INDEMNITY AGREEMENT
Exhibit
10.1
INDEMNITY AGREEMENT
This INDEMNITY
AGREEMENT (this
“Agreement”), is made and executed as of _______________,
2009, by and between INTERNAP NETWORK SERVICES
CORPORATION, a Delaware corporation (the “Company”), and ________________, an individual
resident of the State of __________________ (“Indemnitee”).
WHEREAS, it is essential to the Company that
it attract and retain as directors and officers the most capable persons
available;
WHEREAS, the Company is aware that, to
induce highly competent persons to serve the Company as directors, officers or
in other capacities, the
Company must provide such persons with adequate protection through directors and officers liability
insurance, advancement of expenses and
indemnification against
risks of claims and actions against them, and against damage to their
professional and/or
personal reputations resulting from allegations, claims, actions and
investigations arising out
of or relating
to their service to and
activities on behalf of the Company;
WHEREAS, the Company’s Board of Directors has determined that
it is in the best interests
of the Company and its
stockholders that the
Company act to assure such persons that there will be increased certainty of
such protection in the future;
WHEREAS, this Agreement is a supplement
to and in furtherance of the provisions of the Company’s Certificate of Incorporation (the
“Certificate”) and Bylaws (“Bylaws”), in each case as amended and in effect
on the date hereof, and resolutions adopted pursuant thereto, and this Agreement shall
not be deemed to substitute therefor, nor to diminish or abrogate any rights of
such persons thereunder;
WHEREAS, it is reasonable, prudent and
necessary for the Company to contractually obligate itself to indemnify
and advance the expenses of
such persons to the fullest
extent permitted by applicable law and to guarantee such persons would
realize the benefit of any subsequent changes in applicable law relating to
indemnification or advancement of expenses so that they will continue to provide services to
the Company free from undue concern that they will not be so
indemnified, thereby
ensuring that the decisions of such persons for or on behalf of the Company will
be independent, objective and in the best interests of the Company’s stockholders;
WHEREAS, it is reasonable, prudent and
necessary for the Company to provide such persons with the specific contractual
assurance that the exculpation from personal liability for directors, the right
to directors and officers
liability insurance and the rights to indemnification and advancement of
expenses provided to them remain available regardless of, among other things,
any amendment to or revocation of the indemnification or advancement of expenses
provisions in the Certificate or the Bylaws or any change in
composition or philosophy of the Company’s Board of Directors such as might occur
following an acquisition or Change of Control (defined below) of the Company;
and
WHEREAS, Indemnitee is willing to serve,
continue to serve, and to
take on additional service for or on behalf of the Company on the condition that
he or she be so indemnified.
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NOW, THEREFORE, in consideration of the
premises and the mutual promises and covenants contained herein, and for other
good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Indemnitee do hereby agree as follows:
1. Definitions. For purposes of this Agreement and if
not otherwise defined herein, the following terms shall have the meanings set forth
below:
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(a)
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“Board” shall mean the Board of Directors
of the Company.
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(b)
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“Change
of
Control” shall mean any of the following
occurrences:
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(i) Any “person,” as such term is used in Sections 13(a)(9) and 13(d) of the Securities Exchange Act of
1934 (“Exchange
Act”), becomes a “beneficial owner,” as such term is used in Rule 13d-3
promulgated under the Exchange Act, of 30% or more of the voting stock of the
Company;
(ii) The majority of the Board consists of individuals other than “incumbent” directors, which term means the members
of the Board on the date hereof; provided that any
person becoming a director subsequent to such date whose election or nomination
for election was supported by two-thirds of the directors who then comprised the incumbent
directors will be considered to be an incumbent director;
(iii) The Company adopts any plan of liquidation providing
for the distribution of all or substantially all of its
assets;
(iv) All or substantially all of the assets
or business of the Company is disposed of pursuant to a merger, consolidation or
other transaction (unless the stockholders of the Company immediately prior to
such merger, consolidation or other transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the voting stock of the Company,
all of the voting stock or other ownership interests of the entity or entities,
if any, that succeed to the business of the Company); or
(v) The Company combines with another
company and is the surviving corporation but, immediately after the combination,
the stockholders of the Company immediately prior to the combination hold,
directly or indirectly, 50% or less of the voting stock of the combined company (there being excluded from
the number of shares held by such stockholders, but not from the voting stock of
the combined company, any shares received by affiliates of such other company in
exchange for stock of such other company).
