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EXHIBIT 10.18
INTERNAP NETWORK SERVICES, INC.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made and entered into
as of October 1, 1997, by and among XXXXXXX X. XXXXXXXX, XXXX X. XXXXXXX,
XXXXXXXXXXX X. XXXXXXX, XXXXX XXXXXXXX, XXXXX XXXXX, XXX XXXXXXXXXXX, XXX XXXX
and XXXXXXXX XXXXXX (collectively, the "Founders"), XXXXXX X. XXXXXX, XX.
("Xxxxxx") and InterNAP CORPORATION, a Washington corporation (the "Company").
Xxxxxx and the Founders are sometimes referred to herein, collectively, as
"Shareholders" or, individually as "Shareholder."
RECITALS
A. On its formation, the Company issued 3,333,333 shares of its common
stock ("Common Stock") to the Founders and 6,666,667 shares of its Series A
Preferred Stock ("Series A Preferred Stock") to Xxxxxx in exchange for the
assignment by the Founders and Xxxxxx of all of their ownership interests in
InterNAP Network Services, L.L.C. (the "LLC").
B. In conjunction with the dissolution of the LLC, the Shareholders
desire to enter into an agreement pertaining to the Common Stock, the Series A
Preferred Stock and certain other matters.
AGREEMENT
NOW, THEREFORE, in consideration of the above, the mutual promises and
covenants contained herein, and other good and valuable consideration, the
parties hereto agree as follows:
1. Restriction on Transfer of Shares. Each Shareholder acknowledges
and agrees that the Common Stock or Series A Preferred Stock owned by such
Shareholder is subject to restrictions on transfer and a right of first refusal
in favor of the Company and the other Shareholders, as set forth in the Bylaws
of the Company.
2. Options on Founders' Shares.
(a) In the event that a Founder resigns from employment by the
Company or is terminated by the Company for cause (the "Departing Founder")
before May 1, 1999 (the "Vesting Date"), then the other Founders (the "Remaining
Founders") shall have the option to purchase, and the Departing Founder shall be
obligated to sell, the Unvested Shares of the Departing Founder at a price of
$0.0006 per share. For purposes of this Agreement, a termination of employment
by reason of (i) the breach by a Founder of such Founder's Employee
Confidentiality, Nonraiding and Noncompetition Agreement, (ii) the malfeasance
of willful misconduct of a Founder, or (iii) the commission by a Founder of a
crime involving moral turpitude, shall be deemed a termination "for cause." The
foregoing option may be exercised by the Remaining Founders by written notice to
the Departing Founder given within thirty (30) days of the termination of the
Departing Founder's employment. If there is more than one Remaining Founder who
desires to purchase such Unvested
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Shares, the Remaining Founders may divide the Unvested Shares in any manner to
which they all agree. In the absence of unanimous agreement, the Unvested
Shares shall be divided among the Remaining Founders in proportion to their
relative shareholdings, as set forth on Exhibit A attached and made a part
hereof.
(b) For purposes of subsection (a) above, the shares of Common
Stock issued to a Founder on the formation of the Company shall be deemed
"Unvested Shares" on the termination of such Founder's employment to the extent
such shares are not fully vested as herein provided. As of October 1, 1997,
47.09% of the shares of Common Stock owned by each Founder shall be deemed
fully vested. An additional 2.77% of such shares shall become fully vested on
the last day of each calendar month commencing October 31, 1997 and continuing
until the Vesting Date, at which time all such shares shall be deemed fully
vested.
(c) The provisions of this Section 2 shall only apply to Common
Stock currently owned by a Founder. Any additional shares of capital stock
acquired hereafter by any Founder, including shares purchased pursuant to this
Section, shall be free from the application of this Section.
3. Options on Xxxxxx'x Shares. Xxxxxx hereby grants to each Founder the
option to purchase his or her Pro Rata Share of 5,000,000 of the 6,666,667
shares of Series B Preferred Stock (or the Common Stock into which such shares
have been converted, appropriately adjusted for stock splits, recapitalizations,
and the like) owned by Xxxxxx at the date hereof at a price of $1.26 per share;
provided that such option shall terminate as to any Founder on the earlier to
occur of: (a) the voluntary resignation of such Founder from employment by the
Company; (b) the termination of employment of such Founder by the Company for
cause; (c) the date 90 days following the termination of such Founder's
employment for any reason other than those specified in (a) and (b) above,
including death, disability or termination by the Company without cause; and (d)
April 30, 2001. For purposes of this Section, a Founder's "Pro Rata Share" shall
be equal to the product obtained by multiplying 5,000,000 by a fraction, the
numerator of which is the number of shares of Common Stock owned by such Founder
on the date hereof, and the denominator of which is total number of shares of
Common Stock owned on the date hereof by all Founders who are then eligible to
purchase pursuant hereto. The full purchase price for each shares shall be
tendered to Xxxxxx upon exercise of the Option, unless the parties otherwise
agree.
4. Notices. Any notice, demand, or communication required or permitted
to be given under this Agreement shall be delivered personally to the party to
whom directed, or mailed by registered or certified mail, postage and charges
prepaid, to the addresses set forth below:
If to the Company: InterNAP Corp.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxx: Xxxxxx X. Xxxxxx, Xx.
