entitled to an equitable abatement of Base Colocation Fees as set forth in Item 15 of the Basic Colocation Information. The foregoing notwithstanding, if Grantee fails to take advantage of the redundant electrical design of the Conditioned Premises (e.g. Grantee “single-cords” its equipment in a scenario where “dual-cording” of Grantee’s equipment is available), and there occurs an interruption of electrical service to the Conditioned Premises, which could have been avoided if Grantee had, in fact, taken proper advantage of such electrical redundancies, then such interruption will not be deemed to be an Interruption of Grantor’s Services.

7.3.3 In addition to Grantee’s right to abatement of Base Colocation Fees, in the event a Continuous Outage (as hereinafter defined) occurs, Grantee may terminate this Agreement by delivering to Grantor within five (5) business days following the occurrence of the Continuous Outage, written notice (“Grantee’s Continuous Outage Termination Notice”) of such termination. Grantee’s failure to timely deliver Grantee’s Continuous Outage Termination Notice shall automatically extinguish Grantee’s right to terminate this Agreement with respect to that particular Continuous Outage. As used herein the term “Continuous Outage” means an Interruption of Grantor’s Services occurs and continues for twenty (20) consecutive days, regardless of whether or not such Interruption of Grantor’s Services was caused by Force Majeure.

7.3.4 In addition to Grantee’s right to abatement of Base Colocation Fees, in the event a Chronic Outage (as hereinafter defined) occurs, Grantee may terminate this Agreement by delivering to Grantor within five (5) business days following the occurrence of the Chronic Outage, written notice (“Grantee’s Chronic Outage Termination Notice”) of such termination. Grantee’s failure to timely deliver Grantee’s Chronic Outage Termination Notice shall automatically extinguish Grantee’s right to terminate this Agreement with respect to that particular Chronic Outage. As used herein the term “Chronic Outage” means that three (3) or more times within a twelve (12) consecutive month period, there occurs separate/independent Interruptions of Grantor’s Services, each occurrence of which continues for eight (8) or more consecutive hours, regardless of whether or not such Interruption of Grantor’s Services was caused by Force Majeure.

8. MAINTENANCE; ALTERATIONS.

8.1 Grantor Maintenance. Except as otherwise expressly provided in Sections 8.1.1 and 8.1.2, Grantor shall have no obligation to repair and/or maintain the Grantee Space.

8.1.1 Grantor will maintain and keep in good repair the Pathway and shared Pathway (including dark fiber(s)), Grantor’s Access Control Systems, HVAC, Back-up Power, fire suppression systems, common area cable management systems comprised of ladder racks, fiber trays, under-floor cable trays and other similar equipment located within the Common Areas that are installed for the benefit of all occupants of the Datacenter, floors and walls, foundation, exterior walls and roof of the Building, the public areas within the Datacenter, and the heating, air conditioning and ventilation system within the

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Datacenter. Grantor shall use commercially reasonable efforts to, (i) maintain the temperature in the Conditioned Premises within the range specified in Item 4(a) of Exhibit “F-I”, Exhibit “F-II”, and Exhibit “F-III”, during the applicable periods, as described therein, and (ii) maintain the relative humidity in the Conditioned Premises within the range specified in Item 4(b) of Exhibit “F-I”, Exhibit “F-II” , and Exhibit “F-III”, during the applicable periods, as described therein.

8.1.2 Grantor’s current preventative maintenance schedule, for Grantor’s preventative maintenance obligations, is attached hereto as Exhibit “I” (the “Current PM Schedule”). Grantor agrees to use commercially reasonable efforts to give Grantee notice of any material changes in such schedule as far in advance as is reasonably required by Grantee. Grantor shall use commercially reasonable efforts to provide Grantee with Grantor’s preventative maintenance schedule with respect to such equipment one year in advance. Although Grantor will use commercially reasonable efforts to substantially adhere to the maintenance schedule provided to Grantee, Grantee acknowledges that Grantor may deviate from such schedule; provided, however, the foregoing acknowledgement shall not be deemed to relieve Grantor of Grantor’s obligations under Section 8.1.1, above. Grantee shall have the right to confirm Grantor’s compliance with Grantor’s maintenance schedule by inspecting Grantor’s books and records with respect thereto (“Books and Records”), interviewing Grantor’s relevant employees or contractors, and visually inspecting the related equipment (collectively, “Grantee’s Maintenance Inspection”), but in no event more frequently than twice in a twelve (12) month period during the Term, unless a prior inspection during the previous twelve (12) months shall have revealed a failure of Grantor to comply with such schedules. Grantee shall exercise the foregoing right by delivering prior written notice (“Grantee’s Inspection Notice”) to Grantor of Grantee’s intent to perform Grantee’s Maintenance Inspection, detailing the equipment for which the Books and Records are requested and/or which Grantee wishes to visually inspect. Any visual inspection shall be performed during Grantor’s normal business hours at a time reasonably designated by Grantor. Grantor shall respond to Grantee’s request to perform an inspection within five (5) business days after receipt of Grantee’s Inspection Notice by delivering to Grantee copies of the requested Books and Records and, if a request for an interview or a visual inspection is included in Grantee’s Inspection Notice, designating the time at which Grantee may perform its interview or visual inspection. If Grantee’s inspection reveals that Grantor is delinquent in complying with Grantor’s maintenance schedule, Grantee shall deliver written notice to Grantor of such delinquency including reasonable detail of such delinquency, and Grantor shall cure such delinquency within the time allowed Grantor pursuant to Section 16.1 of this Agreement, failing which Grantor shall be in default of its obligations hereunder.

8.2 Grantee’s Maintenance. During the Term of this Agreement, Grantee shall, at Grantee’s sole cost and expense, maintain the Grantee Space and Grantee’s equipment therein in a safe and good order and clean condition (and in at least as good order and clean condition as when Grantee took possession), ordinary wear and tear excepted. If Grantee fails to perform its covenants of maintenance and repair hereunder and such failure constitutes an Event of Default, or if Grantee or any of Grantee’s technicians or representatives physically damages the Building, the Datacenter or any portion of any of the above, or the personal property of any other tenant or occupant, Grantor may, but shall not be obligated to, perform all necessary or appropriate maintenance and repair, and any amounts expended by Grantor in connection therewith, plus an administrative charge of ten percent (10%), shall be reimbursed by Grantee to Grantor as Additional Colocation Fees within thirty (30) days after Grantor’s demand therefor.

8.3 Alterations. Notwithstanding any provision in this Agreement to the contrary, Grantee shall not make or cause to be made any alterations, additions, improvements or replacements to the Grantee Space, or any other portion of the Building or Property (collectively, “Alterations”) under this Agreement without the prior written consent and approval of (i) Grantor, which consent and approval will not be unreasonably withheld, conditioned or delayed, and (ii) 111 Chelsea, to the extent that such consent is required under the terms of the Underlying Lease.

8.4 Removal of Cable, Wiring, Connecting Lines, Equipment and Personal Property. Grantee agrees that, upon the expiration or earlier termination of this Agreement, Grantee (or, failing which, a contractor designated by Grantor) shall at Grantee’s sole cost and expense, promptly remove all of Grantee’s Personal Property (defined below), and shall restore those portions of the Building, Datacenter

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and/or the Grantee Space damaged by such removal of (or by the initial installation of) such Grantee’s Personal Property to their condition immediately prior to the installation or placement of such items. If Grantee fails to promptly remove any such Grantee’s Personal Property pursuant to this Section 8.4, Grantor shall have the right to remove such Grantee’s Personal Property and to restore those portions of the Building, Datacenter and/or the Grantee Space damaged by such removal to their condition immediately prior to the installation or placement of such Grantee’s Personal Property, in which case Grantee agrees to reimburse Grantor within thirty (30) days of Grantor’s demand therefor, for all of Grantor’s costs of removal and restoration plus an administrative fee equal to ten percent (10%) of such cost; provided, however, Grantee shall not have any responsibility to reimburse Grantor for such removal costs (or any administrative fees thereon) if the incoming occupant to the Grantee Space pays for or otherwise causes such removal costs to be funded (e.g., through an improvement allowance). For purposes hereof, “Grantee’s Personal Property” shall mean, collectively, all cable, wiring, connecting lines, and other installations, equipment or property installed or placed by, for, through, under or on behalf of Grantee or any Grantee Party anywhere in the Building, the Datacenter and/or the Grantee Space (other than (i) equipment or property owned, leased or licensed by Grantor or any other member of the Grantor Group and (ii) Existing Fixtures and Equipment). Additionally, for the purposes of clarity, the parties acknowledge that Grantee’s Personal Property includes all equipment or property (other than (i) equipment or property owned, leased or licensed by Grantor or any other member of the Grantor Group and (ii) Existing Fixtures and Equipment) installed and/or placed anywhere in the Building in connection with this Agreement and/or the Grantee Space by any party specifically and solely in order to provide any service to Grantee or any Grantee Party (e.g., data storage/archiving and data recovery type equipment that is utilized by or for Grantee or any Grantee Party in the Grantee Space, but which is actually owned by a third party, other than Grantor or any other member of the Grantor Group).

9. CASUALTY; TAKING; INSURANCE.

9.1 Casualty; Taking.

9.1.1 If at any time during the Term of this Agreement, a material portion of the Property, the Building, the Datacenter, or the Grantee Space shall be (i) damaged or destroyed by fire or other casualty (a “Casualty”) or (ii) taken under the power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or sold to prevent the exercise thereof (a “Taking”), then Grantor shall have the right to elect, in Grantor’s sole and absolute discretion, to either (a) terminate this Agreement by delivery of written notice (a “Termination Notice”) thereof to Grantee or (b) to continue this Agreement, in which case, Grantor shall repair and reconstruct the Grantee Space to substantially the same condition in which they existed immediately prior to such Casualty or Taking. For the avoidance of doubt, however, such repair and reconstruction obligations shall not be deemed to include any obligation on the part of Grantor with regard to any of Grantee’s Personal Property. If as a result of the Casualty, the Grantee Space is unfit for use by Grantee in the ordinary conduct of Grantee’s business and actually is not used by Grantee, then Grantor shall provide written notice (the “Restoration Notice”) to Grantee as soon as practicable after the Casualty of the period of time (the “Stated Restoration Period”) which shall be required for the repair and restoration of the Datacenter to permit use of the Grantee Space in the ordinary conduct of Grantee’s business and Grantee shall have the right, at its election, (i) to terminate this Agreement if either (a) the Stated Restoration Period shall be in excess of one hundred eighty (180) days following the Casualty or Taking, (b) fewer than twenty-four (24) months remain in the Term as of the date of the Taking or Casualty, or (c) fewer than twelve (12) months would remain in the Term upon the expiration of the Stated Restoration Period, and Grantee terminates this Agreement with written notice thereof to Grantor within thirty (30) days following delivery of the Restoration Notice, or (ii) to terminate this Agreement if Grantor shall fail within the Stated Restoration Period to complete the repair and restoration of the Datacenter necessary to allow Grantee’s use of the Grantee Space in the ordinary conduct of Grantee’s business and Grantee delivers written notice of such termination to Grantor within thirty (30) days following the expiration of the restoration deadline.

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9.1.2 Base Colocation Fees Abatement; Taking Awards. In the event that this Agreement is terminated as herein permitted, Grantor shall refund to Grantee any prepaid Base Colocation Fees less any sum then owing Grantor by Grantee.

9.1.2.1 Base Colocation Fees Abatement. If this Agreement is not terminated as provided in Section 9.1.1 above, Base Colocation Fees shall abate proportionately during the period and to the extent that the Grantee Space is unfit for use by Grantee in the ordinary conduct of Grantee’s business (as reasonably determined by Grantee) and actually is not used by Grantee, Grantor shall promptly commence the repair of the damage caused by such Casualty or Taking and thereafter diligently prosecute such repair to completion, subject to Force Majeure, including, without limitation, delays arising from shortages of labor or material, delay in obtaining government approvals or other conditions beyond Grantor’s reasonable control. Grantor shall take commercially reasonable measures to mitigate delays arising from Force Majeure events.

9.1.2.2 Taking Award Rights. Grantor reserves the right to receive the entirety of the condemning authority’s award related to a Taking of any portion of the Property. The foregoing notwithstanding, in the event that this Agreement is terminated in connection with any Taking, Grantor expressly permits Grantee to make a separate claim against the condemning authority, in any appropriate proceeding, for the value of Grantee’s unamortized, but taken, fixtures, equipment or other improvements to the Grantee Space made by Grantee, or at Grantee’s expense, which are taken in connection with such Taking, and for Grantee’s moving expenses related to such Taking, but only if such claim and/or recovery does not reduce the condemnation/taking award otherwise payable to Grantor in connection with such Taking (“Grantee’s Taking Award Rights”). If any such award made, or compensation paid, to either party specifically includes an award or amount for the other, the party first receiving the same shall promptly account therefore to the other.

9.1.3 Grantee’s Remedy. Grantee’s termination right, Base Colocation Fees abatement and right to file a separate claim in the event of a Taking, to the extent provided above in this Article 9, shall be Grantee’s sole remedies in the event of a Casualty or Taking, and Grantee shall not be entitled to any compensation or damages for loss of, or interference with, Grantee’s business or use or access of all or any part of the Grantee Space resulting from any such damage, repair, reconstruction or restoration; provided, however, that notwithstanding anything to the contrary herein, if any Casualty is caused by the active negligence or omission or willful misconduct of Grantee or any Grantee Party, Grantee shall not be entitled to terminate this Agreement under Section 9.1.1 and there shall be no abatement of any Base Colocation Fees (or any other Colocation Fees or other amounts) due hereunder.

9.1.4 Waiver. Grantor and Grantee agree that the provisions of this Article 9 and the remaining provisions of this Agreement shall exclusively govern the rights and obligations of the parties with respect to any and all damage to, or destruction of, all or any portion of the Grantee Space, the Datacenter, the Building or the Property, and/or any Taking thereof, and each Grantor and Grantee hereby waive and release each and all of their respective common law and statutory rights inconsistent herewith, whether now or hereinafter in effect.

9.2 Grantee’s Insurance. Grantee shall, at Grantee’s expense, procure and maintain throughout the Term of this Agreement a policy or policies of insurance in accordance with the terms and requirements set forth in Exhibit “B” to this Agreement. Grantee hereby waives its rights against the Grantor Group (defined in Item 24 of the Basic Colocation Information) with respect to any claims or damages or losses (including any claims for bodily injury to persons and/or damage to property) which are caused by or result from (i) risks insured against under any insurance policy carried by Grantee at the time of such claim, damage, loss or injury, or (ii) risks which would have been covered under any insurance required to be obtained and maintained by Grantee under this Agreement had such insurance been obtained and maintained as required; provided, however, that in no event shall Grantee be deemed to have waived its right against Grantor with respect to any claims or damages or losses (including any claims for bodily injury to persons and/or damage to property) which are caused by or result from the gross negligence or willful misconduct of any member of the Grantor Group. The foregoing waivers shall be in addition to,

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and not a limitation of, any other waivers or releases contained in this Agreement; provided, however, the foregoing waivers shall not apply to any claims, damages or losses arising from or related to the gross negligence or willful misconduct of Grantor or any member of the Grantor Group.

9.3 Grantor’s Insurance. Grantor shall, at Grantor’s expense, procure and maintain throughout the Term of this Agreement a policy or policies of insurance insuring all of Grantor’s equipment and fixtures installed in or on the Building against loss due to fire and other casualties included in standard extended coverage insurance policies, in an amount equal to the replacement cost thereof. For the avoidance of doubt, however, Grantor and Grantee acknowledge and agree that, in no event, shall Grantor be obligated to carry any insurance on any of Grantee’s Personal Property. All insurance required under this Agreement shall be issued by insurers with a “General Policyholders Rating” of at least A-, VIII, as set forth in “Best’s Insurance Guide.” Such insurers shall be authorized to do business in the state in which the Property is located. Grantor hereby waives its rights against Grantee with respect to any claims or damages or losses (including any claims for bodily injury to persons and/or damage to property) which are caused by or result from (i) risks insured against under any insurance policy carried by Grantor at the time of such claim, damage, loss or injury, or (ii) risks which would have been covered under any insurance required to be obtained and maintained by Grantor under this Agreement had such insurance been obtained and maintained as required; provided, however, that in no event shall Grantor be deemed to have waived its rights against Grantee with respect to any claims or damages or losses (including any claims for bodily injury to persons and/or damage to property) which are caused by or result from the negligence or willful misconduct of Grantee and/or the Grantee Parties, as defined in Section 14.2 below. The foregoing waivers shall be in addition to, and not a limitation of, any other waivers or releases contained in this Agreement. All of Grantor’s insurance policies shall be endorsed so as to include a waiver of subrogation with and to the full extent of Grantor’s waiver of claims above.

10. ASSIGNMENT AND SUBLETTING.

10.1 Restrictions on Transfers; Grantor’s Consent. Except as provided in Section 10.1.1, Grantee shall not sublease all or any part of the Grantee Space, nor assign this Agreement, nor enter into any other agreement (a) permitting a third party (other than Grantee’s employees and occasional guests) to occupy or use any portion of the Grantee Space or (b) otherwise assigning, transferring, mortgaging, pledging, hypothecating, encumbering or permitting a lien to attach to its interest under this Agreement (any such assignment, sublease or the like may sometimes be referred to herein as a “Transfer” and any person or entity to whom a Transfer is made or sought to be made is referred to herein as a “Transferee”), without Grantor’s express prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Except as provided in Section 10.1.1, no Transfer (whether voluntary, involuntary or by operation of law) shall be valid or effective without Grantor’s prior written consent and, at Grantor’s election, any Transfer or attempted Transfer shall constitute an Event of Default of this Agreement. Except as set forth in Section 10.5 below, Grantee expressly covenants and agrees not to enter into (and acknowledges and agrees that it has no right to enter into) any Transfer which expressly, implicitly, or effectively amounts to or is the equivalent of a sublease or other arrangement which creates a co-location between Grantee and any Transferee (any such Transfer a “Sub-Co-location Arrangement”) without the prior written consent of Grantor which, in such circumstances, may be granted or withheld by Grantor for any reason or for no reason in the exercise of Grantor’s sole and absolute discretion (and Grantee agrees that it shall be reasonable for Grantor to withhold its consent to any Transfer which would amount to or create the equivalent of a Sub-Co-location Arrangement).

