EXHIBIT 10.22
TECHNOLOGY GROUP
FINOVA FINANCIAL INNOVATORS
FINOVA TECHNOLOGY FINANCE, INC.
a subsidiary of
FINOVA CAPITAL CORPORATION
00 XXXXXXXXX XXXXX
XXXXXXXXXX, XX 00000-0000
TEL 000 000 0000
000 000 0000
FAX 000 000 0000
December 17, 1997
Xx. Xxxxxxx Xxxxxx
Chief Financial Officer
Exodus Communications, Inc.
0000 Xxx Xxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Dear Xxxxxxx:
FINOVA Technology Finance, Inc. (the "Lessor") is pleased to offer to lease the
Equipment described below to Exodus Communications, Inc. (the "Lessee").
The outline of this Commitment is as follows:
Lessee: Exodus Communications, Inc.
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Lessor: FINOVA Technology Finance, Inc.
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Equipment: The Equipment to be financed shall include not less
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than 60% Hard Assets (including, but not limited to:
computers, workstations, generators, shelving, routers,
office furniture and equipment) and not more than 40%
Soft Costs (including, but not limited to: software,
cabling, construction building, and leasehold
improvements). Prior to delivery, the Lessee shall
provide the Lessor with the detail of the Equipment to
include the manufacturer, model and cost of the
Equipment to include the manufacturer, model and cost
of the Equipment. All Equipment shall be subject to
review by the Lessor for its acceptability to the
Lessor for this lease and shall have been acquired
since June 30, 1997.
Equipment Cost: Not to exceed $4,000,000. At Lease Term Commencement,
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the Lessor shall hold back 10% of the Equipment Cost to
be funded. At the time the Lessee completes its Initial
Public Offering of common stock, with net proceeds to
the Lessee of at least $30 million, the amount held
back from funding shall be funded to the Lessee.
Equipment Location: Santa Clara, CA and Jersey City, NJ.
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Lease Term
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Commencement: Upon delivery of the Equipment or upon each completion
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of deliveries of items of Equipment with aggregate cost
of not less than $500,000, but no later than March 31,
1998.
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Term: From each Lease Term Commencement until forty-two (42)
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months from the 30th day of the month following or
coincident with that Lease Term Commencement.
Rent: Monthly Rent equal to 2.8672% of Equipment Cost shall
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be payable monthly in advance. The first month's rent
shall be payable upon signing the lease.
Adjustment to
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Rental Payments: The Monthly Rent Payments as of the date of each Lease
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Term Commencement shall be increased or decreased
proportionally to the change in highest yields on four-
year U.S. Treasury Securities from the week ending
November 143, 1997 ("Index Yield") to the week
preceding the date of each Lease Term Commencement, as
published in The Wall Street Journal. The Index Yield
for this commitment shall be 5.77%. As of the date of
each Lease Term Commencement, the Monthly Rent Payments
shall be fixed for the term.
Interim Rent: Interim Rent shall accrue from each Lease Term
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Commencement until the 29th day of the month (27th day
of the month in the case of February unless the Lease
Term Commencement is on the 30th or 31st day of a month
(28th day of the month in the case of February).
Interim Rent shall be at the daily equivalent of the
currently adjusted Monthly Payment.
Net Lease: The lease shall be a net lease containing the usual
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provisions in the Lessor's lease agreements and such
other or different provisions that are agreed to be the
parties. The Lessee shall be responsible for
maintenance, insurance, taxes, and all other costs and
expenses.
Taxes: Sales or use taxes shall be added to the Equipment
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Cost or collected on the gross rentals, as appropriate.
Insurance: Prior to any delivery of Equipment, the Lessee shall
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furnish confirmation of insurance acceptable to the
Lessor covering the Equipment including against all
risks of loss damage with the Lessor as the loss payee
and for comprehensive public liability and property
damage with the Lessor as an additional insured.
Conditions to Closing: Conditions precedent to every Lease Term Commencement
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shall include that no payment is then past due to the
Lessor or any assign of the Lessor from the Lessee,
that the Lessee is in compliance with the provisions of
this Commitment and the lease, that information
requested by the Lessor and all documentation then
required by the Lessor's counsel has been received by
the Lessor
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including resolutions of the Board of Directors of the
Lessee authorizing the transactions contemplated by
this Commitment and an opinion of counsel for the
Lessee satisfactory to counsel for the Lessor is not in
default under any material contract to which it is a
party or by which it or its property is bound, and that
there has not been any material adverse change or
threatened material adverse change in the financial or
other condition, business, operations, properties,
assets or prospects of the Lessee since October 31,
1997 or from the written information that has been
supplied to the Lessor prior to the date of this
Commitment by the Lessee.
The Lessor shall not be responsible for any failure of
suppliers or manufacturers of the Equipment or their
distributors to perform their obligations to the Lessor
or the Lessee. The Lessee shall provide monthly
financial statements and status reports during the
commitment period.
Purchase Agreement: The Lessee shall purchase all (but not less than all)
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the Equipment at the expiration of the term of the
lease for ten percent (10.)%) of the Equipment Cost,
plus applicable sales and other taxes.
Additional Covenants: There shall be no actual or threatened conflict with,
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or violation of, any regulatory statute, standard or
rule relating to the Lessee, its present or future
operations, or the Equipment.
All information supplied by the Lessee shall be correct
and shall not omit any statement necessary to make the
information supplied not be misleading. There shall be
no material breach of the representations and
warranties of the Lessee in the lease. The
representations shall include that the Equipment Cost
of each item of the Equipment does not exceed the fair
and usual price for like quantity purchases of such
item and reflects all discounts, rebates and allowances
for the Equipment given to Lessee, any affiliate of
Lessee by the manufacturer, supplier or anyone else
including, without limitation, discounts for
advertising, prompt payment, testing or other services.
Lessee shall provide confirmation that the facilities
lease at each of the locations at which the equipment
is located, has remaining term of at lease 125% of the
term contemplated herein.
Fees and Expenses: The Lessee and the Lessor shall be responsible for
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their own respective fees and expenses in connection
with the transaction.
Commitment Fee: Simultaneously with the acceptance of the Commitment
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by the Lessee, a nonrefundable Commitment Fee of
$40,000 shall be then
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due to the Lessor. The Commitment Fee shall be applied
on a pro-rata basis to the second month's Rent Payment
due under the lease. The Application Fee of $10,000
previously paid by the Lessee to Xxxxx Xxxxxxxx &
Company shall be applied to the Commitment Fee.
Commitment Expiration: This commitment shall expire on December 23, 1997
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unless prior thereto either extended in writing by the
Lessor or accepted as provided below by the Lessee.
Survival: This Commitment Letter shall survive closing. However,
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if there is any conflict between the terms and
conditions of the Master Lease Agreement (or Lease
Schedules) and those of this Commitment Letter, the
Master Lease Agreement (Lease Schedules) shall control.
Should you have any questions, please call me. If you wish to accept this
commitment, please do so indicate by signing and returning the enclosed
duplicate copy of this letter together with your check for $30,000 to me by
December 23, 1997.
Very truly yours,
Xxxxxx X. Xxxxxxxx
Vice President, Credit
Accepted this 23rd day of December, 1997
EXODUS COMMUNICATIONS, INC.
By: /s/ K. B. Xxxxxxxxxxxxx
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Typed or Printed Name: K. B. Xxxxxxxxxxxxx
Title: President
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