<PAGE>
 
                                                                   EXHIBIT 10.35


                              AMENDED AND RESTATED

                       MASTER LOAN AND SECURITY AGREEMENT



          THIS AGREEMENT, originally dated as of September 3, 1997 and amended
and restated as of June 30, 1998, is made by Exodus Communications, Inc. (the
"Borrower"), a Delaware corporation having its principal place of business and
chief executive office at 2650 San Tomas Expressway, Santa Clara, CA, 95051 in
favor of Transamerica Business Credit Corporation, a Delaware corporation (the
"Lender"), having its principal office at Riverway II, West Office Tower, 9399
West Higgins Road, Rosemont, Illinois 60018.

          WHEREAS, the Borrower has requested that the Lender make Loans to it
from time to time; and

          WHEREAS, the Lender has agreed to make such Loans on the terms and
conditions of this Agreement.

          NOW, THEREFORE, in consideration of the premises and to induce the
Lender to extend credit, the Borrower hereby agrees with the Lender as follows:

          SECTION  1.  DEFINITIONS.
                       ----------- 

          As used herein, the following terms shall have the following meanings,
and shall be equally applicable to both the singular and plural forms of the
terms defined:

Agreement shall mean this Master Loan and Security Agreement together with all
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schedules and exhibits hereto, as amended, supplemented, or otherwise modified
from time to time.

Applicable Law shall mean the laws of the State of Illinois (or any other
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jurisdiction whose laws are mandatorily applicable notwithstanding the parties'
choice of Illinois law) or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.

Business Day shall mean any day other than a Saturday, Sunday, or public holiday
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or the equivalent for banks in New York City.

Code shall have the meaning specified in Section 8(d).
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Collateral shall have the meaning specified in Section 2.
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Collateral Access Agreement shall mean any landlord waiver, mortgagee waiver,
---------------------------                                                  
bailee letter, or similar acknowledgement of any warehouseman or processor in
possession of any Equipment, in each case substantially in the form of Exhibit
A.

Effective Date shall mean the date on which all of the conditions specified in
--------------                                                                
Section 3.3 shall have been satisfied.

Equipment shall have the meaning specified in Section 2.
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Event of Default shall mean any event specified in Section 7.
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Financial Statements shall have the meaning specified in Section 6.1.
--------------------                                                 

GAAP shall mean generally accepted accounting principles in the United States of
----                                                                            
America, as in effect from time to time.
<PAGE>
 
Loans shall mean the loans and financial accommodations made by the Lender to
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the Borrower in accordance with the terms of this Agreement and the Notes.

Loan Documents shall mean, collectively, this Agreement, the Notes, and all
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other documents, agreements, certificates, instruments, and opinions executed
and delivered in connection herewith and therewith, as the same may be modified,
extended, restated, or supplemented from time to time.

Material Adverse Change shall mean, with respect to any Person, a material
-----------------------                                                   
adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Material Adverse Effect shall mean, with respect to any Person, a material
-----------------------                                                   
adverse effect on the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Note shall mean each Promissory Note made by the Borrower in favor of the
----                                                                     
Lender, as amended, supplemented, or otherwise modified from time to time, in
each case substantially in the form of Exhibit B.

Obligations shall mean all indebtedness, obligations, and liabilities of the
-----------                                                                 
Borrower under the Notes and under this Agreement, whether on account of
principal, interest, indemnities, fees (including, without limitation,
attorneys' fees, remarketing fees, origination fees, collection fees, and all
other professionals' fees), costs, expenses, taxes, or otherwise.

Permitted Liens shall mean such of the following as to which no enforcement,
---------------                                                             
collection, execution, levy, or foreclosure proceeding shall have been
commenced:  (a) liens for taxes, assessments, and other governmental charges or
levies or the claims or demands of landlords, carriers, warehousemen, mechanics,
laborers, materialmen, and other like Persons arising by operation of law in the
ordinary course of business for sums which are not yet due and payable, or liens
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP; (b) deposits or pledges to secure the payment of
worker's compensation, unemployment insurance, or other social security benefits
or obligations, public or statutory obligations, surety or appeal bonds, bid or
performance bonds, or other obligations of a like nature incurred in the
ordinary course of business; (c) licenses, restrictions, or covenants for or on
the use of the Equipment which do not materially impair either the use of the
Equipment in the operation of the business of the Borrower or the value of the
Equipment; and (d) attachment or judgment liens that do not constitute an Event
of Default.

Person shall mean any individual, sole proprietorship, partnership, joint
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venture, trust, unincorporated organization, association, corporation,
institution, entity, party, or government (including any division, agency, or
department thereof), and the successors, heirs, and assigns of each.

Schedule shall mean each Schedule in the form of Schedule A hereto delivered by
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the Borrower to the Lender from time to time.

Solvent means, with respect to any Person, that as of the date as to which such
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Person's solvency is measured:

          (a) the fair saleable value of its assets is in excess of the total
amount of its liabilities (including contingent liabilities as valued in
accordance with GAAP) as they become absolute and matured;

          (b) it has sufficient capital to conduct its business; and

          (c) it is able generally to meet its debts as they mature.