10.1.1 Permitted Transfer. Notwithstanding anything to the contrary in this Agreement, Grantee may, without the consent of Grantor (and without being subject to Grantor’s rights under Section 10.3, below) assign its interests in this Agreement to (i) an Affiliate of Grantee Parent, or (ii) any assignee which acquires all or substantially all of the business of Grantee Parent whether by stock purchase, asset purchase or other transfer, or (iii) any public offering of the securities of Grantee Parent, or (iv) any merger or combination of Grantee Parent, Grantee, and/or any parent entity of the foregoing (each a “Permitted Transfer”). For purposes of the foregoing, a sale of those assets of Grantee Parent and the Tel^x Affiliates that generates ninety percent (90%) or more of the aggregate gross revenues of Grantee

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Parent and the Tel^x Affiliates for the last full Grantee Parent fiscal year prior to any such sale shall be deemed to constitute a sale of “substantially all” of the assets of Grantee Parent and the Tel^x Affiliates. The term “Affiliate of Grantee Parent” as used herein shall mean any partnership, limited liability company, or corporation or other entity, directly or indirectly, which through one or more intermediaries, controls, is controlled by, or is under common control with Grantee Parent, and which entity has a Tangible Net Worth of not less than the Tangible Net Worth of Grantee Parent as of the date of the assignment to such entity. The term “Tel^x Affiliates” as used herein shall mean any individual, partnership, limited liability company, corporation, trust, real estate investment trust, association or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with Grantee Parent. The term “control”, as used in the two (2) immediately preceding sentences shall mean with respect to a corporation the right to exercise, directly or indirectly, fifty percent (50%) or more of the voting rights attributable to the controlled corporation or the power to elect a majority of its Board of Directors. The term “Tangible Net Worth” as used herein shall mean the excess of total assets over total liabilities (in each case, determined in accordance with GAAP) excluding from the determination of total assets all assets which would be classified as intangible assets under GAAP, including, without limitation, goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises.

10.2 Notice to Grantor. If Grantee desires to make any Transfer (other than a Permitted Transfer, for which Grantee must notify Grantor within twenty (20) days after the occurrence of same), then at least twenty (20) days (but no more than one hundred eighty (180) days) prior to the proposed effective date of the proposed Transfer, Grantee shall submit to Grantor a written request (a “Transfer Notice”) for Grantor’s consent, which notice shall include: (i) a statement containing: (a) the name and address of the proposed Transferee; (b) current, certified financial statements of the proposed Transferee, and any other information and materials (including, without limitation, credit reports, business plans, operating history, bank and character references) required by Grantor to assist Grantor in reviewing the financial responsibility, character, and reputation of the proposed Transferee; (c) all of the principal terms of the proposed Transfer; and (d) such other information and materials as Grantor may reasonably request (and if Grantor requests such additional information or materials, the Transfer Notice shall not be deemed to have been received until Grantor receives such additional information or materials) and (ii) one (1) original of the proposed assignment or other Transfer setting forth the major economic terms thereof on a form reasonably approved by Grantor and four (4) originals of the Grantor’s standard form of “Assignment and Assumption of Agreement and Consent” or other Transfer documentation executed by Grantee and the proposed Transferee. If Grantee modifies any of the terms and conditions relevant to a proposed Transfer specified in the Transfer Notice, Grantee shall re-submit such Transfer Notice to Grantor for its consent pursuant to all of the terms and conditions of this Article 10.

10.3 Intentionally Deleted.

10.4 No Release; Subsequent Transfers. No Transfer (whether or not a Permitted Transfer) will release Grantee from Grantee’s obligations under this Agreement or alter the primary liability of Grantee to pay the Colocation Fees and to perform all other obligations to be performed by Grantee hereunder, or will release Guarantor from Guarantor’s obligations under the Guaranty. In no event shall the acceptance of any payment by Grantor from any other person be deemed to be a waiver by Grantor of any provision hereof. Consent by Grantor to one Transfer will not be deemed consent to any subsequent Transfer. In the event of breach by any Transferee of Grantee or any successor of Grantee in the performance of any of the terms hereof, Grantor may proceed directly against Grantee without the necessity of exhausting remedies against such Transferee or successor. The voluntary or other surrender of this Agreement by Grantee or a mutual termination thereof shall not work as a merger and shall, at the option of Grantor, either (i) terminate all and any existing agreements effecting a Transfer, or (ii) operate as an assignment to Grantor of Grantee’s interest under any or all such agreements.

10.5 Colocation. Grantor acknowledges that the business to be conducted by the undersigned Grantee in the Colocation Premises requires the installation of certain equipment (described below) owned by customers or co-locators of the undersigned Grantee (“Permitted Licensees”) in the Colocation Premises, in order for the Permitted Licensees to place and maintain computer, switch and/or

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communications equipment which may interconnect with Grantee’s facilities and/or the Permitted Licensees’ facilities (the “Permitted Interconnection”). To expedite the Permitted Licensees’ access to the Colocation Premises for the Permitted Interconnection, Grantor expressly agrees that Grantee may, without Grantor’s further consent, license portions of the Colocation Premises to the Permitted Licensees for the sole purpose of the Permitted Interconnection pursuant to written agreements by and between Grantee and the Permitted Licensees (collectively, “Permitted Agreements”); provided, however, that (a) Grantee provides a list of contact information for such Permitted Licensees in a format that Grantor may reasonably alter from time-to-time, (b) Grantee pays to Grantor as Additional Colocation Fees Grantor’s prevailing fee for each Permitted Licensee (the “Access Card Fee”) for the purpose of providing the Permitted Licensee with access to the Colocation Premises, which Access Card Fee, as of the date of this Agreement, is $35 per access card and is subject to increases from time-to-time during the Term of this Agreement, and (c) the Permitted Licensee’s license of a portion of the Colocation Premises may not violate the terms of this Agreement or any Applicable Laws. Grantor expressly waives its right to prior review of such Permitted Agreements. Grantee’s Permitted Agreements with the Permitted Licensees may not affect, or provide any rights with respect to or to use in any manner, the Pathway as defined in Item 7 of the Basic Colocation Information or Grantee’s interconnections. The Permitted Licensees shall comply with all Applicable Laws and the Rules and Regulations. The Permitted Agreements and the Permitted Licensees’ rights thereunder shall be subject and subordinate at all times to the Agreement and all of its provisions, covenants and condition. Grantee hereby agrees to indemnify, defend, and hold harmless Grantor and the Grantor Group from and against (and to reimburse Grantor and the Grantor Group for) any and all Claims (defined in Section 14.2, below) arising from or in any manner relating to (i) any Permitted Agreement, (ii) the use or occupancy of the Grantee Space or any other portion of the Building or the Property by any Permitted Licensee or any person claiming by, through or under any Permitted Licensee, its partners, and their respective officers, agents, servants or employees of Grantee or any such person (collectively, the “Colocating Parties”), or (iii) the acts or omissions of any Permitted Licensee or any Colocating Parties. Anything to the contrary contained herein notwithstanding, Grantor and Grantee acknowledge and agree that Permitted Agreements shall not constitute, or be deemed to be, the grant of a leasehold interest or otherwise constitute, or be deemed to be, a real property interest.

11. INTENTIONALLY DELETED.

12. INTENTIONALLY DELETED.

13. SURRENDER OF GRANTEE SPACE; HOLDING OVER.

13.1 Grantee’s Method of Surrender. Upon the expiration of the Term of this Agreement, or upon any earlier termination of this Agreement or the termination of Grantee’s right to possess the Grantee Space, Grantee shall, subject to the provisions of this Article 13 and Section 8.4, quit and surrender possession of the Grantee Space to Grantor in good working order and clean condition, reasonable wear and tear, and damages by Casualty (not caused by any Grantee Party) and Taking excepted. If Grantee fails to surrender the Grantee Space upon the expiration of this Agreement, or within sixty (60) days following any earlier termination of this Agreement or the termination of Grantee’s right to possess the Grantee Space in accordance with the terms of this Agreement, then Grantee shall indemnify, protect, defend and hold the Grantor Group harmless from, and shall reimburse Grantor for its first-party losses, costs and expenses in connection with, all Claims (including, without limitation, costs and expenses incurred by Grantor in returning the Grantee Space to the condition in which Grantee was to surrender and Claims made by any succeeding occupant founded on or resulting from Grantee’s failure to surrender the Grantee Space) arising out of or in any manner relating to such failure to quit and surrender possession of the Grantee Space to Grantor in the condition required hereunder upon such date.

13.2 Disposal of Grantee’s Personal Property. If any property not belonging to Grantor remains in the Grantee Space after the expiration of or within sixty (60) days after any earlier termination of the Term of this Agreement or the termination of Grantee’s right to possess the Grantee Space, Grantee shall be deemed to have abandoned such property and to have authorized Grantor to make such disposition

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of such property as Grantor may desire without liability for compensation or damages to Grantee in the event that such property is the property of Grantee; and in the event that such property is the property of someone other than Grantee, Grantee shall indemnify and hold Grantor harmless from all Claims arising out of, in connection with, or in any manner related to any removal, exercise or dominion over and/or disposition of such property by Grantor. Grantee shall pay to Grantor Base Colocation Fees at the holdover rates set forth in Section 13.3 below during such time as any property not belonging to Grantor remains in the Grantee Space after the expiration or earlier termination of the Term of this Agreement.

13.3 Intentionally Deleted.

13.4 Survival. The provisions of this Article 13 shall survive the expiration or early termination of this Agreement.

14. WAIVER OF CLAIMS; INDEMNITY.

14.1 Waiver. To the fullest extent permitted by law, Grantee, as a material part of the consideration to Grantor, hereby assumes all risk of, and waives all claims it may have against the Grantor Group (as defined in the Basic Colocation Information) for damage to or loss of property (including, without limitation, loss of profits and intangible property) or personal injury or loss of life or other damages of any kind resulting from the Property, the Building, the Datacenter or the Grantee Space or any part thereof becoming out of repair, by reason of any repair or alteration thereof, or resulting from any accident within the Property, the Building, the Datacenter or the Grantee Space or on or about any space adjoining the same, or resulting directly or indirectly from any act or omission of any person, or due to any condition, design or defect of the Property, the Building, the Datacenter or the Grantee Space, or any space adjoining the same, or the mechanical systems of the Building, which may exist or occur, whether such damage, loss or injury results from conditions arising upon the Grantee Space or upon other portions of the Building, or from other sources or places, and regardless of whether the cause of such damage, loss or injury or the means of repairing the same is accessible to Grantee; provided, however, that such assumption and waiver shall not apply to the extent such claims are determined by a court of competent jurisdiction to have been proximately caused by the gross negligence or willful misconduct of Grantor or any other member of the Grantor Group. Grantee agrees that Grantor will not have any responsibility or liability for any damage to Grantee’s equipment or interruption of Grantee’s operations which is caused by any other tenant or occupant of the Datacenter, the Building or the Property or the employees, agents, contractors, technicians, representatives, customers, co-locators or invitees of any such tenant or occupant.

14.2 Indemnification.

14.2.1 Grantee’s Indemnification. Except to the extent caused by the gross negligence or willful misconduct of Grantor, Grantee hereby agrees to indemnify, defend, and hold harmless Grantor and the Grantor Group (as such term is defined in the Basic Colocation Information) from and against (and to reimburse Grantor and the Grantor Group for) any and all claims, actions, suits, proceedings, losses, damages, obligations, liabilities, penalties, fines, costs and expenses (including, without limitation, attorneys’ fees, legal costs, and other costs and expenses of defending against any claims, actions, suits, or proceedings) (collectively, “Claims”) arising from, in connection with, or in any manner relating to (or alleged to arise from, to be in connection with, or to be in any manner related to): (i) the use or occupancy of the Grantee Space or any portion of the Datacenter, the Building or the Property by Grantee or any person claiming by, through or under Grantee or any other Grantee Party (not arising from the gross negligence or willful misconduct of Grantor or its employees, agents, contractors or invitees), or (ii) the negligence or willful omissions of Grantee or any Grantee Parties with respect to the Grantee Space, the Datacenter, the Building or the Property; provided, however, Grantee’s indemnification, defense and hold harmless obligations under this Section shall not extend to Claims covered by Grantor’s indemnity of Grantee in Section 14.2.2, below. In the event that any action or proceeding is brought against Grantor or any member of the Grantor Group by reason of any such Claim, Grantee, upon timely notice from Grantor, shall defend such action or proceeding at Grantee’s cost and expense by counsel reasonably approved by Grantor. Grantee’s obligations under this Section 14.2 shall survive the expiration or termination of this

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Agreement as to any matters arising prior to such expiration or termination or prior to Grantee’s vacation of the Grantee Space and the Datacenter. Notwithstanding any provision to the contrary contained in this Section 14.2, nothing contained in this Section 14.2 shall be interpreted or used in any way to affect, limit, reduce or abrogate any insurance coverage provided by any insurer to either Grantee or Grantor. This indemnity provision shall survive the termination or expiration of this Agreement.

14.2.2 Grantor’s Indemnification. Subject to Sections 9.2 and 14.1, Grantor shall defend, indemnify, and hold harmless Grantee and the Grantee Parties (and to reimburse Grantee and any Grantee Parties) from and against all Claims to the extent arising from, in connection with, or in any manner relating to (or alleged to arise from, to be in connection with, or to be in any manner related to) the gross negligence or willful misconduct of Grantor or any member of the Grantor Group. In the event that any action or proceeding is brought against Grantee or any member of the Grantee Parties by reason of any such Claim, Grantor, upon timely notice from Grantee, shall defend such action or proceeding at Grantor’s cost and expense by counsel reasonably approved by Grantee. Grantor’s obligations under this Section 14.2 shall survive the expiration or termination of this Agreement as to any matters arising prior to such expiration or termination or prior to Grantee’s vacation of the Grantee Space and the Datacenter. Notwithstanding any provision to the contrary contained in this Section 14.2.2, nothing contained in this Section 14.2.2 shall be interpreted or used in any way to affect, limit, reduce or abrogate any insurance coverage provided by any insurer to either Grantee or Grantor. This indemnity provision shall survive the termination or expiration of this Agreement.

14.3 Consequential Damages. Except for the indemnification obligations expressly set forth in Section 13.3 and this Section 14.3, under no circumstances whatsoever shall Grantor or Grantee ever be liable under this Agreement for consequential damages, incidental damages, indirect damages, or special damages, or for loss of profit, loss of business opportunity or loss of income. The foregoing notwithstanding, with regard to each customer or other person or entity to which Grantee, any Grantee Affiliate, or any Transferee provides goods or services, which are in any way related to or associated with the use of the Grantee Space, including, but not limited to, those (now or hereafter) conducting transactions or other operations by or through or in connection with equipment located within the Grantee Space (collectively, “Grantee Space Customers”), Grantee hereby agrees to indemnify and hold Grantor and the other members of the Grantor Group harmless with regard to (and to reimburse Grantor and any other members of the Grantor Group for) any and all claims by, through, or under any Grantee Space Customer which are related to the use of the Grantee Space or equipment located within the Grantee Space, for, or with regard to, any and all types of consequential damages, incidental damages, indirect damages, or special damages, or for loss of profit, loss of business opportunity or loss of income related to any use of the Grantee Space or equipment located within the Grantee Space.

14.4 Liens. Notwithstanding anything to the contrary herein, in no event shall Grantee have any right (express or implied) to create or permit there to be established any lien or encumbrance of any nature against the Grantee Space, the Building or the Property or against Grantor’s or Grantee’s interest therein or hereunder, including, without limitation, for any improvement or improvements by Grantee, and Grantee shall fully pay the cost of any improvement or improvements made or contracted for by Grantee. Grantee shall require each contractor which it engages to perform any improvements or alterations within the Grantee Space or elsewhere in the Datacenter, the Building or the Property, to acknowledge and agree in writing that it is performing its work under its agreement with Grantee solely for the benefit of Grantee and that Grantee is not acting as Grantor’s agent. Any mechanic’s lien filed against the Grantee Space, the Datacenter, the Building or the Property, or any portion of any of the above, for work claimed to have been done, or materials claimed to have been furnished to Grantee, shall be duly discharged by Grantee within ten (10) business days after the filing of the lien.

14.5 Waiver of Grantor’s Lien. Grantor hereby expressly waives and releases any and all contractual liens and security interests or constitutional and/or statutory liens and security interests arising by operation of law to which Grantor might now or hereafter be entitled on the personal property of Grantee which Grantee now or hereafter places in or upon the Colocation Premises (except for judgment liens that may arise in favor of Grantor). The waiver and release contained herein shall not waive, release or otherwise affect any unsecured claim Grantor may now or hereafter have against Grantee.

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15. GRANTEE DEFAULT.

15.1 Events of Default By Grantee. Each of the following acts or omissions of Grantee or occurrences shall constitute an “Event of Default”:

15.1.1 Any failure or refusal by Grantee to timely pay any Colocation Fees or any other payments or charges required to be paid hereunder, or any portion thereof, within five (5) business days of notice that the same is due; provided, however, that Grantor shall not be required to send such written notice to Grantee more than twice in any twelve (12)-month period and after two (2) such written notices, Grantor shall have no obligation to give Grantee written notice of any subsequent default during the remainder of such twelve (12)-month period and Grantee’s failure or refusal to timely pay Colocation Fees or other sums due hereunder when due during the remainder of such twelve (12)-month period shall constitute an Event of Default.