For purposes of the Change of Control
definition, the “Company” will include any entity that succeeds
to all or substantially all, of the business of the Company and “voting stock” will mean securities of any class or
classes having general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation.
(c) “DGCL” shall mean the Delaware General
Corporation Laws, as amended from time to time, and any successor law or
laws.
(d) “Disinterested
Director” shall mean a director of the Company who neither is
or was a party to the Proceeding in respect of which indemnification is being
sought by Indemnitee.
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(e) “Expenses” shall include all attorneys’ fees, retainers, court costs,
transcript costs, accounting and expert fees, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses incurred in
connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or
preparing to be a witness in, or otherwise participating in, any Proceeding, and
shall include all such items incurred in enforcing or pursuing any rights under
this Agreement.
(f) “Independent
Counsel” shall mean a law firm or member of a law firm that, as of
a particular date, neither is presently representing, nor in the five years
preceding such date has been retained to represent, (i) the Company or
Indemnitee in any matter material to either such party or (ii) any
other party to the Proceeding giving rise
to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under
the applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s right to indemnification
under this
Agreement.
(g) “Proceeding” shall mean any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative or
investigative (formal or informal) nature, including any appeal therefrom,
whether by, in or involving a public official, law enforcement organization,
public or government-sponsored board or commission, self-regulatory body, court or an
administrative, other governmental or private entity or body, and as to which
Indemnitee was, is or will be involved as a party, potential party, non-party
witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by him or her or any action on his or her or her part, or any inaction on
Indemnitee’s part, while acting as director or officer of
the Company, or by reason of the fact that he or she is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
limited liability company, partnership, joint venture, trust or other
enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is
incurred for which indemnification, reimbursement, or advancement of Expenses
can be provided under this Agreement.
2. Service
by Indemnitee. Indemnitee agrees to serve
and/or continue to serve as a director, officer or employee of the Company, as
applicable, and/or, at the request of the Company, as a director, officer, agent
or fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. Indemnitee may at any
time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue the employment, directorship or other service of Indemnitee in such
position. Nothing in this Agreement shall confer upon Indemnitee the
right to continue in the employ of, or as an officer or director of, the Company
or affect the right of the Company to terminate Indemnitee’s employment at any time in the sole discretion
of the Company, with or without cause, subject to any contractual rights of
Indemnitee created or existing under any written employment contract between the
Company and Indemnitee. The foregoing notwithstanding,
this Agreement shall continue in force after
Indemnitee has ceased to serve as director, officer or employee of the Company,
as applicable.
3. Indemnification. Subject to Section 9,
the Company
shall hold harmless and
indemnify, and advance
Expenses to, Indemnitee as
provided in this Agreement and to the fullest extent not prohibited by the DGCL or other applicable
as the same now exists or
may hereafter be amended (but only to the extent any such amendment permits the
Company to provide broader indemnification rights than the DGCL permitted the
Company to provide prior to such amendment). Without diminishing the scope of the
indemnification provided by this Section 3, the rights of indemnification
of Indemnitee provided hereunder shall include, but shall not be limited to, those rights
hereinafter set forth, except that no indemnification shall be paid to
Indemnitee:
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(a) on account of any Proceeding in which
judgment is rendered against Indemnitee for disgorgement of profits made from
the purchase or sale by Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Exchange Act, or similar
provisions of any federal, state or local statutory law; provided,
however, that the Company
may advance Expenses in accordance with Section 11 of this Agreement in connection with
Indemnitee’s defense of a claim under Section 16(b)
of the Exchange Act, which advances shall be repaid to
the Company if it is ultimately determined that Indemnitee is not entitled to
indemnification of such Expenses.
