Exhibit 10.1
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is effective as of the
31st day of August, 2005, by and between WilTel Communications, LLC ("WilTel"),
a Delaware limited liability company (f/k/a Xxxxxxxx Communications, LLC), and
Interland, Inc. ("Interland"), a Minnesota corporation and successor-in-interest
to Hostcentric, Inc. ("Hostcentric").
RECITALS
WHEREAS the Parties, by and through their predecessor companies, entered
into a Network Services Agreement ("NSA") dated June 30, 2000, as amended
November 1, 2002, May 1, 2002, May 31, 2002 and May 14, 2003, wherein WilTel
would provide certain telecommunications services to Hostcentric; and
WHEREAS the NSA provided that Hostcentric could terminate the NSA at any
time upon ninety days written notice to WilTel and payment of an Agreement
Termination Fee "equal to the net present value (discounted at the annual rate
of nine percent (9%)) of the difference between: (X) one-half of Hostcentric's
remaining aggregate Minimum Commitment as of the termination date, (Y) less the
aggregate amount by which each payment for Applicable Services (including any
Deficiency Amounts paid) has exceeded the total of monthly Minimum Commitments
accrued as of the termination date;" and
WHEREAS Interland sold its dedicated hosting assets to Peer 1 Network, Inc.
("Peer 1"), a Canadian corporation, and, as a result of such transaction,
desires to terminate the NSA and pay the Agreement Termination Fee; and
WHEREAS the Parties have disagreed on the method to be used to calculate
the Agreement Termination Fee, and now desire to settle that disagreement;
NOW, THEREFORE, in exchange for the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
1. NSA Termination. The parties hereby agree that the NSA shall be deemed
terminated effective as of August 31, 2005.
2. Agreement Termination Fee. Interland shall pay to WilTel a one-time
Agreement Termination Fee of seven hundred fifty thousand dollars
($750,000.00). Said fee shall be due and payable immediately upon
execution of this Agreement, by wire transfer to WilTel
Communications, x/x Xxxx xx Xxxxxxxx, Xxxxx, XX, Account Number:
010649443, ABA Number: 000000000.
3. Transition Period. Notwithstanding termination of the NSA under
paragraph 1, pursuant to Section 3.5 of the NSA regarding the
post-cancellation transition period WilTel shall continue to provide
the services being provided to Interland, as of the effective date of
this Agreement (the "Continuous Services") and Interland shall
continue to pay for said services as outlined on Exhibit A attached
hereto, on a month-to-month basis, under same terms and conditions as
set forth in the NSA, as amended, and the applicable Schedules and
Service Orders in effect as of the date of this Agreement, except that
Interland may terminate the Continuous Services on a
circuit-by-circuit basis and shall give WilTel thirty (30) days
written notice of the date upon which it desires that each of the
Continuous Services be terminated, which notice shall be given no
earlier than December 8, 2005. Interland shall continue to pay the
regular monthly recurring fee for each of the Continuous Services in
the amounts as outlined on Exhibit A attached hereto (the total of
which for the Continuous Services in effect as of the Agreement
Effective Date is seventy two thousand one hundred dollars
($72,100.00)). In the event any of the Continuous Services are
terminated after January 7, 2006 pursuant to this Section 3, the
$72,100 cost will be reduced accordingly. WilTel agrees to use
commercially reasonable efforts to work with Interland and Peer 1 in
order to minimize disruption upon termination of WilTel services.
Notwithstanding the foregoing, in the event that WilTel has not
received notice of termination for all of the Continuous Services by
April 1, 2006, WilTel may at any time thereafter terminate the
Continuous Services upon thirty (30) days notice to Interland.
4. Compromise and Denial of Liability. The parties agree that they are
entering into this Agreement as a compromise to avoid the cost and
expense of possible litigation. The Parties' performance of all
obligations set forth in this Agreement shall finally settle and
resolve all claims asserted or which could have been asserted by
either of them in regard to the Agreement Termination Fee owed under
the NSA. The payment, consideration and covenants herein provided are
not be to construed as an admission of liability by any Party on the
basis asserted by another Party, and any such alleged liability is
expressly denied. Each party agrees to bear its own attorneys' fees,
costs and expenses incurred in connection with this dispute.
5. Release of Claims. Upon performance of the obligations set forth in
paragraphs 1 through 3 of this Agreement, and in consideration of the
promises and covenants contained herein, each Party, on behalf of
itself and its predecessors, successors, parents, subsidiaries,
affiliates, assigns, directors, officers, employees, agents and legal
representatives, hereby fully and finally releases and forever
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discharges the other Party and its predecessors, successors, parents,
subsidiaries, affiliates, assigns, directors, officers, employees,
agents and legal representatives, from any and all claims, causes of
action, liens, claims, suits, judgments, rights, damages, loss, costs,
expenses or demands, whether known or unknown, asserted or unasserted,
matured or unmatured, liquidated or unliquidated, at law or in equity
("Claims"), which the releasing Party has or at any time may have had
as a result of, or in connection with the Agreement Termination Fee.
6. Indemnification. The Parties each agree to save, defend, indemnify and
hold harmless the other against any claims, causes of action, liens,
claims, suits, judgments, rights, damages, loss, costs, expenses or
demands (including attorney's fees) arising out of or in connection
with any breach of a representation, covenant and/or warranty set
forth herein.
