EXHIBIT 10.54

 

                            Exodus Communications, Inc.

               5% Convertible Subordinated Notes due March 15, 2006

                                Purchase Agreement

                                                         February  25, 1999

Goldman, Sachs & Co.,
BancBoston Robertson Stephens Inc.
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette
   Securities Corporation
Hambrecht & Quist LLC
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.

Ladies and Gentlemen:

Exodus Communications, Inc., a Delaware corporation (the 
"Company"), proposes, subject to the terms and conditions stated 
herein, to issue and sell to the Purchasers named in Schedule I hereto 
(the "Purchasers") an aggregate of $200,000,000 principal amount of the 
5% Convertible Subordinated Notes due March 15, 2006, convertible into 
Common Stock, $0.001 par value per share ("Stock") of the Company, 
specified above (the "Firm Securities") and, at the election of the 
Underwriters, up to an aggregate of $50,000,000 additional aggregate 
principal amount (the "Optional Securities") (the Firm Securities and the 
Optional Securities which the Underwriters elect to purchase pursuant to 
Section 2 hereof are herein collectively called the "Securities").

1.      The Company represents and warrants to, and agrees with, each 
of the Purchasers that:

(a)     A preliminary offering circular, dated February 22, 1999 
(the "Preliminary Offering Circular") and an offering circular, 
dated February 25, 1999 (the "Offering Circular"), have been 
prepared in connection with the offering of the Securities and 
shares of the Stock issuable upon conversion thereof.  
Additionally, the Company has previously prepared the following 
documents: the Company's Special Preliminary Proxy Statement filed 
pursuant to Section 14(a) of the United States Securities Exchange 
Act of 1934, as amended (the "Exchange Act"), dated January 29, 
1999, the Company's Special Definitive Proxy Statement filed 
pursuant to Section 14(a) of the Exchange Act, dated February 9, 
1999, the Company's Annual Report on Form 10-K for the fiscal year 
ended December 31, 1998 and the Company's Current Reports on Form 
8-K, dated January 29, 1999 and February 22, 1999 (together the 
"Exchange Act Reports").  Any reference (other than in Sections 
7(a) and 7(b) hereof) to the Preliminary Offering Circular or the 
Offering Circular shall be deemed to refer to and include the 
Exchange Act Reports, and any reference (other than in Sections 
7(a) and 7(b) hereof) to the Preliminary Offering Circular or the 
Offering Circular as amended or supplemented as of any specified 
date after the date hereof shall be deemed to include (i) the 
Exchange Act Reports and all subsequent documents filed with the 
United States Securities and Exchange Commission (the 
"Commission") pursuant to Section 13(a), 13(c) or 15(d) of the 
Exchange Act, after the date of the Offering Circular and prior to 
such specified date and (ii) any Additional Issuer Information (as 
defined in Section 5(f)) furnished by the Company, prior to the 
completion of the distribution of the Securities. The Exchange Act 
Reports, when they were filed with the Commission, conformed in all 
material respects to the applicable requirements of the Exchange 
Act and the applicable rules and regulations of the Commission 
thereunder.  The Preliminary Offering Circular,  the Offering 
Circular and the Exchange Act Reports did not, as of their 
respective dates, contain an untrue statement of a material fact or 
omit to state a material fact necessary in order to make the 
statements therein, in the light of the circumstances under which 
they were made, not misleading; provided, however, that this 
representation and warranty shall not apply to any statements or 
omissions made in reliance upon and in conformity with information 
furnished in writing to the Company by a Purchaser through Goldman, 
Sachs & Co. expressly for use therein.  Since December 31, 1998, 
the Company has not filed any documents with the Commission 
pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act other 
than the Exchange Act Reports;

(b)     Neither the Company nor any of its subsidiaries has 
sustained since the date of the latest audited financial statements 
included in the Offering Circular any material loss or interference 
with its business from fire, explosion, flood or other calamity, 
whether or not covered by insurance, or from any labor dispute or 
court or governmental action, order or decree, otherwise than as 
set forth or contemplated in the Offering Circular; and, since the 
respective dates as of which information is given in the Offering 
Circular, there has not been any change in the capital stock or 
long-term debt of the Company or any of its subsidiaries or any 
material adverse change, or any development that is reasonably 
likely to result in a material adverse change, in or affecting the 
general affairs, management, financial position, stockholders' 
equity or results of operations of the Company and its 
subsidiaries, otherwise than as set forth or contemplated in the 
Offering Circular;

(c)     The Company has no subsidiary that is a "Significant 
Subsidiary" of the Company within the meaning of Regulation S-X 
under the Securities Act of 1933, as amended (the "Securities 
Act");

(d)     The Company and its subsidiaries own no real property.  
The Company and its subsidiaries have good and marketable title to 
all personal property owned by them, in each case free and clear of 
all liens, encumbrances and defects except such as are described in 
the Offering Circular or such as do not materially affect the value 
of such property and do not interfere with the use made and 
proposed to be made of such property by the Company and its 
subsidiaries; and any real property and buildings held under lease 
by the Company and its subsidiaries are held by them under valid, 
subsisting and enforceable leases with such exceptions as are not 
material and do not interfere with the use made and proposed to be 
made of such property and buildings by the Company and its 
subsidiaries;

(e)     The Company has been duly incorporated and is validly 
existing as a corporation in good standing under the laws of 
Delaware, with power and authority (corporate and other) to own its 
properties and conduct its business as described in the Offering 
Circular, and has been duly qualified as a foreign corporation for 
the transaction of business and is in good standing under the laws 
of each other jurisdiction in which it owns or leases properties or 
conducts any business so as to require such qualification, or is 
subject to no material liability or disability by reason of the 
failure to be so qualified in any such jurisdiction; and each 
subsidiary of the Company has been duly incorporated and is validly 
existing as a corporation in good standing under the laws of its 
jurisdiction of incorporation;

(f)     The Company has an authorized capitalization as set forth 
in the Offering Circular, and all of the issued shares of capital 
stock of the Company have been duly and validly authorized and 
issued and are fully paid and non-assessable; the shares of Stock 
initially issuable upon conversion of the Securities have been duly 
and validly authorized and reserved for issuance and, when issued 
and delivered in accordance with the provisions of the Securities 
and the Indenture referred to below, will be duly and validly 
issued, fully paid and non-assessable and will conform to the 
description of the Stock contained in the Offering Circular; and 
all of the issued and outstanding shares of capital stock of each 
subsidiary of the Company have been duly and validly authorized and 
issued, are fully paid and non-assessable and (except for 
directors' qualifying shares and except as otherwise set forth in 
the Offering Circular) are owned directly or indirectly by the 
Company, free and clear of all liens, encumbrances, equities or 
claims;

(g)     The Securities have been duly authorized and, when issued 
and delivered pursuant to this Agreement, will have been duly 
executed, authenticated, issued and delivered and will constitute 
valid and legally binding obligations of the Company entitled to 
the benefits provided by the indenture to be dated as of March 1, 
1999  (the "Indenture") between the Company and Chase Manhattan 
Bank and Trust Company, National Association, as Trustee (the 
"Trustee"), under which they are to be issued, which will be 
substantially in the form previously delivered to you; the 
Indenture has been duly authorized and, when executed and delivered 
by the Company and the Trustee, the Indenture will constitute a 
valid and legally binding instrument, enforceable in accordance 
with its terms, subject, as to enforcement, to bankruptcy, 
insolvency, reorganization and other laws of general applicability 
relating to or affecting creditors' rights and to general equity 
principles; and the Securities and the Indenture conform to the 
descriptions thereof in the Offering Circular and are in 
substantially the form previously delivered to you;

(h)     That certain Registration Rights Agreement among the 
Company and the Purchasers to be dated as of March 1, 1999 (the 
"Registration Rights Agreement") has been duly authorized and, 
when executed and delivered by the Company, the Registration Rights 
Agreement will constitute a valid and legally binding instrument, 
enforceable in accordance with its terms;

