SETTLEMENT AGREEMENT
Exhibit 10.1
THIS SETTLEMENT AGREEMENT (this “Agreement”) is made and entered into effective as of February 6, 2007 (the “Effective Date”) by and among Hawaiian Telcom Communications, Inc, a Delaware corporation (“HT”), TC Group III, L.P. (“Carlyle”) (as to Sections 12, 13, 15 and 17 through 24 only) and BearingPoint, Inc., a Delaware corporation (“BE”).
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Effective as of August 2, 2004, HT and BE entered
into a Master Services Agreement (together with any amendments thereto or
change requests executed thereunder, the “MSA”),
pursuant to which BE agreed to provide certain information technology and
other services to HT. |
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On or before the Closing Date (as defined below), BE
shall cause the Insurers to deliver to their respective counsel or other
designee (other than BE) to be held in trust for the benefit of HT
immediately available funds by wire transfer as set forth in Exhibit A. |
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2. Closing: |
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After the date that all Insurer Payments required under Section 1 have been received by the respective counsel of the Insurers (or other designee other than BE), but in any event on or before March 27, 2007 (the “Closing Date”), BE shall coordinate the simultaneous delivery of the Settlement Payments to HT by wire transfer to an account designated by HT. |
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Effective as of the Closing Date, BE hereby
waives, releases and forgives HT from
any liability for the BE invoices previously submitted to HT and listed in Exhibit B. This
forgiveness specifically extends to all invoices for operate services
provided by BE to HT from the initiation of such services through the
Effective Date. |
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Effective as of the Closing Date, except for the
Reserved Claims (as defined below), HT (on behalf of itself and its former,
present and future subsidiaries, parents, affiliates, representatives,
successors and assigns and all persons acting by, through, under or in
concert with them or any of them) hereby fully and forever irrevocably and unconditionally
releases, acquits and discharges BE, together with its former, present and
future subsidiaries, affiliates, successors, assigns, representatives, their
respective directors, officers and employees and all persons acting by,
through, under or in concert with them or any of them, and their respective
insurers and reinsurers (collectively, the “BE
Released Parties”) from, and agrees not to ▇▇▇ regarding, any and
all actions, causes of action, claims or demands (whether at law or in
equity), liabilities, losses, damages, or any other form of claim or
compensation for known or unknown acts or omissions taken or suffered by any
of the BE Released Parties on or before the Closing Date. |
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Effective as of the Closing Date, except for the Reserved Claims, BE (on behalf of itself and its former, present and future subsidiaries, parents, affiliates, representatives, successors and assigns and all persons acting by, through, under or in concert with them or any of them) hereby fully and forever irrevocably and unconditionally releases, acquits and discharges HT, |
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together with its former, present and future
subsidiaries, affiliates, successors, assigns, representatives, their
respective directors, officers and employees and all persons acting by,
through, under or in concert with them or any of them (collectively, the “HT Released Parties”) from, and agrees not to ▇▇▇
regarding, any and all actions, causes of action, claims or demands (whether
at law or in equity), liabilities, losses, damages, or any other form of
claim or compensation for known or unknown acts or omissions taken or
suffered by any of the HT Released Parties on or before the Closing Date. |
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For the avoidance of doubt, the releases set forth above shall have no effect on the obligation of HT and BE to perform their respective obligations under the Transition Agreement (as defined below), all of which shall be subject to the terms and conditions of the Transition Agreement. |
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In recognition of the transactions contemplated by
this Agreement and the respective obligations of HT and BE under the
Transition Agreement, from and after the Effective Date and until the earlier
of the Closing Date or the date of termination of this Agreement in
accordance with Section 16 below, the MSA shall be deemed suspended and
neither HT nor BE shall be obligated to perform their respective obligations
thereunder. 1. Section 9.4.2 (b) (License to Supplier Technical Elements); 2. Section 9.4.3 (License to Supplier Third Party Technical Elements); and 3. Section 11.2 (Ownership) (other than Subsections 11.2.5 and 11.2.6 thereof).