7. Confidentiality. The Parties agree that neither of them will disclose
the terms of this Agreement or any matters pertaining to this
settlement unless such disclosure is (i) lawfully required by a
governmental agency or order of a court of competent jurisdiction;
(ii) otherwise required to be disclosed by law; (iii) reasonably
required to be made to accountants and/or financial consultants
retained by the parties in the normal course of their business and
operations; (iv) reasonably required to be made to the Internal
Revenue Service or governing state tax authorities for tax purposes;
or (v) necessary in any legal proceeding in order to enforce any
provisions of this Agreement. The Parties agree that they will notify
each other in writing within five (5) calendar days of the receipt of
any subpoena, court order, or administrative order requiring
disclosure of information subject to this non-disclosure provision.
Notwithstanding the foregoing, WilTel acknowledges and consents to
Interland's disclosure of this Agreement only to the extent Interland
deems necessary to comply with U.S. securities laws and the rules of
any applicable national exchange.
8. Complete Agreement. This document contains the complete Agreement
between the Parties with respect to its subject matter and supercedes
any and all prior agreements, understanding, promises, warranties, and
representations made by each Party to the other concerning the subject
matter.
9. Execution. This Agreement may be executed in identical counterparts,
each of which shall constitute an original and all of which shall
constitute one and the same Agreement. In addition, the parties
understand, agree and stipulate that facsimile signatures shall be
sufficient to bind the signing parties to their respective obligations
hereunder, and the parties may rely on such facsimile signatures in
carrying out their obligations. Original signatures shall thereafter
be provided to the parties. The Parties agree to execute and exchange
any such further documentation as may be reasonably required to give
effect to the Agreement.
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10. Modification. This Agreement may be modified only by a written
document signed by the Parties. No waiver of this Agreement or of any
of the promises, obligations, terms, or conditions hereof shall be
valid unless it is written and signed by the Party against whom the
waiver is to be enforced.
11. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties thereto, their predecessors, successors,
parents, subsidiaries, affiliates, assigns, agents, directors,
officers, employees, and attorneys. Each of the signatories of this
Agreement represents and warrants that he is authorized to execute
this Agreement and to bind the Parties hereto.
12. Severability. If any part or any provision of this Agreement shall be
finally determined to be invalid or unenforceable under applicable law
by a court of competent jurisdiction, that part or provision shall be
ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of said provision or
the remaining provisions of this Agreement.
13. Warranties. The Parties hereby warrant and represent that they have
not assigned or in any way transferred or conveyed all or any portion
of the claims covered by this Agreement, and to their knowledge, no
other person or entity has a right to any claim that purports to be
settled by this Agreement. The Parties acknowledge and agree that this
warranty and representation is an essential and material term of this
Agreement, without which they would not have entered into it. The
Parties each agree to defend and to hold each other harmless against
the claims of any other person or entity asserting a claim or right
that purports to be settled by the Agreement.
14. Voluntary Agreement. The Parties acknowledge that they have had the
opportunity to consult with legal counsel of their choosing prior to
entering into this Agreement, that they know and understand this
Agreement's contents and their legal effect, and that they are
executing this Agreement knowingly and voluntarily, free of undue
influence, coercion or duress of any nature whatsoever.
15. No Construction Against Drafter. The Parties cooperated in the
drafting of this Agreement, and in the event that it is determined
that any provision herein is ambiguous, that provision shall not be
presumptively construed against either Party.
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16. Enforcement. In the event that a Party seeks to enforce the provisions
of this Agreement, the prevailing Party shall recover its attorneys'
fees and costs incurred therein.
17. Governing Law. This Agreement shall be governed in all respects under
the laws of the State of New York, regardless of its choice of law
rules.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed on the date set forth beneath each Party's respective signature.
WILTEL COMMUNICATIONS, LLC INTERLAND, INC.
/s/ X.X. xxXxxxxx /s/ Xxxxxxx Xxxxxxxx
--------------------------------- ----------------------------------
Signature of Authorized Representative Signature of Authorized Representative
X.X. xxXxxxxx Xxxxxxx Xxxxxxxx
-------------------------------- ----------------------------------
Printed Name Printed Name
SVP & CFO CFO
--------------------------------- ----------------------------------
Title Title
12/8/05 12/8/05
--------------------------------- ----------------------------------
Date Date
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EXHIBIT A
CONTINUOUS SERVICES
------------------------- ------------------------------------ ----------------------------------------------
CIRCUIT NUMBER LOCATION/DESCRIPTION MONTHLY RECURRING FEE
------------------------- ------------------------------------ ----------------------------------------------
00-XXX-0000 Xxxxx Xxxxx, XX - colo $1400.00 (2-23" Racks, 30 DC Amps)
------------------------- ------------------------------------ ----------------------------------------------
00-XXX-000 Xxxxx Xxxxx, XX - colo $700.00 (1-19" Rack, 20 AC Amps, 30 DC Amps
------------------------- ------------------------------------ ----------------------------------------------
TWC671876 Palo Alto, CA - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
TWC1114543 Miami, FL - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
TWC1116898 Atlanta, GA - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
TWC1136562 Miami, FL - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
TWC1136563 Atlanta, GA - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
XXX000000 Xxxxx Xxxxx, XX - GigE DIA $11,400.00 (325Mbps min commit)*
------------------------- ------------------------------------ ----------------------------------------------
TWC633995 Orlando,FL - DS3 DIA $1,600.00 (45Mbps full rate)
------------------------- ------------------------------------ ----------------------------------------------
* all usage above minimum commit level (95th percentile peak) billed at $35/Mbps
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