(b) on account of conduct of Indemnitee
which is finally adjudged by a court of competent jurisdiction to have been
knowingly fraudulent or to constitute willful misconduct;
(c) in any circumstance where such
indemnification is expressly prohibited by applicable law, including if Indemnitee’s conduct is determined to have been in
bad faith, in opposition to the best interests of the Company or, with respect
to a criminal proceeding, if Indemnitee knew or reasonably should have known
that Indemnitee’s conduct was
unlawful;
(d) with respect to liability for which
payment is actually made to Indemnitee under a valid and collectible insurance
policy or under a valid and enforceable indemnity clause or other agreement
(other than this Agreement), except in respect of any liability in excess of
payment under such insurance, indemnity clause or other
agreement;
(e) if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not
lawful; or
(f) in connection with any Proceeding initiated by
Indemnitee against the Company or any of its
direct or indirect subsidiaries or the directors, officers, employees or other
indemnitees of the Company or any of its direct or indirect subsidiaries,
(i) unless such indemnification is expressly required to be made
by law, (ii) unless the Proceeding was authorized by the Board or such
other person or persons empowered pursuant to Section 9 to make such
determination, (iii) unless such indemnification is provided by the
Company, in its sole discretion, pursuant to the
powers vested in the Company by applicable law, or (iv) except as provided
in Section 12.
4. Actions
or Proceedings Other Than an Action by or in the Right of the
Company. Indemnitee shall be entitled to the
indemnification rights provided in this Section 4 if Indemnitee was or is a party or witness or is
threatened to be a party or witness to any Proceeding, other than a Proceeding
by or in the right of the Company, by reason of the fact that Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company, or any of its direct or indirect
subsidiaries, or is or was serving at the request of the Company, or any of its
direct or indirect subsidiaries, as a director, officer, employee, agent or fiduciary
of any other entity, including, but not limited to, another corporation,
partnership, limited liability company, employee benefit plan, joint venture,
trust or other enterprise, or by reason of any act or omission by him or her in such capacity. Pursuant to this Section 4,
Indemnitee shall be indemnified against all
Expenses, judgments, penalties (including excise and similar taxes), fines and
amounts paid in settlement which were actually and reasonably incurred by
Indemnitee in connection with such Proceeding
(including, but not limited to, the investigation, defense or appeal thereof),
if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any
criminal Proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
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5. Actions
by or in the Right of the Company. Indemnitee shall be entitled to the
indemnification rights provided in this Section 5 if Indemnitee was or is a party or witness or is
threatened to be made a party or witness to any Proceeding brought by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any of its direct or indirect subsidiaries, or is or was serving at
the request of the Company, or any of its direct or indirect subsidiaries, as a
director, officer, employee, agent or fiduciary of another entity, including, but not limited
to, another corporation, partnership, limited liability company, employee benefit plan, joint
venture, trust or other enterprise, or by reason of any act or omission by
him or her in any such capacity. Pursuant to this Section 5, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or her in connection with the defense or
settlement of such Proceeding (including, but not limited to
the investigation, defense or appeal thereof), if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; provided,
however, that no such
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable
to the Company, unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such Proceeding was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to be
indemnified for such Expenses actually and reasonably incurred by him
or her which such court shall deem
proper.
6. Good
Faith Definition. For purposes of this
Agreement, Indemnitee shall be deemed to have acted in good
faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best
interests of the Company, or, with respect to any criminal Proceeding, to have
had no reasonable cause to believe Indemnitee’s conduct was unlawful, if such action
was based on any of the following: (a) the records or books of the account
of the Company or other
enterprise, including financial statements; (b) information, opinions, reports
or statements supplied to Indemnitee by the officers or employees of the
Company or other enterprise in the course of his or her duties; (c) the advice of legal counsel for the Company or other
enterprise; or (d) information or records given in reports made to the Company
or other enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the Company or other
enterprise. The provisions of this Section 6 shall not be deemed
to be exclusive or to limit in any way the other circumstances in which
Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
7. Indemnification
for Expenses of a Witness or a Successful Party. Notwithstanding the other provisions of
this Agreement, to the extent that Indemnitee has (i) served on behalf of
or at the request of
the Company, or any of its
direct or indirect subsidiaries, as a witness or other
participant in any class action or Proceeding, or (ii) has been successful,
on the merits or otherwise, in defense of any Proceeding referred to in
Sections 4 and 5, or in defense of any claim, issue or matter therein,
including, but not limited to, the
dismissal of any action without prejudice or the settlement of a Proceeding
without an admission of liability, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by Indemnitee in connection therewith without any determination pursuant to
Section 9.
8. Partial
Indemnification. If
Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the investigation,
defense, appeal or settlement of such Proceeding described in Section 4 and
5 hereof, but is not entitled to indemnification for the total amount
thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee to which Indemnitee is entitled.
