Exhibit (d)(29)
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (the "Agreement') is entered into
effective as of this 1st day of November, 2001 (the "Effective Date") by and
between (A) Interliant Texas, Inc., a Delaware corporation with offices at 0
Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000 ("Interliant Texas"), (B) Interliant,
Inc., a Delaware corporation with offices at 0 Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, XX
00000 ("Interliant"), and (C) Xxxxx X. Xxxxxx, an individual residing at 0000
Xxxxxx, Xxxxxx, Xxxxx 00000, Xxxxxxxx X. Xxxxx, an individual residing at 0000
Xxxxxxxxx Xxx, Xxxxxx, Xxxxx 00000, Xxxxxxx X. Xxxxxxx, an individual residing
at 0000 Xxxxxxxxx, Xxxxxx, Xxxxx 00000, and Xxxxx X. Xxxxxxx, an individual
residing at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (collectively, the
"Shareholders" and individually, a "Shareholder").
WHEREAS, the parties hereto, together with Milestone Services, Inc., a
Texas corporation, have previously entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") dated July, 27, 2000; and
WHEREAS, pursuant to Section 2.03(a)(iii) of the Stock Purchase Agreement,
certain consideration was to be paid by Interliant Texas to the Shareholders
upon the occurrence of certain milestone events and net revenues targets
(singularly the "Earnout", collectively the "Earnouts"); and
WHEREAS, such milestone events and net revenue targets have been satisfied
subject to collection of certain accounts receivable and work in process
identified on Exhibit E attached hereto ("AR/WIP"); and
---------
WHEREAS, the parties wish to provide for the payment of the Earnouts in the
manner set forth in this Agreement; and
NOW THEREFORE, in exchange for the release set forth herein, and for good
and valuable consideration, including, but not limited to, the mutual promises
set forth herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Definitions. Unless otherwise defined or set forth in this Agreement,
capitalized terms used herein shall have the meaning set forth in the Stock
Purchase Agreement.2.
2. Settlement of Earnout. The parties agree that, subject to collection of
certain amounts of the AR/WIP, the amount due to the Shareholders as the
Consolidated Net Revenues Earnout under Section 2.03(a)(iii) of the Stock
Purchase Agreement is $1,880,000, which is based on calculations previously
submitted by the Shareholders to Interliant by letter dated August 16, 2001, a
copy of which is annexed hereto as Exhibit A. Pursuant to Section 2.03 (a)(x) of
---------
the Stock Purchase Agreement, the parties hereby agree that (i) 40% thereof or
$752,000 (the "Earnout Cash Portion"), shall be paid in accordance with the
provisions of Paragraph 3.1 below, and 60% thereof or $1,128,000
(the "Earnout Stock Portion") shall be paid in accordance with the provisions of
Paragraph 3.2 below.
3. Payment by Interliant.
3.1 Earnout Cash Portion. Interliant, on behalf of Interliant
Texas, agrees to pay each Shareholder the amount set forth
next to each Shareholders' name on Exhibit B hereto and
---------
identified thereon as "Cash Portion Settlement Amount", in
full settlement of all obligations for the Earnout Cash
Portion. Interliant shall pay each Shareholder the "Initial
Payment" as identified on Exhibit B, as of the date of the
---------
execution of this Agreement and the balance thereof, or the
amount identified on Exhibit B as the "Principal Amount", in
---------
accordance with the terms of a promissory note in the form
attached as Exhibit C and to be delivered by Interliant
---------
concurrently with the execution of this Agreement
(collectively, the "Cash Notes" and each, a "Cash Note"),
which Cash Notes shall have a maturity date of December 1,
2002 and shall bear interest from September 14, 2001 at the
rate of seven percent (7%) per annum which interest will be
payable monthly.
3.2 Earnout Stock Portion. Interliant, on behalf of Interliant
Texas, agrees to pay each Shareholder the amount set forth
next to each Shareholders' name on Exhibit B hereto and
---------
identified thereon as "Stock Portion Settlement Amount", in
full settlement of all obligations for the Earnout Stock
Portion. Interliant shall pay each Shareholder the amount
identified on Exhibit B as the "Principal Amount", in
---------
accordance with the terms of a promissory note in the form
attached as Exhibit D and to be delivered by Interliant
---------
concurrently with the execution of this Agreement
(collectively, the "Stock Notes" and each, a "Stock Note"),
which Stock Notes shall have a maturity date of July 1, 2005
and shall bear interest from September 14, 2001 at the rate of
seven percent (7%) per annum which interest will be payable
monthly commencing January 1, 2003, except as otherwise
provided in the Stock Note.
4. Release by The Shareholders. (a) Upon receipt of the Initial Payment,
the Cash Notes and the Stock Notes by each Shareholder, the Shareholders hereby
irrevocably release and discharge Interliant Texas, Interliant and their
respective officers, directors, agents, employees, subsidiaries,
representatives, successors and assigns of and from any and all claims, demands,
debts, damages, duties, causes of action, actions, and suits whatsoever, in law
or equity, which they may now have or to which they may hereafter become
entitled, arising out of or relating to the obligation of Interliant Texas or
Interliant to pay the Earnout Cash Portion or the Earnout Stock Portion pursuant
to Section 2.03(a)(iii) of the Stock Purchase Agreement including claims and
damages not yet ascertainable, if there be any, as well as those known, except
for obligations of Interliant under the Cash Notes and the Stock Notes, any New
Notes (as such term is defined in the Stock Notes) and the Shareholders do
hereby acknowledge full satisfaction
thereof. Notwithstanding anything in this Agreement to the contrary, the
provisions of this Agreement, including without limitation, this Section 4 do
not release or discharge or purport to release or discharge any claims, demands,
debts, damages, duties, causes of action, actions, and suits whatsoever, in law
or equity, which they may now have or to which they may hereafter become
entitled, arising out of or relating to or pursuant to the Stock Purchase
Agreement other than those claims, demands, debts, damages, duties, causes of
action, actions, and suits whatsoever, in law or equity, related to Interliant
Texas and/or Interliant's obligations to pay the Earnouts pursuant to Section
2.03(a)(iii) of the Stock Purchase Agreement.
