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Exhibit 10.1
 
AMENDMENT NO. 2 TO CREDIT AGREEMENT
 
This AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Amendment") is made and entered
into as of this 30th day of September, 2008, by and among INTERNAP NETWORK
SERVICES CORPORATION, a Delaware corporation (“Borrower”), each of the Loan
Parties (as defined in the Credit Agreement (defined below)) party hereto, the
Lenders (as defined in the Credit Agreement (defined below)) signatory hereto
and BANK OF AMERICA, N.A., as administrative agent for itself and on behalf of
the Lenders (in such capacity, the "Administrative Agent"), L/C Issuer and Swing
Line Lender (each as defined in the Credit Agreement (as defined below)).
 
W I T N E S S E T H:
 
WHEREAS, Borrower, the Loan Parties, the Lenders, the Administrative Agent, the
L/C Issuer and the Swing Line Lender are parties to that certain Credit
Agreement, dated as of September 14, 2007 (as hereafter amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
pursuant to which the Lenders extended certain financial accommodations to the
Borrower under the terms and conditions stated therein; and
 
WHEREAS, the Borrower and the other Loan Parties have informed the
Administrative Agent and the Lenders that they desire to amend the Credit
Agreement as further set forth herein;
 
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties hereto agree that all
capitalized terms used herein which are not otherwise defined herein shall have
the meanings ascribed thereto in the Credit Agreement, and further agree as
follows:
 
 1. 
   Amendments.      

 (a)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby amended
by adding the following new definitions in the appropriate alphabetical order:
 
“Amendment No. 2” shall mean that certain Amendment No. 2 to Credit Agreement,
dated as of September 30, 2008, by and among Borrower, the Loan Parties
signatory thereto, the Lenders signatory thereto, Administrative Agent, L/C
Issuer and Swing Line Lender.
 

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“Amendment No. 2 Effective Date” shall mean the “Effective Date” under and as
defined in Amendment No. 2.
 
“Consolidated Debt Service Coverage Ratio” means, at any date of determination,
for the most recently completed Measurement Period, the ratio of (a)
Consolidated EBITDA to (b) the sum of (i) Consolidated Interest Charges for such
Measurement Period and (ii) the aggregate principal amount of all regularly
scheduled principal payments or redemptions or similar acquisitions for value of
outstanding debt for borrowed money, but excluding any such payments to the
extent refinanced through the incurrence of additional Indebtedness otherwise
expressly permitted under Section 7.02, for such Measurement Period.
 
“Lease Financing Agreement” has the meaning set forth in Section 2.16.
 
“Lease Financing Obligations” has the meaning set forth in Section 2.16.
 
(b)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby further
amended by deleting the defined term “Consolidated Fixed Charge Coverage Ratio”.
 
(c)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby further
amended by deleting the definitions of the terms “Consolidated Leverage Ratio”,
“Loan Documents”, “Obligations”, “Outstanding Amount” and “Total Revolving
Credit Outstandings” in their entirety and by inserting, in lieu thereof, the
following new definitions:
 
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
EBITDA of the Borrower and its Subsidiaries on a consolidated basis for the most
recently completed Measurement Period.
 
“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) the Collateral Documents, (e) the Fee Letter, (f) each Issuer
Document, (g) each Secured Hedge Agreement, (h) each Secured Cash Management
Agreement and (i) the Lease Financing Agreement; provided that for purposes of
the definition of “Material Adverse Effect” and Articles IV through IX, “Loan
Documents” shall not include Secured Hedge Agreements or Secured Cash Management
Agreements.
 
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, and all Lease Financing
Obligations, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
 
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 “Outstanding Amount” means (a) with respect to Term Loan, Revolving Credit
Loans, Swing Line Loans or any Lease Financing Obligations on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of the Term Loan, Revolving Credit
Loans, Swing Line Loans and Lease Financing Obligations, as the case may be,
occurring on such date; and (b) with respect to any L/C Obligations on any date,
the amount of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts.
       
