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BUSINESS

We are a leading full service provider of sophisticated end-to-end Internet solutions to business enterprises. Our solutions include:

• secure and fault-tolerant Internet data centers;
• high performance network connectivity to the Internet; and
• hosting and support for complex Internet-based applications.

These three major elements of our total Internet solution combine to provide our customers with the ability to create, operate and scale their increasingly complex Internet operations in a cost effcient manner.

Our customers primarily use our products and services to maintain complex computer equipment in a secure, fault-tolerant environment with connectivity to a high-speed, high-capacity, direct link to the Internet and to support complex Internet applications. We currently offer our products and services from our new SuperPOP facilities in New York City, London, UK and Santa Clara, California. Our teams of account managers, computer system and network engineers and customer support specialists are located at each SuperPOP. Our strong local market presence enables us to evaluate the needs of our customers and quickly respond with tailored solutions. We also provide our customers the ability to outsource the systems administration and technical management of their Internet presence. Our products are flexible and scalable, allowing us to modify the size and breadth of the services we provide. We believe that our ability to offer a broad range of Internet products and services, combined with our local sales and support professionals and high performance Internet data center facilities and network, differentiates us from our competitors.

FACILITIES AND NETWORK EXPANSION

Each of our newly opened SuperPOP facilities features:

• a high performance Internet data center with multiple, redundant, high-capacity fiber connections, uninterruptable power supplies with back-up power generation, a dry fire suppression system, raised flooring and environmental controls;
• a network operations center, which provides 24 hour a day, 7 day a week monitoring of our network and our customers’ web sites; and
• on-site customer support, sales and marketing, and administration of Internet software and hardware, including servers and routers.

The addition of the new SuperPOP facilities during 1999 increased our total Internet data center capacity from 2,000 square feet to 63,000 square feet, signifcantly increasing the space we have available to house servers and routers for hosting web sites and co-location.

We have established a network to significantly increase data transmission speed and capacity, improve reliability and reduce data transmission costs. This network connects our points of presence or network access points in Chicago, Washington D.C., Amsterdam, Frankfurt, Geneva, Milan, Paris and Stockholm to our SuperPOPs. We are also seeking to establish SuperPOPs and other facilities in other major business centers in the United States and abroad. We will expand our network to connect these SuperPOPs and other facilities when they are established.

MARKET OPPORTUNITY

According to estimates by independent research firms, a signifcant market opportunity exists to provide Internet products and services to businesses. We believe we are well positioned to take advantage of this opportunity. As an example, International Data Corp. estimates that U.S. value-added Internet service revenues, such as electronic commerce and security services, will increase from approximately $3.0 billion in 1998 to approximately $12.9 billion in 2003. Forrester Research estimates that:

• U.S. enterprises online will increase from approximately 1.8 million in 1998 to approximately 4.3 million in 2003; and
• U.S. managed web site hosting revenues will increase from less than $1.0 billion in 1998 to over $14.0 billion in 2003.

Dataquest/Gartner Group estimates that:

• European corporate Internet access revenues will increase from approximately $1.7 billion in 1998 to approximately $9.1 billion in 2003; and
• worldwide corporate Internet access revenues will increase from approximately $6.9 billion in 1998 to approximately $22.7 billion in 2003.

The rapidly growing need for Internet access and other Internet products and services has resulted in a highly fragmented industry with the proliferation of Internet service providers operating worldwide as well as within the United States. These ISPs primarily consist of large national and global ISPs and numerous smaller ISPs. Large national and global ISPs generally focus on Internet access and rely on indirect sales, telemarketing and remote network operation centers to serve their customers. In addition, these ISPs typically do not offer a full range of services. Smaller local or regional ISPs typically focus on serving their local market and lack the resources to provide and support a full range of Internet products and services. Accordingly, Globix believes that the needs of businesses for comprehensive Internet products and services are not being met by the larger national and global or smaller local and regional ISPs who constitute most of Globix’s competitors.

CUSTOMERS

We have established a diversified base of customers in a variety of Internet-intensive industries, such as media and publishing, financial services, retail, healthcare and technology. Since we initiated Internet services in December 1995, our customer base has grown to over 1,600 business customer accounts, including Acclaim Entertainment, Ebookers.com, Edgar-Online Inc., GiftCertificates.com, Major League Soccer, Microsoft, New York Post, S3/Diamond Multimedia and Times Square 2000.

GROWTH STRATEGY

Our objective is to become the leading provider of sophisticated Internet solutions to business enterprises in key global markets. To achieve this objective, we intend to:

• continue to invest extensively in our infrastructure by establishing new SuperPOPs and points of presence strategically located near our customers, and by expanding our network;
• expand our product and service offerings;
• sell additional products and services to existing customers;
• enhance the Globix brand name in our target markets; and
• make investments in, or acquire, complementary businesses.

RECENT DEVELOPMENTS

On December 3, 1999, Globix issued $80.0 million in new Series A Convertible Preferred Stock to affiliates of Hicks, Muse, Tate & Furst Incorporated to expand our build-out of SuperPOPs and other facilities. The preferred stock is convertible into common stock at $20.00 per share at any time and cannot be called for redemption for five years. Under the agreement, the preferred stock is subject to mandatory redemption in 2014 and pays an annual dividend at the rate of 7.5% payable quarterly in cash or additional preferred stock at the option of Globix. As a result of this investment, Hicks Muse benefficially owns approximately 19% of Globix’s outstanding common stock on an as-converted basis.

On December 10, 1999, Globix announced a two-for-one stock split of its outstanding shares of common stock. All common stock share references contained in this offering memorandum reflect this stock split, which was paid on December 30, 1999.

On January 10, 2000, Globix announced an additional two-for-one stock split of its outstanding shares of common stock. The common stock share references contained in this offering memorandum do not reflect this stock split, which is payable on January 31, 2000.

As of January 11, 2000, our equity market capitalization was approximately $1.6 billion based upon a closing price of $91.56 per share and the number of shares of common stock issued and outstanding on that date.

OUR HISTORY

We were originally incorporated in New York in 1989 as NAFT International Ltd. In July 1994, PFM Technologies Corporation, a newly formed affiliate of NAFT, acquired NAFT and its affiliated corporations in a tax-free exchange of common stock. We reincorporated in Delaware in 1995 under the name Bell Technology Group Ltd. We changed our name to Globix Corporation on June 1, 1998. Our principal executive offces are located at 139 Centre Street, New York, New York 10013. Our telephone number is (212) 334-8500.

The name “Globix” and the Globix logo are trademarks and service marks of Globix. Each trademark, trade name or service mark of any other company appearing in this offering memorandum belongs to its respective owner.

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