Exodus, StorageNetworks Kiss and Make Up

Just a little more than a month after managed hosting provider Exodus Communications Inc. filed for Chapter 11 bankruptcy protection, the
company and its erstwhile partner, StorageNetworks Inc. , resolved outstanding financial matters and reaffirmed
their business relationship.


On Wednesday, Exodus agreed to assume all material contracts between itself and StorageNetworks, including the Joint Marketing and
Services Agreement under which StorageNetworks provides its services to customers in Exodus’ Internet Data Centers.

Under the reworked agreement, StorageNetworks said that joint customers will continue to receive uninterrupted storage services, and
both partners will share the economic benefits of the relationship “on both a historical and going forward basis.”

“Both companies are committed to providing our customers with world-class data storage management solutions that address their needs
not only today, but as data requirements continue to grow in the future,” said Paul Flanagan, chief financial officer of
StorageNetworks.

StorageNetworks provides data storage solutions to Exodus customers, from primary data storage to tape backup and restore and
business continuity solutions.

Exodus filed for Chapter 11 on Sept. 26, after months of speculation that the company was on its last legs. At the time, the company
obtained up to $200 million in debtor-in-possession financing from GE Capital, which it used to keep the lights on and suppliers and
employees paid.

The company cut its staff by one-third earlier in the year, followed by the unexpected departure of three of the company’s 10 board
members. In August, then-CEO Ellen Hancock suggested at the time that Exodus was steeling itself to entertain a takeover bid. The company ousted her early in September in favor of L.
William Krause.

Krause said Exodus, which recorded 17 straight quarters of growth until the tech bubble burst, had sacrificed profitability for
growth and market share during the boom years, over-expanding into areas in advance of demand. Upon taking charge of the troubled
company, Krause promised to address balance sheet issues and restore Exodus to financial stability using the assets it built up
during the tech expansion.

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