“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of
all Revolving Credit Loans, Swing Line Loans, L/C Obligations and Lease
Financing Obligations.
     

 
(d)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby further
amended by deleting the final proviso in the definition of “Applicable Rate” and
by inserting, in lieu thereof, the following new final proviso:

        “; and provided, further that in the event that Borrower does not
maintain all or substantially all of its deposit accounts and securities
accounts (as such terms are defined in the UCC) with Bank of America, N.A. or
one of its Affiliates at any time following May 30, 2009, the Applicable Rate
for Eurodollar Rate Loans shall automatically increase by 0.15%, which increase
shall be effective from and after the first date after May 30, 2009 on which
Borrower does not maintain all or substantially all of its deposit accounts and
securities accounts with Bank of America, N.A.”      

(e)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby further
amended by amending the definition of “Letter of Credit Sublimit” by deleting
the reference to “$5,000,000” therein and replacing it with “$7,000,000”.
 
 
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(f)    Section 1.01 of the Credit Agreement, Defined Terms, is hereby further
amended by amending the definitions of “Revolving Credit Borrowing” and
“Revolving Credit Commitment” by deleting the references to “Section 2.01(b)”
therein and replacing them with “Section 2.01(c)”.
 
(g)   Section 2.01 of the Credit Agreement, The Loans, is hereby amended by
adding the following new clause (d) immediately after existing clause (c)
thereof:
 
“(d)    Conversion of Term Loans into Revolving Loans on the Amendment No. 2
Effective Date.  Notwithstanding any provision of this Agreement to the contrary
(including without limitation the provisions of Section 2.01(a)), on the
Amendment No. 2 Effective Date (i) the entire outstanding principal amount of
the Term Loans hereunder (which principal amount is $20,000,000 as of the
Amendment No. 2 Effective Date) shall be converted into a Revolving Credit Loan
outstanding on such date, (ii) the Term Loan Commitment of each Term Loan Lender
shall be reduced to $0 in accordance with the new Schedule 2.01 adopted as of
the Amendment No. 2 Effective Date, (iii) the Revolving Credit Commitment of
each Revolving Credit Lender shall be increased as set forth on the new Schedule
2.01 adopted as of the Amendment No. 2 Effective Date, and (iv) the Term Loan
Lenders shall have no further obligation to make Term Loans
hereunder.  Notwithstanding the immediately preceding sentence, the $20,000,000
portion of the Revolving Loan representing the converted Term Loan on the
Amendment No. 2 Effective Date shall continue to accrue interest at the interest
rate that was applicable thereto on the Amendment No. 2 Effective Date until
October 15, 2008; provided that after October 15, 2008, all of the Revolving
Loans (including the $20,000,000 portion thereof converted from the Term Loan on
the Amendment No. 2 Effective Date) shall accrue interest as set forth
herein.  The conversion of the Term Loans into a portion of the Revolving Loans
on the Amendment No. 2 Effective Date is not intended by the parties to
constitute, and shall not constitute, a novation or an accord and satisfaction
of any of the indebtedness and other obligations owing by the Borrower to any
Lender under this Agreement.”
 
(h)   Article II of the Credit Agreement, The Commitments and Credit Extensions,
is hereby amended by adding a new Section 2.16 immediately following Section
2.15 as follows:
 

“2.16    Lease Financing Agreement.  The Borrower and Bank of America may, after
the Amendment No. 2 Effective Date, enter into a lease financing agreement in an
aggregate funded amount not to exceed $10,000,000 at any time on terms and
conditions satisfactory to Bank of America in its sole discretion (such
financing agreement, if executed, and as amended, modified, restated or replaced
from time to time, the “Lease Financing Agreement”), it being understood that
Bank of America has no obligation to enter into the Lease Financing Agreement or
any other financing arrangement with Borrower.  In the event that a Lease
Financing Agreement is executed between Borrower and Bank of America, (i) all
indebtedness and other obligations owing from time to time by Borrower to Bank
of America under such Lease Financing Agreement (the “Lease Financing
Obligations”) shall constitute Obligations hereunder, (ii) the Lease Financing
Obligations shall be secured by the Collateral hereunder under the other Loan
Documents and (iii) the outstanding balance of all Lease Financing Obligations
outstanding from time to time shall constitute a portion of the Total Revolving
Credit Outstandings.”
 