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9. Procedure
for Determination
of Entitlement to Indemnification.
(a) To obtain indemnification under this
Agreement, Indemnitee shall submit to the Secretary of the Company a written
request, including documentation and information which is reasonably available
to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to Section 4, 5, 7 and 8 hereof, the entitlement of Indemnitee
to indemnification pursuant to the terms of this Agreement shall be determined
by the following person or persons, who shall be empowered to make
such determination: (i) if a Change of Control shall have occurred, by
Independent Counsel (unless Indemnitee shall request in writing that such
determination be made by the Board (or a committee thereof) in the manner
provided for in clause (ii)
of this Section 9(b)) in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A)(1)
by the Board of the Company, by a majority vote of Disinterested Directors even though less than a
quorum, or (2) by a committee of Disinterested Directors designated by majority
vote of Disinterested Directors, even though less than a quorum, or (B) if there
are no such Disinterested Directors or, even if there are such Disinterested Directors, if the
Board, by the majority vote of Disinterested Directors, so directs, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee. Such Independent Counsel shall be
selected by the Board and
approved by Indemnitee. Upon failure of the Board to so select, or upon failure
of Indemnitee to so approve, such Independent Counsel shall be selected by the
Chancellor of the State of Delaware or such other person as the
Chancellor shall designate to make such selection.
Such determination of entitlement to indemnification shall be made not later
than 45 days after receipt by the Company of a written request for
indemnification. If the person making such determination
shall determine that Indemnitee is entitled to indemnification as to part (but
not all) of the application for indemnification, such person shall reasonably
prorate such part of indemnification among such claims, issues or matters. The Company agrees to be bound by, and
not contest, appeal or seek reconsideration of, such opinion of Independent
Counsel. If it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within 10 days after such
determination.
(c) Indemnitee shall reasonably cooperate
with the person, persons or entity making such determination with respect to
Indemnitee’s entitlement to Indemnification,
including providing to such person, persons or entity upon reasonable advance request such
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Independent Counsel or members
of the Board shall act reasonably and in
good faith in making a determination under the Agreement of
Indemnitee’s entitlement to
Indemnification. Any Expenses incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and
the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
10. Presumptions
and Effect of Certain Proceedings.
(a) In making a determination with respect
to entitlement to indemnification, Indemnitee shall, to the fullest extent not
prohibited by law, be presumed to be entitled to indemnification hereunder and
the Company shall, to the fullest extent not prohibited by law, have the burden of proof in
the making of any determination contrary to such presumption. Neither
the failure of the Board (or such other person or persons empowered to make the
determination of whether Indemnitee is entitled to indemnification) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor any determination thereby that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
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(b) If the Board, or such other person or
persons empowered pursuant to Section 9 to make the determination of whether
Indemnitee is entitled to indemnification, shall have failed to make a
determination as to entitlement to indemnification within 45 days after receipt by the Company of
such request, the requisite determination of entitlement to indemnification shall be deemed
to have been made and Indemnitee shall be absolutely entitled to such
indemnification, absent actual fraud in the request for indemnification or a
prohibition of indemnification under applicable law; provided,
however, that such 45-day
period may be extended for a reasonable time, not to exceed an additional 30
days, if the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of
documentation and/or information relating thereto. The termination of any
Proceeding described in Sections 4 and 5 by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself: (i) create a
presumption that Indemnitee did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal Proceeding, that Indemnitee
has reasonable cause to believe that
Indemnitee’s conduct was unlawful; or (ii)
otherwise adversely affect the rights of Indemnitee to indemnification, except
as may be provided herein.
(c) The knowledge and/or actions, or failure
to act, of any director, officer, agent or employee of the Company
shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
11. Advancement
of Expenses.
(a) Subject to applicable law, all
reasonable Expenses actually incurred by Indemnitee as a party, witness or other participant
in connection with any
Proceeding (including a
Proceeding by or on behalf of the Company) shall be paid by the Company in advance
of the final disposition of such Proceeding, if so requested by
Indemnitee, within 30 days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances. Indemnitee may submit such statements from
time to time. Indemnitee’s entitlement to such Expenses shall
include those incurred in connection with any proceeding
by Indemnitee seeking an
adjudication or award in Arbitration (defined below) pursuant to this
Agreement.