15.1.2 Any failure by Grantee to perform or observe any other covenant or condition of this Agreement (including, without limitation, in the Rules and Regulations) to be performed or observed by Grantee (other than those described in Section 15.1.1, above or Sections 15.1.3, or 15.1.4, below) if such failure continues for a period of ten (10) days following written notice to Grantee of such failure; provided, however, that in the event Grantee’s failure to perform or observe any covenant or condition of this Agreement to be performed or observed by Grantee cannot reasonably be cured within ten (10) days following written notice to Grantee, Grantee shall not be in default if Grantee commences to cure same within the ten (10) day period and thereafter diligently prosecutes the curing thereof to completion within thirty (30) days following such written notice; provided, however, that Grantor shall not be required to send such written notice to Grantee more than three (3) times in any twelve (12)-month period for the same non-monetary default and after three (3) such written notices for the same non-monetary default, Grantor shall have no obligation to give Grantee written notice of the same non-monetary default during the remainder of such twelve (12)-month period and any subsequent occurrence of the same non-monetary default during the remainder of such twelve (12)-month period shall, at the election of Grantor, constitute an Event of Default.

15.1.3 The filing or execution or occurrence of any one of the following: (i) a petition in bankruptcy or other insolvency proceeding by or against Grantee, (ii) a petition or answer seeking relief under any provision of the Bankruptcy Act, (iii) an assignment for the benefit of creditors, (iv) a petition or other proceeding by or against Grantee for the appointment of a trustee, receiver or liquidator of Grantee or any of Grantee’s property, which proceeding or appointment is not dismissed within ninety (90) days, or (v) a proceeding by any governmental authority for the dissolution or liquidation of Grantee or any other instance whereby Grantee or any general partner of Grantee shall cease doing business as a going concern, which proceeding is not dismissed within ninety (90) days.

15.1.4 Any failure by Grantee to execute and deliver any statement or document described in either Article 11 or Section 12.1 requested to be so executed and delivered by Grantor within the time periods specified therein applicable thereto, where such failure continues for three (3) days after delivery of written notice of such failure by Grantor to Grantee.

The parties hereto acknowledge and agree that all of the notice periods provided in this Section 15.1 are in lieu of, and not in addition to, the notice requirements of any Applicable Laws.

15.2 Remedies. Upon the occurrence of any Event of Default by Grantee, Grantor shall have, in addition to any other remedies available to Grantor at law or in equity, the option to pursue any one or more of the remedies described in Section 1 of Exhibit “D” attached hereto and incorporated herein by this reference, each and all of which shall, subject to applicable law, be cumulative and nonexclusive, without any notice or demand whatsoever (and all of the other provisions of Section 1 of Exhibit “D” shall apply to an Event of Default by Grantee hereunder).

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16. LIMITATION OF GRANTOR’S LIABILITY.

16.1 Grantor Default. In the event that Grantor shall fail to perform any obligation of Grantor to be performed under this Agreement, Grantee’s sole and exclusive remedies for any such failure shall be an action for money damages, specific performance and/or injunctive relief (Grantee hereby waiving the benefit of any laws granting Grantee a lien upon the property of Grantor and/or upon rental due Grantor or granting Grantee a right to terminate this Agreement upon a default by Grantor); provided, however, that Grantor shall not be in default hereunder (and Grantee shall have no right to pursue any such claim for damages in connection with any such failure) unless and until Grantee shall have delivered to Grantor a written notice specifying such default with particularity, and Grantor shall thereafter have failed to cure such default within thirty (30) days (or, if the nature of Grantor’s obligation is such that more than thirty (30) days are reasonably required for its performance, then not unless Grantor shall have failed to commence such performance of such cure within such thirty (30) day period and thereafter diligently pursue the same to completion). Notwithstanding the foregoing, in the event Grantor’s failure to perform an obligation of Grantor to be performed under this Agreement materially adversely affects Grantee’s use of the Grantee Space for the Permitted Use, Grantor shall commence to cure such default within ten (10) business days following receipt of written notice from Grantee of such default, and in the event of an emergency, shall commence to cure such default within twenty-four (24) hours following receipt of written notice from Grantee of such default, and shall diligently pursue the curing thereof to completion. Unless and until Grantor shall have so failed to so cure any such failure after such notice, Grantee shall not have any remedy or cause of action by reason thereof. Except as expressly set forth in this Agreement, in no event shall Grantee have the right to terminate the Agreement nor shall Grantee’s obligation to pay Base Colocation Fees or other charges under this Agreement abate based upon any default by Grantor of its obligations under the Agreement. All obligations of Grantor hereunder will be construed as covenants, not conditions; and all such obligations will be binding upon Grantor only during the period of Grantor’s possession of the Datacenter and not thereafter.

16.2 Grantor’s Liability. In consideration of the benefits accruing under this Agreement to Grantee and notwithstanding anything to the contrary in this Agreement or in any exhibits, riders, amendments, or addenda to this Agreement (collectively, the “Agreement Documents”), it is expressly understood and agreed by and between the parties to this Agreement that: (i) the recourse of Grantee or its successors or assigns against Grantor (and the liability of Grantor to Grantee, its successors and assigns) with respect to (a) any actual or alleged breach or breaches by or on the part of Grantor of any representation, warranty, covenant, undertaking or agreement contained in any of the Agreement Documents, or (b) any matter relating to Grantee’s occupancy of the Grantee Space (collectively, the “Grantor’s Agreement Undertakings”), shall be limited solely to an aggregate amount not to exceed $20,000,000.00 (“Grantor’s Liability Cap”); (ii) except for the assets of Grantor, Grantee shall have no recourse against any assets of any member of the Grantor Group (as defined in the Basic Colocation Information); (iii) except as it relates to the assets of Grantor, no personal liability or personal responsibility of any sort with respect to any of Grantor’s Agreement Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against, the Grantor Group, and (iv) at no time shall Grantor be responsible or liable to Grantee or any Grantee Party for any lost profits, lost economic opportunities or any form of consequential damages as the result of any actual or alleged breach by Grantor of Grantor’s Agreement Undertakings.

16.3 Transfer of Grantor’s Interest. Grantor shall have the right, from time to time, to assign its interest in this Agreement in whole or, to a wholly owned subsidiary, in part. Notwithstanding the foregoing, in connection with any assignment in part to a wholly-owned subsidiary, (i) Grantor shall provide a written notice to Grantee specifying the rights and obligations so assigned and (ii) Grantor shall guaranty the performance of the obligations assigned to such wholly-owned subsidiary; provided, however, Grantor’s maximum liability under such guaranty shall not exceed the maximum liability it would have had under this Agreement if such obligations had not been assigned. Grantor, and each successor to Grantor,

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shall be fully released from the performance of Grantor’s obligations under the Agreement Documents arising after the date of such transfer of Grantor’s interest in the Property to a third party, provided that Grantor’s transferee assumes all of Grantor’s obligations under the Agreement Documents. Provided that Grantor’s transferee assumes all obligations of Grantor under the Agreement Documents, Grantor shall not be liable for any obligation under the Agreement Documents arising after the date of such transfer of its interest in the Property, and Grantee agrees to look solely to the successor in interest of Grantor in and to this Agreement for all obligations and liabilities accruing on or after the date of such transfer. If any security has been given by Grantee to secure the faithful performance of any of the covenants of this Agreement, Grantor may transfer or deliver said security, as such, to Grantor’s successor in interest and thereupon Grantor shall be discharged from any further liability with regard to said security.

17. MISCELLANEOUS.

17.1 Severability. If any provision of this Agreement is determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected thereby.

17.2 Performance. The covenants and obligations of Grantee pursuant to this Agreement shall be independent of performance by Grantor of the covenants and obligations of Grantor pursuant to this Agreement. Grantee’s performance of each of its obligations under this Agreement shall be a condition precedent to the duty of Grantor to perform its obligations hereunder.

17.3 Attorneys’ Fees and Costs. If either Grantor or Grantee initiates any litigation, mediation, arbitration or other proceeding regarding the enforcement, construction or interpretation of this Agreement, then the non-prevailing party shall pay the prevailing party’s attorneys’ fees and costs (including, without limitation, all expense reimbursements, expert witness fees and litigation costs). In addition, if it should otherwise be necessary or proper for Grantor to consult an attorney concerning this Agreement (specifically, for the review of instruments evidencing a proposed Transfer, or the for the purpose of collecting Colocation Fees), Grantee agrees to pay to Grantor its actual attorneys’ fees whether suit be brought or not to the extent such fees exceed $500.00. If any member of the Grantor Group is made a party to any litigation instituted by Grantee against a party other than Grantor, or by a third party against Grantee, Grantee shall indemnify, hold harmless and defend such member of the Grantor Group from any and all Claims arising out or, in connection with, or in any manner related to such litigation, except for the extent to which such Claims arise as a result of the gross negligence or willful misconduct of any member of the Grantor Group.

17.4 Waiver of Right to Jury Trial. IN ORDER TO LIMIT THE COST OF RESOLVING ANY DISPUTES BETWEEN THE PARTIES, AND AS A MATERIAL INDUCEMENT TO EACH PARTY TO ENTER INTO THIS AGREEMENT, TO THE FULLEST EXTENT PERMITTED BY LAW, GRANTOR AND GRANTEE EACH EXPRESSLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY TRIAL HELD AS A RESULT OF A CLAIM ARISING OUT OF, IN CONNECTION WITH, OR IN ANY MANNER RELATED TO THIS AGREEMENT IN WHICH GRANTOR AND GRANTEE ARE ADVERSE PARTIES. THE FILING OF A CROSS-COMPLAINT BY ONE AGAINST THE OTHER IS SUFFICIENT TO MAKE THE PARTIES “ADVERSE.”

17.5 Headings; Time; Survival. The headings of the Articles, Sections and Exhibits of this Agreement are for convenience only and do not define, limit or construe the contents thereof. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. Each of the parties hereto acknowledges that it has read and reviewed this Agreement and that it has had the opportunity to confer with counsel in the negotiation of this Agreement. Accordingly, this Agreement shall be construed neither for nor against Grantor or Grantee, but shall be given a fair and reasonable interpretation in accordance with the meaning of its terms and the intent of the parties. In all instances where Grantee is required to pay any sum or do any act at a particular indicated time or within an indicated period, it is understood that time is of the essence. Any obligations of Grantee accruing prior to the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement, and Grantee shall promptly perform all such obligations whether or not this Agreement has expired.

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17.6 Notices. Any notice which may or shall be given under the provisions of this Agreement shall be in writing and may be delivered by (i) hand delivery or personal service, (ii) a reputable overnight courier service which provides evidence of delivery, or (iii) facsimile (so long as a confirming copy is forwarded by a reputable overnight courier service within twenty-four (24) hours thereafter), if for Grantor, to the Building office and at the address specified in Item 16 of the Basic Colocation Information, or if for Grantee, at the address specified in Item 3 of the Basic Colocation Information, or at such other addresses as either party may have theretofore specified by written notice delivered in accordance herewith. Such address may be changed from time to time by either party by giving notice as provided herein. Notice shall be deemed given, (a) when delivered (if delivered by hand or personal service), (b) if sent by a reputable overnight courier service, on the business day immediately following the business day on which it was sent, or (c) the date the facsimile is transmitted.

17.7 Governing Law; No Counterclaim; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the state in which the Property is located. It is mutually agreed that in the event Grantor commences any summary proceeding for non-payment of Colocation Fees, Grantee will not interpose any counterclaim (other than any compulsory counterclaims) of whatever nature or description in any such proceeding. The foregoing shall not be construed to prevent Grantee from bringing a separate action related to such counterclaims. In addition, Grantee hereby submits to local jurisdiction in the state in which the Property is located and agrees that any action by Grantee against Grantor shall be instituted in the state in which the Property is located and that Grantor shall have personal jurisdiction over Grantee for any action brought by Grantor against Grantee in the state in which the Property is located.

17.8 Incorporation; Amendment; Merger. This Agreement, along with any exhibits and attachments or other documents referred to herein, all of which are hereby incorporated into this Agreement by this reference, constitutes the entire and exclusive agreement between Grantor and Grantee relating to the Grantee Space and each of the aforementioned documents may be altered, amended or revoked only by an instrument in writing signed by the party to be charged thereby. All prior or contemporaneous oral or written agreements, understandings and/or practices relative to the leasing or use of the Grantee Space are merged herein or revoked hereby.

17.9 Brokers. Each party hereto represents to the other that the representing party has not engaged, dealt with or been represented by any broker in connection with this Agreement other than the brokers specified in Item 18 of the Basic Colocation Information. Grantor and Grantee shall each indemnify, defend (with legal counsel reasonably acceptable to the other) and hold harmless the other party from and against all Claims (including attorneys’ fees and all litigation expenses) related to any claim made by any other person or entity for any commission or other compensation in connection with the execution of this Agreement or the leasing of the Grantee Space to Grantee if based on an allegation that claimant dealt through the indemnifying party. The provisions of this Section 17.9 shall survive the termination of this Agreement.

17.10 Examination of Agreement. This Agreement shall not be binding or effective until each of the parties hereto have executed and delivered an original or counterpart hereof to each other.

17.11 Recordation. Unless required by law, neither Grantee nor any person or entity acting through, under or on behalf of Grantee shall record or cause the recordation of this Agreement, a short form memorandum of this Agreement or any reference to this Agreement.

17.12 Authority. Each of Grantor and Grantee represents to the other party that the person executing this Agreement on its behalf is duly authorized to execute and deliver this Agreement pursuant to its respective by-laws, operating agreement, resolution or other legally sufficient authority. Further, each

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party represents to the other party that (i) if it is a partnership, the undersigned are all of its general partners, (ii) it has been validly formed or incorporated, (iii) it is duly qualified to do business in the state in which the Property is located, and (iv) this Agreement is being executed on its behalf and for its benefit.

17.13 Successors and Assigns. Except as otherwise provided in this Agreement, all of the covenants, conditions and provisions of this Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives and permitted successors and assigns.

17.14 Force Majeure. A party shall incur no liability to the other party with respect to, and shall not be responsible for any failure to perform, any of its obligations hereunder (other than payment obligations or obligations that may be cured by the payment of money (e.g., maintaining insurance)) if such failure is caused by any reason beyond the reasonable control of the party obligated to perform such obligations, including, but not limited to, strike, labor trouble, governmental rule, regulations, ordinance, statute or interpretation, or by fire, earthquake, civil commotion, or failure or disruption of utility services (collectively, “Force Majeure”). The amount of time for a party to perform any of its obligations (other than payment obligations) shall be extended by the amount of time it is delayed in performing such obligation by reason of any Force Majeure occurrence whether similar to or different from the foregoing types of occurrences.

17.15 No Partnership or Joint Venture; No Third Party Beneficiaries. Nothing contained in this Agreement shall be deemed or construed to create the relationship of principal and agent, or partnership, or joint venturer, or any other relationship between Grantor and Grantee other than licensor and licensee. Grantor shall have no obligations hereunder to any person or entity other than Grantee or any person or entity claiming through Grantee, and no other parties shall have any rights hereunder as against Grantor.

17.16 Access by Grantor. Grantor, Grantor’s agents and employees shall have the right to enter upon any and all parts of the Grantee Space at any reasonable time upon prior reasonable oral or written notice (except in the case of an emergency when as much prior notice as Grantor in good faith determines is practicable given the circumstances) to examine the condition thereof, to clean, to make any repairs, alterations or additions required to be made by Grantor hereunder, to show the Grantee Space to prospective purchasers, licensees or colocators or mortgage lenders (prospective or current), to determine whether Grantee is complying with all of its obligations under this Agreement, to exercise any of Grantor’s rights or remedies hereunder and for any other purpose deemed reasonable by Grantor. In connection with Grantor’s rights hereunder, Grantor shall at all times have and retain a key with which to unlock all of the doors in, on or about the Grantee Space, and Grantor shall have the right to use any and all means by which Grantor may deem proper to open such doors to obtain entry to the Grantee Space. Grantee hereby waives any claim for damages for any injury to Grantee’s business or inconvenience to, or interference with, Grantee’s business, any loss of occupancy or quiet enjoyment of the Grantee Space or any other loss occasioned by such entry, and Grantee shall not be entitled to any abatement or reduction of Colocation Fees by reason thereof, and no such entry to the Grantee Space shall be deemed or construed to be a forcible or unlawful entry into or a detainer of the Grantee Space or an eviction, actual or constructive, of Grantee from any part of the Grantee Space. Notwithstanding anything in Sections 17.16 and 17.17, any rules or regulations promulgated by Grantor or any maintenance schedule relative to Grantor’s access to the Grantee Space to the contrary, Grantor agrees that (except in the case of an emergency) Grantor’s access to the Colocation Premises shall be subject to Grantor’s compliance with the procedures required by Grantee (“Grantee’s Security Procedures”), provided that (i) Grantor has received written notice of Grantee’s Security Procedures and any changes thereof, and (ii) Grantee’s Security Procedures (as amended from time to time by Grantee) do not interfere with Grantor’s ability to perform, or increase the cost to Grantor to perform, Grantor’s obligations under this Agreement or any other lease demising premises in the Building. Grantee shall deliver written notice of the changes to Grantee’s Security Procedures to Grantor at Grantor’s address for notices as provided herein. Notwithstanding anything herein to the contrary, except for emergencies, Grantor shall use reasonable efforts to minimize disruption of Grantee’s business or occupancy during such entries.

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17.16.1 Carrier Service Area. For the avoidance of doubt, Grantor and Grantee acknowledge and agree that, notwithstanding the installation of any Grantee Security System, Grantor shall have the right to access the Carrier Room Area, which is expressly not included in Conditioned Space-C, at all times during the Term of this Agreement. Grantor and Grantee acknowledge that the Carrier Room Area is not included in the Grantee Space, and the parties agree that Grantor shall have the right to secure the Carrier Room Area from the balance of the Datacenter.