(i)     None of the transactions contemplated by this Agreement 
(including, without limitation, the use of the proceeds from the 
sale of the Securities) will violate or result in a violation of 
Section 7 of the Exchange Act, or any regulation promulgated 
thereunder, including, without limitation, Regulations T, U, and X 
of the Board of Governors of the Federal Reserve System; 

(j)     Prior to the date hereof, neither the Company nor any of 
its affiliates (as such term is defined in Rule 144 promulgated 
under the Securities Act) has taken any action which is designed to 
or which has constituted or which might have reasonably been 
expected to cause or result in stabilization or manipulation of the 
price of any security of the Company in connection with the 
offering of the Securities;

(k)     The issue and sale of the Securities and the compliance by 
the Company with all of the provisions of the Securities, the 
Indenture, the Registration Rights Agreement and this Agreement and 
the consummation of the transactions herein and therein 
contemplated will not conflict with or result in a breach or 
violation of any of the terms or provisions of, or constitute a 
default under, any indenture, mortgage, deed of trust, loan 
agreement or other agreement or instrument to which the Company or 
any of its subsidiaries is a party or by which the Company or any 
of its subsidiaries is bound or to which any of the property or 
assets of the Company or any of its subsidiaries is subject, nor 
will such action result in any violation of the provisions of the 
Certificate of Incorporation or By-laws of the Company or any 
statute or any order, rule or regulation of any court or 
governmental agency or body having jurisdiction over the Company or 
any of its subsidiaries or any of their properties; and no consent, 
approval, authorization, order, registration or qualification of or 
with any such court or governmental agency or body is required for 
the issue and sale of the Securities or the consummation by the 
Company of the transactions contemplated by this Agreement, the 
Indenture or the Registration Rights Agreement except such 
consents, approvals, authorizations, registrations or 
qualifications as may be required under state securities or Blue 
Sky laws in connection with the purchase and distribution of the 
Securities by the Purchasers;

(l)     Neither the Company nor any of its subsidiaries is in 
violation of its Certificate of Incorporation or By-laws or in 
default in the performance or observance of any material 
obligation, covenant or condition contained in any indenture, 
mortgage, deed of trust, loan agreement, lease or other agreement 
or instrument to which it is a party or by which it or any of its 
properties may be bound;

(m)     The statements set forth in the Offering Circular under 
the caption "Description 
of Notes" and "Description of Common Stock", insofar as they 
purport to constitute a summary of the terms of the Securities, the 
Indenture, the Registration Rights Agreement and the Stock, under 
the caption "Certain United States Federal Income Tax 
Considerations", and under the caption "Underwriting", insofar 
as they purport to describe the provisions of the laws and 
documents referred to therein, are accurate, complete and fair;

(n)     Other than as set forth in the Offering Circular, there 
are no legal or governmental proceedings pending to which the 
Company or any of its subsidiaries is a party or of which any 
property of the Company or any of its subsidiaries is the subject 
which, if determined adversely to the Company or any of its 
subsidiaries, would individually or in the aggregate have a 
material adverse effect on the current or future financial 
position, stockholders' equity or results of operations of the 
Company and its subsidiaries; and, to the best of the Company's 
knowledge, no such proceedings are threatened or contemplated by 
governmental authorities or threatened by others;

(o)     When the Securities are issued and delivered pursuant to 
this Agreement, the Securities  will not be of the same class 
(within the meaning of Rule 144A under the Securities Act as 
securities which are listed on a national securities exchange 
registered under Section 6 of the Exchange Act or quoted in a U.S. 
automated inter-dealer quotation system;

(p)     The Company is subject to Section 13 or 15(d) of the 
Exchange Act;

(q)     The Company is not, and after giving effect to the 
offering and sale of the Securities, will not be an "investment 
company", as such term is defined in the United States Investment 
Company Act of 1940, as amended (the "Investment Company Act");

(r)     Neither the Company nor any of its subsidiaries, nor any 
person acting on its or their behalf has offered or sold the 
Securities by means of any general solicitation or general 
advertising within the meaning of Rule 502(c) under the Securities 
Act;

(s)     Within the preceding six months, neither the Company nor 
any other person acting on behalf of the Company has offered or 
sold to any person any Securities, or any securities of the same or 
a similar class as the Securities, other than Securities offered or 
sold to the Purchasers hereunder.  The Company will take reasonable 
precautions designed to insure that any offer or sale, direct or 
indirect, in the United States or to any U.S. person (as defined in 
Rule 902 under the Securities Act) of any Securities or any 
substantially similar security issued by the Company, within six 
months subsequent to the date on which the distribution of the 
Securities  has been completed (as notified to the Company by 
Goldman, Sachs & Co.), is made under restrictions and other 
circumstances reasonably designed not to affect the status of the 
offer and sale of the Securities in the United States and to U.S. 
persons contemplated by this Agreement as transactions exempt from 
the registration provisions of the Securities Act;

(t)     Neither the Company nor any of its affiliates does 
business with the government of Cuba or with any person or 
affiliate located in Cuba within the meaning of Section 517.075, 
Florida Statutes; and

(u)     KPMG Peat Marwick LLP, who have certified certain 
financial statements of the Company and its subsidiaries, are 
independent public accountants as required by the Securities Act 
and the rules and regulations of the Commission thereunder; 

(v)     The Company owns or possesses, or can acquire on 
reasonable terms, adequate patents, patent rights, licenses, 
inventions, copyrights, know-how (including trade secrets and other 
unpatented and/or unpatentable proprietary or confidential 
information, systems or procedures), trademarks, service marks, 
trade names or other intellectual property (collectively, 
"Intellectual Property") necessary to carry on the business now 
operated by it, and the Company has not received any notice of, and 
is not otherwise aware of, any infringement of or conflict with 
asserted rights of others with respect to any Intellectual Property 
or of any facts or circumstances which would render invalid, or 
otherwise prevent or materially inhibit the Company from utilizing, 
any Intellectual Property necessary to carry on the business now 
conducted by the Company, and which infringement or conflict (if 
the subject of any unfavorable decision, ruling or finding), 
invalidity, prevention or inhibition, singly or in the aggregate, 
is reasonably likely to result in a material adverse change in the 
general affairs, management, financial position, stockholders' 
equity or results of operations of the Company;

(w)     Except as described in the Offering Circular and except as 
would not, singly or in the aggregate, result in a material adverse 
change in or affecting the general affairs, management, financial 
position, stockholders' equity or results of operations of the 
Company, (A) the Company is not in violation of any federal, state, 
local or foreign statute, law, rule, regulation, ordinance, code, 
policy or rule of common law or any judicial or administrative 
interpretation thereof, including any judicial or administrative 
order, consent, decree or judgment, relating to pollution or 
protection of human health, the environment (including, without 
limitation, ambient air, surface water, groundwater, land surface 
or subsurface strata) or wildlife, including, without limitation, 
laws and regulations relating to the release or threatened release 
of chemicals, pollutants, contaminants, wastes, toxic substances, 
hazardous substances, petroleum or petroleum products (collectively 
"Hazardous Materials") or to the manufacture, processing, 
distribution, use, treatment, storage, disposal, transport or 
handling of Hazardous Materials (collectively, "Environmental 
Laws"), (B) the Company has all permits, authorizations and 
approvals required under any applicable Environmental Laws and is 
in compliance with their requirements, (C) there are no pending or, 
to the best of the Company's knowledge, threatened administrative, 
regulatory or judicial action, suits, demands, demand letters, 
claims, liens, notices of noncompliance or violation, investigation 
or proceedings relating to any Environmental Law against the 
Company and (D) to the best of the Company's knowledge, there are 
no events or circumstances that might reasonably be expected to 
form the basis of an order for clean-up or remediation, or an 
action, suit or proceeding by any private party or government body 
or agency, against or affecting the Company relating to Hazardous 
Materials or any Environmental Laws;

(x)     The Company has reviewed its operations and that of its 
subsidiaries and any third parties with which the Company or any of 
its subsidiaries has a material relationship to evaluate the extent 
to which the business or operations of the Company or any of its 
subsidiaries will be affected by the Year 2000 Problem.  Based on 
such review, the Company has no reason to believe, and does not 
believe, that the Year 2000 Problem will have a material adverse 
effect on the general affairs, management, the current or future 
consolidated financial position, stockholders' equity or results of 
operations of the Company and its subsidiaries or result in any 
material loss or interference with the Company's business or 
operations.  The "Year 2000 Problem" as used herein means any 
significant risk that computer hardware or software used in the 
receipt, transmission, processing, manipulation, storage, 
retrieval, retransmission or other utilization of data or in the 
operation of mechanical or electrical systems of any kind will not, 
in the case of dates or time periods occurring after December 31, 
1999, function at least as effectively as in the case of dates or 
time periods occurring prior to January 1, 2000.

