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Filed By Exodus Communications, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
And deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Commission File No. 000-23795
Subject Company: Exodus Communication
EXODUS COMMUNICATIONS, INC.
TRANSCRIPT OF MEDIA TELECONFERENCE WITH Q&A
EXODUS/GLOBAL CROSSING
Moderator: Ellen Hancock
September 28, 2000
10:00 a.m. MT
Operator: Good afternoon, everyone, and welcome to the Exodus/Global Crossing
media teleconference call. With us today, we have Ellen Hancock,
chairman and chief executive officer of Exodus; and Leo Hindery, chief
executive officer of Global Crossing and chairman and chief executive
officer of Global Center. After the opening remarks, we will be taking
questions. At that time, if you have a question, you will need to
press the 1 followed by the 4 on your telephone. This call is being
recorded and is copyrighted material, therefore, your participation
implies consent to our recording the call. If you do not agree to
these terms, simply drop off the line. Now I would like to turn the
call over to Jane Underwood. Please go ahead, ma'am.
Maureen O'Connell: Actually, it's Maureen O'Connell. Thank you, Operator.
Good morning, ladies and gentlemen. This is Maureen O'Connell, vice
president of corporate communications for Exodus. We're very excited
that you could join us this morning to hear the details regarding our
acquisition of Global Center. Joining me this morning are Ellen
Hancock, chairman and CEO of Exodus; and Leo Hindery, chief executive
officer of Global Crossing and chairman and CEO of Global Center.
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Before we begin, let me say that this conference call may contain
statements that are considered forward-looking. As such, they are
subject to a number of significant risks and uncertainties that have
been disclosed in our filings with the SEC. Actual results may differ
materially. Please refer to our press release for a summary of some
of the principle risks and uncertainties.
I'd now like to turn the call over to Ellen Hancock. Ellen.
Ellen Hancock: Thanks, Maureen. I'm delighted to talk to you this morning
about the announcement we've made concerning the acquisition of Global
Center as well as our network agreement with Global Crossing and our
joint venture with Asia Global Crossing. These agreements offer
exciting opportunities for our shareholders, employees, customers, and
the technology industry as a whole.
This morning we announced that the boards of directors of Exodus and
Global Crossing approved a definitive merger agreement under which
Exodus will acquire Global Center, a subsidiary of Global Crossing,
for approximately $6.1 billion in Exodus common stock. This
transaction is a major strategic milestone for our company. With this
combination we will have the additional scale, scope, and
international reach to further enhance our position as the preferred
provider of mission-critical Web hosting solutions to customers
worldwide.
As most of you know, Exodus is a leading provider of complex Web
hosting services to businesses with mission-critical Web operations.
Our company offers sophisticated systems and network management
solutions and managed services along with professional services to
provide optimal performance for customers' Websites.
According to a recent Forester research report, Web hosting market
is expected to reach $20 billion in 2004 in the United States.
Through our combination with Global Center, we will now have the scale
and the scope to capture the full range of opportunities that are
being fueled by the explosive growth of the complex Web hosting market
worldwide. With the combined pro forma annualized recurring revenue
run rate of approximately $1 billion, with almost 4,000 customers and
32 Internet data centers today totaling 2.6 million gross square feet,
Exodus will be a powerhouse in complex Web hosting.
We've seen a tremendous migration business processes to the Internet
over the last five years and the development of several business
hosting models. As the customer requirements for a high-end, value-
added Web hosting services becomes more sophisticated, only a handful
of companies
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will have what it takes to succeed. By joining forces with Global
Center, Exodus is extending its leadership position. We will have the
opportunity to leverage and expand our managed and professional
services and premier brand and sales force over a wider geography and
increased customer base. Additionally, Global Center's data center
buildout plans will be leveraged with our own, accelerating our global
expansion. This presence alone will greatly enhance our ability to
support our global customers and reach new multinational customers at
an accelerated pace. The depth of skill sets created by this
combination further supports our planned expansion.
Through the 10-year network agreement we have now with Global
Crossing also announced today, our extensive global Internet data
centers will now be on 'Net with Global Crossing's state-of-the-art
international fiber network. This seamless connectivity and universal
access to information resources is yet another way our customers will
benefit from this transaction.