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(i)     Article VII of the Credit Agreement, Negative Covenants, is hereby
amended by deleting Section 7.11, Financial Covenants, in its entirety and
replacing it with the following new Section 7.11 as follows:
 
“7.11    Financial Covenants.
 
(a)    Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as
of the end of any fiscal quarter of the Borrower to be greater than 2.00 to
1.00.
 
(b)    Consolidated Debt Service Coverage Ratio.  Permit the Consolidated Debt
Service Coverage Ratio as of the end of any fiscal quarter of the Borrower to be
less than 3.00 to 1.00.
 
(c)    Minimum Liquidity.  At any time upon the request of Administrative Agent
in its sole discretion, permit the balance of unrestricted cash or cash
equivalents in any deposit account or securities account maintained by Borrower
to be less than $10,000,000.”
 
(j)    Article VII of the Credit Agreement, Negative Covenants, is hereby
further amended by deleting Section 7.12, Capital Expenditures, in its entirety
and replacing it with the following new Section 7.12 as follows:
 
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   “7.12
 Capital Expenditures.
   
 
Make or become legally obligated to make any Capital Expenditure, except for
Capital Expenditures in the ordinary course of business not exceeding, in the
aggregate for the Borrower and it Subsidiaries (i) $55,000,000 during the fiscal
year ended December 31, 2008 and (ii) for each fiscal year thereafter, either
(A) $25,000,000 or (B) an amount to be mutually agreed upon between Borrower and
Administrative Agent in writing pursuant to a letter agreement in the form
attached to Amendment No. 2 as Exhibit A; provided, that so long as no Default
has occurred and is continuing or would result from such expenditure, any
portion of any Capital Expenditure set forth above, if not expended in the
fiscal year for which it is permitted above, may be carried over for expenditure
in the next following fiscal year and if any such amount is so carried over, it
will be deemed used first in the applicable subsequent fiscal year before the
amount agreed upon above for such fiscal year.”

 

 “(a) Non-Payment.  The Borrower or any other Loan Party fails to (i) pay when
and as required to be paid herein, any amount of principal of any Loan, any
Lease Financing Obligation or any L/C Obligation or deposit any funds as Cash
Collateral in respect of L/C Obligations, or (ii) pay within three days after
the same becomes due, any interest on any Loan, any Lease Financing Obligation
or any L/C Obligation, or any fee due hereunder, or (iii) pay within five days
after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or”

 
(k)      Article VIII of the Credit Agreement, Events of Default and Remedies,
is hereby further amended by deleting clause (a) of Section 8.01 and by
inserting, in lieu thereof, the following new clause (a) of Section 8.01:
 

   “(a) Non-Payment.  The Borrower or any other Loan Party fails to (i) pay when
and as required to be paid herein, any amount of principal of any Loan, any
Lease Financing Obligation or any L/C Obligation or deposit any funds as Cash
Collateral in respect of L/C Obligations, or (ii) pay within three days after
the same becomes due, any interest on any Loan, any Lease Financing Obligation
or any L/C Obligation, or any fee due hereunder, or (iii) pay within five days
after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or”

 
(l)    The Credit Agreement is further amended by deleting Schedule 2.01 thereof
and replacing it with Schedule 2.01 attached to this Amendment.
 