2.      Subject to the terms and conditions herein set forth, (a) the 
Company agrees to issue and sell to each of the Purchasers, and each of 
the Purchasers agrees, severally and not jointly, to purchase from the 
Company, at a purchase price of 97.25% of the principal amount thereof, 
plus accrued interest, if any, from March 3, 1999 to the Time of Delivery 
hereunder, the principal amount of Firm Securities set forth opposite the 
name of such Purchaser in Schedule I hereto, and (b) in the event and to 
the extent that the Underwriters shall exercise the election to purchase 
Optional Securities as provided below, the Company agrees to issue and 
sell to each of the Purchasers, and each of the Purchasers agrees, 
severally and not jointly, to purchase from the Company, at the same 
purchase price set forth in clause (a) of this Section 2, that portion of 
the aggregate principal amount of the Optional Securities as to which 
such election shall have been exercised (to be adjusted by you so as to 
eliminate fractions) determined by multiplying such aggregate principal 
amount of Optional Securities by a fraction, the numerator of which is 
the maximum aggregate principal amount of Optional Securities which such 
Purchaser is entitled to purchase as set forth opposite the name of such 
Purchaser in Schedule I hereto and the denominator of which is the 
maximum aggregate principal amount of Optional Securities which all of 
the Purchasers are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase 
at their election up to $50,000,000 aggregate principal amount of 
Optional Securities, at the same purchase price set forth in clause (a) 
of the first paragraph of this Section 2, for the sole purpose of 
covering overallotments in the sale of Firm Securities. Any such election 
to purchase Optional Securities may be exercised by written notice from 
Goldman, Sachs & Co. to the Company, given within a period of 30 calendar 
days after the date of this Agreement, setting forth the aggregate 
principal amount of Optional Securities to be purchased and the date on 
which such Optional Securities are to be delivered, as determined by you 
but in no event earlier than the First Time of Delivery (as defined in 
Section (4) hereof) or, unless you and the Company otherwise agree in 
writing, earlier than two or later than ten business days after the date 
of such notice.

3.      Upon the authorization by Goldman, Sachs & Co. of the release 
of the Firm Securities, the several Purchasers propose to offer the Firm 
Securities for sale upon the terms and conditions set forth in this 
Agreement and the Offering Circular and each Purchaser hereby represents 
and warrants to, and agrees with the Company that:

(a)     It will offer and sell the Securities only to persons who it 
reasonably believes are "qualified institutional buyers" ("QIBs") 
within the meaning of Rule 144A under the Securities Act in transactions 
meeting the requirements of Rule 144A;

(b) It is an Institutional Accredited Investor; 

(c)     Upon request of the Company, it will notify the Company upon 
completion of the distribution of the Securities; and

(d)     It has not offered and will not offer or sell the Securities 
by any form of general solicitation or general advertising, including but 
not limited to the methods described in Rule 502(c) under the Securities 
Act.

4.      (a) The Securities to be purchased by each Purchaser hereunder 
will be represented by one or more definitive global Securities in book 
entry form which will be deposited by or on behalf of the Company with 
The Depository Trust Company ("DTC") or its designated custodian.  The 
Company will deliver the Securities to Goldman, Sachs & Co. for the 
account of each Purchaser, against payment by or on behalf of such 
Purchaser of the purchase price therefor by wire transfer, payable to the 
order of the Company in Federal (same day) funds, by causing DTC to 
credit the Securities to the account of Goldman, Sachs & Co. at DTC.  The 
Company will cause the certificates representing the Securities to be 
made available to Goldman, Sachs & Co. for checking at least twenty-four 
hours prior to the Time of Delivery (as defined below) at the office of 
DTC or its designated custodian (the "Designated Office"). The time and 
date of such delivery and payment shall be, with respect to the Firm 
Securities, 9:30 a.m., New York City  time, on March 3, 1999 or at such 
other time and date as you and the Company may agree upon in writing, 
and, with respect to the Optional Securities, 9:30 a.m., New York City 
time, on the date specified by you in the written notice given by you of 
the Purchasers' election to purchase the Optional Securities, or at such 
other time and date as you and the Company may agree upon in writing.  
Such time and date for delivery of the Firm Securities is herein called 
the "First Time of Delivery", such time and date for delivery of the 
Optional Securities, if not the First Time of Delivery, is herein called 
the "Second Time of Delivery", and each such time and date for delivery 
is herein called a "Time of Delivery".

(b)     The documents to be delivered at each Time of Delivery by or 
on behalf of the parties hereto pursuant to Section 7 hereof, including 
the cross-receipt for the Securities and any additional documents 
requested by the Purchasers pursuant to Section 7(i) hereof, will be 
delivered at such time and date at the offices of Fenwick & West LLP, Two 
Palo Alto Square, Palo Alto, California 94034 (the "Closing Location"), 
and the Securities will be delivered at the Designated Office, all at 
such Time of Delivery.  A meeting will be held at the Closing Location at 
6:00 p.m., New York City time, on the New York Business Day next 
preceding such Time of Delivery, at which meeting the final drafts of the 
documents to be delivered pursuant to the preceding sentence will be 
available for review by the parties hereto.  For the purposes of this 
Section 4, "New York Business Day" shall mean each Monday, Tuesday, 
Wednesday, Thursday and Friday which is not a day on which banking 
institutions in New York are generally authorized or obligated by law or 
executive order to close.

5.      The Company agrees with each of the Purchasers:

(a)     To prepare the Offering Circular in a form approved by you; to 
make no amendment or any supplement to the Offering Circular which shall 
be disapproved by you promptly after reasonable notice thereof; and to 
furnish you with copies thereof;

(b)     Promptly from time to time to take such action as you may 
reasonably request to qualify the Securities and the shares of Stock 
issuable upon conversion of the Securities for offering and sale under 
the securities laws of such jurisdictions as you may request and to 
comply with such laws so as to permit the continuance of sales and 
dealings therein in such jurisdictions for as long as may be necessary to 
complete the distribution of the Securities, provided that in connection 
therewith the Company shall not be required to qualify as a foreign 
corporation or to file a general consent to service of process in any 
jurisdiction;

(c)     To furnish the Purchasers with five copies of the Offering 
Circular and each amendment or supplement thereto signed by an authorized 
officer of the Company with the independent accountants' report(s) in the 
Offering Circular, and any amendment or supplement containing amendments 
to the financial statements covered by such report(s), signed by the 
accountants, and additional copies thereof in such quantities as you may 
from time to time reasonably request, and if, at any time prior to the 
expiration of nine months after the date of the Offering Circular, any 
event shall have occurred as a result of which the Offering Circular as 
then amended or supplemented would include an untrue statement of a 
material fact or omit to state any material fact necessary in order to 
make the statements therein, in the light of the circumstances under 
which they were made when such Offering Circular is delivered, not 
misleading, or, if for any other reason it shall be necessary or 
desirable during such same period to amend or supplement the Offering 
Circular, to notify you and upon your request to prepare and furnish 
without charge to each Purchaser and to any dealer in securities as many 
copies as you may from time to time reasonably request of an amended 
Offering Circular or a supplement to the Offering Circular which will 
correct such statement or omission or effect such compliance;

(d)     During the period beginning from the date hereof and 
continuing until the date ninety days after the date of the Offering 
Circular, not to offer, sell contract to sell or otherwise dispose of, 
except as provided hereunder any securities of the Company that are 
substantially similar to the Securities or the Stock, including but not 
limited to any securities that are convertible into or exchangeable for, 
or that represent the right to receive, Stock or any such substantially 
similar securities (other than (i) pursuant to employee stock and option 
plans and agreements existing on, or upon the conversion or exchange of 
convertible or exchangeable securities outstanding as of, the date of 
this Agreement, or (ii) pursuant to stock option agreements entered into 
after the date of this Agreement, provided that no shares shall vest 
under such new stock option agreements until after the date ninety days 
after the date of the Offering Circular), without your prior written 
consent; provided, however, that the Company may issue shares of Stock as 
consideration for acquisitions of businesses occurring after the date of 
the Offering Circular, provided that each recipient of any such shares 
agrees in writing for the benefit of the Purchasers that all such shares 
shall remain subject to restrictions identical to those contained in this 
paragraph.