Looking forward, Global Center's and Exodus' partnerships with key
technology providers including Cisco, Compaq, Dell, Inktomi,
Microsoft, Oracle, SoftBank, and Sun Microsystems will result in
further innovation to enhance the quality and breadth of our products
and services. We believe that this combination clearly raises the bar
for complex hosting services.
Now I'd like to hand the call over to Leo, chief executive officer
of Global Crossing and Global Center's chairman and CEO, who will
review in more detail our joint venture and network agreement,
including the joint venture with Asia Pacific and some of the other
strategic benefits that they create. Leo?
Leo Hindery: Thanks so much, Ellen. Good morning, everyone. Rather than go
through with you the press release which you all have, and I try not
to be repetitive to Ellen's comments, I thought I'd just share a
couple of quick thoughts, and then we'll try to get to the Q&A, which,
I assume, will be of greater import to [audio break] all of the
greater moment.
The first person that I met in the Internet services space after I
left AT&T/TCI was Ellen Hancock. That was back in December of 1999,
just after I took over the position at Global, and she and I talked
back then about an industry in a world that I was about to enter where
scale and breadth meant everything. Over the course of this past
year, we committed ourselves at Global Crossing to realizing for our
shareholders the value of our Global Center asset -- very committed at
one time to taking that company public. Believe in this transaction
that the message that Ellen and I chatted about back in December
really needs to come into
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play. Exodus is an extraordinary company, and combined with Global
Center, I think it's the premier company in this space. It is, indeed,
about scale and breadth.
We set out to do three things from our side. We set out, as I said,
to realize the value of Global Center. We're just thrilled with the
prospect of being Ellen's shareholder that the partnership entails.
We, obviously, had some concerns about protecting the network services
prerogatives of Global Crossing. Ellen has discussed a 10-year
network services agreement that is very beneficial to our core
business, but, to be frank, extremely beneficial to Ellen's ongoing
responsibilities and agendas. There's great merit, great opportunity,
in being on 'Net, both from a cost savings point of view, but from the
offensive ability to bring services and values to customers that you
cannot do without assured connectivity, on-'Net connectivity. We also
have a soon-to-be sister company, Asian Global Crossing. Ellen has
described a partnership there between her new company, post-Global
Center and Asia Global Crossing, that will also be very advantageous
to her growth aspirations and capabilities in Asia.
We're thrilled with the revenue multiple. We think that as the story
comes out today, and from here on out, that she paid a fair price for
the asset, one that is accretive, as she has described -- accretive to
earnings -- day one -- substantial synergies. One of the things I've
talked about briefly is this network. It's an enormous advantage to
have a dynamic network relationship. Ellen will receive pricing
second to none in a world capabilities and opportunities in that
space, again, second to none. She and her associates will have the
ability to approach and go after new customer verticals, financial
services, media entertainment that, perhaps, would have been a little
more difficult otherwise.
We don't view this as a merger and a go-away. We view it as a merger
and a partnership thereafter. We at Crossing are thrilled for our
shareholders. We're certainly, Ellen and I, very selfishly thrilled
for the employees of her company who have distinguished themselves
under her stewardship. My people have done an extraordinary job of
trying to be competitive and capable in this space. We're thrilled
for them in a combination, and selfishly, at Global Crossing, I love
this network partnership that's ensued.
We had a nice chat about an hour or so ago with the financial
community. We're anxious to hear your questions and try to get
through them now. Later today Ellen and I will continue meetings with
our employees and our shareholders and try to get this story out
throughout the day.
With that, Jill, maybe you could go through the Q&A protocols, and
we'll try to just respond to anybody's questions that we can take.
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Operator: Thank you. Ladies and gentlemen, we will now begin the question-
and-answer session. If you have a question, please press the 1
followed by the 4 on your telephone. You will hear a three-tone
prompt acknowledging your request. If your question has been
answered, and you wish to withdraw your polling request, you may do so
by pressing the 1 followed by the 3. If you are on a speakerphone,
please pick up your handset before entering your request. One moment,
please, for the first question. Bob Wallace with Information Week
magazine, please go ahead with your question.
Bob Wallace: Hi, good morning. I just have a quick two-part question. The
first is I want to make sure I'm clear on who has what as far as network? I
saw the deal about buying services from Global Crossing, but I'm not clear as
to how that plays with what Exodus does or doesn't have for a network now.