17.17 Rights Reserved by Grantor. Grantor reserves the following rights exercisable without notice (except as otherwise expressly provided to the contrary in this Agreement) and without being deemed an eviction or disturbance of Grantee’s use or possession of the Grantee Space or giving rise to any claim for set-off or abatement of Colocation Fees: (i) to install, affix and maintain all signs on the exterior and/or interior of the Datacenter; (ii) intentionally deleted; (iii) intentionally deleted; (iv) to install, operate and maintain systems which monitor, by closed circuit television or otherwise, all persons entering or leaving the Datacenter; (v) to install and maintain pipes, ducts, conduits, wires and structural elements located in the Grantee Space and which serve other parts or other tenants or occupants of the Building and/or the Property, provided, however, that Grantor agrees that, with regard to the installation of new water pipes, Grantor shall use commercially reasonable efforts to install such pipes in locations that do not travel in the Grantee Space directly over Grantee’s systems and/or other computer equipment; (vi) to retain at all times master keys or pass keys to the Grantee Space; (vii) intentionally deleted; (viii) to install fencing, demising walls and/or doors to secure the Carrier Room Area, as determined by Grantor in its reasonable discretion, and (ix) the absolute right to license space for use in the Demised Premises as Grantor, in its sole business judgment, shall determine is in the best interests of the Demised Premises (and Grantor does not represent and Grantee does not rely upon any specific type or number of tenants, licensees or occupants occupying any space in the Datacenter and the Demised Premises during the Term of this Agreement). Notwithstanding the foregoing, Grantor’s ability to exercise its rights pursuant to clauses (iii), (v) and (vii), above, shall be conditioned upon such exercise by Grantor not having a material adverse effect on Grantee’s or the Permitted Licensees’ use or occupancy of the Colocation Premises.

17.18 Counterparts; Execution by Facsimile. This Agreement may be executed simultaneously in two or more counterparts each of which shall be deemed an original, but all of which shall constitute one and the same Agreement. Grantor and Grantee agree that the delivery of an executed copy of this Agreement by facsimile or e-mail shall be legal and binding and shall have the same full force and effect as if an original executed copy of this Agreement had been delivered.

17.19 Confidentiality. Each party agrees that (i) the terms and provisions of this Agreement are confidential and constitute proprietary information of the parties and (ii) it shall not disclose, and it shall cause its partners, officers, directors, shareholders, employees, brokers and attorneys to not disclose any term or provision of this Agreement to any other person without first obtaining the prior written consent of the other party, except that each party shall have the right to disclose such information for valid business, legal and accounting purposes and/or if advisable under any applicable securities laws regarding public disclosure of business information. The foregoing notwithstanding, either party (or both parties) may post a press release or press releases, that discloses the fact that Grantor and Grantee have entered into a colocation agreement; provided that same does not disclose the location, economics or square footage related hereto. Any references in such press release or press releases, in excess of the fact that Grantor and Grantee have entered into a colocation agreement, require approval by both parties, which either party may withhold in its sole and absolute discretion.

17.20 Incorporation of Exhibits. All of the terms and conditions of all of the Exhibits to this Agreement are hereby incorporated into this Agreement.

17.21 Financial Statements. Within ten (10) days after Grantor’s written request therefore, Grantee must deliver to Grantor the current audited annual financial statements of Grantee, including an opinion of a certified public accountant, a balance sheet and profit and loss statement, all prepared in accordance with generally accepted accounting principles consistently applied (collectively, Grantee’s “Financial Statements”). If Grantee does not then have its Financial Statements audited, Grantee must

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forward unaudited Financial Statements certified by Grantee’s chief financial officer as true, complete and correct in all material respects. Grantee’s failure to timely comply with this Section 17.21 shall be an Event of Default hereunder. Grantor hereby agrees to maintain Grantee’s Financial Statements as proprietary and confidential and agrees not to disclose Grantee’s Financial Statements to any third party other than any lender, mortgagee, or prospective purchaser of the Building, the Underlying Lease and/or the Demised Premises, and Grantor’s attorneys, accountants and similar business advisors. Notwithstanding the foregoing, this Section 17.21 shall not apply to Grantee if, and so long as, (i) the entity named as “Grantee” under this Agreement is a publicly traded entity that is traded on a nationally recognized stock exchange, and/or (ii) the Guaranty is in full force and effect and there is no default by Guarantor thereunder. For the avoidance of doubt, in the event that (a) the Guarantee is not in full force and effect or there exists a default by Guarantor thereunder, and (b) the entity that is named as “Grantee” under this Agreement is merely an affiliate or subsidiary of an entity that is publicly traded on a nationally recognized stock exchange (i.e., the entity that is named as “Grantee” under this Agreement is not an entity that is (itself) actually publicly traded on a nationally recognized stock exchange), then Grantee’s obligation to provide its Financial Statements, in accordance with this Section 17.21, shall remain in effect - the publicly traded nature of its parent or affiliate notwithstanding.

17.22 Subject to Underlying Lease. Notwithstanding anything contained in this Agreement to the contrary (including that which is contained in Article 12 hereof), this Agreement and Grantor’s obligations hereunder (including the obligation to provide Grantee the right to use the Grantee Space during the Term of this Agreement) are subject and subordinate, in all events, to the terms and conditions of the Underlying Lease. Grantor shall (a) comply with all of its obligations, in a timely fashion, under the Underlying Lease, (b) not surrender the Datacenter prior to the expiration of the Underlying Lease, except in the event of a Casualty or a Taking, (c) not agree to an early termination of the Underlying Lease, except in the event of a Casualty or a Taking, and (d) otherwise maintain the Underlying Lease in full force and effect during the Term of this Agreement, except in the event of a Casualty or a Taking. Additionally, Grantor agrees to use reasonable efforts to enforce the obligations of 111 Chelsea, to the extent that such obligations affect Grantee’s express rights under this Agreement.

[SIGNATURES APPEAR ON NEXT PAGE]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

GRANTOR:

DIGITAL CHELSEA, LLC,

a Delaware limited liability company,

By: Digital Above, L.L.C., a Delaware limited liability company, its sole member

By: Digital Services, Inc., a Maryland corporation its sole member

By:	/s/ Chun M. Lee
Name:	Chun M. Lee
Title:	Vice President

Date: September 27, 2010

GRANTEE:

TELX – NEW YORK 111 8TH, LLC, a Delaware limited liability company
By:	/s/ J. Todd Raymond
Name:	J. Todd Raymond
Title:	Co-Manager
Date:	September 22, 2010

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EXHIBIT “A”

DEPICTION OF CONDITIONED SPACE-A, CONDITIONED SPACE-B, CONDITIONED

SPACE-C, UNCONDITIONED SPACE-A, UNCONDITIONED SPACE-B, AND CARRIER ROOM

AREA

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EXHIBIT “B”

INSURANCE REQUIREMENTS

Policies

A.   Commercial general liability insurance (including contractual liability):	$2,000,000 single limit; $5,000,000 aggregate limit
B.   “All Risk” Personal Property Insurance:	Full replacement value of Grantee’s Personal Property.
C.   Workers’ Compensation Insurance:	in accordance with the laws of the state in which the Property is located, and Employer’s Liability insurance with a limit not less than $1,000,000 Bodily Injury Each Accident; $1,000,000 Bodily Injury By Disease - Each Person; and $1,000,000 Bodily Injury By Disease - Policy Limit.

Requirements:

All insurance required under this Agreement shall be issued by insurers with a “General Policyholders Rating” of at least A-, X, as set forth in “Best’s Insurance Guide.” Such insurers shall be authorized to do business in the state in which the Property is located. The commercial general liability policies procured hereunder shall name the Grantor Group (as defined in the Basic Colocation Information) and Grantor’s managing agent as additional insureds. Prior to occupying the Grantee Space and upon subsequent requests of Grantor, Grantee shall submit to Grantor evidence that Grantee has the insurance policies required hereunder in effect and, if requested by Grantor, shall provide Grantor with certificates of insurance evidencing such policies. All insurance policies procured hereunder shall contain a provision stating that the insurer shall endeavor to provide at least thirty (30) days written notice to Grantor and all others named as additional insureds prior to any cancellation or material modification of such policy. If Grantee does not deliver to Grantor a certificate or other proof of renewal or coverage from another insurance carrier prior to the expiration dates of each expiring policy, Grantor may give written notice to Grantee of such failure and if Grantee does not obtain such insurance within five (5) business days of receipt of such notice, Grantor may obtain such insurance on behalf of Grantee, and Grantee shall, within ten (10) business days after Grantor’s demand therefor, pay to Grantor an amount equal to the cost of such insurance policies plus an administrative surcharge of five percent (5%). All of Grantee’s insurance policies with respect to the Grantee Space shall be endorsed so as to include a waiver of subrogation in accordance with and to the full extent of Grantee’s waiver of claims with respect to the Grantor Group set forth in Sections 9.2 and 14.1 of this Agreement.

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EXHIBIT “C”

DESCRIPTION OF PATHWAY

Phase I Period: Subject to the terms of Exhibit “L”, during the Phase I Period, the “Pathway” shall consist of all conduits, cables, and fibers connecting the IDFs in Conditioned Space-A (as set forth on Exhibit “A”) to the Carrier Room Area as of the Commencement Date (the “Phase I Pathways”). Grantor agrees to provide Grantee with a complete description of the Phase I Pathways (the “PI Pathway Description”) on or before the Commencement Date. Grantor and Grantee hereby agree that, upon Grantor’s delivery of notice of the PI Pathway Description to Grantee, the PI Pathway Description shall, at such point, be deemed to represent a complete and conclusive description of the Phase I Pathways.

Phase II Period: Subject to the terms of Exhibit “L”, during the Phase II Period, the “Pathway” shall consist of the Phase I Pathways, together with all conduits, cables, and fibers connecting the IDFs in Conditioned Space-B (as set forth on Exhibit “A”) to the Carrier Room Area as of the Phase II Expansion Date (the “Phase II Pathways”). Grantor agrees to provide Grantee with a complete description of the Phase II Pathways (the “PII Pathway Description”) on or before the Phase II Expansion Date. Grantor and Grantee hereby agree that, upon Grantor’s delivery of notice of the PII Pathway Description to Grantee, the PII Pathway Description shall, at such point, be deemed to represent a complete and conclusive description of the Phase II Pathways.

Phase III Period: Subject to the terms of Exhibit “L”, during the Phase III Period, the “Pathway” shall consist of the Phase I Pathways and the Phase II Pathways, together with all conduits, cables, and fibers connecting the IDF in Conditioned Space-C (as set forth on Exhibit “A”) to the Carrier Room Area as of the Phase III Expansion Date (the “Phase III Pathways”). Grantor agrees to provide Grantee with a complete description of the Phase III Pathways (the “PIII Pathway Description”) on or before the Phase III Expansion Date. Grantor and Grantee hereby agree that, upon Grantor’s delivery of notice of the PIII Pathway Description to Grantee, the PIII Pathway Description shall, at such point, be deemed to represent a complete and conclusive description of the Phase III Pathways.

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EXHIBIT “D”

NEW YORK STATE LAW PROVISIONS

1. Remedies For Events Of Default

1.1 This Agreement and the Term and rights hereby granted to Grantee are subject to the limitation that if and whenever any Event of Default shall occur, Grantor may at any time thereafter give to Grantee a notice of termination of this Agreement setting forth a termination date three (3) days from the date of the giving of such notice, and, upon the giving of such notice, this Agreement and the term and rights hereby granted (whether or not the Term of the Agreement shall theretofore have commenced) shall expire and terminate upon the expiration of said three (3) days with the same effect as if that day were the date hereinbefore set for the expiration of the Term of the Agreement, but Grantee shall remain liable for damages as provided in Section 2 below.

1.2 If an Event of Default shall have occurred, Grantor and/or Grantor’s agents and employees, whether or not this Agreement shall have been terminated pursuant to this Exhibit “D” may, without notice to Grantee, immediately or at any time thereafter re-enter into or upon the Grantee Space or any part thereof, either by summary dispossess proceedings or by any suitable action or proceeding at law, or by force or otherwise, to the extent legally permitted, without being liable to indictment, prosecution or damages therefor, and may repossess the same, and may remove any persons or property therefrom, to the end that Grantor may have, hold and enjoy the Grantee Space again as and of its first estate and interest therein. The words “re-enter”, “re-entry” and “re-entered” as used in this Agreement are not restricted to their technical legal meanings. In the event of any termination of this Agreement under the provisions of this Exhibit “D” or in the event that Grantor shall re-enter the Grantee Space under the provisions of this Exhibit “D” or in the event of the termination of this Agreement (or of re-entry and replacement of Grantee) by or under any summary dispossess or other proceeding or action or any provision of law, Grantee shall thereupon pay to Grantor the Base Colocation Fees, Additional Colocation Fees and any other charges payable hereunder by Grantee to Grantor up to the time of such termination of this Agreement, or of such recovery of possession of the Grantee Space by Grantor, as the case may be, plus the expenses incurred or paid by Grantor in terminating this Agreement or of re-entering the Grantee Space and securing possession thereof, including actual attorneys’ fees and costs of removal and storage of Grantee’s property, and Grantee shall also pay to Grantor damages as provided in Section 2 below.

1.3 In the event of the re-entry into the Grantee Space by Grantor under the provisions of this Exhibit “D”, and if this Agreement shall not be terminated, Grantor may (but shall have absolutely no obligation to do so), not in Grantor’s own name, but as agent for Grantee, grant to a third party the right to use the whole or any part of the Grantee Space for any period equal to or greater or less than the remainder of the remaining original term of this Agreement, for any sum which Grantor may deem suitable, including colocation fees concessions, and for any use and purpose which Grantor may deem appropriate. Such reletting may include any improvements, personalty and trade fixtures remaining in the Grantee Space.

1.4 In the event of a breach or threatened breach on the part of Grantee with respect to any of the covenants, agreements, terms, provisions or conditions on the part of or on behalf of Grantee to be kept, observed or performed, Grantor shall also have the right to obtain injunctive relief.

1.5 In the event of (i) the termination of this Agreement under the provisions of this Exhibit D or (ii) the re-entry of the Grantee Space by Grantor under the provisions of this Exhibit “D”, or (iii) the termination of this Agreement (or re-entry and replacement of Grantee) by or under any summary dispossess or other proceeding or action or any provision of law by reason of default hereunder on the part of Grantee, Grantor shall be entitled to retain all monies, if any, paid by Grantee to Grantor, whether as advance colocation fees, security deposit or otherwise, but such monies shall be credited by Grantor against any Base Colocation Fees, Additional Colocation Fees or any other charge due from Grantee at the time of such termination or replacement of Grantee or, at Grantor’s option, against any damages payable by Grantee under Section 2 of this Exhibit “D” or pursuant to law.

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1.6 The specified remedies to which Grantor may resort under this Agreement are cumulative and concurrent, and are not intended to be exclusive of each other or of any other remedies or means of redress to which Grantor may lawfully be entitled at any time, and Grantor may invoke any remedy allowed under this Agreement or at law or in equity as if specific remedies were not herein provided for, and the exercise by Grantor of any one or more of the remedies allowed under this Agreement or in law or in equity shall not preclude the simultaneous or later exercise by the Grantor of any or all other remedies allowed under this Agreement or in law or in equity.

2. Damages

2.1 In the event of any termination of this Agreement under the provisions hereof or under any summary dispossess or other proceeding or action or any provision of law, or in the event that Grantor shall re-enter the Grantee Space under the provisions of this Agreement, Grantee shall pay to Grantor as damages, at the election of Grantor, either:

(i) a sum which at the time of such termination of this Agreement or at the time of any such replacement of Grantee by Grantor, as the case may be, represents the then value of the excess, if any, of (a) the aggregate of the installments of Base Colocation Fees and the Additional Colocation Fees (if any) which would have been payable hereunder by Grantee, had this Agreement not so terminated, for the period commencing with such earlier termination of this Agreement or the date of any such replacement of Grantee, as the case may be, and ending with the date hereinbefore set for the expiration of the full term hereby granted over (b) the aggregate colocation license value of the Grantee Space for the same period (the amounts of each of clauses (a) and (b) being first discounted to present value at an annual rate equal to the then prevailing discount rate announced by the Federal Reserve Bank); or

(ii) sums equal to the aggregate of the installments of Base Colocation Fees and Additional Colocation Fees (if any) which would have been payable by Grantee had this Agreement not so terminated, or had Grantor not so re-entered the Grantee Space and replaced Grantee, payable upon the due dates therefor specified herein following such termination or such replacement of Grantee by Grantor and until the date herein before set for the expiration of the full term hereby granted; provided, however, that if Grantor shall grant any third party the right to use the Grantee Space during said period, Grantor shall credit Grantee with the net colocation fees received by Grantor from such third party’s use, such net fees to be determined by first deducting from the gross fees as and when received by Grantor from such use the expenses incurred or paid by Grantor in terminating this Agreement and of re-entering the Grantee Space and of securing possession thereof, including actual attorneys’ fees and costs of removal and storage of Grantee’s property, as well as the expenses of re-using the space, including repairing, restoring and improving the Grantee Space for new occupants, brokers’ commissions, advertising costs, actual attorneys’ fees and disbursements, and all other similar or dissimilar expenses chargeable against the Grantee Space and the fees therefrom in connection with such re-use, it being understood that such re-use may be for a period equal to or shorter or longer than the remaining term of this Agreement; and provided further, that (a) in no event shall Grantee be entitled to receive any excess of such net fees over the sums payable by Grantee to Grantor under this Agreement, (b) in no event shall Grantee be entitled in any suit for the collection of damages pursuant to this Subdivision (ii) to a credit in respect of any net fees from a third party’s use except to the extent that such net fees are actually received by Grantor prior to the commencement of such suit, and (c) if the Grantee Space or any part thereof should be re-used in combination with other space, then proper apportionment on a square foot area basis shall be made of the colocation fees received from such re-use and of the expenses of re-using the space, or if re-used for a period longer than the remaining term of this Agreement, the expenses of re-using shall be apportioned based on the respective periods.