(e)     Not to be or become, at any time prior to the expiration of 
three years after the date of the latest Time of Delivery, an open-end 
investment company, unit investment trust, closed-end investment company 
or face-amount certificate company that is or is required to be 
registered under Section 8 of the Investment Company Act;

(f)     At any time when the Company is not subject to Section 13 or 
15(d) of the Exchange Act, for the benefit of holders from time to time 
of Securities, to furnish at its expense, upon request, to holders of 
Securities and prospective purchasers of securities information (the 
"Additional Issuer Information") satisfying the requirements of 
subsection (d)(4)(i) of Rule 144A under the Securities Act;

(g)     If requested by you, to use its best efforts to cause 
Securities to be eligible for the PORTAL trading system of the National 
Association of Securities Dealers, Inc.; 

(h)     To furnish to the holders of the Securities as soon as 
practicable after the end of each fiscal year an annual report (including 
a balance sheet and statements of income, stockholders' equity and cash 
flows of the Company and its consolidated subsidiaries certified by 
independent public accountants) and, as soon as practicable after the end 
of each of the first three quarters of each fiscal year (beginning with 
the fiscal quarter ending after the date of the Offering Circular), to 
make available to its stockholders consolidated summary financial 
information of the Company and its subsidiaries for such quarter in 
reasonable detail;

(i)     During a period of five years from the date of the Offering 
Circular, to furnish to you copies of all reports or other communications 
(financial or other) furnished to stockholders of the Company, and to 
deliver to you (i) as soon as they are available, copies of any reports 
and financial statements furnished to or filed with the Commission or any 
securities exchange on which the Securities or any class of securities of 
the Company is listed; and (ii) such additional information concerning 
the business and financial condition of the Company as you may from time 
to time reasonably request (such financial statements to be on a 
consolidated basis to the extent the accounts of the Company and its 
subsidiaries are consolidated in reports furnished to its stockholders 
generally or to the Commission) provided that you agree to hold in 
confidence any confidential or nonpublic information so provided;

(j)     During the period of two years after the date of the Offering 
Circular, the Company will not, and will use all reasonable efforts to 
ensure that its "affiliates" (as defined in Rule 144 under the 
Securities Act) do not, resell any of the Securities which constitute 
"restricted securities" under Rule 144 that have been reacquired by any 
of them;

(k)     The Company agrees that it will use the net proceeds of the 
sale of the Securities (other than $48.475 million) to finance the 
purchase or other acquisition of any property, inventory, asset or 
business directly or indirectly, by the Company or any Restricted 
Subsidiary used in, or to be used in, the System and Network Management 
Business or for such other purposes permitted by the Senior Note 
Indenture (as defined below).  Neither the Company nor any of its 
Restricted Subsidiaries has, as of the date hereof, incurred any Debt 
under Section 1008(11) of the Senior Notes Indenture.  "Debt" has the 
meaning given thereto in the Senior Notes Indenture.  "Restricted 
Subsidiary" shall mean any subsidiary of the Company that has not been 
designated an "Unrestricted Subsidiary" pursuant to the Indenture dated 
as of July 1, 1998 between the Company and the Chase Manhattan Bank and 
Trust Company, National Association, as trustee governing the Company's 
11 1/4% Senior Notes due 2008 (as amended or supplemented from time to time, 
the "Senior Notes Indenture").  "System and Network Management Business" 
means:  (i) server and other hardware hosting; (ii) connectivity, data 
networking, telecommunications or content for computer or data networks 
or systems; (iii) management of computer or data networks or systems; 
(iv) technology services, equipment sales or leasing or software 
licensing for computer or data networks or systems (including Internet 
Protocol and any successor protocol(s) based networks); and (v) 
businesses reasonably related, complementary or incidental thereto.;

(l)     To reserve and keep available at all times, free of preemptive 
rights, shares of Stock for the purpose of enabling the Company to 
satisfy any obligations to issue shares of its Stock upon conversion of 
the Securities; and

(m)     To use its best efforts to list, subject to notice of 
issuance, the shares of Stock issuable upon conversion of the Securities 
on the Nasdaq National Market.

6.      The Company covenants and agrees with the several Purchasers 
that the Company will pay or cause to be paid the following: (i) the 
fees, disbursements and expenses of the Company's counsel and accountants 
in connection with the issue of the Securities and the shares of Stock 
issuable upon conversion of the Securities and all other expenses in 
connection with the preparation, printing and filing of the Preliminary 
Offering Circular and the Offering Circular and any amendments and 
supplements thereto and the mailing and delivering of copies thereof to 
the Purchasers and dealers; (ii) the cost of printing or producing any 
Agreement among Purchasers, this Agreement, the Indenture, the Blue Sky 
and Legal Investment Memoranda, closing documents (including any 
compilations thereof) and any other documents in connection with the 
offering, purchase, sale and delivery of the Securities; (iii) all 
expenses in connection with the qualification of the Securities and the 
shares of Stock issuable upon conversion of the Securities for offering 
and sale under state securities laws as provided in Section 5(b) hereof, 
including the fees and disbursements of counsel for the Purchasers in 
connection with such qualification and in connection with the Blue Sky 
and legal investment surveys; (iv) any fees charged by securities rating 
services for rating the Securities; (v) the cost of preparing the 
Securities; (vi) the fees and expenses of the Trustee and any agent of 
the Trustee and the fees and disbursements of counsel for the Trustee in 
connection with the Indenture and the Securities; (vii) any cost incurred 
in connection with the designation of the Securities for trading in 
PORTAL and the listing on the Nasdaq National Market of the shares of 
Stock issuable upon conversion of the Securities; and all other costs and 
expenses incident to the performance of its obligations hereunder which 
are not otherwise specifically provided for in this Section.  It is 
understood, however, that, except as provided in this Section, and 
Sections 8 and 11 hereof, the Purchasers will pay all of their own costs 
and expenses, including the fees of their counsel, transfer taxes on 
resale of any of the Securities by them, and any advertising expenses 
connected with any offers they may make.

7.      The obligations of the Purchasers hereunder shall be subject, 
in their discretion, to the condition that all representations and 
warranties and other statements of the Company herein are, at and as of 
each Time of Delivery, true and correct, the condition that the Company 
shall have performed all of its obligations hereunder theretofore to be 
performed, and the following additional conditions:

(a)     Wilson Sonsini Goodrich & Rosati, Professional Corporation, 
counsel for the Purchasers, shall have furnished to you such opinion or 
opinions, dated such Time of Delivery, with respect to the matters 
covered in paragraphs (i), (ii), (v), (vi), (vii), (xi), (xii), (xiii) 
and (xiv) of subsection (b) below as well as such other related matters 
as you may reasonably request, and such counsel shall have received such 
papers and information as they may reasonably request to enable them to 
pass upon such matters;

(b)     Fenwick & West LLP, counsel for the Company (or such other 
counsel as the Company shall deem appropriate) shall have furnished to 
you their written opinion, dated such Time of Delivery, in form and 
substance satisfactory to you, to the effect that:

     (i)     The Company has been duly incorporated and is validly 
     existing as a corporation in good standing under the laws of the 
     state of Delaware, with corporate power and corporate authority  to 
     own its properties and conduct its business as described in the 
     Offering Circular;