The second part of my question is -- does all this talk about
complex and advanced and high-level Web hosting services -- the market
research shows, at least for now, that all the action is down at co-lo
and shared hosting and low-level managed hosting. What is Exodus
going to do to try and get, maybe, existing and prospective customers
up the value chain to more profitable and more advanced services?
Thank you.
E. Hancock: OK. Let me discuss the Exodus network. It actually consists of
three parts. One is the local area network. The second is the
private exchanges and public exchanges we do with other networks.
We'll continue our policy of doing that. We partner with about 61
companies for private exchange and over 200 companies in the public
network and 95 percent of our traffic goes over private exchange.
The next network we have, and this is the one that reflects on this
transaction -- we have a very large backbone network. We have 22 data
centers today in the United States and Canada and Europe and Asia.
Over the past several years we have bought a massive amount of
bandwidth from several carriers, primarily in the beginning --
Worldcom, then Qwest, and last year we bought a major amount of
bandwidth from Global Crossing. The Global Crossing transaction last
year included reserved bandwidth to Frankfurt from New York, to London
from New York, a European ring, and Asia Pacific. What we've
committed to in this deal is that, going forward, all new backbone
bandwidth will have Global Crossing as the primary supplier. We have,
in fact, committed to having 50 percent of that, at least, be with
Global Crossing, and in Asia Pacific we've committed that at least 60
percent, and we're intending to try to make that number closer to 67
percent would, in fact, come from Global Crossing, and in return for
that we have received excellent pricing from Global Crossing.
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Relative to the business model, Exodus in the past has done very
well as a co-lo hosting company, as is Global Center. Both companies,
however, have moved over the past couple of years into the more
managed services space. As of last quarter, 33 percent of the revenue
for Exodus, in fact, came from managed services, including both tape
backup and caching and firewall service and security and professional
services. We have over 800 professional services people.
In the case of Global Center, 6 percent of their revenue stream, in
fact, came from managed services, and part of the transaction as we
see it, allows Exodus to take our managed services and essentially
offer them to the Global Center customers. So we believe, over time,
you're going to see us not only offer our current managed services,
but since we have respectively now received such a leadership position
in the complex Web hosting space, that our management teams now can
really dedicate their efforts to rolling out more enhanced services
and, over time, I think you're going to see much more in that higher
value-added space, and, as you said, and more profitable space.
B. Wallace: Thank you, Ellen.
Operator: Jerry Sapperstein with CFO Associates Inc., please go ahead with
your question.
Jerry Sapperstein: Yes, this is for Ms. Hancock. I had heard on, I believe, it
was CNBC earlier this year you had commented about Exodus having to go
back into the market for additional cash towards the end of year 2000.
I know that this is an acquisition for stock, but where does this put
you as far as your cash position in the short and medium term?
E. Hancock: A very good question. As you said, we did recently go to the market
and received extremely good support for the market. We went forward
with a high-yield offering for 600 million and, in fact, closed that
deal at 1.2 billion including some euro bonds. Second, we are working
on a 600 million bank facility, and we're getting very, very good
support. In fact, part of that bank facility is already oversold.
Now, having said that and having just been to the market for that kind
of support, we believe that based on the networking savings that we
are achieving through this transaction, based on the fact that because
both Global Center and Exodus were addressing some of the same cities,
that we do not need the full amount of capex that was in the Global
Center plan and the Exodus plan, and therefore it is our current view
that we are able to fund this transaction to take it through-- Global
Crossing will fund the capex into the time of the closing, but post-
closing we believe that we are capable of funding this plan to the end
of 2001 and our current plan indicated that starting in
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2002, we would be producing sufficient cash to manage our own
offerings.
J. Sapperstein: Can I ask one additional question?
E. Hancock: Yes.
J. Sapperstein: I've noted an extremely large number of insider sales over the
last several months. Is that indicative of anything?
E. Hancock: Insider sales on the Exodus side?
J. Sapperstein: Yes.
E. Hancock: Well, we'll have to say that as a lot of transactions were occurring
and being considered we, in fact, had very limited opportunities for
either the executives of Exodus or even the directors of Exodus to be
able to handle any transactions and many of the Exodus executives, in
fact, want to diversify or required some element of cash. So there
was a limited amount of time to do that, and they took the opportunity
at that particular timeframe, but, in general, I believe that you will
see that many of us are consistent purchasers of the stock. I
purchase the Exodus stock every two months, and I think that you'll
find that the Exodus insiders, in fact, are very large shareholders of
Exodus.