Taxes shall have the meaning specified in Section 5.5.
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                                       2
<PAGE>
 
          SECTION  2.  CREATION OF SECURITY INTEREST; COLLATERAL.  The Borrower
                       -----------------------------------------               
hereby assigns and grants to the Lender a continuing general, first priority
lien on, and security interest in, all the Borrower's right, title, and interest
in and to the collateral described in the next sentence (the "Collateral") to
secure the payment and performance of all the Obligations.  The Collateral
consists of all equipment set forth on all the Schedules delivered from time to
time under the terms of this Agreement (the "Equipment"), together with all
present and future additions, parts, accessories, attachments, substitutions,
repairs, improvements, and replacements thereof or thereto, and any and all
proceeds thereof, including, without limitation, proceeds of insurance and all
manuals, blueprints, know-how, warranties, and records in connection therewith,
all rights against suppliers, warrantors, manufacturers, sellers, or others in
connection therewith, and together with all substitutes for any of the
foregoing.

          SECTION  3.  THE CREDIT FACILITY.
                       ------------------- 

               SECTION 3.1. BORROWINGS. Each Loan shall be in an amount not less
than $150,000, and in no event shall the sum of the aggregate Loans made exceed
the amount of the Lender's written commitment to the Borrower in effect from
time to time. Notwithstanding anything herein to the contrary, the Lender shall
be obligated to make the initial Loan and each other Loan only after the Lender,
in its sole discretion, determines that the applicable conditions for borrowing
contained in Sections 3.3 and 3.4 are satisfied. The timing and financial scope
of Lender's obligation to make Loans hereunder are limited as set forth in
commitment letters executed by Lender and Borrower, dated as of August 26, 1997
and June 24, 1998 and attached hereto as Exhibits C and C1 (the "Commitment
Letters").

               SECTION  3.2.  APPLICATION OF PROCEEDS.  The Borrower shall not
directly or indirectly use any proceeds of the Loans, or cause, assist, suffer,
or permit the use of any proceeds of the Loans, for any purpose other than for
the purchase, acquisition, installation, or upgrading of Equipment or the
reimbursement of the Borrower for its purchase, acquisition, installation, or
upgrading of Equipment.

               SECTION  3.3.  CONDITIONS TO INITIAL LOAN.

          (a) The obligation of the Lender to make the initial Loan is subject
to the Lender's receipt of the following, each dated the date of the initial
Loan or as of an earlier date acceptable to the Lender, in form and substance
satisfactory to the Lender and its counsel:

               (i)    completed requests for information (Form UCC-11) listing
          all effective Uniform Commercial Code financing statements naming the
          Borrower as debtor and all tax lien, judgment, and litigation searches
          for the Borrower as the Lender shall deem necessary or desirable;

               (ii)   Uniform Commercial Code financing statements (Form UCC-1)
          duly executed by the Borrower (naming the Lender as secured party and
          the Borrower as debtor and in form acceptable for filing in all
          jurisdictions that the Lender deems necessary or desirable to perfect
          the security interests granted to it hereunder) and, if applicable,
          termination statements or other releases duly filed in all
          jurisdictions that the Lender deems necessary or desirable to perfect
          and protect the priority of the security interests granted to it
          hereunder in the Equipment related to such initial Loan;

               (iii)  a Note duly executed by the Borrower evidencing the amount
          of such Loan;

               (iv)   a Collateral Access Agreement duly executed by the lessor
          or mortgagee, as the case may be, of each premises where the Equipment
          is located;

               (v)    certificates of insurance required under Section 5.4 of
          this Agreement together with loss payee endorsements for all such
          policies naming the Lender as lender loss payee and as an additional
          insured;

                                       3
<PAGE>
 
               (vi)   a copy of the resolutions of the Board of Directors of the
          Borrower (or a unanimous consent of directors in lieu thereof)
          authorizing the execution, delivery, and performance of this
          Agreement, the other Loan Documents, and the transactions contemplated
          hereby and thereby, attached to which is a certificate of the
          Secretary or an Assistant Secretary of the Borrower certifying (A)
          that the copy of the resolutions is true, complete, and accurate, that
          such resolutions have not been amended or modified since the date of
          such certification and are in full force and effect and (B) the
          incumbency, names, and true signatures of the officers of the Borrower
          authorized to sign the Loan Documents to which it is a party;

               (vii)  the opinion of counsel for the Borrower covering such
          matters incident to the transactions contemplated by this Agreement as
          the Lender may reasonably require; and

               (viii) such other agreements and instruments as the Lender deems
          necessary in its sole and absolute discretion in connection with the
          transactions contemplated hereby.

          (b)  There shall be no pending or, to the knowledge of the Borrower
after due inquiry (but without the search of any docket or court or agency
records), threatened litigation, proceeding, inquiry, or other action (i)
seeking an injunction or other restraining order, damages, or other relief with
respect to the transactions contemplated by this Agreement or the other Loan
Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender.

          (c)  The Borrower shall have paid all fees and expenses required to be
paid by it to the Lender as of such date.

          (d)  The security interests in the Equipment related to the initial
Loan granted in favor of the Lender under this Agreement shall have been duly
perfected and shall constitute first priority liens.