(b) Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee in connection
therewith; provided,
however, that following a
Change of Control or in the event of a Proceeding brought by or in the name of
the Company, the Company agrees that Indemnitee shall be required
to submit to the Company only summary statements and invoices, and that in
connection with such submissions, Indemnitee shall have the right to withhold or
redact any documents or information that are protected by the attorney-client privilege or the
attorney work product doctrine.
(c) Indemnitee’s submission of statements and requests
for payment of Expenses
shall include or be accompanied by (i) a written affirmation by Indemnitee of
Indemnitee’s good faith belief that Indemnitee has
met the standard of conduct necessary for indemnification under this Agreement
and (ii) an undertaking executed personally or on behalf of Indemnitee to repay
such amount if it is ultimately determined that Indemnitee is not entitled to be indemnified
against such Expenses by the Company pursuant to this Agreement or
otherwise. Each written undertaking to pay amounts advanced must be
an unlimited general obligation but need not be secured, shall be interest free and shall be accepted without reference to
financial ability to make repayment. The Company shall have no
obligation to advance any Expenses pursuant to this Section 11 with respect
to any claim made by Indemnitee for which indemnity is excluded pursuant to
Section 3(f).
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12. Remedies
of Indemnitee.
(a) In the event that (i) a
determination is made pursuant to Section 9 that Indemnitee is not entitled
to indemnification under this Agreement, (ii) advancement of Expenses is
not timely made pursuant to Section 11 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant to
Section 9(b) within 60 days after receipt by the Company of a request for
indemnification, (iv) payment of indemnification is not made pursuant
to clause (i) of Section 7
within 10 days after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within 10 days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made
pursuant to Sections 9 and 10, Indemnitee shall be entitled to an
adjudication in an appropriate court of his or her entitlement to such
indemnification or advancement of Expenses.
(b) As an alternative to subsection
(a), Indemnitee may, at
Indemnitee’s option, seek an award in
arbitration administered by
JAMS pursuant to its Streamlined Arbitration Rules & Procedures then in
effect (“JAMS
Rules”) and the provisions of this subsection
(b), without regard to the amount in controversy (“Arbitration”). In the event there is a
conflict between the JAMS Rules and any provision of this Agreement, the terms
of this Agreement shall govern. This clause shall not preclude the
parties from seeking provisional remedies in aid of arbitration from a court of appropriate
jurisdiction. The following provisions modify the JAMS Rules and govern an
arbitration:
(i) The Arbitration shall be conducted by a
sole arbitrator selected pursuant to Rule 12 of the JAMS Rules from the then
current list of former or
retired federal judges on the JAMS roster of arbitrators and mediators
(“Arbitrator”).
(ii) The Hearing (as defined in the JAMS
Rules) shall be conducted in Atlanta, Georgia, except that the Arbitrator, in order
to hear a third party witness, may conduct such portion of the Hearing
at any location.
(iii) The Hearing shall commence within 60
days and the Final Award (pursuant to Rule 19 of the JAMS Rules) shall be
rendered within 90 days of the commencement of the Arbitration pursuant to Rule
5 of the JAMS
Rules.
(iv) Pursuant to Rule 19(b) of the JAMS
Rules, the Arbitrator shall be guided by the law of the State of Delaware in determining the merits of the
dispute.
(v) After the commencement of the
Arbitration pursuant to Rule 5 of the JAMS Rules, no party to the Arbitration
may seek any interim or provisional relief in any court or collateral proceeding
regarding any issue or claim that is the subject of the Arbitration.
(vi) The Company shall pay the fees for the
Arbitration pursuant to Rule 26 of the JAMS Rules (“Arbitration
Fees”), and is solely responsible for the
Arbitrator compensation, if Indemnitee prevails in the
Arbitration. In the event the Company fails to pay the Arbitration Fees within seven days of
the commencement of the Arbitration, and/or in the event the Company fails to
promptly pay the Arbitrator compensation, Indemnitee may pay such amounts and
such amounts shall be awarded to Indemnitee in the Final Award. In the event the Company
is the prevailing party in the Arbitration, Indemnitee shall reimburse the
Company for Indemnitee’s pro rata share of the
Arbitrator’s compensation, with the Company being
responsible for 50% of the Arbitrator’s compensation and all Indemnitees who are a party to
the Arbitration being severally, and not jointly, responsible for the remaining
50%.