J. Sapperstein: Thank you.
E. Hancock: Sure.
Operator: Judith Hurwitz of Hurwitz Group, please go ahead with your question.
Judith Hurwitz: Yes, my question is now that you're adding networking
capability and adding to your data centers, what type of capabilities
will you be adding next to add more managed services to your
portfolio?
E. Hancock: OK, very good question. First of all, as you've watched over the
past several weeks we have been adding to our value-added services.
Just yesterday we announced a VPN offering. A couple of days before
that with Cisco, we announced several extensions to our security
services offering. We did just recently acquire a very small company
in the UK of 50 professional services people. You know that we took
an investment in Mirror Image and so it's our intent in the fourth
quarter to start rolling out the Mirror Image caching offering, which
is a value-added service for our customers. We already took part in
the Inktomi [sp] content bridge exchange. We intend to work with
Inktomi on that process.
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The other thing that we have seen recently is that we are seeing a
lot of demand for storage, and by this I mean disk storage. We do
have an arrangement with storage networks where we do provide storage
on demand with them. We've worked with Sun on storage. We recently
did an announcement with Storage Way, and we are now reselling EMC
drives. So I think that you will find us adding custom services to
our price list, and essentially increasing those managed offerings.
Are there any other questions?
Operator: Max Smetannikov with Interactive Week, please go ahead with your
question.
Max Smetannikov: Good afternoon. I have three questions, so I'll just rattle
them out in whichever order you want to pick them. First is, to Leo
Hindery -- Leo, a lot of analysts that I've talked to basically
questioning whether-- well-- they really want to understand why Global
Crossing is exiting Web hosting if it is, indeed, such a high-revenue
business and such a big opportunity. You mentioned something about
partnership. If you could deliberate on that, that would be very
helpful. The other two questions are to Ellen Hancock -- there is a
number out there by Salomon Smith Barney that in year 2001, based on
the current build of data centers, Exodus would have a revenue of 1.8
billion. How do you think this number will change now that Global
Center's status has come into the picture? And do you think that
certain duplicity that might exist in Exodus and Global Center builds
would be eliminated now that it will become one company? And as a
tagalong to that, what will happen in the immediate future with some
of your network contracts, since you have several pipes that go into
different data centers? Do you think that any of those will be
canceled with Global Crossing being in the picture? Or is it just new
bandwidth arrangement that this new arrangement will cover?
L. Hindery: Max, it's Leo. Let me start first by-- I think the point's a good
one. I don't see us selling this company. I really don't see it as a
merger and go-away, as I said. I thought that we had enough wind in
our sails, enough insight to the marketplace to be very successful
standing alone. I will tell you that I am of a mind that it is an
industry where scale is rewarded and breadth of offerings are rewarded
as well, and I just see that from my shareholders a substantial
shareholding in Ellen's company under her stewardship is a very good
thing for them, and I got there because of the willingness and the
partnership that was established around the network arrangement.
Global Crossing is Ellen's primary connectivity opportunity, going
forward, and we live and die together, and I have believed for a long
time, as has Ellen, that-- I think it was Bob from Infoweek who asked
the first question, I believe it's a world where you're rewarded, not
for your co-lo activities, but for your combination, your
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amalgam of connectivity, professional services, and complex Web
hosting, and it's that amalgam that's magical, and I represent, at
Global Crossing, one leg of that three-legged stool. Ellen is more
capable than anyone of being successful in the professional services
and a complex Web hosting area in partnership with Crossing.
Partnership, Max, I think it's just darn exciting. I think my
shareholders-- I really have convinced myself easily that my
shareholders owning indirectly a large share position in Ellen's
company is a preferable position for them than following an
independent course.
M. Smettannikov: OK.
E. Hancock: Relative to the other two questions, the analysts would indicate
that in 2001, Exodus, as you said, would be about 1.8 billion. There
is an assumption that the plan that Global Center has put in place
would yield about 500 million for next year. So those would be the
two numbers that people would indicate.
Relative to the network itself, we do go out to the market about
once a year for new bandwidth. We have bought that bandwidth from
Worldcom and Qwest, but, most recently, last year, we bought a
significant amount of that bandwidth from Global Crossing, and so we
already do have a major part of our network based on Global Crossing.