2.  Strict Compliance.  Except for the amendments set forth above, the text of
the Credit Agreement shall remain unchanged and in full force and effect.  The
amendments agreed to herein shall not constitute a modification of the Credit
Agreement or a course of dealing with the Administrative Agent and the Lenders,
or any of them, at variance with the Credit Agreement such as to require further
notice by the Administrative Agent, the Lenders, the Swing Line Lender, the
Required Lenders, the L/C Issuer, or any of them, to require strict compliance
with the terms of the Credit Agreement, as amended by this Amendment, in the
future.
 
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3.    Representations and Warranties.  Borrower and each other Loan Party hereby
represents and warrants to and in favor of the Administrative Agent, the L/C
Issuer, the Swing Line Lender and the Lenders as follows:
 
(a)    Each representation and warranty set forth in Article 5 of the Credit
Agreement, as amended hereby, is hereby restated and affirmed as true and
correct in all material respects as of the date hereof, except to the extent (i)
relating specifically to the Agreement Date, in which case such representation
or warranty is true and correct in all material respects as of such date and
(ii) such representation or warranty already contains a materiality qualifier,
in which case such representation or warranty shall be true and correct in all
respects;
 
(b)    Borrower and each other Loan Party has the corporate power and authority
(i) to enter into this Amendment and (ii) to do all acts and things as are
required or contemplated hereunder to be done, observed and performed by it;
 
(c)    This Amendment has been duly authorized, validly executed and delivered
by one or more authorized signatories of the Borrower and each Loan Party, and
each of this Amendment and the Credit Agreement as amended hereby constitutes
the legal, valid and binding obligations of the Borrower and each Loan Party,
enforceable against each of them in accordance with its terms; and
 
(d)    The execution and delivery of this Amendment and performance by each Loan
Party under the Credit Agreement, as amended hereby, does not and will not
require the consent or approval of any Governmental Authority or any other
Person having jurisdiction over any Loan Party, nor be in contravention of or in
conflict with the Organizational Documents of any Loan Party, or any provision
of any statute, judgment, order, indenture, instrument, agreement, or
undertaking, to which any Loan Party is party or by which any Loan Party’s
assets or properties are bound.
 
4.     Conditions Precedent to Effectiveness of this Amendment.  This Amendment,
shall be effective as of the date on which each of the conditions precedent set
forth below are satisfied (such date, the “Effective Date”):
 
(a)    all of the representations and warranties of the Borrowers under Section
3 hereof which are made as of the date hereof are true and correct in all
respects; and
 
(b)    receipt by the Administrative Agent of executed signature pages to this
Amendment from the Borrower, the Guarantors and the Lenders.
 
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5.    Guarantor Acknowledgment.
 
(a)    Each Guarantor hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment.  Each Guarantor hereby
confirms that the Guaranty to which it is a party or otherwise bound will
continue to guarantee, as the case may be, to the fullest extent possible in
accordance with such Guaranty the payment and performance of all "Obligations"
under each of the Guaranties, as the case may be (in each case as such terms are
defined in the applicable Guaranty), including without limitation the payment
and performance of all such "Obligations" under each of the Guaranties, as the
case may be, in respect of the Obligations of the Borrowers now or hereafter
existing under or in respect of the Credit Agreement and the Notes defined
therein.
 
(b)    Each Guarantor acknowledges and agrees that any of the Guaranties to
which it is a party or otherwise bound shall continue in full force and effect
and that all of its obligations thereunder shall be valid and enforceable and
shall not be impaired or limited by the execution or effectiveness of this
Amendment.  Each Guarantor represents and warrants that all representations and
warranties contained in the Credit Agreement, this Amendment and the Guaranty to
which it is a party or otherwise bound are true, correct and complete in all
material respects on and as of the date hereof to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
 
(c)    Each Guarantor acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Guarantor is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments of the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other
Loan Document shall be deemed to require the consent of such Guarantor to any
future amendments to the Credit Agreement.
 