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(vii) Judgment on the Final Award may be
entered in any court having jurisdiction.
(viii) In the event a Final Award is rendered
in favor of Indemnitee, the Company shall pay to Indemnitee the entire amount of
the Final Award within 20 days of the date of the Final Award, regardless of
whether the Company decides to seek to vacate, overturn, appeal or seek reconsideration of all or
any aspect of the Final Award, subject to an undertaking (in form and substance
contemplated by Section 11 of this Agreement) by Indemnitee to repay the amount
of the Final Award to the extent that the Final Award is subsequently vacated, overturned,
reversed or otherwise successfully appealed or reconsidered.
(ix) In the event the Arbitration is
commenced and a Final Award is rendered in favor of Indemnitee because the
Company failed to abide by a determination in favor of Indemnitee pursuant to Section 9 of
this Agreement, or in the event the Company fails to timely pay the amount of
the Final Award to Indemnitee in accordance with Section 12(b)(viii) of this
Agreement, the Company agrees to pay interest on the amount of the Final Award, compounded monthly, at
the “prime
rate” of interest quoted
from time-to-time in The Wall Street
Journal.
(c) In the event that a determination is
made pursuant to Section 9 of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding or
Arbitration commenced
pursuant to this Section 12 shall be conducted in all respects as
a de
novo trial or a de novo Arbitration (as applicable) on the
merits, and Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial
proceeding or Arbitration commenced pursuant to this
Section 12, the Company shall have the burden of proving Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be, and
the Company shall be
precluded from referring to or offering into evidence a determination made
pursuant to Section 9 of this Agreement that is adverse to
Indemnitee’s right to indemnification or
advancement of Expenses.
(d) In the event that a determination is
made or deemed to be made
pursuant to Section 8 or 9 that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or
Arbitration commenced
pursuant to this Section 12, absent (i) a misstatement by
Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading,
in connection with a request for indemnification, or (ii) a prohibition of
such indemnification under applicable law.
(e) The Company shall be precluded from asserting in any
judicial Proceeding or
Arbitration commenced pursuant to this
Section 12 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before any such Arbitrator that the Company is bound by
all provisions of this Agreement.
(f) If the court or Arbitrator shall determine that Indemnitee is
entitled to any indemnification hereunder, the Company shall pay all reasonable
Expenses actually incurred by Indemnitee in connection with such adjudication or
award at Arbitration (including, but not limited
to, any appellate
proceedings).
13. Notification
of
Proceedings and
Defense of Claims. Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Agreement, notify the Secretary of the
Company in writing of the commencement thereof; but the omission to so notify
the Secretary of the Company will not relieve the Company from any liability that it may have to
Indemnitee otherwise than under this Agreement or
otherwise, except to the extent that the Company may suffer material prejudice
by reason of such failure. Notwithstanding any other provision of
this Agreement, with respect to any such Proceeding as to which
Indemnitee gives notice to the Company of the
commencement thereof:
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(a) The Company will be entitled to
participate therein at its own expense.
(b) Except as otherwise provided in this
Section 13(b), to the extent that it may wish, the Company,
jointly with any other indemnifying party similarly notified, shall be entitled
to assume the defense thereof with counsel reasonably satisfactory to
Indemnitee. After notice from the Company to
Indemnitee of the Company’s election to so assume the defense
thereof, the Company shall not be liable to Indemnitee under this Agreement for
any legal or other Expenses subsequently incurred by Indemnitee in connection
with the defense thereof other than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to
employ Indemnitee’s own counsel in such Proceeding, but
the fees and Expenses of such counsel incurred after notice from the Company of
its assumption of the defense thereof shall be at the expense of Indemnitee unless
(i) the employment of counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there is a conflict of
interest between the Company and Indemnitee in the conduct of the defense of such action and such
conclusion by Indemnitee shall be supported by
a written determination
of counsel provided to the
Company, which determination shall be reasonably acceptable to the
Company, or (iii) the Company shall not in fact have employed counsel to assume the defense of
the action within a reasonable time after the Company has provided notice to
Indemnitee of the Company’s election to assume the defense of such
action, in each of which cases the Expenses of such counsel shall be
at the expense of the Company.
The Company shall not be entitled to
assume the defense of any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have reached the conclusion provided for
in clause (ii) above.