               SECTION  3.4.    CONDITIONS PRECEDENT TO EACH LOAN.  The
obligation of the Lender to make each Loan is subject to the satisfaction of the
following conditions precedent:

          (a)  the Lender shall have received the documents, agreements, and
instruments set forth in Section 3.3(a)(i) through (v) applicable to such Loan,
each in form and substance satisfactory to the Lender and its counsel and each
dated the date of such Loan or as of an earlier date acceptable to the Lender;

          (b)  the Lender shall have received a Schedule of the Equipment
related to such Loan, in form and substance satisfactory to the Lender and its
counsel, and the security interests in such Equipment related to such Loan
granted in favor of the Lender under this Agreement shall have been duly
perfected and shall constitute first priority liens;

          (c)  all representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct on and as of the date of
such Loan as if then made, other than representations and warranties that
expressly relate solely to an earlier date, in which case they shall have been
true and correct as of such earlier date;

          (d)  no Event of Default or event which with the giving of notice or
the passage of time, or both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making of the requested Loan
as of the date of such request; and

          (e)  the Borrower shall be deemed to have hereby reaffirmed and
ratified all security interests, liens, and other encumbrances heretofore
granted by the Borrower to the Lender.

                                       4
<PAGE>
 
          SECTION  4.  THE BORROWER'S REPRESENTATIONS AND WARRANTIES.
                       --------------------------------------------- 

               SECTION  4.1.    GOOD STANDING; QUALIFIED TO DO BUSINESS.  The
Borrower (a) is duly organized, validly existing, and in good standing under the
laws of the State of its organization, (b) has the power and authority to own
its properties and assets and to transact the businesses in which it is
presently, or proposes to be, engaged, and (c) is duly qualified and authorized
to do business and is in good standing in every jurisdiction in which the
failure to be so qualified could have a Material Adverse Effect on (i) the
Borrower, (ii) the Borrower's ability to perform its obligations under the Loan
Documents, or (iii) the rights of the Lender hereunder.

               SECTION  4.2.    DUE EXECUTION, ETC.  The execution, delivery,
and performance by the Borrower of each of the Loan Documents to which it is a
party are within the powers of the Borrower, do not contravene the
organizational documents, if any, of the Borrower, and do not (a) violate any
law or regulation, or any order or decree of any court or governmental
authority, (b) conflict with or result in a breach of, or constitute a default
under, any material indenture, mortgage, or deed of trust or any material lease,
agreement, or other instrument binding on the Borrower or any of its properties,
or (c) require the consent, authorization by, or approval of or notice to or
filing or registration with any governmental authority or other Person. This
Agreement is, and each of the other Loan Documents to which the Borrower is or
will be a party, when delivered hereunder or thereunder, will be, the legal,
valid, and binding obligation of the Borrower enforceable against the Borrower
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.

               SECTION  4.3.    SOLVENCY; NO LIENS.  The Borrower is Solvent and
will be Solvent upon the completion of all transactions contemplated to occur
hereunder (including, without limitation, the Loan to be made on the Effective
Date); the security interests granted herein constitute and shall at all times
constitute the first and only liens on the Collateral other than Permitted
Liens; and the Borrower is, or will be at the time additional Collateral is
acquired by it, the absolute owner of the Collateral with full right to pledge,
sell, consign, transfer, and create a security interest therein, free and clear
of any and all claims or liens in favor of any other Person other than Permitted
Liens.

               SECTION  4.4.    NO JUDGMENTS, LITIGATION.  No judgments are
outstanding against the Borrower nor is there now pending or, to the Borrower's
knowledge after due inquiry (but without the search of any docket or court or
agency records), threatened any litigation, contested claim, or governmental
proceeding by or against the Borrower except judgments and pending or threatened
litigation, contested claims, and governmental proceedings which would not, in
the aggregate, have a Material Adverse Effect on the Borrower.

               SECTION  4.5.    NO DEFAULTS.  The Borrower is not in default or
has not received a notice of default under any material contract, lease, or
commitment to which it is a party or by which it is bound. The Borrower knows of
no dispute regarding any contract, lease, or commitment which could have a
Material Adverse Effect on the Borrower.

               SECTION  4.6.    COLLATERAL LOCATIONS.  On the date hereof, each
item of the Collateral is located at the place of business specified in the
applicable Schedule.

               SECTION  4.7.    NO EVENTS OF DEFAULT.  No Event of Default has
occurred and is continuing nor has any event occurred which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.

               SECTION  4.8.    NO LIMITATION ON LENDER'S RIGHTS.  Except as
permitted herein, none of the Collateral is subject to contractual obligations
that may restrict or inhibit the Lender's rights or abilities to sell or dispose
of the Collateral or any part thereof after the occurrence of an Event of
Default.

               SECTION 4.9.     PERFECTION AND PRIORITY OF SECURITY INTEREST.  
This Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected first priority and exclusive security interest
in the Collateral, securing the payment of all the Obligations.

                                       5
<PAGE>
 
               SECTION  4.10.   MODEL AND SERIAL NUMBERS.  The Schedules set
forth the true and correct model number and serial number of each item of
Equipment that constitutes Collateral.