For the avoidance of doubt, BE’s provision of Transition Services (as defined below) will be subject to the terms and conditions of the Transition Agreement and not the MSA. |
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The following provisions (the “Reserved
Provisions”) of the MSA will survive the termination of the MSA
and remain in full force and effect:
Subsections 18.1.5, 18.1.9, 18.2.2 and 18.2.3 (IP Infringement). |
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Contemporaneously with the execution and delivery of this Agreement, BE and HT shall execute and deliver a Transition Agreement, pursuant to which BE shall provide certain transition assistance services (“Transition Services”) to HT (the “Transition Agreement”). The effectiveness of this Agreement shall be subject to the prior execution and delivery of the Transition Agreement. |
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10. Acknowledgement: |
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By executing and delivering this Agreement, neither HT nor BE shall be deemed to have admitted to the performance or suffering of any improper action in connection with the subject matter hereof. |
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In the event a BE Bankruptcy Event (as defined below) occurs prior to the Closing Date, if BE does not assume this Agreement |
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within 60 days of such Bankruptcy Event, HT may file
a precautionary claim in any bankruptcy proceeding of BE regarding the
matters settled herein (not limited to the amount of the Settlement
Payments), but agrees to withdraw such claim if the bankruptcy court
subsequently enters an order authorizing and directing assumption of this
Agreement and payment in full of the Settlement Payments and such Settlement
Payments are received by HT. Nothing
set forth in this paragraph shall be deemed an admission by any party hereto
that this Agreement is or shall be an executory contract on or after the
occurrence of a BE Bankruptcy Event. |
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12. Confidentiality: |
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Each of HT, Carlyle and BE shall keep the terms and conditions of this Agreement strictly confidential, and no party hereto shall disclose such terms and conditions to any third party except: (1) with the prior written consent of each of the other parties, (2) to the extent required by applicable law or regulation or by order of a court of competent jurisdiction, (3) in confidence to the professional legal and financial counsel representing such party, (4) in confidence to any party covered or potentially covered by the releases granted herein, or (5) as required by agreements |
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with a party’s existing and potential financing
sources, provided that such sources are bound by existing confidentiality
obligations. With respect to a
disclosure by HT or BE pursuant to the foregoing clause (2), HT or BE, as the
case may be, shall, except as may be prohibited by applicable law, provide BE
or HT, as the case may be, with prior written notice as early as practicable
prior to such disclosure pursuant to such applicable law, regulation or order
so as to permit the other an opportunity to object or seek confidential
treatment of such material, as applicable and such disclosing party shall (i)
reasonably assist the other objecting to such disclosure in its efforts (a)
to interpose an objection to such disclosure, (b) to take action to seek to
assure confidential handling of such information or (c) to take such other
action as it deems reasonably appropriate to protect such information, and
(ii) at the request of the party objecting to such disclosure, use
commercially reasonable efforts, at the expense of the objecting party, to
limit the disclosure of the terms and conditions of this Agreement to the
extent permitted by applicable law.
With respect to the U.S. Federal Communications Commission, the U.S.
Securities and Exchange Commission and Hawaii Public Utilities Commission,
nothing herein shall restrict a party’s ability to disclose terms and conditions
of this agreement to the extent legally required, in the sole good faith
judgment of the disclosing party. |
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From and after the date hereof, each of HT (on behalf of itself and its subsidiaries, parent, affiliates, successors, assigns, directors and officers) and Carlyle hereby agrees not to make any written or oral statement to a person not subject to Section 12 above or Section 2.9 of the Transition Agreement or, in the case of statements to persons or entities that are portfolio companies controlled by Carlyle or in which Carlyle has a substantial economic interest, or that are affiliates of Carlyle, not subject to similar confidentiality obligations to ▇▇▇▇▇▇▇, ▇▇ or an affiliate of either, concerning BE’s performance under the MSA, the Services provided by BE under the MSA or the |
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management of such performance or Services that
would negatively comment on, disparage, or call into question the business,
operations, policies or conduct of BE, or to act in any way with respect to
such business, operations, policies or conduct that would damage BE’s
reputation, business relationships or present or future business, or the
reputation of any past or present subsidiaries, affiliates, successors,
assigns, directors, officers or employees of BE, except to the extent: (1) required by law, (2) in HT’s or Carlyle’s
sole good faith discretion, necessary for HT or Carlyle to defend itself in
any civil, criminal, administrative, judicial, arbitral, regulatory, or
administrative proceeding, or (3) in HT’s or Carlyle’s sole good faith
discretion, necessary to respond to requests for information submitted by
existing and potential financing sources of HT or Carlyle, provided that such
sources are bound by existing confidentiality obligations. |
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14. Press Release: |
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Attached hereto as Exhibit C is a form of press release to be issued by HT and BE promptly following the execution and delivery of this Agreement. |
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It is the intention of the parties hereto that, upon execution and delivery of this Agreement by all of the parties hereto, this Agreement shall be binding and enforceable against each such party. |
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16. Termination: |
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HT in its sole discretion, by written notice to BE,
may terminate this Agreement if HT does not receive the Settlement Payments
in full by 4:00 p.m., Eastern Time, on March 30, 2007; provided however,
termination under this provision shall not in and of itself relieve any Party
from liability regarding the matters settled herein (including but not
limited to costs, expenses and damages, whether consequential or