6. Counterparts.  This Amendment may be executed in multiple counterparts, each
of which shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
 
7. Law of Contract.  This Amendment shall be deemed to be made pursuant to the
laws of the State of Georgia and shall be construed, interpreted, performed and
enforced in accordance therewith.
 
8. Loan Document.  This Amendment shall constitute a Loan Document.
 
9. Amendment to Loan Documents.  All of the Loan Documents are hereby amended to
the extent necessary to give full force and effect to the amendment contained in
this Amendment.
 
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10. Severability.  Any provision of this Amendment which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.
 
[Remainder of page intentionally left blank]
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal
as of the day and year first above written.
 

  BORROWER AND GUARANTORS:

 

  INTERNAP NETWORK SERVICES CORPORATION        
 
By:
/s/ George E. Kilguss, III     Name:  George E. Kilguss, III     Title: CFO    
       

 

VITALSTREAM HOLDINGS, INC.        
 
By:
/s/ George E. Kilguss, III     Name:  George E. Kilguss, III     Title: CFO    
       

 

VITALSTREAM, INC.        
 
By:
/s/ George E. Kilguss, III     Name:  George E. Kilguss, III     Title: CFO    

 

PLAYSTREAM, INC.        
 
By:
/s/ George E. Kilguss, III     Name:  George E. Kilguss, III     Title: CFO    

VITALSTREAM ADVERTISING SERVICES, INC.        
 
By:
/s/ George E. Kilguss, III     Name:  George E. Kilguss, III     Title: CFO    

 

ADMINISTRATIVE AGENT, L/C ISSUER, SWING LINE LENDER AND SOLE LENDER:        BANK
OF AMERICA, N.A.        
 
By:
/s/ Van Brandenberg      Name:  Van Brandenberg       Title:  Vice President   

                                                                                     
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Schedule 2.01
 
Commitments and Applicable Percentages
 

 
Term Loan Facility
 

 
 
Term Loan Lender
 
Term Loan Commitment
Applicable Percentage of
Term Loan Facility
Bank of America, N.A.
$0
100.000000000%
Totals:
$0
100.000000000%

 
Revolving Credit Facility
 
 
 
Revolving Credit Lender
 
Revolving Credit Commitment
Applicable Percentage of Revolving
Credit Facility
Bank of America, N.A.
$35,000,000.00
100.000000000%
Totals:
$35,000,000.00
100.000000000%

 
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Exhibit A
to
Amendment No. 2
Form of Letter Agreement for Capital Expenditures
 
_________, 200__
 
Internap Network Services Corporation
250 Williams Street
Atlanta, Georgia 30303
Attn: Richard Dobb, Esq.
rdobb@internap.com
Telephone: 404-302-9700
Telecopier: 404-302-9984
 

 
  RE:
Credit Agreement, dated as of September 14, 2007, by and among INTERNAP NETWORK
SERVICES CORPORATION, a Delaware corporation (“Borrower”), each of the Loan
Parties party hereto, the Lenders signatory thereto and BANK OF AMERICA, N.A.,
as administrative agent for itself and on behalf of the Lenders (in such
capacity, the "Administrative Agent"), L/C Issuer and Swing Line Lender (as
hereafter amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement").

 
Dear ____________:
 
Pursuant to clause (ii)(B) of Section 7.12 of the Credit Agreement,
Administrative Agent hereby agrees that Borrower shall be permitted to make
Capital Expenditures in the ordinary course of business not to exceed
$______________ for the fiscal year ended December 31, 20____.
 
Except for the modification expressly set forth herein, the Credit Agreement
shall remain unchanged and in full force and effect.  This letter agreement
shall not become effective until signed by the Administrative Agent and accepted
and agreed to in writing by Borrower.
 

  BANK OF AMERICA, N.A.           By:       Name:       Title:     

                                                                         
ACCEPTED AND AGREED TO:
 
INTERNAP NETWORK SERVICES
 
CORPORATION

 

By:      Name:      Title:    

 

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