               SECTION  4.11.   ACCURACY AND COMPLETENESS OF INFORMATION.  All
data, reports, and information heretofore, contemporaneously, or hereafter
furnished by or on behalf of the Borrower in writing to the Lender or for
purposes of or in connection with this Agreement or any other Loan Document, or
any transaction contemplated hereby or thereby, are or will be true and accurate
in all material respects on the date as of which such data, reports, and
information are dated or certified and not incomplete by omitting to state any
material fact necessary to make such data, reports, and information not
misleading at such time. There are no facts now known to the Borrower that
relate specifically and uniquely to the Borrower (i.e., are not generally
applicable to Borrower's industry or the economy in general) which individually
or in the aggregate would reasonably be expected to have a Material Adverse
Effect and which have not been specified herein, in the Financial Statements, or
in any certificate, opinion, or other written statement previously furnished by
the Borrower to the Lender.

               SECTION  4.12.   PRICE OF EQUIPMENT.  The cost of each item of
Equipment does not exceed the fair and usual price for such type of equipment
purchased in like quantity and reflects all discounts, rebates and allowances
for the Equipment (including, without limitation, discounts for advertising,
prompt payment, testing, or other services) given to the Borrower by the
manufacturer, supplier, or any other person.

          SECTION  5.  COVENANTS OF THE BORROWER.
                       ------------------------- 

               SECTION  5.1.    EXISTENCE, ETC.  The Borrower shall: (a) retain
its existence and its current yearly accounting cycle, (b) maintain in full
force and effect all licenses, bonds, franchises, leases, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct of
its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any U.S.
federal, state, or local governmental authority, except for such laws and
regulations the violations of which would not, in the aggregate, have a Material
Adverse Effect on the Borrower.

               SECTION  5.2.    NOTICE TO THE LENDER.  As soon as possible, and
in any event within five days after the Borrower learns of the following, the
Borrower will give written notice to the Lender of (a) any proceeding instituted
or threatened to be instituted by or against the Borrower in any federal, state,
local, or foreign court or before any commission or other regulatory body
(federal, state, local, or foreign) involving a sum, together with the sum
involved in all other similar proceedings, in excess of $50,000 in the
aggregate, (b) any contract that is terminated or amended and which has had or
could reasonably be expected to have a Material Adverse Effect on the Borrower,
(c) the occurrence of any Material Adverse Change with respect to the Borrower,
and (d) the occurrence of any Event of Default or event or condition which, with
notice or lapse of time or both, would constitute an Event of Default, together
with a statement of the action which the Borrower has taken or proposes to take
with respect thereto.

               SECTION   5.3.   MAINTENANCE OF BOOKS AND RECORDS.  The Borrower
will maintain books and records pertaining to the Collateral in such detail,
form, and scope as the Lender shall require in its commercially reasonable
judgment. The Borrower agrees that the Lender or its agents may enter upon the
Borrower's premises at any time and from time to time during normal business
hours, and at any time upon the occurrence and continuance of an Event of
Default, for the purpose of inspecting the Collateral and any and all records
pertaining thereto.

               SECTION  5.4.    INSURANCE.  The Borrower will maintain insurance
on the Collateral under such policies of insurance, with such insurance
companies, in such amounts, and covering such risks as are at all times
satisfactory to the Lender. All such policies shall be made payable to the
Lender, in case of loss, under a standard non-contributory "lender" or "secured
party" clause and are to contain such other provisions as the Lender may
reasonably require to protect the Lender's interests in the Collateral and to
any payments to be made under such

                                       6
<PAGE>
 
policies. Certificates of insurance policies are to be delivered to the Lender,
premium prepaid, with the loss payable endorsement in the Lender's favor, and
shall provide for not less than thirty days' prior written notice to the Lender,
of any alteration or cancellation of coverage. If the Borrower fails to maintain
such insurance, upon reasonable notice to the Borrower and an opportunity for
Borrower to cure, the Lender may arrange for (at the Borrower's expense and
without any responsibility on the Lender's part for) obtaining the insurance.
Unless the Lender shall otherwise agree with the Borrower in writing, the Lender
shall have the sole right, after reasonable notice to the Borrower, in the name
of the Lender or the Borrower, to file claims under any insurance policies, to
receive and give acquittance for any payments that may be payable thereunder,
and to execute any endorsements, receipts, releases, assignments, reassignments,
or other documents that may be necessary to effect the collection, compromise,
or settlement of any claims under any such insurance policies.

               SECTION  5.5.    TAXES.  The Borrower will pay, when due, all
taxes, assessments, claims, and other charges ("Taxes") lawfully levied or
assessed against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by the
Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof, or if any lien shall be claimed therefor, then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may pay
such Taxes, and the amount thereof shall be included in the Obligations.