(c) The Company shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
Proceeding effected without its prior written consent, which consent shall not
be unreasonably withheld; provided,
however, that the Company
shall be deemed to have
consented to any settlement if the Company does not object to such settlement
within 30 days after receipt by the Company of a written request for consent to
such settlement. The Company shall be required to obtain the consent
of Indemnitee to settle any Proceeding in which
Indemnitee is named as a party or has potential liability exposure, unless such
settlement solely involves the payment of money and includes a complete and
unqualified release of Indemnitee from all liability on any claims that are the subject matter of the
Proceeding and does not impose any future restriction or limitation on
Indemnitee.
(d) As soon as practicable after the receipt
of a notice of a claim
pursuant to this Section 13, the Company shall give prompt notice
of the commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter take all
reasonably necessary or desirable action to cause such insurers to comply with such
policies including, without limitation, to pay, on behalf of Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of
the policies.
14. Other
Right to Indemnification; Subrogation.
(a) The indemnification and advancement of
Expenses provided by this Agreement are cumulative, and not exclusive, and are
in addition to any other rights to which Indemnitee may now or in the future be
entitled under any provision of the Certificate or Bylaws of the Company, any resolution
adopted pursuant thereto, any provision of law or otherwise. Except as required by
applicable law, the Company shall not adopt any amendment to its Certificate or
Bylaws, the effect of which would be to deny, diminish or encumber Indemnitee’s rights to indemnification or
advancement of Expenses under this Agreement.
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(b) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights and recovery of Indemnitee, who shall execute all papers
required and take all actions necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.
(c) The Company shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.
15. Director
and Officer Liability Insurance.
(a) The Company shall obtain and maintain
directors’ and officers’ liability insurance in customary and
reasonable amounts for so long as Indemnitee’s services are covered hereunder, with
reputable insurance
companies providing Indemnitee with coverage for losses from wrongful acts,
including Expenses, and to ensure the Company’s performance of its indemnification and
advancement of Expenses obligations under this Agreement, provided and to the
extent that such insurance is available on a
commercially reasonable basis. Such coverage shall not be on terms of
coverage or amounts less favorable to Indemnitee than those of the policies in
effect on the date of this Agreement, except to the extent coverage on
such terms or in such
amounts cannot be obtained through the use of commercially reasonable
efforts. Indemnitee shall be covered by such
policy or policies in accordance with their terms to the maximum extent
available for any such director or officer under such policy or
policies.
(b) The Company further agrees that the provisions hereof shall
remain in effect regardless of whether liability or other insurance coverage is
at any time obtained or retained by the Company, except that any payments made
to, or on behalf of,
Indemnitee under an insurance policy shall reduce the obligations of the Company
hereunder.
16. Intent. This Agreement is intended to be broader
than any statutory indemnification rights applicable in the State of Delaware
and shall be in addition to
any other rights Indemnitee may have under the Certificate or
Bylaws of the Company, the DGCL, applicable law or otherwise. To the extent that a change in
applicable law (whether by statute or judicial decision) permits greater
indemnification by
agreement than would be afforded currently under the Certificate or Bylaws of
the Company, the DGCL, applicable law or this Agreement, it is the intent of the
parties that Indemnitee enjoy by this Agreement the greater
benefits so afforded by such change. In the event of any change
in applicable law, statute or rule which narrows the right of a Delaware
corporation to indemnify, or advance Expenses to, a member of its Board or an
officer, employee, agent or fiduciary, such change, to the extent not
otherwise required by such
law, statute or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties’ rights and obligations
hereunder.
17. Attorneys’
Fees and Other Expenses to Enforce Agreement. In the event that Indemnitee is subject to or intervenes in any
Proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication or award in Arbitration to enforce Indemnitee’s rights under, or to recover damages
for breach of, this Agreement Indemnitee, if he or she prevails in whole or in part in such
action, shall be entitled to recover from the Company and shall be indemnified
by the Company against any actual Expenses for attorneys’ fees and disbursements reasonably
incurred by Indemnitee.
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18. Effective
Date. The provisions of this Agreement shall
cover claims or Proceedings whether now pending or
hereafter commenced and shall be retroactive to cover acts or omissions or
alleged acts or omissions which heretofore have taken place. The Company shall be liable under
this Agreement, pursuant to Sections 4 and 5, for all acts of Indemnitee while serving as a director and/or
officer, notwithstanding the termination of Indemnitee’s service, if such act was performed or
omitted to be performed
during the term of Indemnitee’s service to the
Company.