     (ii)    The Company had, as of the dates specified in the Offering 
     Circular, duly authorized capital stock as set forth under the 
     caption "Capitalization" in the Offering Circular, and all of the 
     issued and outstanding shares of capital stock of the Company 
     described therein have been duly and validly authorized and issued, 
     are non-assessable and to such counsel's knowledge, are fully paid, 
     and the shares of Stock initially issuable upon conversion of the 
     Securities have been duly and validly authorized and reserved for 
     issuance and, when issued and delivered in accordance with the 
     provisions of the Securities and the Indenture, will be duly and 
     validly issued and fully paid and non-assessable, and will conform 
     to the description of the Stock contained in the Offering Circular;

     (iii)   The Company has been duly qualified as a foreign 
     corporation for the transaction of business and is in good standing 
     under the laws of each jurisdiction within the United States in 
     which it owns or leases properties or employs personnel, or where 
     the failure to be so qualified would have a material adverse effect 
     of the business, financial condition or results of operations of 
     the Company;

     (iv)    To such counsel's knowledge and other than as set forth in 
     the Offering Circular, there are no legal or governmental 
     proceedings pending to which the Company is a party or of which any 
     property of the Company is the subject which, if determined 
     adversely to the Company, would individually or in the aggregate 
     have a material adverse effect on the current or future 
     consolidated financial position, stockholders' equity or results of 
     operations of the Company; and, to such counsel's knowledge, no 
     such proceedings are threatened by governmental authorities or 
     threatened by others;

     (v)     This Agreement has been duly authorized and duly executed 
     and delivered by the Company to you;

     (vi)    The Securities have been duly authorized, executed, 
     authenticated, issued and delivered and constitute valid and 
     legally binding obligations of the Company;

     (vii) The Indenture and the Registration Rights Agreement have 
     been duly authorized, executed and delivered by the Company and 
     each constitutes a valid and legally binding instrument, 
     enforceable in accordance with its terms, subject, as to 
     enforcement, to bankruptcy, insolvency, reorganization and other 
     laws of general applicability relating to or affecting creditors' 
     rights and to general equity principles;

     (viii)  The issue and sale of the Securities being delivered at 
     such Time of Delivery and the compliance by the Company with all of 
     the provisions of the Securities, the Indenture, the Registration 
     Rights Agreement and this Agreement and the consummation of the 
     transactions herein and therein contemplated were they to be 
     completed on or prior to the date of such opinion and assuming the 
     absence of any applicable cure period, waiting period or other 
     similar provision, do not conflict with or result in a breach or 
     violation of any of the terms or provisions of, or constitute a 
     default under, any of the agreements listed as exhibits to the 
     Company's Annual Report on Form 10-K for the year ended December 
     31, 1998 or any agreements entered into by the Company after 
     December 31, 1998 that would be required to be filed as a material 
     agreement exhibit on Form 10-Q or any other Exchange Act Report 
     (collectively, the "Material Agreements") (provided that in 
     determining which documents would be required to be so filed, such 
     counsel may rely on an officer's certificate that specifies 
     agreements that the Company has entered into since December 31, 
     1998) nor does such action result in any violation of the 
     provisions of the Certificate of Incorporation or Bylaws of the 
     Company or any statute or any order, rule or regulation known to 
     such counsel of any court or governmental agency or body having 
     jurisdiction over the Company or any of its properties;

     (ix)    No consent, approval, authorization, order, registration 
     or qualification of or with any such court or governmental agency 
     or body is required for the issue and sale of the Securities or the 
     consummation by the Company of the transactions contemplated by 
     this Agreement, the Indenture or the Registration Rights Agreement, 
     except (A) such as may be required under the Securities Act in 
     connection with the shares of Stock issuable upon conversion of the 
     Securities and such consents, approvals, authorizations, 
     registrations or qualifications as may be required under state 
     securities or Blue Sky laws in connection with the purchase and 
     distribution of the Securities  by the Purchasers (as to which such 
     counsel renders no opinion) or (B) such consents, approvals, 
     authorizations, orders, registrations or qualifications as are 
     referenced in the Offering Circular;

     (x)     The Company is not in violation of its Certificate of 
     Incorporation or By-laws or, to such counsel's knowledge, in 
     default in the performance or observance of any material 
     obligation, agreement, covenant or condition contained in any of 
     the Material Agreements;

     (xi)    The statements set forth in the Offering Circular under the
     the caption "Description of Notes", and "Description of Capital 
     Stock", insofar as they purport to constitute a summary of the 
     terms of the Securities, the Indenture, the Registration Rights 
     Agreement and the Stock, under the caption "Certain United States 
     Federal Income Tax Considerations", and under the caption 
     "Underwriting", insofar as they purport to describe the 
     provisions of the laws and documents referred to therein, are 
     accurate and complete in all material respects;

     (xii)   The Exchange Act Reports (other than the financial 
     statements and related notes and schedules (and financial data) 
     therein, as to which such counsel need express no opinion), when 
     they were filed with the Commission, complied as to form in all 
     material respects with the requirements of the Exchange Act, and 
     the rules and regulations of the Commission promulgated thereunder; 

     (xiii)  No registration of the Securities under the Securities 
     Act, and no qualification of an indenture under the United States 
     Trust Indenture Act of 1939 with respect thereto, is required for 
     the offer and, sale to, and initial resale of the Securities by, 
     the Purchasers in the manner contemplated by this Agreement; and

     (xiv)   The Company is not an "investment company", as such 
     term is defined in the Investment Company Act.

        In addition, such counsel shall state that, although they 
are not passing upon and do not assume any responsibility for, nor 
have they independently verified, the accuracy, completeness or 
fairness of the statements contained in the Preliminary Offering 
Circular and the Offering Circular, except for and to the extent of 
those referred to in the opinion in subsection (xi) of this 
Section 7(b),  they have participated in certain conferences with 
officers and other employees of the Company, representatives of the 
Company's independent certified public accountants and 
representatives of the Purchasers with respect to the preparation 
of the Preliminary Offering Circular and the Offering Circular, and 
no facts have come to the attention of attorneys devoting attention 
to the representation of the Company in its preparation of the 
Preliminary Offering Circular and the Offering Circular that have 
caused them to believe that, as of their respective dates and as of 
the Time of Delivery, the Preliminary Offering Circular and the 
Offering Circular or any further amendments thereto made by the 
Company prior to such Time of Delivery (other than the financial 
statements and related notes, related schedules and financial data 
included therein, as to which such counsel need express no opinion) 
contained an untrue statement of a material fact or omitted to 
state a material fact required to be stated therein or necessary to 
make the statements therein, in light of the circumstances under 
which they were made, not misleading. Further, such counsel shall 
state that, although they are not passing upon and do not assume 
any responsibility for, nor have they independently verified, the 
accuracy, completeness or fairness of the statements contained in 
the Exchange Act Reports, they have participated in certain 
conferences with officers and other employees of the Company, and 
representatives of the Company's independent certified public 
accountants with respect to the preparation of the respective 
Exchange Act Reports, and no facts have come to the attention of 
attorneys devoting attention to the representation of the Company 
in its preparation of the respective Exchange Act Reports that have 
caused them to believe that as of the dates on which the respective 
Exchange Act Reports were filed with the Commission, the Exchange 
Act Reports (other than the financial statements and related notes, 
related schedules and financial data included therein, as to which 
such counsel need express no opinion) contained an untrue statement 
of material fact or omitted to state a material fact required to be 
stated therein or necessary to make the statements therein, in 
light of the circumstances under which they were made when such 
documents were so filed, not misleading.