2.2 For the purposes of Subdivision 2.1(i) of this Exhibit “D”, the amount of Additional Colocation Fees which would have been payable by Grantee for each year, as therein provided,

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ending after such termination of this Agreement or such replacement of Grantee by Grantor, shall be deemed to be an amount equal to the amount of such Additional Colocation Fees payable by Grantee for the calendar year ending immediately preceding such termination of this Agreement or such replacement of Grantee by Grantor. Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Grantor from time to time at Grantor’s election, and nothing contained herein shall be deemed to require Grantor to postpone suit until the date when the term of this Agreement would have expired if it had not been terminated under the provisions of this Exhibit “D”, or under any provision of law, or had Grantor not re-entered the Grantee Space and replaced Grantee.

2.3 Nothing contained in this Exhibit “D” shall be construed as limiting or precluding the recovery by Grantor against Grantee of any payments or damages to which, in addition to the damages particularly provided above, Grantor may lawfully be entitled by reason of any default hereunder on the part of Grantee. The failure or refusal of Grantor to grant a license to use the Grantee Space or any part or parts thereof to a third party, or the failure of Grantor to collect the colocation fees thereof under such re-use, shall not release or affect Grantee’s liability for damages.

2.4 Grantee hereby knowingly and voluntarily waives, after advice of competent counsel, any duty of Grantor (and any affirmative defense based upon such duty) following any default to mitigate Grantor’s damages arising from such default. Notwithstanding the foregoing, Grantor agrees to use commercially reasonable efforts to mitigate its damages in connection with a default by Grantee.

3. Waiver of Right of Redemption

Grantee, for Grantee, and on behalf of any and all persons claiming through or under Grantee, including creditors of all kinds, does here by waive and surrender all right and privilege which they or any of them might have under or by reason of any present or future law to redeem the Grantee Space, or to have a continuance of this Agreement for the term hereby demised, after Grantee shall be dispossessed or ejected therefrom by process of law or under the terms of this Agreement or after the expiration or termination of this Agreement as herein provided or pursuant to law. Grantee also waives the provisions of any law relating to notice and/or delay in levy of execution in case of an eviction or dispossess of an occupant for non-payment of colocation fees, and of any other law of like import now or hereafter in effect. In the event that Grantor shall commence any summary proceeding for non-payment of colocation fees or for holding over after the expiration or sooner termination of this Agreement, Grantee shall not, and hereby expressly waives any right to, interpose any counterclaim of whatever nature or description in any such proceeding (except as expressly provided in Section 17.7 of this Agreement).

4. Grantor’s Right to Cure

4.1 If Grantee shall default in the observance or performance of any term, covenant, provision or condition on Grantee’s part to be observed or performed under or by virtue of any of the terms or provisions in this Agreement, then, unless otherwise provided elsewhere in this Agreement, Grantor may immediately or at any time thereafter and upon notice to Grantee perform the obligation of Grantee thereunder, and if Grantor, in connection therewith or in connection with any default by Grantee in the covenant to pay Base Colocation Fees or Additional Colocation Fees hereunder, shall make any expenditures or incur any obligations for payment of money, including court costs and actual attorneys’ fees and disbursements, in instituting, prosecuting or defending any action or proceeding, then such fees, disbursements, costs and expenses so paid or obligations incurred shall be Additional Colocation Fees to be paid by Grantee to Grantor, upon demand, with interest thereon at an annual rate (the “Interest Rate”) equal to the lesser of: (a) the then prevailing prime rate (which, for the purposes hereof, includes any equivalent or successor interest rate, however denominated) of interest for unsecured ninety-day loans by Citibank, N.A. (or The Chase Manhattan Bank, N.A., if Citibank, N.A. shall not then have an established prime rate; or the prime rate of any major banking institution doing business in New York City, as selected by Grantor, if neither of the aforementioned banks shall be in existence or have an established prime rate) plus four (4) percentage points, or (b) the maximum rate allowed by law. Any interest payable by Grantee pursuant to this Agreement at the Interest Rate shall be calculated from the day such expenditure is made or obligation is incurred until the date when such payment is finally and completely paid by Grantee to Grantor.

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4.2 Bills for any property, material, labor or services provided, furnished or rendered, or caused to be provided, furnished or rendered, by Grantor to Grantee, may be sent by Grantor to Grantee monthly (or immediately, at Grantor’s option), and shall be due and payable by Grantee as Additional Colocation Fees within ten (10) days after the same shall be sent to Grantee by Grantor. If Grantor shall commence a summary proceeding against Grantee for non-payment of colocation fees, Grantee shall reimburse Grantor as Additional Colocation Fees for Grantor’s actual attorneys’ fees and expenses, both if judgment is awarded for Grantor, or if Grantee makes the payment subsequent to service of process but prior to entry of judgment. If Grantee or any sub-colocating party of Grantee shall request Grantor’s consent to any matter that requires Grantor’s consent under this Agreement and if Grantor (in Grantor’s sole discretion) shall refer the matter to Grantor’s attorneys or other professionals or consultants, then, whether or not such consent shall be granted, Grantee shall reimburse Grantor for the reasonable fees and disbursements incurred by Grantor in connection therewith as Additional Colocation Fees within ten (10) days after a bill therefor shall have been rendered.

5. Survival

The provisions of Sections 1 through 5 this Exhibit “D” shall survive the expiration or sooner termination of this Agreement.

6. Express Provision to the Contrary under Section 223-a of the Real Property Law of the State of New York

Supplementing the provisions of Article 2 of this Agreement, the parties hereto agree that Article 2 of this Agreement constitutes an express provision as to the time at which Grantor shall deliver possession of the Grantee Space to Grantee, and Grantee hereby waives any rights to rescind this Agreement which Grantee might otherwise have pursuant to Section 223-a of the Real Property Law of the State of New York, or pursuant to any other law of like import now or hereafter in force.

7. Express Agreement Governing Damage or Destruction of the Building or the Datacenter

Supplementing the provisions of Section 9.1 of this Agreement, the parties hereby agree that, this Agreement shall be considered an express agreement governing any case of damage to or destruction of the Building or the Datacenter or any part thereof by fire or other casualty, and Section 227 of the Real Property Law of the State of New York (providing for such a contingency in the absence of express agreement), and any other law of like import now or hereafter in force, shall have no application in such case.

8. No violation of Section 202 of the Labor Law

Supplementing the provisions of Section 8.2 of this Agreement, Grantee shall not clean, or permit, suffer or allow to be cleaned, any windows in the Grantee Space from the outside in violation of Section 202 of the Labor Law or any other Applicable Laws.

9. Grantee’s Waiver of Section 2201 of the New York Civil Practice Law and Rules

Grantee expressly waives, for itself and for any person claiming by, through or under Grantee, any rights which Grantee or any such persons may have under the provisions of Section 2201 of the New York Civil Practice Law and Rules, and of any successor law of like import then in force, in connection with any summary holdover proceedings which Grantor may institute to enforce the provisions of Article 13 of this Agreement.

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10. Consent to Jurisdiction

Supplementing the provisions of Section 17.7 of this Agreement, Grantor and Grantee, any sub-colocating party, and any guarantor of Grantee’s obligations under this Agreement, hereby expressly consent to the jurisdiction of the Civil Court of the City of New York and the Supreme Court of the State of New York with respect to any action or proceeding between Grantor and Grantee or such party with respect to this Agreement or any rights or obligations of either party pursuant to this Agreement, and each of such sub-colocating party, guarantor, Grantor and Grantee agrees that venue shall lie in New York County. Grantee and any sub-colocating party further waive any and all rights to commence any such action or proceeding against Grantor before any other court.

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EXHIBIT “E”

A. Meter Installations. Grantor shall cause:

-         The installation of the Electrical Metering Equipment in accordance with the terms of Section 3.5 of the Lease (the “Meter Installations”).

B. Capital Replacement Installations. For the purposes of this Lease, (a) the term “Grantor’s Electrical Infrastructure” shall mean and refer to the Grantor-owned (i.e., not owned by the utility provider, the Building owner or any other third party) electrical equipment (including the Back-Up Power equipment) that serves the Grantee Space; and (b) the term “Grantor’s HVAC Infrastructure” shall mean and refer to the Grantor-owned (i.e., not owned by the utility provider, the Building owner or any other third party) heating, ventilation and air conditioning equipment (including the CRAC units) that serves the Grantee Space. In the event that (i) Grantor determines that the replacement of any or all of Grantor’s Electrical Infrastructure or Grantor’s HVAC Infrastructure (collectively, “Grantor’s Infrastructure Equipment”) is reasonably necessary in order to properly maintain the service levels that are being provided to Grantee hereunder; and/or (ii) Grantee reasonably requests that any or all of Grantor’s Infrastructure Equipment be replaced, Grantor agrees to undertake to procure and install the applicable replacement items of Grantor’s Infrastructure Equipment (the procurement and installation of each such replacement item of Grantor’s Infrastructure Equipment is referred to herein as a “Capital Replacement Installation”). Grantor and Grantee agree that (x) such installations shall be undertaken at a time that is mutually agreed to by Grantor and Grantee in writing; and (y) no interruptions of electrical power or interruptions of HVAC services occurring during such installations (which shall include the period occurring until such equipment is successfully commissioned and placed into operation) shall be deemed to be Interruptions of Grantor’s Services hereunder.

C. Conceptually Pre-Approved Capital Replacement Installations. Grantor and Grantee agree that Grantee has, prior to the Effective Date, requested certain Capital Replacement Installations. Grantor does hereby provide its pre-approval, in concept, as it relates to the Capital Replacement Installations regarding portions of Grantor’s Electrical Infrastructure, as described, in schematic form, on Exhibit “E-1”, attached hereto (the “Conceptually Pre-Approved Capital Replacement Installations”). However, Grantor and Grantee acknowledge that such pre-approval only represents approval by Grantor with regard to the concept of such alterations, and that such Conceptually Pre-Approved Capital Replacement Installations remain subject to (a) Grantor’s review and approval with regard to the detailed plans and specifications for same, and (b) consent with regard to the Conceptually Pre-Approved Capital Replacement Installations by 111 Chelsea, to the extent that such consent is required under the terms of the Underlying Lease. Additionally, for the avoidance of doubt, Grantor and Grantee acknowledge that the Conceptually Pre-Approved Capital Replacement Installations, once commenced, will have the effect of invalidating the electricity-related standards set forth in items 1-3 of Exhibits “F-1”, “F-2” and “F-3”. As such, Grantor and Grantee agree that, in addition to items (a) and (b) above, the parties must also (prior to such work being undertaken) execute an amendment to this Agreement, which accounts for appropriate modifications of the aforementioned items and exhibits, and accounts for appropriate treatment of Interruptions of Grantor’s Services that may occur during the performance, and/or as a result, of such installations.

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EXHIBIT “E-1”

CONCEPTUALLY PRE-APPROVED CAPITAL REPLACEMENT INSTALLATIONS

Grantee desires for Capital Replacement Installations related to Grantor’s Existing Electrical Infrastructure (see Exhibit “E-1-2”, attached hereto) to be performed, in accordance with the scope and schedule attached as Exhibit “E-1-1”, causing the changes in such infrastructure to occur as set forth in Exhibit E-1-3”, attached hereto, in order for Grantor’s Electrical Infrastructure to be substantially as shown on Exhibit “E-1-4”, attached hereto.

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EXHIBIT “E-1-1”

CONCEPTUALLY PRE-APPROVED CAPITAL REPLACEMENT INSTALLATIONS –

SCHEDULE AND SCOPE

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EXHIBIT “E-1-2”

CONCEPTUALLY PRE-APPROVED CAPITAL REPLACEMENT INSTALLATIONS –

EXISTING ELECTRICAL INFRASTRUCTURE

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EXHIBIT “E-1-3”

CONCEPTUALLY PRE-APPROVED CAPITAL REPLACEMENT INSTALLATIONS –

EQUIPMENT PLAN

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EXHIBIT “E-1-4”

CONCEPTUALLY PRE-APPROVED CAPITAL REPLACEMENT INSTALLATIONS –

MODIFIED ELECTRICAL INFRASTRUCTURE

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EXHIBIT “F-I”

PHASE I PERIOD SERVICE LEVELS

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EXHIBIT “F-II”

PHASE II PERIOD SERVICE LEVELS

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EXHIBIT “F-III”

PHASE III PERIOD SERVICE LEVELS

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EXHIBIT “G”

INTENTIONALLY OMITTED

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EXHIBIT “H”

DATACENTER RULES AND REGULATIONS

Datacenter

Rules and Regulations

OPERATION AND MAINTENANCE GUIDE

TABLE OF CONTENTS

SECTION 11102: TURN-KEY DATACENTER™ RULES & REGULATIONS	1
THE PURPOSE OF THESE STANDARDS	1
DEFINITION OF MISSION CRITICAL AREAS	1
UNPLANNED OUTAGES: INNOCENT ACTIVITIES/SERIOUS PROBLEMS	1
GENERAL RULES	2
ACCESS POLICY	2
Access for Employees	3
Vendors/Contracts Access	3
Emergency Access	3
Security	3
Smoke, Odor, Dusty Work Including Heat Guns	4
Removing Raised Floor Tiles	5
Removing Ceiling Tiles	5
Perform Any Work Under The Raised Flooring	6
Hammer Drilling	6
CABLE INSTALLATIONS	6
Communications cables LABELING STANDARD	7
ELECTRICAL DISTRIBUTION	7
FIRE ALARM/SUPRESSION SYSTEMS	8
Fire Suppression Systems	8
Fire Detection Systems	8
HVAC STANDARDS	8
CABINET//CAGE ACCESS & SIGNAGE STANDARDS	9
DELIVERIES	9
Work Scheduling and Preparation	9
GENERAL Safety Practices	11
EQUIPMENT INSTALLATION	11
Connection & Addition Of Material	11
HOUSEKEEPING	11
TRASH REMOVAL	12
EMERGENCY POWER-OFF (EPO)	12
APPROVED LABELING AND BINDING MATERIALS	12

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OPERATION AND MAINTENANCE GUIDE

SECTION 11102: TURN-KEY DATACENTER™

RULES & REGULATIONS

2. THE PURPOSE OF THESE STANDARDS

This section applies to properties that are managed and operated by Digital Realty Trust (DLR) along with their providers. These Rules and Regulations are highly recommended, for locations where customers manage the sites, but are not required.

A. In order to achieve our goal of NO UNPLANNED OUTAGES, it is vital that everyone that enters the Turn-Key Datacenter™ understand and follow the information provided in this document.

B. This document will provide you with the following:

1. An awareness of the critical nature of the Turn-Key Datacenter™ environment

2. An understanding of the need to follow the rules and regulations when working at these sites

3. The extra care you must take in performing all activities, even the most routine duties

4. Who to call before you start and if you encounter a problem

3. DEFINITION OF MISSION CRITICAL AREAS

A. All DLR Turn-Key Datacenter™ are designated as Mission Critical Areas,

B. A Mission Critical Area consists of all areas, rooms, systems and equipment associated with network and data processing operations including Meet-Me-Rooms, Point of Presence Rooms, and Turn-Key Datacenter spaces. These are typically always on raised floor with precision air conditioning and redundant electrical power. They also include the UPS modules, heat rejection systems, electrical distribution systems, and the computer equipment that depends on it.

C. Mission Critical Areas need to maintain continuous up-time for all primary systems: 24 hours a day; 7 days a week, 365 days a year

4. UNPLANNED OUTAGES: INNOCENT ACTIVITIES/SERIOUS PROBLEMS

A. An unplanned outage can be caused by well-meaning people doing innocent activities.

1. An unplanned outage can cause:

a) Lost data

b) A decline in customer service

c) Lost revenue

d) Financial liability

e) Noncompliance with federal and state regulations

f) ALL OF THE ABOVE

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2. Examples of such emergencies are:

a) Plugging into an electrical outlet and causing a short

b) Replacing a fuse and bringing down a system load

c) Spray painting in an area and setting off the fire alarm

d) Pulling a loose cable and unplugging an equipment connection

e) Opening or closing a power distribution panel and jarring a circuit breaker

f) Using a toxic, odor-causing solvent without proper ventilation could cause the staff to flee the building

5. GENERAL RULES

A. Depending on the risk assessment conducted by Building Management, the Vendors/Contractors may also be required to submit a Change Management Request and a detailed set of electrical switching procedures.

B. Customer shall develop an access and authorization plan (the customer’s “Access and Authorization Plan”) before move-in that specifies process and permissions for granting access to the customer space. With proper staffing and processes, this plan can allow for immediate access to the customer space.

C. If you observe any problems with doors not closing properly or you notice any other possible security concern, be sure to report the issue to Security promptly.

D. Cameras, video equipment or visitors are not allowed in the Turn-Key Datacenter™ unless specifically authorized to do so. It is the customer’s responsibility to inform Building Management and Security.

E. All DLR facilities are designated as ‘no smoking facilities’. Smoking is allowed outside and not within 25 feet of the main entrance of the building.

F. No food or drink is allowed in the Turn-Key Datacenter™ at any time.

G. Tampering with the access control systems, camera equipment, or fire alarm/smoke detectors, electrical or HVAC systems within the building is strictly prohibited and will result in immediate dismissal from the building.

6. ACCESS POLICY

A. Prior to providing access to the Turn-Key Datacenter™, it is required that everyone that will enter the space read, fully understand and sign the DLR 11101 - Pre-Work Information & Acknowledgement. A copy of the signed form will be kept on file with the Building Management. For a copy of this document, please contact Building Management.

B. Customer shall develop an “Access and Authorization Plan” before move-in that specifies process and permissions for granting access to the customer space. The plan should designate those that can grant access into the customer’s space “Customer Authorizers”

1. The plan must include the following:

a. The names of all employees of the customer that will require access into the Turn-Key Datacenter™ space.

