Exodus Communications Facilitates Financial Restructuring

EXODUS COMMUNICATIONS FACILITATES FINANCIAL RESTRUCTURING


o FILES FOR REORGANIZATION THROUGH VOLUNTARY CHAPTER 11 CASE o SECURES COMMITMENT FOR $200 MILLION IN "DIP" FINANCING o ASSURES UNINTERRUPTED OPERATIONS AND CUSTOMER SERVICE o FOCUSES ON LONG-TERM PROFITABLE GROWTH


SANTA CLARA, CALIF., SEPTEMBER 26, 2001: Exodus Communications(R), Inc. (NASDAQ:EXDS) announced today it has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing will enable Exodus(R) to focus on operating its business and serving its customers while it develops a plan of reorganization to provide a suitable capital structure for long-term growth. The company also announced it has received a commitment for up to $200 million in debtor-in-possession (DIP) financing from GE Capital which will be used to fund post-petition operating expenses and supplier and employee obligations. The company filed its voluntary petition in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The filing includes the company's domestic operations headquartered in Santa Clara, Calif.


Exodus Chairman and Chief Executive Officer L. William Krause said the actions allow the company to continue to provide its customers with the highest quality service and support and assure fulfillment of its obligations to them as well as to Exodus employees.


"Providing high quality products and services to our customers has been, and continues to be, our number one priority. Our employees have been, and continue to be, our number one asset," Krause said. "We are committed to meeting the needs of both -- now and well into the future. This restructuring action ensures we have the wherewithal to do that and our daily operations continue uninterrupted as before. In addition, we will now be able to devote efforts to solidifying and executing on a go-forward operating plan that is based on tough-minded fiscal discipline and focuses on managing Exodus to profitability."


DEBTOR-IN-POSSESSION FINANCING


To enhance its liquidity, Exodus has obtained a commitment for up to $200 million in DIP financing from GE Capital. This financing, as well as cash from operations will be used to fund post-petition operating expenses and supplier and employee obligations. Funding of the DIP financing is subject to condition precedents normal and customary with respect to facilities of this type, including, but not limited to, obtaining Bankruptcy Court approval.


"With a commitment for DIP financing in place and the protections pro ...