19. Duration
of Agreement. This Agreement shall survive and
continue even though Indemnitee may have terminated his or her service as a director, officer,
employee, agent or fiduciary of the Company or as a director, officer,
employee, agent or fiduciary of any other entity, including, but not limited to
another corporation, partnership, limited liability company, employee benefit
plan, joint venture, trust or other enterprise or by reason of any act or omission by
Indemnitee in any such capacity. This Agreement
shall be binding upon the Company and its successors and assigns, including,
without limitation, any corporation or other entity which may have acquired all
or substantially all of the
Company’s assets or business or into which the
Company may be consolidated or merged, and shall inure to the benefit of
Indemnitee and his or her spouse, successors, assigns, heirs,
devisees, executors, administrators or other legal representations. The Company shall require any successor
or assignee (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by written agreement in form and substance reasonably satisfactory to the Company and
Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession or assignment had
taken place.
20. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason other than that Indemnitee did not act in good faith and in a
manner he or she
reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to a criminal Proceeding,
that Indemnitee had reasonable cause to believe his
or her conduct was unlawful, the Company shall
contribute to the amount of Expenses, judgments, penalties, fines, excise taxes,
amounts paid or to be paid in settlement actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such
Proceeding in such proportion as is deemed fair and reasonable in light of all
of the circumstances of
such Proceeding in order to reflect (i) the relative benefits received by
the Company and Indemnitee as a result of the event(s) and/or transaction(s)
giving rise to such Proceeding and/or (ii) the relative fault of the
Company (and its directors, officers, employees and
agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
21. Disclosure
of Payments. Except as expressly required by any
federal or state securities laws or other federal or state law,
neither party shall
disclose any payments under this Agreement unless prior approval of the other
party is obtained.
22. Modification
and Waiver. No supplement, modification or amendment
of this Agreement or any provision hereof shall limit or restrict in any way
any right of Indemnitee under this Agreement with respect to
any action taken or omitted by Indemnitee when he or she was a director, officer, employee, agent
or fiduciary of the Company, or any of its direct or indirect subsidiaries, or while serving at the
request of the Company, or any of its direct or indirect subsidiaries, as a
director, officer, employee, agent or fiduciary of any other entity, including,
but not limited to, another corporation, partnership, limited liability company, employee benefit
plan, joint venture, trust or other enterprise prior to such supplement,
modification or amendment. No supplement, modification or amendment
of this Agreement or any provision hereof shall be binding unless
executed in writing by both the Company and
Indemnitee. No waiver of any provision
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
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23. Severability. If any provision or provisions of this
Agreement shall be held invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, but not limited to, all portions of any Sections of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and (b) to
the fullest extent possible, the provisions of this Agreement (including, but not limited to, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to
the intent manifest by the provision held
invalid, illegal or unenforceable.
24. Counterparts. This Agreement may be executed by one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same agreement.
Only one such counterpart signed by the
party against whom enforceability is sought shall be required to be produced to
evidence the existence of this Agreement.
25. Interpretation. The captions and headings used in
this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
26. Notices. All notices, requests, demands or other
communications hereunder shall be in writing and shall be deemed to have been duly given
if (a) delivered by hand with receipt acknowledged by the party to whom said
notice or other communication shall have been directed, (b) mailed by certified
or registered mail, return receipt requested with postage prepaid, on the date shown on the return
receipt or (c) delivered by facsimile transmission on the date shown on the
facsimile machine report:
If to Indemnitee to:
Email:
If to the Company
to:
000 Xxxxxxxx Xxxxxx, Xxxxx X-000
Xxxxxxx, Xxxxxxx
Email: xxxxx@xxxxxxxx.xxx
Attn: General
Counsel
or to such other address as may be
furnished to Indemnitee by the Company or to the Company by
Indemnitee, as the case may
be.
27. Governing
Law. The parties hereto agree that this
Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, applied without giving effect to any
conflicts of law principles.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the day and year first above
written.
|
THE
COMPANY:
|
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| INTERNAP NETWORK SERVICES CORPORATION | |||
|
By:
|
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| Name: | |||
| Title: | |||
| INDEMNITEE: | |||
|
|
|
||
| Print Name: | |||
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