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b. Names of company(s) and employees of Vendors/Contractors and under what conditions they must meet in order to be allowed into the customer space unescorted.

c. It is the responsibility of the Customer to provide and update the access list. Customer should provide updates for, any changes in personnel that require removal from access to the Turn-Key Datacenter™.

2. Turn-Key Datacenter™ access is restricted to personnel with an approved business need. Only designated “Customer Authorizers” may approve an individual’s access into the Turn-Key Datacenter™.

3. Visitor(s) not on the approved access list will not be allowed to enter the customer space. Security will contact the “Customer Authorizers” and inform them that a visitor(s) has arrived and is in the waiting area. It will be the customer’s responsibility whether to escort the visitor(s) or have Security issue a access badge.

4. Access cards will expire upon 90 consecutive days of non-usage.

C. ACCESS FOR EMPLOYEES

1. Security will issue access cards to each employee of the Customer that are on the “Access and Authorization Plan”.

2. The Customer should contact Building Management to schedule the issuing of employee access cards. Photo ID’s will be required to be provided to Security prior in order to verify the person is on the approved customer access list.

3. Many DLR facilities utilize biometric readers, which will require programming prior to first-time entry.

D. VENDORS/CONTRACORS ACCESS

1. Vendors/Contractors that require access to the Customer’s Turn-Key Datacenter™ must meet the DLR insurance requirements prior to performing any work in the building.

E. EMERGENCY ACCESS

1. Emergency access of individuals not on the approved list can only be approved by the “Customer Authorizers”.

2. The “Customer Authorizers” should contact Security and provide a complete description of the scope of work and the nature of the emergency. Some work scope may require the approval of Building Management prior to granting access to the vendor.

F. SECURITY

1. Card access doors control admittance to the Turn-Key Datacenter™. Never loan your badge or use another person’s badge for any purpose. Failure to comply will cause your removal from the site.

2. If you should lose your ID badge, immediately report it to Security so it can be deactivated.

3. Do not allow others to tailgate into a controlled space behind you. Tailgating is a way for someone who lacks authorization to enter a restricted space. Each person must use the badge access system to facilitate their own access by use of their own badge. Conversely, you must not follow another person into any restricted space without having separately used your own badge to unlock the door into that space.

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4. The badge access system may require that you pass your badge by a reader in order to exit the Turn-Key Datacenter™. This process will provide greater awareness of occupancy in the event of an emergency.

5. Do not attempt to enter areas to which you are not authorized.

6. If additional card readers are required, contact Building Management for pricing

7. The Turn-Key Datacenter™ is under 24-hour closed circuit TV cameras surveillance. They are deployed within the Turn-Key Datacenter™ and surrounding areas to monitor the security of exits and entrances. Activity viewed by these cameras is recorded and may be used for investigative purposes or when a security policy, such as tailgating, is violated.

8. Tampering with the camera equipment is strictly prohibited and will result in immediate dismissal from the Building.

9. The Turn-Key Datacenter™ is secured with a “fail-safe” access control system utilizing either access card and/or biometric.

10. All doors into the Turn-Key Datacenter™ and other restricted space must not be propped open for any length of time. You should ensure that each controlled access door closes immediately after you enter.

11. All entrance into and out off the building exterior will be on the DLR access control system. This also applies to all common area spaces, so as to not impede any other Customers or Building Management staff.

12. Customers may install their own access control systems only on the entrance into their space. The Customer must grant access to all DLR, Building Management employees and third party provider’s to perform work on systems and equipment that are within the Customers space. DLR and/or Building Management will provide and maintain an updated access list.

G. SMOKE, ODOR, DUSTY WORK OR HEAT PRODUCING TOOLS/EQUIPMENT

1. Any work that involves the use of tools that may produce smoke, dust or strong odors, (i.e. heat guns, hammer drills, grinders, etc) must be scheduled and approved by Building Management. Any such work shall require the disabling of the fire alarm enunciation, smoke detection and suppression systems.

2. An approved DLR Fire Impairment Form must be submitted to Building Management for review and approval.

3. Any fines imposed by the local Fire Department resulting from any events or alarms created by such work will be the full financial responsibility of the Customer performing such work.

4. Extensive dusty work may further require the replacement of HVAC unit filters and an associated charge for this material. The installation of pre-filter media over the HVAC unit intake may be required.

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5. Any accidental discharge of the fire suppression system caused by a Customer who violates these rules shall be the full financial responsibility of the Customer.

H. REMOVING RAISED FLOOR TILES

1. In order to maintain static pressure for proper cooling of equipment, all installation or removal of raised floor perforated tiles, are to be performed by the Building Engineering Staff only.

2. Customers may remove and replace solid floor tiles within their space. To maintain structural integrity of the raised flooring, no more than 5 floor tiles or 3 floor stringers may be removed at any given period of time.

3. Customers are allowed to perform tile cuts for cable access. Prior approval from the Building Engineering Staff is required and the opening and grommet must be in compliance with Digital Realty Trust’s standard listed below:

a. Koldlock Integral, Model # 1010.

b. AirGuard Part # 116-800-001

i. Overall Size 6.0” H x 12.0” W x 1.5”D inches

ii. Hole open 5-3/8” H x 10.5” W

c. Any deviation in this standard size opening must be approved by DLR.

4. Raised floor cutting and installation services can be performed by Digital Realty Trust at an additional cost.

5. No Tile cutting will be allowed on the Turn-Key Datacenter™ floor.

I. REMOVING CEILING TILES

1. The following requirements only apply to shared, common space outside of the Colocation Premises. Customer may lift ceiling tiles within their own Conditioned Space and will not require an inspection or notice to DLR

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a. Ceiling tiles are only to be removed by the Building Management staff. Customers and Vendors/Contractors are not allowed to perform ANY work (i.e. cabling, electrical, conduit, etc.) outside the Customers Turn-Key Datacenter™ at any time without the approval of Building Management.

J. PERFORM ANY WORK UNDER THE RAISED FLOORING

1. Since under floor smoke detectors are located under the raised floor, all work requiring access to under the raised flooring, authorization must be received by Building Management.

2. Any such work shall require the disabling of the fire alarm enunciation, smoke detection and suppression systems.

K. DRILLING

1. All work must conform to the Building drilling policy. The use a hammer drill with tool interrupter device or equipment is required if X-rays or Farroscan is not performed. Contact the Building Management to review the current Construction Policies. Building Management must review and approve all work prior to any work.

2. If drilling is to be performed, a portable vacuum cleaner must be used during the drilling to minimize the amount of dust particles emitted into the space.

3. Any such work shall require the disabling of the fire alarm enunciation, smoke detection and suppression systems.

7. CABLE INSTALLATIONS

A. Depending upon the extent of the work, Customer should consider the disabling of the fire alarm enunciation, smoke detection and suppression systems.

B. The following requirements only apply to shared, common space outside of the Colocation Premises. Customer cable work inside customer premises is exempt; provided

1. Customer must use good workmanship and engineering practices.

2. No “Customer to Customer” cable connections are permitted between DLR Customers in the Turn-Key Datacenter™. Customers are allowed to interconnect between any of their owed equipment and their customer’s within their designated premises.

3. The under floor cable management is to be used for all cable runs.

4. Customer may run overhead ladder rack or tray affixed to the top of customer cabinets within customer’s premises, as necessary.

5. All cables installations must be secured and bundled together using the approved materials such as wax-coated string, Velcro-ties or plastic tie-straps.

6. Cables are not allowed to extend beyond the rack/tray edges. Cable bundles will be kept in a neat and orderly fashion to maintain workability and appearance.

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7. All cables must be run on top of the rack/tray and are not allowed to be run underneath them.

8. COMMUNICATIONS CABLES LABELING STANDARD

A. Grantor reserves the right to review and approve the pathway and engineering of all DLR “Customer to Customer” interconnections. Approval will not be unreasonably withheld. All interconnections must occur in the Building Meet-Me-Room.

B. All cables to and from the Customer space must run in the common area cable management system.

C. If cables extend into DLR space, then cables must be labeled according to the following Labeling Standard:

1. Customer conduit runs in common space may be labeled at the ends and junctions only.

2. Tagging of all cables must be performed at the beginning and end points of each cable. Cable bundles may be labeled as single units. Customer standard tags are acceptable. “Write-on” labels are allowed for the identification of circuits due to the potential for change, but must be legible.

3. Tags must have the following:

i. Customer name,

ii. cage location

iii. Interconnection rack area or port number(s).

9. ELECTRICAL DISTRIBUTION

A. The following requirements only apply to the last demarcation point of Grantor supplied power (the “Grantor/Customer Demarcation Point”). Demarcation is the output power of the Power Distribution Unit (PDU).

1. All electrical switching will require the completion of a DLR Electrical Switch Procedures.

2. Building Management and Engineering will manage all electrical distribution requirements. All electrical distribution installations and/or changes must be specified and approved in advance by Building Management.

3. Building Engineering will control all electrical breaker positions. All distribution panels will remain locked at all times. Coordination of breaker operation must be requested by the Customer to the Building Management, and approved by the Building’s Chief Engineer and/or his designated representative, prior to activation.

B. Customers are responsible for any power strips or equipment connected to the UPS circuits within their cage(s) or cabinets.

C. Customers are responsible for the termination of all DC voltage cabling to Customer fuse panels within their cage(s).

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D. For all work preformed on shared electrical infrastructure, performed by a contractor, under the direction of the customer, will require inspection by Building Management prior to any power activation.

E. Written agreements must be fully executed between the Customer and the Grantor prior to electrical circuit activation.

F. DLR can provide quotes for additional electrical installations. If a customer would like to have a contractor of their choice provide this service, the contractor must meet all DLR insurance requirements. A list of approved electrical contractors is maintained by the Building Management.

10. FIRE ALARM/SUPRESSION SYSTEMS

A. Customers are not authorized to tamper with or alter the Building’s existing Fire Alarm/Suppression Systems at any time.

B. The fire suppression system for the Turn-Key Datacenter™ must be disabled for any work, which may cause smoke, odor, or dust, including the use of heat guns. A minimum of 24 hours advanced written notice to the Building Management office is required.

C. Email replies received directly from the Building Manager are considered acceptable notice. Receipt confirmations will not be valid. All notices must be accompanied with a detailed description outlining the scope of work.

D. Only Building Management may disable/impair the Fire Alarm/Suppression Systems A “Fire System Impairment” form will need to be completed and all tasks and notifications must be done as listed in the instructions contained on the form.

E. FIRE SUPPRESSION SYSTEMS

1. Pre-action water sprinklers protect the Mission Critical Areas, offices and support spaces. The sprinklers will function automatically when the space temperature exceeds a preset level and the fire detection system is in alarm.

2. Some facilities may also have gaseous suppression systems in addition to the pre-action system mentioned above. These systems will activate automatically as well.

F. FIRE DETECTION SYSTEMS

1. The fire detection system consists of ceiling and under floor mounted smoke detectors. These can be set off by dust or fumes which will in turn activate the fire suppression systems mentioned above.

2. Many facilities also employ a VESDA™, Very Early Smoke Detection system, which is capable of detecting the microscopic particles of combustion. Generally air is drawn in through a network of small-bore pipes laid out above or below a ceiling in parallel runs covering a protected area. A VESDA detector will trigger automatic fire response systems.

11. HVAC STANDARDS

Alteration of or tampering with the Building HVAC settings, related airflows or any other HVAC systems within the Turn-Key Datacenter™ is strictly prohibited.

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12. SIGNAGE STANDARDS

The Grantor shall provide the initial signage for each Customer, if requested, using the Building Standard signage. Any additional signs or changes must be approved by the Grantor and are subject to additional charges. Grantor must approve any changes requested by any Customer, and all such changes are subject to additional charges.

13. DELIVERIES

Digital Realty Trust facilities do not have shipping and receiving departments. This policy has been designed to aid our customers in their delivery needs.

All Customer deliveries made to the property must follow the procedures listed below:

1. The Vendor and their cargo must be authorized and cleared by Building security.

2. The delivery must be received by the Customer or Customer’s designee, at the freight dock and immediately deposited by Customer (or such designee) within such Customer’s Colocation Premises.

3. Intentionally Omitted.

4. As a courtesy to other users of the loading dock(s), whenever large deliveries are expected or the dock area will be blocked for an extended period of time, please coordinate these times with Building Management.

5. All Customers are required to ensure delivery and moving companies provide the appropriate insurance certificates to Building Management BEFORE the delivery arrives.

6. Any equipment with a “footprint” weight of 1250lbs or greater requires the review and placement approval of the building structural engineer prior to installation. All costs associated with the structural review are the responsibility of the Customer.

7. Customer and Building Engineering will periodically review the Layout Plan, as compared to the actual placement of equipment in the premises, to ensure structural safety and conformity with the Layout Plan.

8. Breakdown of all cartons and crating materials should be done in the Building Turn-Key Datacenter™ Storage Area prior to transporting the equipment to the Turn-Key Datacenter™.

Under no circumstances shall the Grantor (or any member of the Grantor Group) be held responsible for the safety or condition of any deliveries.

14. Work Scheduling and Preparation

A. The following requirements only apply to the last demarcation point of Grantor supplied power or outside of the Customer’s own space (the “Grantor/Customer Demarcation Point”). This would also apply to work requested by Customer that would be considered shared infrastructure.

1. All work must have a completed “Method of Operation” (MOP) that provides specific work plans before you begin work must be completed and approved before a “Change Management Work Request” number will be granted.

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2. If any electrical switching will be required, an approved “Switching Procedures” must also be completed before a “Change Management Work Request” number will be granted.

3. You must have an approved Change Management Work Request prior to beginning any work.

4. Stick to the approved MOP. If any additional work is needed, a new request will need to be submitted for review and approval, before the work can begin.

5. Only Building Management can approve any activity that affects the electrical and mechanical systems of the buildings.

6. Power receptacles and other hardware connection points will be identified by an authorized Building Management. Vendors/Contractors are not to plug in any hardware, laptops, power tools, or diagnostic equipment without prior approval.

7. Vendor personnel are expected to have their own tools and equipment necessary for their assignment.

8. Cables, tools and accessories are to be properly stowed when work is complete or at the end of each business day.

9. All doors, panels and covers will be installed when work is complete or at the end of each business day.

10. Vendors/Contractors are not allowed to cut floor tiles without prior approval from an authorized Building Management and never on the raised floor.

11. No wires or cables of any sort are to be permanently installed on top of the raised floor.

12. Floor tiles are to be re-installed whenever vendor personnel are away from the work area.

13. Consult Building Management before placing protective covers over any equipment.

14. Arrange all heavy equipment moves with Building Management before you begin.

15. Set up protective barriers; for people, equipment and the environment.

16. Provide 24 hour contact numbers for immediate contact when on-site.

17. Building Management will provide more detailed information on any of the above topics, at your request.

B. Vendors/Contractors can perform work, as long as the vendor meets insurance requirements and notifies engineering with an approved Method of Procedure.

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15. GENERAL SAFETY PRACTICES

1. If you observe actual or suspected safety violations, bring these concerns to Building Management immediately.

2. Ensure all aisles and exits are free of obstructions.

3. The procedures for reporting and responding to a medical emergency can be provided by Building Management

16. EQUIPMENT INSTALLATION

A. The following requirements only apply to the last demarcation point of Grantor supplied power or outside of the Customer’s own space (the “Grantor/Customer Demarcation Point”). This would also apply to work requested by Customer that would be considered shared infrastructure

1. Additions of ladder racks, cable management tray, fiber guide and floor tile within/above/below any Customer caged areas must be pre-approved by the Building Management and match the existing system in-place.

B. All connection points must be “bonded” between sections to maintain the integrity of the existing rack/tray system including appropriate grounding.

C. To ensure effective grounding, the paint must be removed down to the bare metal and Customer agrees to install according to common practices and/or manufacturer instructions in order to provide a metal contact point for the bonding connection(s).

D. The frames of all cabinets, PDU’s, CRAC’S, etc. installed on the raised floor must be bonded to the single reference grid (SRG) located under the raised floor.

17. HOUSEKEEPING

A. Customers are expected to keep their area neat and clean. Contact Building Management for any issues or assistance.

1. Unpack equipment outside the computer room and dispose of the combustibles.

2. Storage of combustible material on the raised floor is never allowed.

3. Replace all ceiling and floor tiles removed for access, before leaving the site over the night or weekend.

4. Cut tile and cables outside the raised floor area and properly dispose of all waste.

5. Never leave an area with dirt and debris, even temporarily. Remove dust or dirt immediately.

6. All vacuums used must have a HEPA filter on the discharge.

7. Report any spills or fire hazards so corrective action can be taken.

8. No food or drink is allowed in the raised floor areas of the buildings. Please use the break rooms.

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18. TRASH REMOVAL

A. Customers may request trash removal from the Turn-Key Datacenter™ by contacting Building Management.

1. In the event that Customer requests removal by Building Management, Customer should label the trash and provide in as tidy of a pile as possible outside of the cage.

2. Once equipment is unpacked, all cardboard boxes are to be removed from the Turn-Key Datacenter™ either by Customer, or in connection with item A. (above). Always dispose (or cause the disposal) of all combustibles.

3. At no time will wooden pallets or spools be allowed to remain in the Turn-Key Datacenter™ as they are a fire hazard.

4. Contact Building Management for any cleaning equipment needed.

5. Report any spills or fire hazards so corrective action can be taken.

19. EMERGENCY POWER-OFF (EPO)

A. Emergency power-off (EPO) buttons are located adjacent to the exit doors within the Turn-Key Datacenter™ for use in an emergency situation where the shutdown of power and cooling is necessary to prevent loss of life or to prevent the spread of a significant electrical fire.