               SECTION  5.6.    BORROWER TO DEFEND COLLATERAL AGAINST CLAIMS;
FEES ON COLLATERAL.  The Borrower will defend the Collateral against all claims
and demands of all Persons at any time claiming the same or any interest
therein. The Borrower will not knowingly permit any notice creating or otherwise
relating to liens on the Collateral or any portion thereof to exist or be on
file in any public office other than Permitted Liens. The Borrower shall
promptly pay, when payable, all transportation, storage, and warehousing charges
and license fees, registration fees, assessments, charges, permit fees, and
taxes (municipal, state, and federal) which may now or hereafter be imposed upon
the ownership, leasing, renting, possession, sale, or use of the Collateral,
other than taxes on or measured by the Lender's income and fees, assessments,
charges, and taxes which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves are
maintained to the extent required by GAAP.

               SECTION   5.7.   NO CHANGE OF LOCATION, STRUCTURE, OR IDENTITY.  
The Borrower will not (a) change the location of its chief executive office or
establish any place of business other than those specified herein or (b) move or
permit the movement of any item of Collateral from the location specified in the
applicable Schedule, except that the Borrower may change its chief executive
office and keep Collateral at other locations within the United States provided
that the Borrower has delivered to the Lender (i) prior written notice thereof
and (ii) duly executed financing statements and other agreements and instruments
(all in form and substance satisfactory to the Lender) necessary or, in the
opinion of the Lender, desirable to perfect and maintain in favor of the Lender
a first priority security interest in the Collateral. Notwithstanding anything
to the contrary in the immediately preceding sentence, the Borrower may keep any
Collateral consisting of motor vehicles or rolling stock at any location in the
United States provided that the Lender's security interest in any such
Collateral is conspicuously marked on the certificate of title thereof and the
Borrower has complied with the provisions of Section 5.9.

               SECTION  5.8.    USE OF COLLATERAL; LICENSES; REPAIR.  The
Collateral shall be operated by competent, qualified personnel in connection
with the Borrower's business purposes, for the purpose for which the Collateral
was designed and in accordance with applicable operating instructions, laws, and
government regulations, and the Borrower shall use every reasonable precaution
to prevent loss or damage to the Collateral from fire and other hazards. The
Collateral shall not be used or operated for personal, family, or household
purposes. The Borrower shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the
Collateral. The Borrower shall keep all of the Equipment in a satisfactory state
of repair and satisfactory operating condition in accordance with industry
standards, and will make all repairs and replacements when and where necessary
and practical. The Borrower will not waste or destroy the Equipment or any part
thereof, and will not be negligent in the care or use thereof. The Equipment
shall not be annexed or affixed to or become part of any realty without the
Lender's prior written consent.

                                       7
<PAGE>
 
               SECTION  5.9.    FURTHER ASSURANCES.  The Borrower will, promptly
upon request by the Lender, execute and deliver or use its best efforts to
obtain any document reasonably required by the Lender (including, without
limitation, warehouseman or processor disclaimers, mortgagee waivers, landlord
disclaimers, or subordination agreements with respect to the Obligations and the
Collateral), give any notices, execute and file any financing statements,
mortgages, or other documents (all in form and substance satisfactory to the
Lender), mark any chattel paper, deliver any chattel paper or instruments to the
Lender, and take any other actions that are necessary or, in the reasonable
opinion of the Lender, desirable to perfect or continue the perfection and the
first priority of the Lender's security interest in the Collateral, to protect
the Collateral against the rights, claims, or interests of any Persons, or to
effect the purposes of this Agreement. The Borrower hereby authorizes the Lender
to file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without the signature of
the Borrower where permitted by law, provided that lender will use its best
efforts to deliver a copy of same to Borrower concurrently with the filing
thereof. A carbon, photographic, or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. To the extent
required under this Agreement, the Borrower will pay all costs reasonably
incurred in connection with any of the foregoing.

               SECTION  5.10.   NO DISPOSITION OF COLLATERAL.  The Borrower will
not in any way hypothecate or create or permit to exist any lien, security
interest, charge, or encumbrance on or other interest in any of the Collateral,
except for the lien and security interest granted hereby and Permitted Liens
which are junior to the lien and security interest of the Lender, and the
Borrower will not sell, transfer, assign, pledge, collaterally assign, exchange,
or otherwise dispose of any of the Collateral. In the event the Collateral, or
any part thereof, is sold, transferred, assigned, exchanged, or otherwise
disposed of in violation of these provisions, the security interest of the
Lender shall continue in such Collateral or part thereof notwithstanding such
sale, transfer, assignment, exchange, or other disposition, and the Borrower
will hold the proceeds thereof in a separate account for the benefit of the
Lender. Following such a sale, the Borrower will transfer such proceeds to the
Lender in kind.

               SECTION  5.11.   NO LIMITATION ON LENDER'S RIGHTS.  The Borrower
will not enter into any contractual obligations which may restrict or inhibit
the Lender's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof.