00000 XX 000xx Xxxxxx
Xxxxxxxxx, XX 00000
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If to Founders: Xxxxxxx X. Xxxxxxxx
0000 - 000xx Xxxxx XX
Xxxxxxx, XX 00000
Xxxx X. XxXxxxx
00000 XX 00xx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxxxxxxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxx #000
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx
00000 XX 00xx Xxxxx
Xxxxxxxx, XX 00000
Ophir Ronen
0000 Xxxxx Xxx. XX, #0
Xxxxxxx, XX 00000
Xxx Xxxxxxxxxxx
000 Xxxxxx Xxxxxx, Xxx. X-000
Xxxxxxx, XX 00000
Xxx Xxxx
0000 - 00xx Xxx. X.
Xxxxxxx, XX 00000
Xxxxxxxx Xxxxxx
0000 - 000xx Xxxxxx XX
Xxxxxxxx, XX 00000
Except as otherwise provided herein, any such notice shall be deemed to be
given when personally delivered or, if mailed as provided herein, three (3)
business days after the date of mailing. A party may change its or his address
for the purposes of notices hereunder by giving notice to the others specifying
such changed address in the manner specified in this paragraph 4.
5. Legend.
(a) Concurrently with the execution of this Agreement, there shall be
imprinted or otherwise placed, on certificates representing the shares of Common
Stock and Series A Preferred Stock owned by the Shareholders (the "Shares") the
following restrictive legend (the "Legend"):
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"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A SHAREHOLDERS AGREEMENT WHICH PLACES CERTAIN
RESTRICTIONS ON THE SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING
ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL
BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH
SHAREHOLDERS AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS.
(b) The Company agrees that, during the term of this Agreement, it
will not remove, and will not permit to be removed (upon registration of
transfer, reissuance of otherwise), the Legend from any such certificate and
will place or cause to be placed the Legend on any new certificate issued to
represent Shares theretofore represented by a certificate carrying the Legend.
6. Successors. The provisions of this Agreement shall be binding upon the
successors in interest to any of the Shareholders. The Company shall not permit
the transfer of any of the Shares on its books or issue a new certificate
representing any of the Shares unless and until the person to whom such security
is to be transferred shall have executed a written agreement, substantially in
the form of this Agreement, pursuant to which such person becomes a party to
this Agreement and agrees to be bound by all provisions hereof as if such person
were a Shareholder.
7. Specific Performance. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement and agree that the terms
of this Agreement shall be specifically enforceable. If any party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
8. Governing Law. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Washington as such laws apply to agreements among Washington residents made and
to be performed entirely within the State of Washington.
9. Amendment. This Amendment may be amended only by an instrument in
writing signed by the parties hereto.
10. Severability. If any provision of this Agreement is held to be
invalid or unenforceable, the validity and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
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11. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors,
assigns, administrators, executors and other legal representatives.
12. Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be deemed an original but all of which together
shall constitute one and the same agreement.
13. Waiver. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
14. Attorneys' Fees. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party shall be
entitled to all costs and expenses of maintaining such suit or action,
including reasonable attorneys' fees.
15. Entire Agreement. This Agreement and the Exhibit hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
EXECUTED by the undersigned, effective as of the date first above written.
THE COMPANY: INTERNAP CORP.
By /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
President
XXXXXX: /s/ XXXXXX X. XXXXXX, XX.
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XXXXXX X. XXXXXX, XX.
FOUNDERS: /s/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
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/s/ XXXX X. XXXXXXX
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XXXX X. XXXXXXX
/s/ XXXXXXXXXXX X. XXXXXXX
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XXXXXXXXXXX X. XXXXXXX
/s/ XXXXX XXXXXXXX
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XXXXX XXXXXXXX
/s/ OPHIR RONEN
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OPHIR RONEN
/s/ XXX XXXXXXXXXXX
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XXX XXXXXXXXXXX
/s/ XXX XXXX
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XXX XXXX
/s/ XXXXXXXX XXXXXX
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XXXXXXXX XXXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ XXXXXX XXXXXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ X. XXXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ XXXXXXX X. XXXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ XXXXX XXXXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ IOLAMTHE XXXXXX XXXXX
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SPOUSAL CONSENT
I AM THE SPOUSE OF AN INDIVIDUAL SIGNING THIS AGREEMENT. I HAVE BEEN GIVEN
THE OPPORTUNITY TO READ THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY CONCERNING
ITS CONTENTS AND IMPORT, AND TO ASK QUESTIONS OF ANY PERSONS WITHOUT RESTRICTION
CONCERNING ANY MATTERS CONTAINED HEREIN WHICH I DO NOT UNDERSTAND; AND I HAVE
EITHER TAKEN SUCH ACTIONS OR HEREBY WAIVE MY RIGHT TO DO SO. I UNDERSTAND THAT
BY SIGNING THIS CONSENT OF SPOUSE MY RIGHTS AND INTERESTS MAY BE AFFECTED. I
AGREE TO BE FULLY BOUND BY ALL THE TERMS OF THIS AGREEMENT.
/s/ XXXXXXXXX X. XXXXXXXX
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