20. APPROVED LABELING AND BINDING MATERIALS

APPROVED CABLE IDENTIFICATION METHODS

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APPROVED CABLE AND ELECTRICAL CIRCUIT IDENTIFICATION METHODS

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EXHIBIT “H-1”

BUILDING RULES AND REGULATIONS

(1) Upon termination of this Agreement, Grantee agrees to return all keys to Grantor.

(2) Grantee shall refer all contractors, contractor’s representatives and installation technicians rendering any service to Grantee, to Grantor for Grantor’s supervision, approval and control before performance of any contractual service. This provision shall apply to all work performed in the Demised Premises, including, without limitation, installation of telephones, telegraph equipment, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any other physical portion of the Building.

(3) Movement in and out of the Building of furniture, office equipment or other bulky materials, or movement through Building entrances or lobby, or dispatch or receipt by Grantee of any merchandise or materials which requires use of elevators or stairways shall be subject to the terms of the Underlying Lease. All such movement shall be under supervision of Grantor and in the manner agreed between Grantee and Grantor by prearrangement before performance of any such movement. Such prearrangements initiated by Grantee shall include determination by Grantor, and subject to Grantor’s decision and control, of the time, method and routing of movement, and limitations imposed by safety or other concerns which may prohibit any article, equipment or any other item from being brought into the Building. Grantee shall assume all risk as to damage to articles moved and injury to persons or public engaged or not engaged in such movement, including equipment, property and personnel of Grantor if damaged or injured as a result of acts in connection with carrying out this service for Grantee from the time of entering property to completion of work.

(4) No signs, advertisements or notices shall be allowed in any form on windows or doors inside or outside the Grantee Space or any other part of the Building, and no signs except for those approved by Grantor and permitted under the Underlying Lease shall be permitted in the public corridors or on corridor doors or entrances to the Grantee Space. All signs shall be contracted for by Grantor for Grantee at the rate fixed by Grantor from time to time, and Grantee shall be billed and pay for such service accordingly upon demand.

(5) No draperies, shutters, or other window covering shall be installed on exterior windows or walls or windows and doors facing public corridors without Grantor’s written approval. Grantor shall have the right to require installation and continued use of uniform window covering for such windows.

(6) No portion of the Grantee Space or any other part of the Building shall at any time be used or occupied as sleeping or lodging quarters.

(7) Grantee shall not place, install or operate in the Grantee Space or in any other part of the Building any machinery or conduct mechanical operations, or place or use in or about the Grantee Space any explosives, gasoline, kerosene, oil, acids, caustics or any other inflammable, explosive or hazardous materials, fluid or substance without the prior written consent of Grantor.

(8) Grantor shall not be responsible for lost or stolen personal property, equipment, money or jewelry from the Grantee Space or public rooms regardless of whether such loss occurs when any such area is locked against entry or not.

(9) No birds or animals shall be brought into or kept in or about the Grantee Space or any other part of the Building.

(10) None of the entries, sidewalks, vestibules, elevator shafts, passages, doorways or hallways and similar areas shall be blocked or obstructed, or any rubbish, litter, trash or material of any

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nature placed, emptied or thrown into such areas, or such areas be used at any time for any purpose except for ingress or egress by Grantee, Grantee’s agents, employees or invitees to and from the Grantee Space and for going from one to another part of the Building.

(11) Grantee and Grantee’s employees, agents and invitees shall observe and comply with the driving and parking signs and markers on the premises or parking facilities surrounding the Building.

(12) Grantor shall have the right to prescribe the weight and position of safes, computers and other heavy equipment which shall, in all cases, in order to distribute their weight, stand on supporting devices approved by Grantor. All damage done to the Grantee Space or to the Building by placing in or taking out any property of Grantee, or done by Grantee’s property while in the Grantee Space or the Building, shall be repaired immediately at the sole expense of Grantee.

(13) Plumbing fixtures and appliances shall be used only for purposes for which constructed, and no sweeping, rubbish, rags or other unsuitable material shall be thrown or placed therein. Damage resulting to any such fixtures or appliances from misuse by Grantee, or Grantee’s agents or employees shall be paid by Grantee, and Grantor shall not in any case be responsible therefor.

(14) Occupants on multi-occupant floors shall keep all entrance doors to the Grantee Space closed at all times [if applicable].

(15) Grantor reserves the right to rescind any of these rules and make such other and further reasonable rules and regulations as in Grantor’s judgment shall from time to time be needful for the safety, protection, care and cleanliness of the Demised Premises and the Building, the operation thereof, the preservation of good order therein, and the protection and comfort of its occupants, their agents, employees and invitees, which rules when made and notice thereof given to an occupant shall be binding upon such occupant in like manner as if originally prescribed.

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EXHIBIT “I”

CURRENT PM SCHEDULE

Maintenance & Operations Standards

I. OVERVIEW

The purpose of this document is to provide an overview of our Maintenance and Operation Program. Each site in the portfolio uses this document as a template, and then localizes their processes and procedures to the equipment, installation and operation. The end-product is then integrated into our Critical Facilities Management™ system for production use, ongoing management and process improvement.

NOTE: All maintenance is scheduled for normal business hours: 7:00 a.m. to 6:00 p.m., Monday through Friday, excluding designated holidays

Normal business hours are the ideal time for maintenance on the critical systems due to the following reasons:

1. Availability of highest quality support personnel.

2. Availability of manufacturer’s highest quality technical support.

3. Parts inventory access.

The above items are not generally available at night or weekends and could lead to prolonged delays.

At the Customer request, any or all of these tasks can be performed at alternate times; DLR will ensure that the necessary schedules changes are made, however, the additional costs incurred will be the responsibility of the customer.

DLR incorporates the specifications and guidelines of the following as the basis for our Maintenance Programs.

• National Fire Protection Association (NFPA 70B - 2006 Recommended Practice for Electrical Equipment Maintenance)

• International Electrical Testing Association (2007 - NETA Maintenance Testing Specifications)

• Institute of Electrical and Electronic Engineers (IEEE)

• American Society of Heating Refrigeration and Air-Conditioning Engineers (ASHRAE)

• Original Equipment Manufacturer’s (OEM’s)

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II. DEFINITIONS

• Preventive Maintenance - Maintenance performed when a system is functioning properly to prevent a later failure.

• Predictive Maintenance - Comparing the trend of measured physical parameters against known engineering limits for the purpose of detecting, analyzing, and correcting problems before failure occurs.

• Corrective Maintenance - Maintenance done to correct a problem when something has failed, or is failing.

• Failure-finding Maintenance - Involves checking a part of a system to see if it is still working. This is most often performed on portions of a system dedicated to safety - protective devices.

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III. ELECTRICAL MAINTENANCE FREQUENCIES - NFPA 70B INTERVAL GUIDELINES

Item/Equipment	Task/Function	Interval
Substations (Outdoor)	Infrared scanning	Annually
Insulators	Visual inspection	4–6 months
	Corona detection	4–6 months
	Electrical tests	As indicated by other PM
Conductors	Visual inspection of connections	4–6 months
	Check connections for tightness	As indicated by other PM
Air-disconnecting switches	Visual inspection	4–6 months
	Operation check	Annually
	Contact inspection	Annually
Grounding equipment	Visual inspection	Annually
	Check connections for tightness	1–2 years
	Electrical test	3 years
Enclosures	Security/operational check	1–3 months
Switchgear Assemblies	Infrared scanning	Annually
Enclosures	Security/operational check	Outdoor — 1–3 months
		Indoor — 6 months
	Visual inspection	Outdoor — 1–3 months
		Indoor — 6 months
Ventilation	Visual inspection	1–3 months
Space heaters	Operational check	Annually
Insulation	Visual inspection/clean	Annually
	Electrical tests	2 years
Air Circuit Breakers — Medium Voltage
Insulation	Visual inspection/clean	Annually
	Electrical tests	3 years
Contacts	Visual inspection/clean	Annually
	Adjust	Annually
	Electrical test	3 years
Arc interrupters	Visual inspection/clean	Annually
	Electrical test	3 years
	Air-puffer operational check	Annually
Operating mechanism	Visual inspection	Annually
	Operational check/adjustment	Annually
Trip device circuit	Operational check	Annually
Air Circuit Breakers — Low Voltage	Visual inspection/clean/adjust	Annually
	Electrical tests	3 years
Vacuum Circuit Breaker	Visual inspection/clean/adjust	Annually
	Contact checks/vacuum integrity	3 years
	Electrical tests	3 years
Oil Circuit Breaker	General inspections and tests	3 years
Bushings	Visual inspection/clean	3 years
Oil	Dielectric breakdown test	Annually
	level	Annually
Contacts	Resistance check	3 years
	Visual inspection	3 years

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Item/Equipment	Task/Function	Interval
Interrupter Switches	See air circuit breaker	See air circuit breaker (med voltage)
	(med voltage)
Surge Arresters	Visual inspection	Outdoor — 3–6 months
		Indoor — annually
	Electrical test	3–6 years
Capacitors	Visual inspection	3–6 months
	Fuse check	3–6 months
Stationary Batteries and Chargers	Visual inspection/clean	Monthly
Torque intercell connectors	As per NFPA	Annually
Pilot cell measurements	As per NFPA	Monthly
All lead — acid cell-specific gravity	As per NFPA	Quarterly
Capacity test	As per NFPA	1–5 years
Sample connection resistances	As per NFPA	Quarterly
Infrared scanning	As per NFPA	Annually
Protective Relays	Cleaning, calibration and function tests	Electro-mech. 1–2 years
		Solid state — 3 years
Power and Distribution Transformers
Liquid filled	Current and voltage readings	Weekly–monthly
	Temperature readings	Weekly–monthly
	Liquid level check	Weekly–monthly
	Pressure/vacuum gauge readings	Weekly–monthly
	Liquid analysis	Annually
	Comprehensive liquid tests	Annually
	Insulation test	3–5 years
	Turns-ratio test	3–5 years
	Fault gas analysis	Annually
	Dissolved-gas-in-oil analysis	Annually
Dry-type	Cleaning, inspection, and testing	2 years
Power Cables	Visual inspection	Yearly
	Electrical testing	1–3 years
Motor Control Equipment	Infrared scanning	Annually
Enclosures	Visual inspection/clean	Annually
Bus bar, wiring, and terminal connections	Check connections for tightness and proper torque	2 years
	Visual inspection of insulators	Annually
	Visual inspection of wiring	Annually
	Electrical tests	2 years
Disconnects	Visual inspection/clean	Annually
	Operation check	Annually
Contactors	Visual inspection/clean	Annually
Motor overload relays	Check connections for tightness	2 years
Non-thermal type	Cleaning, calibration, and function tests	3 years
Electrical interlocks	Inspection	Annually
Mechanical interlocks	Inspection	Annually
Electronic Equipment	Inspection	Annually
	Cleaning	3 years
	Adjustments/calibration	3–5 years

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Item/Equipment	Task/Function	Interval
Molded-Case Circuit Breakers	Visual inspection/clean	3 years
	Mechanical test	2 years
	Electrical test	3–5 years
Fuses — 1000 Volts or Less
Fuse terminals and fuse clips	Visual inspection	3 years
	Clip contact pressure	3 years
	Cleaning of contact surfaces	3 years
Fuses	Visual inspection –– discolor and damage	3 years
Fuses — Over 1000 Volts
Insulators	Visual inspection/cleaning	3 years
Fuse terminals and fuse clips	Inspection of contact surfaces	3 years
Fuses	Visual inspection –– corrosion	3 years
	Terminal connections and hardware	3 years
	Fuse tubes	3 years
Fuses — Vented Expulsion Type	Visual inspection — seals	3 years
Rotating Equipment	Vibration analysis	Continuously to 6-month intervals
Stator and rotor windings	Visual and mechanical inspection, cleaning	Annually
	Electrical testing	Annually
Brushes, collector rings, and commutators	Visual and mechanical inspection	Annually
Bearings, sleeved	Oil level check	Weekly–monthly
Waste-packed	Drain, flush, and lubricate	Annually
	Re-oil, check air gap	1000 hrs
Ball and roller	Inspection and lubrication	Per manufacturer
Kingsbury thrust bearings	Drain, flush, and lubricate	Per manufacturer
Wiring Devices
Attachment plugs, cord connector bodies	Inspection	Monthly and when used
Receptacles	Inspection	Monthly and when used
	Operation check	Monthly and when used
General use snap switches	Operation check	When used
Pin and sleeve devices, heavy-duty industrial-type plugs, cord connectors, and receptacles	Inspections, cleaning, and checks	Monthly and when used
Portable Electric Tools	Inspections/cleaning	Monthly and when used
	Lubrication	Per manufacturer
	Electrical tests	Quarterly
Low-Voltage Bus way	Infrared scanning	Annually
	Visual inspection	Annually
	Electrical test	2 years
Uninterruptible Power Supply Systems	Infrared scanning	Annually
	Visual inspection	Quarterly
	Routine maintenance	6 months
	System tests	2 years
	Battery tests	See requirement for stationary batteries
UPS support standby generator	Test run — exercise	Monthly

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IV. DEFINITION OF MISSION CRITICAL AREAS

A Mission Critical Area consists of all areas, rooms, systems and equipment associated with network and data processing operations including Meet-Me-Rooms, Point of Presence Rooms, and Turn-Key Datacenter spaces. These are typically always on raised floor with precision air conditioning and redundant electrical power. They also include the UPS modules, heat rejection systems, electrical distribution systems, and the computer equipment that depends on it.

V. RAISED ACCESS FLOOR SYSTEMS

The raised floor system will be kept in clean condition as described in the OEM’s specification through a combination of coordinated, supervised daily and periodic maintenance efforts.

The raised floor areas are cleaned weekly by designated trained personnel, typically the janitorial contractor who services the base building. The cleaning crew has been instructed in proper techniques so as to avoid property damage, injury, or accidental interruption of Digital Realty Trust business.

An annual heavy cleaning will be completed on the top area of the raised floor. This heavy cleaning will be performed by a contractor who is a specialist in this service.

A deep clean (every three years) of the floor system includes all the services of the annual heavy cleaning, in addition to the under floor cleaning.

DLR visually inspects the raised floor system on a regular basis, watching for uneven floor sections, loose stringers, gaps between tiles, trip hazards, and other potential problems.

In addition to this, an annual maintenance and repair program is conducted by a contractor who is specialized in performing and installing raised flooring systems. They provide re-leveling, component replacement, and other floor tuning services on an annual basis. The entire floor is checked for level and will be re-leveled where possible. Portions of the floor with equipment cannot be re-leveled until equipment is moved.

Floor panels are realigned wherever possible and pedestals are inspected for sufficient adhesive, which is reapplied as needed. Any missing or damaged understructure components are replaced and/or repaired. All floor panels are repaired or replaced if necessary.

VI. HVAC SYSTEMS

A thorough preventative maintenance program for chiller systems will be performed on a quarterly basis. Below is a list of a few tasks performed throughout the year:

1. Clean oil strainer; replace filter and gasket annually. (OEM suggested replacement)

2. Repair any minor leaks

3. Change purge oil yearly (OEM Schedule)

4. Check and calibrate safety controls

5. Check dashpot oil in main starter, tighten all starter terminals and check contents for wear

6. Check and calibrate overloads. Record trip amps and trip times

7. Pressure test as required

8. Change oil annually

9. Meg compressor and oil pump motor. Record readings

10. Visually inspect condenser tubes. Heads removed by contractor

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Computer Room Air Conditioner (CRAC) / Computer Room Air Handler (CRAH) units have a preventative maintenance program based on the OEM recommended frequencies of a monthly, quarterly and annual basis, which include the following:

1. Blower Section

2. Compressors

3. Humidifier

4. Reheat Section

5. Evaporator Coil

6. Electrical Panel

7. Heat Rejection Units - Air Cooled Condensers

VII. UPS SYSTEM

DLR performs daily visual inspections to check for any anomalies on the UPS units and batteries. Inspections are performed twice a year, as per OEM recommendation.

VIII. UPS SYSTEMS PERIPHERALS

In addition to the UPS units, connected equipment also is included in the DLR inspection program. These are also visually inspected daily as well as OEM recommended frequencies. Two inspections per year are performed by qualified specialists following the OEM frequencies and inspection tasks The equipment consists of the following:

1. Maintenance Bypass Cabinet

2. Load Bus Sync

3. Power Tie

4. System Control Cabinet/ Static Transfer Switch

5. Distribution Cabinet

IX. BATTERY MAINTENANCE

Battery assessments are performed prior to testing, test set-up, battery discharge, battery recharge test, and tear-down. A documented report is provided of all measurements and test results, which include a summary analysis and recommendations. Inspections are performed quarterly.

1. VALVE REGULATED LEAD ACID -VRLA

Specific preventive maintenance activities are completed as defined in Section III, above. All work is performed in accordance with the IEEE 1188-1669 Standard and OEM’s specifications for batteries.

2. FLOODED LEAD-ACID (WET)

Specific preventive maintenance activities are completed as defined in Section III, above. All work is performed in accordance with the IEEE 450-1995 Standard and OEMs specifications for batteries.

X. DC POWER PLANTS

Many of DLR properties contain 48 volt DC power plants for telecommunication equipment. We understand that these are critical systems, which we fully support with our preventative maintenance program. The equipment systems are inspected by qualified specialists on a quarterly schedule. The components of the DC Plant include the following:

1. Rectifiers

2. Power Boards

3. Inverter

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XI. GENERATORS/ENGINES

DLR performs daily visual inspections of the generator and engines. The units are test run on a monthly schedule for a minimum of 30 minutes. This test will transfer the critical loads in order to verify the operation of the UPS, batteries, ATS and generators to ensure they will function in the event of a power outage. The load to be transferred must be a minimum of 30% of the rated capacity of the generator; otherwise wet-stacking can occur. If unable to load the generator to 30%, then a load banks will be used. In addition to this, specific preventive/predictive maintenance is performed in accordance with OEM recommendations.

