According to the Company’s FORM 10-K for the fiscal year ended December 31, 2004, in September 2003, in connection with the possible settlement, the Company’s officers and directors who had entered tolling agreements with the plaintiffs as described above agreed to extend those agreements so that they would not expire prior to any settlement being finalized. In February 2004, the settlement received preliminary approval from the court. Upon notification of all class members of the settlement, the parties will seek final approval from the court.

As summarized by the Same SEC filing, in July 2001, the Company and certain of its officers and directors, as well as the underwriters of the Company’s initial public offering, or IPO, a number of other companies, or Issuers, individuals and IPO underwriters, were named as defendants in a series of class action shareholder complaints filed in the United States District Court for the Southern District of New York. Those cases are now consolidated under the caption, In re Initial Public Offering Securities Litigation, Case No. 91 MC 92. In October 2002, the parties agreed to toll the statute of limitations with respect to certain of the named officers and directors, including the Company’s, until September 30, 2003 and on the basis of this agreement, the Company’s officers and directors were dismissed from the lawsuit without prejudice. In February 2003, the Court issued a decision denying the motion to dismiss the Section 11 claims against substantially all of the Issuers, including the Company, and denying the motion to dismiss the Section 10(b) claims against many Issuers, including the Company. During the summer and fall of 2003, the Company, along with the substantial majority of Issuers, indirectly participated in discussions with the plaintiffs and the Company’s respective insurers regarding a tentative settlement of the lawsuit. The terms of the tentative settlement would provide for, among other things, a release of the Issuers and their officers and directors, including the Company, from all further liability resulting from plaintiffs’ claims and the assignment to plaintiffs of certain potential claims that the Issuers may have against their IPO underwriters. The tentative settlement also provides that, in the event that plaintiffs ultimately recover less than a guaranteed sum from the IPO underwriters, plaintiffs would be entitled to payment by each participating issuer’s insurer of a pro rata share of any shortfall in the plaintiffs’ guaranteed recovery. The Company entered into a non-binding memorandum of understanding reflecting the settlement terms described above.

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants (Morgan Stanley, Credit Suisse, Robertson Stephens, and Merrill Lynch) had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of InterNAP shares issued in connection with the InterNAP IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate InterNAP shares to those customers in the InterNAP IPO in exchange for which the customers agreed to purchase additional InterNAP shares in the aftermarket at pre-determined prices.