Next, the reason that we go out once a year is essentially to get
the most recent pricing. One change that we're going to see almost
immediately is that we get dynamic pricing from Global Crossing, which
means we get a discounted price. We get-- each time we go back out to
the market requests bandwidth from Global Crossing we will get
whatever is the best price in the market. So in terms of duplicate
builds, over time, we do expire lines if, in fact, they are obsolete.
All the new builds are 50 percent-- at least, of the new builds, will
come from Global Crossing in the U.S. and 60 percent to 67 percent, at
least, will come from Global Crossing in Asia Pacific. So we don't
believe that it's really much of a problem. Most of the energy of
both our two companies would be to put the Exodus data centers on-
'Net, so it's our assumption that we will have lines going into every
data center from Global Crossing and get access to their network
capacity.
M. Smetannikov: The question about duplicate fields was actually on data centers
since both companies had plans to build new co-location-- well-- not
co-location, but raised floor facilities. Would you--
E. Hancock: Sorry, you're right. What we are doing is we have done an analysis
now of the data centers that we have either in plan or under
construction between the two companies. You are right that there
would have been
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duplicate builds. We're going in, and we will be restaffing that.
There are some areas like Amsterdam that we really wanted to be in
Amsterdam. We had not yet gotten any property in Amsterdam and,
therefore, we will go with the Global Crossing facility. We have
wanted some time to go into Manhattan, therefore, we will be able to
use our Manhattan facility, and we can stop our efforts of trying to
find a Manhattan facility. So if you look at the data centers, we
believe that there are at least five data centers between the two
plans that are no longer needed, and, on the other hand, there is
capacity now that Global Center has in some cities, such as Chicago,
Boston, New York, California, where we have sufficient customer demand
that our salespeople will be very interested in using that capacity.
M. Smetannikov: Can you just let me have a quick follow-up? Would it be a
correct assumption to make that, given that you have a nice rate from
Global Crossing on bandwidth that a majority of Exodus traffic will
now travel over Global Crossing network versus Worldcom and Qwest?
L. Hindery: Max, it's Leo. It better be an assumption. She signed an agreement
to that effect. As we said in the press release, Max, at least 50
percent of Ellen's needs, going forward, will be met by Global
Crossing throughout the world in excess 60 percent in Asia.
M. Smetannikov: OK, but that's effective immediately?
L. Hindery: Nothing is effective immediately, because under regulatory approval
protocols, Ellen and I cannot front-run the transaction. It's
effective, Max, upon the closing.
M. Smetannikov: Right, OK, gotcha. That's all I have. Thank you.
E. Hancock: Thank you.
M. O'Connell: I think we have time for one more question.
Operator: Karen Lynch with 451, please go ahead with your question.
Karen Lynch: Yes, a question for Leo Hindery. At your last analyst meeting,
you talked about increasing high-margin corporate services versus
wholesale services on your network, but at least on the face of it,
this deal seems to move you back in the direction of wholesale. So I
wondered if you could comment on that?
L. Hindery: Karen, it was always our intention to cleave Global Center away from
Global Crossing. Had I taken the company public, it would have run as
a sister independently of Crossing. So it's margin behavior and
patterns
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would have been separate from those of Crossing. We're simply
substituting that investment in a stand-alone public company for a
substantial shareholding in Ellen's company, as I mentioned to Max. In
terms of a network, there is no higher margin, nor more profitable
network business than IP network business, which is the--that's the
foundation of Ellen's business. So one of the things I promised you
all at the Crossing level was a continued migration towards 75 percent
of Crossing's revenues coming from data services. Ellen's company is
prototypical of that. That is the high-margin business, the very
profitable business, Karen, that we committed to. So it's a win-win,
in my opinion, and it's certainly not inconsistent with what I
promised, which was on the Crossing side, focus and attention on the
IP side, the data services side -- that's the purpose of the network
agreement. Then this cleaving or realization of value for the
shareholders are activities in Center and Ellen's public--we're going
to have a substantial shareholding. You can look up in this paper
every day, figure out what our shareholding is worth. I think that's
the most thoughtful, responsible way-- fiduciarily responsible way to
realize value for my Crossing shareholders today.
K. Lynch: OK, and one other question -- why was the deal attractive now, when it
wasn't something that the two of you could pull together a couple of
months ago? What's the difference?