Component testing includes all of the following:

1. Fuel System

2. Cooling System

3. Lubrication System

4. Starting and charging system

5. Air induction and exhaust system

6. Cooling system

Additionally, an annual load transfer test lasting 4 hours will be conducted and will consist of a simulated electrical outage. This test will transfer the critical loads in order to verify the operation of the UPS, batteries, ATS and generators to ensure they will function in the event of a power outage.

The load to be transferred must be a minimum of 30% of the rated capacity of the generator; otherwise wet-stacking can occur. If unable to load the generator to 30%, then load banks will be used

XII. ELECTRICAL INFRASTRUCTURE

Annual preventative/predictive maintenance is performed on the critical electrical distribution system while it is energized. The following testing and inspection services, as appropriate, will be conducted:

1. True RMS Voltage and Current

2. Voltage Drop

3. Infrared Thermo graphic Imaging

4. Ultrasonic

5. Voltage and Current Harmonics

6. Power Factor

7. Visual and Mechanical Inspections

8. Phase-Balance

9. Dissolved-Gas-in-Oil Analysis

10. Insulating-Liquid Analysis

In addition to the annual service above, the electrical distribution system and/or electrical component(s) will be de-energized, on a 3-year schedule, to allow for a detailed inspection of the infrastructure to include, as appropriate, the following:

1. Insulation Resistance

2. Winding Resistance

3. Contact Resistance

4. Circuit Breaker Service (Low Voltage)

5. Ground Resistance

6. Transformer

7. Motor

8. Visual and Mechanical Inspection

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Equipment covered includes all of the following:

1. Switchgear and Switchboard Assemblies

2. Transformers

3. Cables

4. Metal-Enclosed Bus ways

5. Switches

6. Circuit Breakers

7. Circuit Switchers

8. Protective Relays

9. Regulating Apparatus

10. Grounding Systems

11. Ground-Fault Protection Systems

12. Rotating Machinery, (AC/DC Motors)

13. Motor Control, Motor Starters

14. Adjustable Speed Drive Systems

15. Surge Arresters

16. Capacitors and Reactors

17. Outdoor Bus Structures

18. Emergency Systems, Engine Generator (Electrical Only)

19. Uninterruptible Power System (UPS) (A/C Power only)

20. Transfer Switches ( Automatic, Static and Manual)

21. Automatic Circuit Reclosers

22. Electrical Safety Equipment

23. Power Distribution Unit’s (PDU)

24. System Control Cabinet

25. Relay Calibration

26. Remote Power Panels (RPP)

9

XIII. FIRE/LIFE SAFETY SYSTEMS

The following table is taken from NFPA 25, Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems and is one example of the inspection standards that are followed with regard to the Fire/Life Safety Systems.

Table 5.1 Summary of Sprinkler System Inspection, Testing, and Maintenance

Item	Activity	Frequency
Gauges (dry, pre-action, and deluge systems)	Inspection	Weekly/monthly
Control valves	Inspection	Weekly/monthly
Water flow devices	Inspection	Quarterly
Valve supervisory devices	Inspection	Quarterly
Supervisory signal devices (except valve supervisory switches)	Inspection	Quarterly
Gauges (wet pipe systems)	Inspection	Monthly
Hydraulic nameplate	Inspection	Quarterly
Buildings	Inspection	Annually (prior to freezing weather)
Hanger/seismic bracing	Inspection	Annually
Pipe and fittings	Inspection	Annually
Sprinklers	Inspection	Annually
Spare sprinklers	Inspection	Annually
Fire department connections	Inspection	Quarterly
Valves (all types)	Inspection	Weekly/monthly
Obstruction	Inspection	5 years
Water flow devices	Test	Quarterly/semiannually
Valves supervisory devices	Test	Semiannually
Supervisory signal devices (except valve supervisory switches)	Test	Semiannually
Main drain	Test	Annually
Antifreeze solution	Test	Annually
Gauges	Test	5 years
Sprinklers — extra-high temperature	Test	5 years
Sprinklers — fast-response	Test	At 20 years and every 10 years thereafter
Sprinklers	Test	At 50 years and every 10 years thereafter
Valves (all types)	Maintenance	Annually or as needed
Obstruction investigation	Maintenance	5 years or as needed
Low-point drains (dry pipe system)	Maintenance	Annually prior to freezing and as needed
Obstruction	Investigation	As needed

10

The systems and equipment covered includes all of the following:

1. Fire Detection and Alarm Systems

2. Pre-action Systems (Cross-zoning verification)

3. Dry Pipe Systems (Winter Set Up)

4. Wet Pipe Systems

5. Fire Pumps Assemblies

6. Air Compressor and Air Systems

7. Valve Maintenance (All Systems)

8. Deluge Systems

9. Electric Motor Pumps

10. Fixed Chemical Extinguishing Systems

11. Portable Fire Extinguishers

12. Standpipe and Hose Systems

13. Total Flooding Chemical Extinguishing Systems

11

Revision History

Author	Date	Comments
Ted Martin	Oct 1, 2006
Jim Smith	Oct 3, 2006	Incorporate comments from TM, AS and publish
Ted Martin	Aug 1, 2007	Reviewed and updated
Ted Martin	April 24, 2008	Reformatted and updated
Ted Martin	June 26, 2008	Added NFPA 70B Chart
Ted Martin	July 30, 2008	Added PM time schedules and generator run.

12

EXHIBIT “J”

FORM OF GUARANTY

In consideration of the making of that certain Colocation Agreement (the “Agreement”) dated of even date herewith between Digital Chelsea, LLC, a Delaware limited liability company (“Grantor”), and tel^x – New York 111 8th, LLC, a Delaware limited liability company (“Grantee”) regarding the use of certain space in that certain building (the “Building”) located at 111 8^th Avenue, New York, New York, and for the purpose of inducing Grantor to enter into and make the Agreement, the undersigned hereby unconditionally guarantees the full and prompt payment of Colocation Fees (as defined in the Agreement) and all other sums required to be paid by Grantee under the Agreement (the “Guaranteed Payments”) and the full and faithful performance of all terms, conditions, covenants, obligations and agreements contained in the Agreement on the Grantee’s part to be performed (the “Guaranteed Obligations”) and the undersigned further promises to pay all of Grantor’s costs and expenses (including reasonable attorneys’ fees) incurred in endeavoring to collect the Guaranteed Payments or to enforce the Guaranteed Obligations or incurred in enforcing this Guaranty as well as all damages which Grantor may suffer in consequence of any default or breach under the Agreement or this Guaranty.

1. Grantor may at any time and from time to time, without notice to or consent by the undersigned, take any or all of the following actions without affecting or impairing the liability and obligations of the undersigned on this Guaranty:

(a) grant an extension or extensions of time for payment of any Guaranteed Payment or time for performance of any Guaranteed Obligation;

(b) grant an indulgence or indulgences in any Guaranteed Payment or in the performance of any Guaranteed Obligation;

(c) modify or amend the Agreement or any term thereof or any obligation of Grantee arising thereunder;

(d) consent to any assignment or assignments, sublease or subleases and successive assignments or subleases by Grantee;

(e) consent to an extension or extensions of the term of the Agreement;

(f) accept other guarantors; and/or

(g) release any person primarily or secondarily liable hereunder or under the Agreement or under any other guaranty of the Agreement.

The liability of the undersigned under this Guaranty shall not be affected or impaired by any failure or delay by Grantor in enforcing any Guaranteed Payment or Guaranteed Obligation or this Guaranty or any security therefor or in exercising any right or power in respect thereto, or by any compromise, waiver, settlement, change, subordination, modification or disposition of any Guaranteed Payment or Guaranteed Obligation or of any security therefor. In order to hold the undersigned liable hereunder, there shall be no obligation on the part of Grantor, at any time, to resort for payment to Grantee or to any other guaranty or to any security or other rights and remedies, and Grantor shall have the right to enforce this Guaranty irrespective of whether or not other proceedings or actions are pending or being taken seeking resort to or realization upon or from any of the foregoing.

2. The undersigned waives all diligence in collection or in protection of any security, presentment, protest, demand, notice of dishonor or default, notice of acceptance of this Guaranty, notice of any extensions granted or other action taken in reliance hereon and all demands and notices of any kind in connection with this Guaranty or any Guaranteed Payment or Guaranteed Obligation.

1

3. The undersigned hereby acknowledges full and complete notice and knowledge of all the terms, conditions, covenants, obligations and agreements of the Agreement.

4. The payment by the undersigned of any amount pursuant to this Guaranty shall not in any way entitle the undersigned to any right, title or interest (whether by subrogation or otherwise) of Grantee under the Agreement or to any security being held for any Guaranteed Payment or Guaranteed Obligation.

5. This Guaranty shall be continuing, absolute and unconditional and remain in full force and effect until all Guaranteed Payments are made, all Guaranteed Obligations are performed and all obligations of the undersigned under this Guaranty are fulfilled.

6. This Guaranty also shall bind the heirs, personal representatives, successors and assigns of the undersigned and shall inure to the benefit of Grantor, its successors and assigns.

7. This Guaranty shall be construed according to the laws of the State in which the Building is located and shall be performed in the county in the first paragraph of this Guaranty. The situs for the resolutions (including any judicial proceedings) of any disputes arising under or relating to this Guaranty shall be the county referenced in the first paragraph of this Guaranty.

8. If this Guaranty is executed by more than one (1) person, all singular nouns and verbs herein relating to the undersigned shall include the plural number, the obligations of the several guarantors shall be joint and several and Grantor may enforce this Guaranty against any one (1) or more guarantors without joinder of any other guarantor hereunder.

9. Grantor and the undersigned intend and believe that each provision of this Guaranty comports with all applicable law. However, if any provision of this Guaranty is found by a court to be invalid for any reason, the remainder of this Guaranty shall continue in full force and effect and the invalid provision shall be construed as if it were not contained herein.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty to Grantor in New York, New York,
this 27^th day of September, 2010.

Address	THE TELX GROUP, INC., a Delaware corporation
The telx Group, Inc.
17 State Street	By:	/s/ Chris Downie
33rd Floor	Name:	Chris Downie
New York, New York 10024	Title:	CFO and President
Attn: J. Todd Raymond
Facsimile No.: (212) 480-8384

2

EXHIBIT “K”

FORM OF PHASE II EXPANSION DATE NOTICE

AND PHASE III EXPANSION DATE NOTICE

             , 20    

VIA FAX: (212) 480-8384

AND FEDERAL EXPRESS

telx – New York 111 8th, LLC

c/o The Telx Group, Inc.

1 State Street, 21^st Floor

New York, New York 10004

Attn: J. Todd Raymond

Re: That certain Colocation Agreement with an effective date of              , 2010 (as amended and modified from time to time, the “Agreement”), by and between telx – New York 111 8th, LLC (“Grantee”), as grantee, and Digital Chelsea, LLC (“Grantor”), as grantor, covering certain colocation premises more particularly described in the Agreement at that certain building located at 111 8^th Avenue, New York, New York. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

Ladies and Gentlemen:

Please be advised that Grantor has delivered possession of the [Phase II Space / Phase III Space] to Grantee and has caused the [Phase II Expansion Date / Phase III Expansion Date] to occur. Accordingly, Grantor confirms the following:

1. The [Phase II Expansion Date / Phase III Expansion Date] is         , 20    .

2. Effective as of the [Phase II Expansion Date / Phase III Expansion Date], the schedule of Grantee’s Base Colocation Fees for the balance of the Term of the Agreement is:

Base Colocation Fees:	$             per month for the period                      through
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .
	$             per month for the period                      through                     .

1

Should you have any questions, please contact                                  at (        )         -            , who will be glad to assist you.

Sincerely,

DIGITAL CHELSEA, LLC

By:

Name:

Title:

cc:	VIA FAX: (650) 233-3601
	AND FEDERAL EXPRESS
	GI Manager L.P.
	2730 Sand Hill Road, Suite 280
	Menlo Park, California 94025
	Attn: Eric Harrison and Alexander Fraser

2

EXHIBIT “L”

INTENTIONALLY OMITTED

1

TABLE OF CONTENTS

			Page
1.	USE OF GRANTEE SPACE			1
	1.1	Grantee Space		1
	1.2	Condition of Grantee Space		1
	1.3	Intentionally Deleted		1
	1.4	Intentionally Deleted		1
	1.5	Quiet Enjoyment; Access		1
	1.6	Common Area		1
2.	TERM			1
	2.1	Term		1
	2.2	Delivery of Grantee Space		2
3.	BASE COLOCATION FEES AND OTHER CHARGES			2
	3.1	Base Colocation Fees		2
	3.2	CR Installation Fees; Labor Rates Recovery		2
	3.3	Payments Generally		4
	3.4	Late Payments		4
	3.5	Utilities		5
4.	TAX ON GRANTEE’S EQUIPMENT; OTHER TAXES			7
	4.1	Equipment Taxes		7
	4.2	Additional Taxes		7
5.	GUARANTY			8
6.	USE			8
	6.1	Permitted Use		8
	6.2	Rules and Regulations		9
	6.3	Compliance with Laws; Hazardous Materials		9
	6.4	Electricity Consumption Threshold		10
	6.5	Structural Load		10
7.	SERVICES TO BE PROVIDED TO THE GRANTEE SPACE			11
	7.1	Access Control		11
	7.2	Electricity		11
	7.3	Interruption of Services		11
8.	MAINTENANCE; ALTERATIONS			12
	8.1	Grantor Maintenance		12
	8.2	Grantee’s Maintenance		13
	8.3	Alterations		13
	8.4	Removal of Cable, Wiring, Connecting Lines, Equipment and Personal Property		13

-i-

TABLE OF CONTENTS

(continued)

			Page
9.	CASUALTY; TAKING; INSURANCE			14
	9.1	Casualty; Taking		14
	9.2	Grantee’s Insurance		15
	9.3	Grantor’s Insurance		16
10.	ASSIGNMENT AND SUBLETTING			16
	10.1	Restrictions on Transfers; Grantor’s Consent		16
	10.2	Notice to Grantor		17
	10.3	Intentionally Deleted		17
	10.4	No Release; Subsequent Transfers		17
	10.5	Colocation		17
11.	INTENTIONALLY DELETED			18
12.	INTENTIONALLY DELETED			18
13.	SURRENDER OF GRANTEE SPACE; HOLDING OVER			18
	13.1	Grantee’s Method of Surrender		18
	13.2	Disposal of Grantee’s Personal Property		18
	13.3	Intentionally Deleted		19
	13.4	Survival		19
14.	WAIVER OF CLAIMS; INDEMNITY			19
	14.1	Waiver		19
	14.2	Indemnification		19
	14.3	Consequential Damages		20
	14.4	Liens		20
	14.5	Waiver of Grantor’s Lien		20
15.	GRANTEE DEFAULT			21
	15.1	Events of Default By Grantee		21
	15.2	Remedies		21
16.	LIMITATION OF GRANTOR’S LIABILITY			22
	16.1	Grantor Default		22
	16.2	Grantor’s Liability		22
	16.3	Transfer of Grantor’s Interest		22
17.	MISCELLANEOUS			23
	17.1	Severability		23
	17.2	Performance		23
	17.3	Attorneys’ Fees and Costs		23

-ii-

TABLE OF CONTENTS

(continued)

		Page
17.4	Waiver of Right to Jury Trial		23
17.5	Headings; Time; Survival		23
17.6	Notices		24
17.7	Governing Law; No Counterclaims; Jurisdiction		24
17.8	Incorporation; Amendment; Merger		24
17.9	Brokers		24
17.10	Examination of Agreement		24
17.11	Recordation		24
17.12	Authority		24
17.13	Successors and Assigns		25
17.14	Force Majeure		25
17.15	No Partnership or Joint Venture; No Third Party Beneficiaries		25
17.16	Access By Grantor		25
17.17	Rights Reserved by Grantor		26
17.18	Counterparts; Execution by Facsimile		26
17.19	Confidentiality		26
17.20	Incorporation of Exhibits		26
17.21	Financial Statements		26
17.22	Subject to Underlying Lease		27

-iii-

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of:

The Telx Group, Inc.:

We consent to the use of our report dated March 18, 2010, with respect to the consolidated balance sheets of The Telx Group, Inc. as of December 31, 2009 and 2008 and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows and the related consolidated financial statement schedule for each of the years in the three-year period ended December 31, 2009, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

New York, New York

November 8, 2010

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned directors of The Telx Group, Inc., a Delaware corporation (the “Company”), does hereby constitute and appoint Eric Shepcaro and Christopher W. Downie, and each of them severally, as the true and lawful attorneys-in-fact and agents of the undersigned, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to do or cause to be done any and all acts and things and to execute any and all instruments and documents which said attorneys-in-fact and agents may deem advisable or necessary to enable the Company to comply with the Securities Act of 1933, as amended (the “Securities Act”), and any rules, regulations and requirements of the Securities and Exchange Commission (the “Commission”) in respect thereof, in connection with the registration of common stock (the “Common Stock”) of the Company on the Registration Statement on Form S-1, including specifically, but without limiting the generality of the foregoing, power and authority to sign, in the name and on behalf of any and all of the undersigned, the Registration Statement on Form S-1 to which this Power of Attorney is filed as an exhibit, any subsequent Registration Statement the Company may hereafter file pursuant to Rule 462(b) of the Securities Act or another appropriate form in respect of the registration of the Securities, and any and all amendments to any of them, including post-effective amendments, and to file or cause to be filed the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, and to effect any and all applications and other instruments in the name and on behalf of the undersigned which said attorneys-in-fact and agents deem advisable in order to qualify or register the Securities under the securities laws of the several States or other jurisdictions; and the undersigned do hereby ratify all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, shall lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I, the undersigned, have hereunto signed my name and caused this Power of Attorney to be duly executed as of this 3rd day of November, 2010.

    /s/ Rolla P. Huff

Rolla P. Huff

    /s/ Jesper Andersen

Jesper Andersen

    /s/ Thomas J. Fitzpatrick

Thomas J. Fitzpatrick