8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

November 18, 2004

Internap Network Services Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-27265	91-2145721
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

250 Williams Street, Atlanta, GA	30303
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(404) 302-9700

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

As previously disclosed in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, Internap Network Services Corporation (the “Company”) was in violation of a loan covenant under its revolving credit facility with Silicon Valley Bank requiring minimum Cash EBITDA, as defined, for the quarter ended September 30, 2004. The non-compliance resulted from an adjustment made in the quarter ended September 30, 2004 to the Company’s existing restructuring charge. As a result of the loan covenant violation, the Company classified as notes payable, current portion all amounts outstanding under the credit facility in its Form 10-Q for the quarter ended September 30, 2004 filed with the Securities and Exchange Commission on November 9, 2004.

On November 18, 2004, the Company entered into a limited waiver and amendment to loan documents with Silicon Valley Bank. Under the limited waiver and amendment, Silicon Valley Bank agreed to waive the default, amend the definition of EBITDA and modify the time period in which the Company must provide its Form 10-Q to Silicon Valley Bank. As a result of receiving the limited waiver and amendment, the Company has reclassified $13.5 million of notes payable on its balance sheet from current liabilities to non-current liabilities.

There is no material relationship between the Silicon Valley Bank or its affiliates and the Company or its affiliates other than as parties to the credit facility.

A copy of this limited waiver and amendment is attached as Exhibit 10.1.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

None.

(b) Pro Forma Financial Information.

None.

(c) Exhibits

10.1 Limited waiver and amendment to loan documents dated November 18, 2004.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTERNAP NETWORK SERVICES CORPORATION
Date: November 22, 2004	By:	/s/ Walter G. DeSocio
		Walter G. DeSocio
		Vice President—Chief Administrative Officer,
		General Counsel and Secretary

EXHIBIT INDEX

10.1 Limited waiver and amendment to loan documents dated November 18, 2004.

EX-10.1

Exhibit 10.1

Silicon Valley Bank

Limited Waiver and

Amendment to Loan Documents

Borrower:	InternapNetwork Services Corporation
Date:	November 18, 2004

THIS LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is entered into between Silicon Valley Bank (“Silicon”) and the borrower named above (“Borrower”).

Silicon and Borrower agree to amend the Loan and Security Agreement between them, dated October 21, 2002 (as otherwise amended, if at all, the “Loan Agreement”), as follows, effective as of the date hereof. (Capitalized terms used but not defined in this Amendment shall have the meanings set forth in the Loan Agreement.)

1. Waiver of Default. Borrower has advised Silicon that Borrower has failed to comply with the Minimum Cash EBITDA Financial Covenant set forth in Section 5 of the Amended and Restated Schedule to Loan and Security Agreement entitled “5. FINANCIAL COVENANTS (Section 5.1)” for the reporting period ending September 30, 2004 (the “Covenant Default”). Silicon and Borrower agree that the Borrower’s Covenant Default is hereby waived. It is understood by the parties hereto, however, that such waiver does not constitute a waiver of any other provision or term of the Loan Agreement or any related document, nor an agreement to waive in the future this covenant or any other provision or term of the Loan Agreement or any related document.

2. Modified EBITDA Definition. The definition of “EBITDA” set forth in Section 5 of the Amended and Restated Schedule to Loan and Security Agreement is hereby amended in its entirety to read as follows:

“EBITDA” shall mean Borrower’s earnings before interest, taxes, depreciation, amortization and other expenses of Borrower that are both non-recurring and non-cash expenses and Borrower’s non-cash stock option expenses, all as determined in accordance with generally accepted accounting principles, consistently applied.

3. Modified Form 10-Q Quarterly Reporting Requirement. The Borrower’s Form 10-Q quarterly reporting requirement set forth in paragraph 5 of Section 6 of the Amended and Restated Schedule to Loan and Security Agreement is hereby amended in its entirety to read as follows:

5. Borrower’s Form 10-Q, including financial statements, as soon as available, and in any event within forty-five days after the end of each fiscal quarter; provided, however, if Borrower does not satisfy the $40 Million Requirement, then monthly unaudited financial statements, as soon as available, and in any event within thirty days after the end of each month.

4. Representations True. Borrower represents and warrants to Silicon that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct as of the date hereof.

5. General Provisions. This Amendment, the Loan Agreement, any prior written amendments to the Loan Agreement signed by Silicon and Borrower, and the other written documents and agreements between Silicon and Borrower set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof. Except as herein expressly amended, all of the terms and provisions of the Loan Agreement, and all other documents and agreements between Silicon and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed.

Borrower: INTERNAP NETWORK SERVICES CORPORATION		Silicon: SILICON VALLEY BANK
By	/S/ DAVID A. BUCKEL	By	/S/ DALE KIRKLAND
	President or Vice President	Title	Senior Vice President
By	/S/ WALTER G. DESOCIO
	Secretary or Ass’t Secretary

CONSENT

The undersigned acknowledges that the undersigned’s consent to the foregoing Amendment is not required, but the undersigned nevertheless does hereby consent to the foregoing Amendment and to the documents and agreements referred to therein and to all future modifications and amendments thereto, and any termination thereof, and to any and all other present and future documents and agreements between or among the foregoing parties. Nothing herein shall in any way limit any of the terms or provisions of the Continuing Guaranty of the undersigned, all of which are hereby ratified and affirmed.

CO SPACE, INC.		CO SPACE CONSTRUCTION, LLC
By	/S/ DAVID A. BUCKEL	By:	Co Space Services, LLC, its sole member
Title	Vice President and CFO	By:	Co Space, Inc., its sole member
By	/S/ WALTER G. DESOCIO	By	/S/ DAVID A. BUCKEL
	Secretary or Ass’t Secretary	Title	Vice President and CFO
CO SPACE SERVICES, INC.		CO SPACE SERVICES TEXAS, L.P.
By:	Co Space, Inc., its sole member	By:	Co Space Services, LLC, its general partner
By	/S/ DAVID A. BUCKEL	By:	Co Space, Inc., its sole member
Title	Vice President and CFO
		By	/S/ DAVID A. BUCKEL
		Title	Vice President and CFO
CO SPACE PROPERTIES, LLC		CO SPACE PROPERTIES TEXAS, L.P.
By:	Co Space, Services, LLC, its sole member	By:	Co Space Services, LLC, its general partner
By:	Co Space, Inc., its sole member	By:	Co Space, Inc., its sole member
By	/S/ DAVID A. BUCKEL	By	/S/ DAVID A. BUCKEL
Title	Vice President and CFO	Title	Vice President and CFO
VPNX.COM, INC.
By	/S/ DAVID A. BUCKEL
Title	Vice President and CFO