(c)     On the date of the Offering Circular prior to the execution of 
this Agreement and also at such Time of Delivery, KPMG Peat Marwick LLP 
shall have furnished to you a letter or letters, dated the respective 
dates of delivery thereof, in form and substance satisfactory to you, to 
the effect set forth in Annex II hereto;

(d)     (i) Neither the Company nor any of its subsidiaries shall have 
sustained since the date of the latest audited financial statements 
included in the Offering Circular any loss or interference with its 
business from fire, explosion, flood or other calamity, whether or not 
covered by insurance, or from any labor dispute or court or governmental 
action, order or decree, otherwise than as set forth or contemplated in 
the Offering Circular, and (ii) since the respective dates as of which 
information is given in the Offering Circular there shall not have been 
any change in the capital stock or long-term debt of the Company or any 
of its subsidiaries or any change, or any development involving a 
prospective change, in or affecting the general affairs, management, 
financial position, stockholders' equity or results of operations of the 
Company and its subsidiaries, otherwise than as set forth or contemplated 
in the Offering Circular, the effect of which, in any such case described 
in Clause (i) or (ii), is in the judgment of the Purchasers so material 
and adverse as to make it impracticable or inadvisable to proceed with 
the public offering or the delivery of the Securities being delivered at 
such Time of Delivery on the terms and in the manner contemplated in this 
Agreement and  in the Offering Circular;

(e)     On or after the date hereof (i) no downgrading shall have 
occurred in the rating accorded the Company's debt securities by any 
"nationally recognized statistical rating organization", as that term 
is defined by the Commission for purposes of Rule 436(g)(2) under the 
Securities Act, and (ii) no such organization shall have publicly 
announced that it has under surveillance or review, with possible 
negative implications, its rating of any of the Company's debt 
securities;

(f)     On or after the date hereof there shall not have occurred any 
of the following: (i) a suspension or material limitation in trading in 
securities generally on the New York Stock Exchange or the Nasdaq 
National Market; (ii) a suspension or material limitation in trading in 
the Company's securities on the Nasdaq National Market; (iii) a general 
moratorium on commercial banking activities declared by either Federal or 
New York State authorities; (iv) the outbreak or escalation of 
hostilities involving the United States or the declaration by the United 
States of a national emergency or war, if the effect of any such event 
specified in this Clause (iv) in the judgment of the Purchasers makes it 
impracticable or inadvisable to proceed with the public offering or the 
delivery of the Securities being delivered at such Time of Delivery on 
the terms and in the manner contemplated in the Offering Circular; or (v) 
the occurrence of any material adverse change in the existing financial, 
political or economic conditions in the United States or elsewhere which, 
in the judgment of the Purchasers, would materially and adversely affect 
the financial markets or markets for the Securities or other debt 
securities;

(g)     The Securities have been designated for trading on PORTAL;

(h)     At such Time of Delivery, a Listing of Additional Shares 
Application shall have been previously received by the Nasdaq National 
Market for the purpose of duly listing the shares of Stock issuable upon 
conversion of the Securities being delivered at such Time of Delivery; 

(i)     The Company shall have furnished to you executed copies of the 
Indenture and the Registration Rights Agreement; and

(j)     The Company shall have furnished or caused to be furnished to 
you at such Time of Delivery certificates of officers of the Company 
satisfactory to you as to the accuracy of the representations and 
warranties of the Company herein at and as of such Time of Delivery, as 
to the performance by the Company of all of its obligations hereunder to 
be performed at or prior to such Time of Delivery, as to the matters set 
forth in subsection (d) of this Section and as to such other matters as 
you may reasonably request.

8.      (a)  The Company will indemnify and hold harmless each 
Purchaser against any losses, claims, damages or liabilities, joint or 
several, to which such Purchaser may become subject, under the Securities 
Act or otherwise, insofar as such losses, claims, damages or liabilities 
(or actions in respect thereof) arise out of or are based upon an untrue 
statement or alleged untrue statement of a material fact contained in any 
Preliminary Offering Circular or the Offering Circular, or any amendment 
or supplement thereto, or arise out of or are based upon the omission or 
alleged omission to state therein a material fact necessary to make the 
statements therein not misleading, and will reimburse each Purchaser for 
any legal or other expenses reasonably incurred by such Purchaser in 
connection with investigating or defending any such action or claim as 
such expenses are incurred; provided, however, that the Company shall not 
be liable in any such case to the extent that any such loss, claim, 
damage or liability arises out of or is based upon an untrue statement or 
alleged untrue statement or omission or alleged omission made in any 
Preliminary Offering Circular or the Offering Circular or any such 
amendment or supplement in reliance upon and in conformity with written 
information furnished to the Company by any Purchaser through Goldman, 
Sachs & Co. expressly for use therein.

(b)     Each Purchaser will indemnify and hold harmless the Company 
against any losses, claims, damages or liabilities to which the Company 
may become subject, under the Securities Act or otherwise, insofar as 
such losses, claims, damages or liabilities (or actions in respect 
thereof) arise out of or are based upon an untrue statement or alleged 
untrue statement of a material fact contained in any Preliminary Offering 
Circular or the Offering Circular, or any amendment or supplement 
thereto, or arise out of or are based upon the omission or alleged 
omission to state therein a material fact or necessary to make the 
statements therein not misleading, in each case to the extent, but only 
to the extent, that such untrue statement or alleged untrue statement or 
omission or alleged omission was made in any Preliminary Offering 
Circular or the Offering Circular or any such amendment or supplement in 
reliance upon and in conformity with written information furnished to the 
Company by such Purchaser through Goldman, Sachs & Co. expressly for use 
therein; and will reimburse the Company for any legal or other expenses 
reasonably incurred by the Company in connection with investigating or 
defending any such action or claim as such expenses are incurred.

(c)     Promptly after receipt by an indemnified party under 
subsection (a) or (b) above of notice of the commencement of any action, 
such indemnified party shall, if a claim in respect thereof is to be made 
against the indemnifying party under such subsection, notify the 
indemnifying party in writing of the commencement thereof; but the 
omission so to notify the indemnifying party shall not relieve it from 
any liability which it may have to any indemnified party otherwise than 
under such subsection.  In case any such action shall be brought against 
any indemnified party and it shall notify the indemnifying party of the 
commencement thereof, the indemnifying party shall be entitled to 
participate therein and, to the extent that it shall wish, jointly with 
any other indemnifying party similarly notified, to assume the defense 
thereof, with counsel satisfactory to such indemnified party (who shall 
not, except with the consent of the indemnified party, be counsel to the 
indemnifying party), and, after notice from the indemnifying party to 
such indemnified party of its election so to assume the defense thereof, 
the indemnifying party shall not be liable to such indemnified party 
under such subsection for any legal expenses of other counsel or any 
other expenses, in each case subsequently incurred by such indemnified 
party, in connection with the defense thereof other than reasonable costs 
of investigation.  No indemnifying party shall, without the written 
consent of the indemnified party, effect the settlement or compromise of, 
or consent to the entry of any judgment with respect to, any pending or 
threatened action or claim in respect of which indemnification or 
contribution may be sought hereunder (whether or not the indemnified 
party is an actual or potential party to such action or claim) unless 
such settlement, compromise or judgment (i) includes an unconditional 
release of the indemnified party from all liability arising out of such 
action or claim and (ii) does not include a statement as to, or an 
admission of, fault, culpability or a failure to act, by or on behalf of 
any indemnified party.