               SECTION  5.12.   PROTECTION OF COLLATERAL.  Upon notice to the
Borrower (provided that if an Event of Default has occurred and is continuing
the Lender need not give any notice), the Lender shall have the right at any
time to make any payments and do any other acts the Lender may deem necessary to
protect its security interests in the Collateral, including, without limitation,
the rights to satisfy, purchase, contest, or compromise any encumbrance, charge,
or lien which, in the reasonable judgment of the Lender, appears to be prior to
or superior to the security interests granted hereunder, and appear in, and
defend any action or proceeding purporting to affect its security interests in,
or the value of, any of the Collateral.  The Borrower hereby agrees to reimburse
the Lender for all payments made and reasonable expenses incurred under this
Agreement including fees, expenses, and disbursements of attorneys and
paralegals acting for the Lender, including any of the foregoing payments under,
or acts reasonably taken to protect its security interests in, any of the
Collateral, which amounts shall be secured under this Agreement, and agrees it
shall be bound by any payment made or act taken by the Lender hereunder absent
the Lender's gross negligence or willful misconduct.  The Lender shall have no
obligation to make any of the foregoing payments or perform any of the foregoing
acts.

               SECTION  5.13.   DELIVERY OF ITEMS.  The Borrower will (a)
promptly (but in no event later than one Business Day) after its receipt
thereof, deliver to the Lender any documents or certificates of title issued
with respect to any property included in the Collateral, and any promissory
notes, letters of credit or instruments related to or otherwise in connection
with any property included in the Collateral, which in any such case come into
the possession of the Borrower, or shall cause the issuer thereof to deliver any
of the same directly to the Lender, in each case with any necessary endorsements
in favor of the Lender and (b) deliver to the Lender as soon as available copies
of any and all press releases and other similar communications issued by the
Borrower.

               SECTION  5.14.  SOLVENCY.  The Borrower shall be and remain
Solvent at all times.

                                       8
<PAGE>
 
               SECTION  5.15.   FUNDAMENTAL CHANGES.  The Borrower shall not (a)
amend or modify its name, unless the Borrower delivers to the Lender thirty days
prior to any such proposed amendment or modification written notice of such
amendment or modification and within ten days before such amendment or
modification delivers executed Uniform Commercial Code financing statements (in
form and substance satisfactory to the Lender) or (b) merge or consolidate with
any other entity or make any material change in its capital structure, in each
case without the Lender's prior written consent which shall not be unreasonably
withheld or delayed.

               SECTION  5.16.   ADDITIONAL REQUIREMENTS.  The Borrower shall
take all such further actions and execute all such further documents and
instruments as the Lender may reasonably request.

          SECTION  6.  FINANCIAL STATEMENTS.  Until the payment and satisfaction
                       --------------------                                     
in full of all Obligations, the Borrower shall deliver to the Lender the
following financial information:

               SECTION  6.1.    ANNUAL FINANCIAL STATEMENTS.  As soon as
available, but not later than 120 days after the end of each fiscal year of the
Borrower and its consolidated subsidiaries, the consolidated balance sheet,
income statement, and statements of cash flows and shareholders equity for the
Borrower and its consolidated subsidiaries (the "Financial Statements") for such
year, reported on by independent certified public accountants without an adverse
qualification; and

               SECTION  6.2.    QUARTERLY FINANCIAL STATEMENTS.  As soon as
available, but not later than 60 days after the end of each of the first three
fiscal quarters in any fiscal year of the Borrower and its consolidated
subsidiaries, the Financial Statements for such fiscal quarter, together with a
certification duly executed by a responsible officer of the Borrower that such
Financial Statements have been prepared in accordance with GAAP and are fairly
stated in all material respects (subject to normal year-end audit adjustments).

          SECTION  7.  EVENTS OF DEFAULT.  The occurrence of any of the
                       -----------------                               
following events shall constitute an Event of Default hereunder:

               (a) the Borrower shall fail to pay within five days of when due
any amount required to be paid by the Borrower under or in connection with any
Note and this Agreement;

               (b) any representation or warranty made or deemed made by the
Borrower under or in connection with any Loan Document or any Financial
Statement shall prove to have been false or incorrect in any material respect
when made;

               (c) the Borrower shall fail to perform or observe (i) any of the
terms, covenants or agreements contained in Sections 5.4, 5.7, 5.10, 5.14, or
5.15 hereof or (ii) any other term, covenant, or agreement contained in any Loan
Document (other than the other Events of Default specified in this Section 7)
and such failure remains unremedied for the earlier of fifteen days from (A) the
date on which the Lender has given the Borrower written notice of such failure
and (B) the date on which the Borrower knew of such failure;

               (d) any provision of any Loan Document to which the Borrower is a
party shall for any reason cease to be valid and binding on the Borrower, or the
Borrower shall so state;

               (e) dissolution, liquidation, winding up, or cessation of the
Borrower's business, failure of the Borrower generally to pay its debts as they
mature, admission in writing by the Borrower of its inability generally to pay
its debts as they mature, or calling of a meeting of the Borrower's creditors
for purposes of compromising any of the Borrower's debts;

               (f) the commencement by or against the Borrower of any
bankruptcy, insolvency, arrangement, reorganization, receivership, or similar
proceedings under any federal or state law and, in the case of any such
involuntary proceeding, such proceeding remains undismissed or unstayed for
forty-five days following the commencement thereof, or any action by the
Borrower is taken authorizing any such proceedings;

                                       9
<PAGE>
 
               (g) an assignment for the benefit of creditors is made by the
Borrower, whether voluntary or involuntary, the appointment of a trustee,
custodian, receiver, or similar official for the Borrower or for any substantial
property of the Borrower, or any action by the Borrower authorizing any such
proceeding;

