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INDEMNITY AGREEMENT

Indemnification Agreement

INDEMNITY AGREEMENT | Document Parties: INTERNAP NETWORK SERVICES CORPORATION You are currently viewing:
This Indemnification Agreement involves

INTERNAP NETWORK SERVICES CORPORATION

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Title: INDEMNITY AGREEMENT
Governing Law: Delaware     Date: 5/29/2009
Industry: Communications Services     Sector: Services

INDEMNITY AGREEMENT, Parties: internap network services corporation
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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:

 

 

(a)

Board ” shall mean the Board of Directors of the Company.

 

 

(b)

Change of Control ” shall mean any of the following occurrences:

 

(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 empow


 
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