(d)     If the indemnification provided for in this Section 8 is 
unavailable to or insufficient to hold harmless an indemnified party 
under subsection (a) or (b) above in respect of any losses, claims, 
damages or liabilities (or actions in respect thereof) referred to 
therein, then each indemnifying party shall contribute to the amount paid 
or payable by such indemnified party as a result of such losses, claims, 
damages or liabilities (or actions in respect thereof) in such proportion 
as is appropriate to reflect the relative benefits received by the 
Company on the one hand and the Purchasers on the other from the offering 
of the Securities.  If, however, the allocation provided by the 
immediately preceding sentence is not permitted by applicable law or if 
the indemnified party failed to give the notice required under subsection 
(c) above, then each indemnifying party shall contribute to such amount 
paid or payable by such indemnified party in such proportion as is 
appropriate to reflect not only such relative benefits but also the 
relative fault of the Company on the one hand and the Purchasers on the 
other in connection with the statements or omissions which resulted in 
such losses, claims, damages or liabilities (or actions in respect 
thereof), as well as any other relevant equitable considerations.  The 
relative benefits received by the Company on the one hand and the 
Purchasers on the other shall be deemed to be in the same proportion as 
the total net proceeds from the offering (before deducting expenses) 
received by the Company bear to the total underwriting discounts and 
commissions received by the Purchasers, in each case as set forth in the 
Offering Circular.  The relative fault shall be determined by reference 
to, among other things, whether the untrue or alleged untrue statement of 
a material fact or the omission or alleged omission to state a material 
fact relates to information supplied by the Company on the one hand or 
the Purchasers on the other and the parties' relative intent, knowledge, 
access to information and opportunity to correct or prevent such 
statement or omission.  The Company and the Purchasers agree that it 
would not be just and equitable if contribution pursuant to this 
subsection (d) were determined by pro rata allocation (even if the 
Purchasers were treated as one entity for such purpose) or by any other 
method of allocation which does not take account of the equitable 
considerations referred to above in this subsection (d).  The amount paid 
or payable by an indemnified party as a result of the losses, claims, 
damages or liabilities (or actions in respect thereof) referred to above 
in this subsection (d) shall be deemed to include any legal or other 
expenses reasonably incurred by such indemnified party in connection with 
investigating or defending any such action or claim.  Notwithstanding the 
provisions of this subsection (d), no Purchaser shall be required to 
contribute any amount in excess of the amount by which the total price at 
which the Securities underwritten by it and distributed to investors were 
offered to investors exceeds the amount of any damages which such 
Purchaser has otherwise been required to pay by reason of such untrue or 
alleged untrue statement or omission or alleged omission. The Purchasers' 
obligations in this subsection (d) to contribute are several in 
proportion to their respective underwriting obligations and not joint.

(e)     The obligations of the Company under this Section 8 shall be 
in addition to any liability which the Company may otherwise have and 
shall extend, upon the same terms and conditions, to each person, if any, 
who controls any Purchaser within the meaning of the Securities Act; and 
the obligations of the Purchasers under this Section 8 shall be in 
addition to any liability which the respective Purchasers may otherwise 
have and shall extend, upon the same terms and conditions, to each 
officer and director of the Company and to each person, if any, who 
controls the Company within the meaning of the Securities Act.

9.      (a)  If any Purchaser shall default in its obligation to 
purchase the Securities which it has agreed to purchase hereunder at a 
Time of Delivery, you may in your discretion arrange for you or another 
party or other parties to purchase such Securities on the terms contained 
herein.  If within thirty-six hours after such default by any Purchaser 
you do not arrange for the purchase of such Securities, then the Company 
shall be entitled to a further period of thirty-six hours within which to 
procure another party or other parties satisfactory to you to purchase 
such Securities on such terms.  In the event that, within the respective 
prescribed periods, you notify the Company that you have so arranged for 
the purchase of such Securities, or the Company notifies you that it has 
so arranged for the purchase of such Securities, you or the Company shall 
have the right to postpone such Time of Delivery for a period of not more 
than seven days, in order to effect whatever changes may thereby be made 
necessary in the Offering Circular, or in any other documents or 
arrangements, and the Company agrees to prepare promptly any amendments 
to the Offering Circular which in your opinion may thereby be made 
necessary.  The term "Purchaser" as used in this Agreement shall 
include any person substituted under this Section with like effect as if 
such person had originally been a party to this Agreement with respect to 
such Securities.

(b)     If, after giving effect to any arrangements for the purchase 
of the Securities of a defaulting Purchaser or Purchasers by you and the 
Company as provided in subsection (a) above, the aggregate principal 
amount of such Securities which remains unpurchased does not exceed 
one-eleventh of the aggregate principal amount of all the Securities to 
be purchased at such Time of Delivery, then the Company shall have the 
right to require each non-defaulting Purchaser to purchase the principal 
amount of Securities which such Purchaser agreed to purchase hereunder at 
such Time of Delivery and, in addition, to require each non-defaulting 
Purchaser to purchase its pro rata share (based on the principal amount 
of Securities which such Purchaser agreed to purchase hereunder) of the 
Securities of such defaulting Purchaser or Purchasers for which such 
arrangements have not been made; but nothing herein shall relieve a 
defaulting Purchaser from liability for its default.

(c)     If, after giving effect to any arrangements for the purchase 
of the Securities of a defaulting Purchaser or Purchasers by you and the 
Company as provided in subsection (a) above, the aggregate principal 
amount of Securities which remains unpurchased exceeds one-eleventh of 
the aggregate principal amount of all the Securities to be purchased at 
such Time of Delivery, or if the Company shall not exercise the right 
described in subsection (b) above to require non-defaulting Purchasers to 
purchase Securities of a defaulting Purchaser or Purchasers, then this 
Agreement (or, with respect to the Second Time of Delivery, the 
obligation of the Purchasers to purchase and of the Company to sell the 
Optional Securities) shall thereupon terminate, without liability on the 
part of any non-defaulting Purchaser or the Company, except for the 
expenses to be borne by the Company and the Purchasers as provided in 
Section 6 hereof and the indemnity and contribution agreements in Section 
8 hereof; but nothing herein shall relieve a defaulting Purchaser from 
liability for its default.

10.     The respective indemnities, agreements, representations, 
warranties and other statements of the Company and the several 
Purchasers, as set forth in this Agreement or made by or on behalf of 
them, respectively, pursuant to this Agreement, shall remain in full 
force and effect, regardless of any investigation (or any statement as to 
the results thereof) made by or on behalf of any Purchaser or any 
controlling person of any Purchaser, or the Company, or any officer or 
director or controlling person of the Company, and shall survive delivery 
of and payment for the Securities.

11.     If this Agreement shall be terminated pursuant to Section 9 
hereof, the Company shall not then be under any liability to any 
Purchaser except as provided in Sections 6 and 8 hereof; but, if for any 
other reason, any Securities are not delivered by or on behalf of the 
Company as provided herein, the Company will reimburse the Purchasers 
through you for all out-of-pocket expenses approved in writing by you, 
including fees and disbursements of counsel, reasonably incurred by the 
Purchasers in making preparations for the purchase, sale and delivery of 
the Securities, but the Company shall then be under no further liability 
to any Purchaser except as provided in Sections 6 and 8 hereof.

12.     In all dealings hereunder, you shall act on behalf of each of 
the Purchasers, and the parties hereto shall be entitled to act and rely 
upon any statement, request, notice or agreement on behalf of any 
Purchaser made or given by you jointly or by Goldman, Sachs & Co. on 
behalf of you as the representatives.

All statements, requests, notices and agreements hereunder shall be 
in writing, and if to the Purchasers shall be delivered or sent by mail, 
telex or facsimile transmission to you as the representatives in care of 
Goldman, Sachs & Co., 32 Old Slip, 9th Floor, New York, New York 10005, 
Attention: Registration Department; and if to the Company shall be 
delivered or sent by mail, telex or facsimile transmission to the address 
of the Company set forth in the Offering Circular, Attention: Secretary; 
provided, however, that any notice to a Purchaser pursuant to Section 
8(c) hereof shall be delivered or sent by mail, telex or facsimile 
transmission to such Purchaser at its address set forth in its 
Purchasers' Questionnaire, or telex constituting such Questionnaire, 
which address will be supplied to the Company by you upon request.  Any 
such statements, requests, notices or agreements shall take effect upon 
receipt thereof.

13.     This Agreement shall be binding upon, and inure solely to the 
benefit of, the Purchasers, the Company and, to the extent provided in 
Sections 8 and 10 hereof, the officers and directors of the Company and 
each person who controls the Company or any Purchaser, and their 
respective heirs, executors, administrators, successors and assigns, and 
no other person shall acquire or have any right under or by virtue of 
this Agreement. No purchaser of any of the Securities from any Purchaser 
shall be deemed a successor or assign by reason merely of such purchase.

14.     Time shall be of the essence of this Agreement.

15.     This Agreement shall be governed by and construed in 
accordance with the laws of the State of New York.

16.     This Agreement may be executed by any one or more of the 
parties hereto in any number of counterparts, each of which shall be 
deemed to be an original, but all such respective counterparts shall 
together constitute one and the same instrument.