L. Hindery: You know, I think we worked harder, and I think the markets have
changed. I think we got to know each other better. To be honest with
you, I think Ellen and I were pushing it awful fast and hard the last
time. It's not an easy press release, Karen, as you've read. It's
got network, it's got Asia, it's got our own shareholding in Ellen's
company, the transition issues underpinning it, and I think as we
worked it harder, it just became easier for us to bring it to closure.
I had some agenda items. I know she did, as well. They were
complicated on my side, no less complicated on hers, and it's not that
long ago -- I think it was middle of July that we were trying the last
time. It's the middle to end of September -- that ain't bad.
K. Lynch: And when you say the markets have changed, are you referring to the
fact that the telecom network operators are all laboring under
depressed share prices? Or do you mean something else?
L. Hindery: No, quite the opposite. The market that's changed is this
affirmation that Ellen and I-- without trying to be self-serving,
Ellen and I had a sense back a year ago that this space was
predicated, as I said, upon scale and breadth, fulsomeness of
offering. This amalgam, as I commented, of connectivity and
professional services and complex Web hosting -- I think it's a
marriage made in heaven. I think these two companies together are,
under Ellen's stewardship especially, Karen, it really is the premier
company in the space -- second to none, in my opinion.
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K. Lynch: OK, well, thank you very much.
L. Hindery: Thanks. Jill, I think we're going to, unfortunately, have to ring
off. To those of you who didn't get a question through, obviously,
both companies are anxious to be available. Ellen and I,
unfortunately, have to go off and-- not unfortunately-- we get to go
off and talk to some more employees here in a bit, but Maureen, Sigrid
Fenton [sp], Tom Goff [sp] at Crossing -- all of those people would
love to be helpful to you. Certainly, Ellen and myself, later today
if you want to reach out to us. Jill, thanks for your thoughtfulness.
Maybe you could wind it up, if you would.
Operator: Thank you. Ladies and gentlemen, that does conclude our conference
for today. You may all disconnect and thank you for participating.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements based on current
expectations. Actual results may differ materially from expectations due to a
number of risks and uncertainties, including, but not limited to the following:
the fulfillment of conditions to complete the merger, including regulatory and
Exodus stockholder approval; the costs incurred to complete the merger; the
combined company's competitive performance; potential difficulties in
integrating the two companies, their product and service offerings and
infrastructure; the ability of the combined company to achieve network cost
savings and operating efficiencies; the continued employment of the combined
entity's employees; potential difficulties in maintaining and enhancing
continued working relationships with strategic partners; the risk that customers
that have placed orders may cancel or reduce their orders or delay the
commencement of services; and the continued development of service offerings of
the combined company. Actual results may also vary from expectations as a
result of risks and uncertainties described from time to time in Exodus' and
Global Crossing North America, Inc.'s filings with the Securities and Exchange
Commission ("Commission"). In particular, see "Factors Affecting Future
Results" in Exodus's quarterly and annual reports filed with the SEC and see
"Risk Factors" in Global Crossing's quarterly and annual reports filed with the
SEC. Neither Exodus nor GlobalCenter assumes any obligation to update the
forward-looking information contained in this communication.
For a detailed discussion of these and other important risk factors and
cautionary statements concerning Exodus and GlobalCenter and their respective
operations, you are referred to the proxy statement that will be filed by
Exodus, as described below.
* * * * * * * * * * * * * * * * * * *
Exodus, its directors, executive officers and employees, and certain other
persons, may be deemed to be participants in the solicitation of proxies of
Exodus stockholders to approve the proposed merger. These individuals may have
interests in the merger,
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including as a result of holding options or shares of Exodus. Information
concerning these individuals and their interests in the transaction and the
participant's in the solicitation will be contained in the proxy statement to be
filed with the Commission in connection with the proposed merger.
* * * * * * * * * * * * * * * * * * * *
Exodus plans to send to Exodus stockholders a proxy statement containing
information about the merger and seeking their approval of the proposed
transaction. You are urged to read the proxy statement carefully, when it is
available. The proxy statement will be filed with the Commission and will
contain important information about Exodus, GlobalCenter, the merger and related
transactions and matters. You may obtain a free copy of this document when it
is available, as well as other documents filed by Exodus with the Commission
(including annual, quarterly and special reports), at the Commission's web site
at www.sec.gov.
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