otherwise). If HT so elects to
terminate this Agreement under this Section 16, (a) such termination shall
constitute HT’s sole and exclusive remedy under this Agreement and (b) the
Parties shall be restored to the status quo ante (it being expressly
understood that no releases contemplated by this Agreement shall have any
force or effect in the event of such termination), including that (i) the MSA
shall be deemed reinstated to full force and effect as of the Effective Date
(as if it had never terminated), (ii) all invoices previously submitted to HT
shall not be waived and all amounts with respect to services provided to HT
but not yet invoiced shall not be waived, (iii) the Transition Agreement
shall be terminated as of the date of the termination of this Agreement and
shall be void ab initio (with the express
understanding that, notwithstanding any provision of the Transition
Agreement, no provisions of the Transition Agreement shall survive and the
relationship of the Parties shall be governed by the MSA as if it had never
been suspended or terminated as the case may be), (iv) promptly (but in any
event within two business days) after any such termination of this Agreement
by HT, HT shall return, by wire transfer of immediately available funds, any
portion of the Settlement Payment previously received by HT to the entity
that paid the same, and (v) this Agreement may not be relied on or referred to
for any purpose, other than to enforce this Agreement. |
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The terms and provisions of this Agreement, including any Exhibit hereto, may be modified or amended only by a written instrument executed by each of the parties hereto, and compliance with any term or provision hereof may be waived only by a written instrument executed by each party entitled to the benefits of the same. Except as expressly provided herein to the contrary, no failure to exercise any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege granted hereunder. |
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18. Construction: |
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The section headings contained in this Agreement are for convenience of reference only and shall in no way define, limit, extend or describe the scope or intent of any provisions of this Agreement. As used in this Agreement, unless otherwise provided to the contrary, (a) all references to days shall be deemed references to calendar days and (b) any reference to a “Section” or “Exhibit” shall be deemed to refer to a section of this Agreement or an exhibit attached to this Agreement. The words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation.” The portions of the MSA that are not Surviving Provisions or Reserved Provisions may be used to the extent necessary to interpret the meaning of the Surviving Provisions and the Reserved Provisions, but only for such purpose and for no other purpose. |
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19. Severability: |
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If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement; provided, however, that if such illegal, invalid or unenforceable provision may be made legal, valid and enforceable by limitation thereof, then the provision shall be revised and reformed to make it legal, valid and enforceable to the maximum extent permitted by law. |
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This Agreement, together with the Transition Agreement, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements and understandings with respect to the subject matter hereof. |
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Any dispute among the parties arising out of or
relating to this Agreement shall be solely and exclusively resolved by
confidential, binding arbitration before the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The arbitrator shall have the right to
award, or include in any award, injunctive relief. Any arbitrator’s award shall be final and
binding on the parties thereto, and judgment thereon may be entered in any
court of competent jurisdiction. The
arbitrator may, in the arbitrator’s sole discretion, award attorneys’ fees to
the prevailing Party in any dispute.
In the event of the arbitrator’s death, disability or extended
absence, the parties to such dispute will mutually agree to name a
replacement arbitrator. |
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This Agreement shall be governed by and construed in accordance with the laws of the State of Hawaii without giving effect to principles of conflicts of law. |
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23. Counterparts: |
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This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. |
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All notices required or permitted by this Agreement will be in writing with a copy sent by email and will be deemed duly given (a) when delivered by hand, (b) on the designated day of delivery after being timely given to an express overnight courier with a reliable system for tracking delivery, (c) when sent by confirmed facsimile with a copy sent by another means (other than email) specified in this Section or (d) five (5) Business Days after the day of mailing, when mailed by United States mail, registered or certified mail, return receipt requested and postage prepaid, and addressed as follows: |
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In the case of HT: |
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In the case of Carlyle: |
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Hawaiian Telecom Communications, Inc. |
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By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
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Name: |
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
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Title: |
Chief Executive Officer |
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TC Group III, L.P. (as to Sections 12, 13, 15 and 17 through 24 only) |
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By: |
TC Group III, L.L.C., its General Partner |
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By: |
TC Group, L.L.C., its Managing Member |
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By: |
TCG Holdings, L.L.C., its Managing Member |
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By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
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Name: |
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
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Title: |
Managing Director |
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BearingPoint, Inc. |
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By: |
/s/ ▇▇▇▇▇ ▇. You |
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Name: |
▇▇▇▇▇ ▇. You |
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Title: |
Chief Executive Officer |
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