               (h) the Borrower shall default in (i) the payment of principal or
interest on any indebtedness in excess of $50,000 (other than the Obligations)
beyond the period of grace, if any, provided in the instrument or agreement
under which such indebtedness was created or otherwise by the other party
thereto; or (ii) the observance or performance of any other agreement or
condition relating to any such indebtedness or contained in any instrument or
agreement relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such indebtedness to cause, with the giving of
notice if required, such indebtedness to become due prior to its stated
maturity;

               (i) the Borrower suffers or sustains a Material Adverse Change;

               (j) any tax lien, other than a Permitted Lien, is filed of record
against the Borrower and is not bonded or discharged within five Business Days;

               (k) any judgment which has had or could reasonably be expected to
have a Material Adverse Effect on the Borrower and such judgment shall not be
stayed, vacated, bonded, or discharged within sixty days;

               (l) any material covenant, agreement, or obligation, as
determined in the sole discretion of the Lender, made by the Borrower and
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; the Borrower shall deny or disaffirm the Obligations under any of the
Loan Documents or any liens granted in connection therewith; or any liens
granted on any of the Collateral in favor of the Lender shall be determined to
be void, voidable, or invalid, or shall not be given the priority contemplated
by this Agreement; or

               
               (m) there is a change in more than 35% of the ownership of any
equity interests of the Borrower on the date hereof or more than 35% of such 
interests become subject to any contractual, judicial, or statutory lien, 
charge, security interest, or encumbrance.

          SECTION  8.  REMEDIES.  If any Event of Default shall have occurred
                       --------                                              
and be continuing:

               (a) The Lender may, without prejudice to any of its other rights
under any Loan Document or Applicable Law, declare all Obligations to be
immediately due and payable (except with respect to any Event of Default set
forth in Section 7(f) hereof, in which case all Obligations shall automatically
become immediately due and payable without necessity of any declaration) without
presentment, representation, demand of payment, or protest, which are hereby
expressly waived.

               (b) The Lender may take possession of the Collateral and, for
that purpose may enter, with the aid and assistance of any person or persons,
any premises where the Collateral or any part hereof is, or may be placed, and
remove the same.

               (c) The obligation of the Lender, if any, to make additional
Loans or financial accommodations of any kind to the Borrower shall immediately
terminate.

               (d) The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein (or in any Loan
Document) or otherwise available to it, all the rights and remedies of a secured
party under the applicable Uniform Commercial Code (the "Code") whether or not
the Code applies to the affected Collateral and also may (i) require the
Borrower to, and the Borrower hereby agrees that it will at its expense and upon
request of the Lender forthwith, assemble all or part of the Collateral as
directed by the Lender

                                       10
<PAGE>
 
and make it available to the Lender at a place to be designated by the Lender
that is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Lender's offices or elsewhere, for
cash, on credit, or for future delivery, and upon such other terms as the Lender
may deem commercially reasonable. The Borrower agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to the Borrower of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Lender shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Lender may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

               (e) All cash proceeds received by the Lender in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Lender, be held by the Lender as
collateral for, or then or at any time thereafter applied in whole or in part by
the Lender against, all or any part of the Obligations in such order as the
Lender shall elect. Any surplus of such cash or cash proceeds held by the Lender
and remaining after the full and final payment of all the Obligations shall be
paid over to the Borrower or to such other Person to which the Lender may be
required under applicable law, or directed by a court of competent jurisdiction,
to make payment of such surplus.

          SECTION  9.   MISCELLANEOUS PROVISIONS.
                        ------------------------ 

               SECTION  9.1.    NOTICES.  Except as otherwise provided herein,
all notices, approvals, consents, correspondence, or other communications
required or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to the Lender, then to Transamerica Technology Finance
Division, 76 Batterson Park Road, Farmington, Connecticut 06032, Attention:
Assistant Vice President, Lease Administration, with a copy to the Lender at
Riverway II, West Office Tower, 9399 West Higgins Road, Rosemont, Illinois
60018, Attention: Legal Department, and if to the Borrower, then to Exodus
Communications, Inc., 2650 San Tomas Expressway, Santa Clara, CA 95051,
Attention: Chief Financial Officer or such other address as shall be designated
by the Borrower or the Lender to the other party in accordance herewith. All
such notices and correspondence shall be effective when received.

               SECTION   9.2.   HEADINGS.  The headings in this Agreement are
for purposes of reference only and shall not affect the meaning or construction
of any provision of this Agreement.

               SECTION  9.3.    ASSIGNMENTS.  The Borrower shall not have the
right to assign any Note or this Agreement or any interest therein unless the
Lender shall have given the Borrower prior written consent and the Borrower and
its assignee shall have delivered assignment documentation in form and substance
satisfactory to the Lender in its sole discretion. The Lender may assign its
rights and delegate its obligations under any Note or this Agreement.