<PAGE>



If the foregoing is in accordance with your understanding, please 
sign and return to us counterparts hereof, and upon the acceptance hereof 
by you, on behalf of each of the Purchasers, this letter and such 
acceptance hereof shall constitute a binding agreement between each of 
the Purchasers and the Company.  It is understood that your acceptance of 
this letter on behalf of each of the Purchasers is pursuant to the 
authority set forth in a form of Agreement among Purchasers, the form of 
which shall be submitted to the Company for examination upon request, but 
without warranty on your part as to the authority of the signers thereof.

                                  Very truly yours,

                                  EXODUS COMMUNICATIONS, INC.

                                  By:
                                      __________________________
                                      Name:
                                      Title:

Accepted as of the date hereof:
Goldman, Sachs & Co.
BancBoston Robertson Stephens Inc.
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette
   Securities Corporation
Hambrecht & Quist LLC

By:  _____________________________________
        (Goldman, Sachs & Co.)
        On behalf of each of the Purchasers





                    [Signature Page to Purchase Agreement]


<PAGE>






                                    SCHEDULE I


                                                         Principal 
                                                          Amount of
                                                          Optional
                                                        Securities to
                                        Principal       be Purchased
                                     Amount of Firm      if Maximum 
                                     Securities  to        Option
             Purchaser                be  Purchased       Exercised
-----------------------------------  ---------------   ---------------
Goldman, Sachs & Co.............       $120,000,000       $30,000,000

BancAmerica Robertson Stephens..         20,000,000         5,000,000

BT Alex. Brown Incorporated.....         20,000,000         5,000,000

Donaldson Lufkin & Jenrette
  Securities Corporation........         20,000,000         5,000,000

Hambrecht & Quist LLC...........         20,000,000         5,000,000
                                     ---------------   ---------------
Total                                  $200,000,000       $50,000,000
                                     ===============   ===============



<PAGE>





                                                               ANNEX I

Pursuant to Section 7(d) of the Purchase Agreement, the accountants 
shall furnish letters to the Purchasers to the effect that:

     (i)     They are independent certified public accountants with 
     respect to the Company and its subsidiaries within the meaning of 
     the Securities Exchange Act of 1934 (the "Exchange Act") and the 
     applicable published rules and regulations thereunder;


     (ii)    In our opinion, the consolidated financial statements and 
     financial statement schedules audited by us and included in the 
     Offering Circular comply as to form in all material respects with 
     the applicable requirements of the Exchange Act and the related 
     published rules and regulations;

     (iii)   The unaudited selected financial information with 
     respect to the consolidated results of operations and financial 
     position of the Company for the five most recent fiscal years 
     included in the Offering Circular agrees with the corresponding 
     amounts (after restatements where applicable) in the audited 
     consolidated financial statements for such five fiscal years;

     (iv)    On the basis of limited procedures not constituting an 
     audit in accordance with generally accepted auditing standards, 
     consisting of a reading of the unaudited financial statements and 
     other information referred to below, a reading of the latest 
     available interim financial statements of the Company and its 
     subsidiaries, inspection of the minute books of the Company and its 
     subsidiaries since the date of the latest audited financial 
     statements included in the Offering Circular, inquiries of 
     officials of the Company and its subsidiaries responsible for 
     financial and accounting matters and such other inquiries and 
     procedures as may be specified in such letter, nothing came to 
     their attention that caused them to believe that:

          (A)     the unaudited consolidated statements of income, 
          consolidated balance sheets and consolidated statements of 
          cash flows included in the Offering Circular are not in 
          conformity with generally accepted accounting principles 
          applied on the basis substantially consistent with the basis 
          for the unaudited condensed consolidated statements of 
          income, consolidated balance sheets and consolidated 
          statements of cash flows included in the Offering Circular;

          (B)     any other unaudited income statement data and balance 
          sheet items included in the Offering Circular do not agree 
          with the corresponding items in the unaudited consolidated 
          financial statements from which such data and items were 
          derived, and any such unaudited data and items were not 
          determined on a basis substantially consistent with the basis 
          for the corresponding amounts in the audited consolidated 
          financial statements included in the Offering Circular;

          (C)     the unaudited financial statements which were not 
          included in the Offering Circular but from which were derived 
          any unaudited condensed financial statements referred to in 
          Clause (A) and any unaudited income statement data and 
          balance sheet items included in the Offering Circular and 
          referred to in Clause (B) were not determined on a basis 
          substantially consistent with the basis for the audited 
          consolidated financial statements included in the Offering 
          Circular;

          (D)     any unaudited pro forma consolidated condensed 
          financial statements included in the Offering Circular do not 
          comply as to form in all material respects with the 
          applicable accounting requirements or the pro forma 
          adjustments have not been properly applied to the historical 
          amounts in the compilation of those statements;

          (E)     as of a specified date not more than five days prior 
          to the date of such letter, there have been any changes in 
          the consolidated capital stock (other than issuances of 
          capital stock upon exercise of options and stock appreciation 
          rights, upon earn-outs of performance shares and upon 
          conversions of convertible securities, in each case which 
          were outstanding on the date of the latest financial 
          statements included in the Offering Circular or any increase 
          in the consolidated long-term debt of the Company and its 
          subsidiaries, or any decreases in consolidated net current 
          assets or stockholders' equity or other items specified by 
          the Purchasers, or any increases in any items specified by 
          the Purchasers, in each case as compared with amounts shown 
          in the latest balance sheet included in the Offering Circular 
          except in each case for changes, increases or decreases which 
          the Offering Circular discloses have occurred or may occur or 
          which are described in such letter; and

          (F)     for the period from the date of the latest financial 
          statements included in the Offering Circular to the specified 
          date referred to in Clause (E) there were any decreases in 
          consolidated net revenues or operating profit or the total or 
          per share amounts of consolidated net income or other items 
          specified by the Purchasers, or any increases in any items 
          specified by the Purchasers, in each case as compared with 
          the comparable period of the preceding year and with any 
          other period of corresponding length specified by the 
          Purchasers, except in each case for decreases or increases 
          which the Offering Circular discloses have occurred or may 
          occur or which are described in such letter; and

     (v)     In addition to the examination referred to in their 
     report(s) included in the Offering Circular and the limited 
     procedures, inspection of minute books, inquiries and other 
     procedures referred to in paragraphs (iii) and (iv) above, they 
     have carried out certain specified procedures, not constituting an 
     audit in accordance with generally accepted auditing standards, 
     with respect to certain amounts, percentages and financial 
     information specified by the Purchasers, which are derived from the 
     general accounting records of the Company and its subsidiaries, 
     which appear in the Offering Circular, and have compared certain of 
     such amounts, percentages and financial information with the 
     accounting records of the Company and its subsidiaries and have 
     found them to be in agreement.


                                                       ___________, 1999

Dear KPMG Peat Marwick:

     Goldman, Sachs & Co., as representatives of the Purchasers of __% 
Convertible Subordinated Notes due 2006 to be issued by Exodus 
Communications, Inc. (the "Company"), will be reviewing certain 
information relating to the Company that will be included (incorporated 
by reference) in the Offering Circular.  This review process, applied to 
the information relation to the issue, is (will be) substantially 
consistent with the due diligence review process that we would perform if 
this placement of securities were being registered pursuant to the 
Securities Act of 1933 (the Act).  It is recognized however that what is 
"substantially consistent" may vary from situation to situation and may 
not be the same as that done in a registered offering of the same 
securities for the same issuer and whether the procedures being, or to 
be, followed will be "substantially consistent" will be determined by 
us on a case-by-case basis.  We are knowledgeable with respect to the due 
diligence review process that would be performed if this placement of 
securities were being registered pursuant to the Act.  We hereby request 
that you deliver to us a "comfort" letter concerning the financial 
statements of the issuer and certain statistical and other data included 
in the offering document.  We will contact you to identify the procedures 
we wish you to follow and the form we wish the comfort letter to take.

                                    Very truly yours,
                                    ________________________________________

                                              (Goldman, Sachs & Co.)