               SECTION  9.4.    AMENDMENTS, WAIVERS, AND CONSENTS.  Any
amendment or waiver of any provision of this Agreement and any consent to any
departure by the Borrower from any provision of this Agreement shall be
effective only by a writing signed by the Lender and shall bind and benefit the
Borrower and the Lender and their respective successors and assigns, subject, in
the case of the Borrower, to the first sentence of Section 9.3.

               SECTION  9.5.    INTERPRETATION OF AGREEMENT.  Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in a Note shall have the meaning set forth in the
applicable Code, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with any Note, or any term or
provision thereof, and is not dealt with herein with more specificity, this
Agreement shall control with respect to the subject matter of such term or
provision. Acceptance of or acquiescence in a course of performance rendered
under this Agreement shall not be relevant in determining the meaning of this
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.

                                       11
<PAGE>
 
               SECTION  9.6.    CONTINUING SECURITY INTEREST.  This Agreement
shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect until the indefeasible payment in full of the
Obligations, (ii) be binding upon the Borrower and its successors and assigns
and (iii) inure, together with the rights and remedies of the Lender hereunder,
to the benefit of the Lender and its successors, transferees, and assigns.

               SECTION  9.7.    REINSTATEMENT.  To the extent permitted by law,
this Agreement and the rights and powers granted to the Lender hereunder and
under the Loan Documents shall continue to be effective or be reinstated if at
any time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.

               SECTION  9.8.    SURVIVAL OF PROVISIONS.  All representations,
warranties, and covenants of the Borrower contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Borrower of the Obligations secured
hereby.

               SECTION  9.9.    INDEMNIFICATION.  The Borrower agrees to
indemnify and hold harmless the Lender and its directors, officers, agents,
employees, and counsel from and against any and all reasonable costs, expenses,
claims, or liability incurred by the Lender or such Person hereunder and under
any other Loan Document or in connection herewith or therewith, unless such
claim or liability shall be due to willful misconduct or gross negligence on the
part of the Lender or such Person.

               SECTION  9.10.   COUNTERPARTS; TELECOPIED SIGNATURES.  This
Agreement may be executed in counterparts, each of which when so executed and
delivered shall be an original, but both of which shall together constitute one
and the same instrument. This Agreement and each of the other Loan Documents and
any notices given in connection herewith or therewith may be executed and
delivered by telecopier or other facsimile transmission all with the same force
and effect as if the same was a fully executed and delivered original manual
counterpart.

               SECTION  9.11.   SEVERABILITY.  In case any provision in or
obligation under this Agreement or any Note or any other Loan Document shall be
invalid, illegal, or unenforceable in any jurisdiction, the validity, legality,
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

               SECTION  9.12.   DELAYS; PARTIAL EXERCISE OF REMEDIES.  No delay
or omission of the Lender to exercise any right or remedy hereunder, whether
before or after the happening of any Event of Default, shall impair any such
right or shall operate as a waiver thereof or as a waiver of any such Event of
Default. No single or partial exercise by the Lender of any right or remedy
shall preclude any other or further exercise thereof, or preclude any other
right or remedy.

               SECTION  9.13.   ENTIRE AGREEMENT.  The Borrower and the Lender
agree that this Agreement, the Schedule hereto, and the Commitment Letters are
the complete and exclusive statement and agreement between the parties with
respect to the subject matter hereof, superseding all proposals and prior
agreements, oral or written, and all other communications between the parties
with respect to the subject matter hereof. Should there exist any inconsistency
between the terms of the Commitment Letters and this Agreement, the terms of
this Agreement shall prevail.

               SECTION  9.14.   SETOFF.  In addition to and not in limitation of
all rights of offset that the Lender may have under Applicable Law, and whether
or not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the payment
of the Obligations of the Borrower all deposits and other obligations then or
thereafter owing by the Lender to or for 

                                       12
<PAGE>
 
the credit or the account of the Borrower.

               SECTION  9.15.   WAIVER OF JURY TRIAL.   THE BORROWER AND THE
LENDER IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

               SECTION  9.16.   GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.

               SECTION  9.17.   VENUE; SERVICE OF PROCESS.  ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN COOK COUNTY, OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS.  THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, (a) ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT TO
INTERPOSE ANY NONCOMPULSORY SETOFF, COUNTERCLAIM, OR CROSS-CLAIM.  THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR IT SPECIFIED IN SECTION 9.1 HEREOF.  NOTHING HEREIN SHALL AFFECT THE RIGHT
OF EITHER PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE OTHER PARTY IN ANY
OTHER JURISDICTION, SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH
RESPECT TO RIGHTS AND REMEDIES.

          IN WITNESS WHEREOF, the undersigned Borrower has caused this Agreement
to be duly executed and delivered by its proper and duly authorized officer as
of the date first set forth above.

                              EXODUS COMMUNICATIONS, INC.


                              BY: /s/  Richard S. Stoltz
                                 _______________________________________
                                NAME:  Richard S. Stoltz
                                TITLE: COO and CFO
                              FEDERAL TAX ID:


ACCEPTED AS OF THE
5th DAY OF MAY, 1998


TRANSAMERICA BUSINESS CREDIT CORPORATION



BY: /s/ Meg Lengson
   ____________________________________________
 NAME:  Meg Lengson 
 TITLE: AVP

FORM16

                                       13