5. No Other Inducement or Admissions. Each party, in executing this Agreement,
does not rely on any inducements, promises, or representations made by the other
party hereto, with the exception of the consideration recited herein.
6. Confidentiality. The parties agree that the terms and conditions of this
Agreement, and any and all underlying communications, negotiations, documents,
correspondence or agreements relating thereto, are confidential. No party shall
publicize or disclose the terms and conditions of this Agreement or the
underlying circumstances to any other person or entity without the prior written
approval of the other parties, except with respect to that information which is
or becomes publicly known through no act or omission of the party charged with
confidentiality or to: (1) its accountants or attorneys for auditing purposes,
(2) its attorneys for purposes of enforcing compliance with this Agreement, or
(3) any person or governmental entity if such disclosure is required by the
terms of a duly-authorized and validly issued subpoena or other form of legal
process or is required by the reporting requirements of a duly-constituted
governmental entity.
7. Remedies. Upon any violation of this Agreement, any party aggrieved by the
violation shall be entitled immediately to seek and obtain from any appropriate
court all appropriate legal and equitable relief to enforce this Agreement,
including specific enforcement, temporary and permanent injunctive relief,
immediate dismissal of any legal action filed in violation of this Agreement,
and recovery of damages, reasonable attorneys' fees, expenses and costs incurred
by the aggrieved party because of the violation of this Agreement.
8. Adequate Time to Review. The parties acknowledge that each has had adequate
time to review this Agreement with its respective attorneys and that this
Agreement is fully understood by them.
9. General.
9.1. Entire Agreement. This Agreement and the Cash Note, the Stock Note
and the New Notes constitute the complete and exclusive agreement
between the parties concerning the subject matter of this Agreement
and supersedes all proposals, oral or written, and all negotiations,
conversations and other communications between the parties relating
to the subject matter of this Agreement. Changes to this Agreement
may be made only by a written amendment signed by both parties that
references this Agreement.
9.2. Governing Law; Actions. All rights, duties and obligations arising
from or relating in any manner to the subject matter of this
Agreement shall be governed by and construed under the laws of the
State of New York applicable to agreements made and fully performed
therein, without regard to its conflict of laws provisions. The
parties submit to the exclusive jurisdiction of (a) the State and
Federal courts located in Westchester and New York Counties, State
of New York regarding any action commenced by Interliant or
Interliant Texas to enforce their respective rights hereunder and
(b) the State and Federal courts located in Dallas County, State of
Texas regarding any action commenced by any Shareholder to enforce
their respective rights hereunder.
9.3. Effect of default under this Agreement the Cash Notes, the Stock
Notes or the New Notes. The parties agree that upon the Default
Date (as such term is defined in the Cash Note and the Promissory
Note) resulting from a default by Interliant or Interliant Texas
under the terms of this Agreement, any Cash Note, Stock Note or any
New Note, the Shareholders shall no longer be bound by the
following provisions and such provisions shall terminate
automatically upon the date such default occurs without any further
action of any of the Parties: (i) the provisions of Section 5.01(a)
of the Stock Purchase Agreement, and (ii) any provision, obligation
or agreement set forth in any employment agreement, policy,
employee handbook or other agreement to which any of the
Shareholders may be a party or subject to, including, without
limitation, that certain Employment Agreement, dated as of July 28,
2000, between Xxxxx X. Xxxxxx and Interliant Texas, that certain
Employment Agreement, dated as of July 28, 2000, between Xxxxxx X.
Xxxx and Interliant Texas, that certain Employment Agreement, dated
as of July 28, 2000, between Xxxxxxxx X. Xxxxx and Milestone
Services, Inc., and those certain Intellectual Property,
Proprietary Information and Non-Solicitation Agreements between
each of Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, and Xxxxxxxx X.
Xxxxx, respectively, and Interliant, which purports to prohibit or
otherwise restrict any Shareholder from competing against
Interliant, Interliant Texas or any of their respective
subsidiaries or affiliates. Further, the parties agree that from
and after the Default Date of a default described in the preceding
sentence, if Interliant shall at any time cease all of its
operations, then the Shareholders shall no longer be bound by the
following provisions and such provisions shall terminate
automatically upon the Default Date without any further action of
any of the Parties: (i) the provisions of Section 5.01 (c) of the
Stock Purchase Agreement, and (ii) any other limitation on the
Shareholders ability to interfere with, hire, solicit or endeavor
to entice away any employee, subcontractor, consultant, client or
customer of Interliant or Interliant Texas or any of their
respective subsidiaries or affiliates set forth in any employment
agreement, policy, employee handbook or other agreement to which
any of the Shareholders may be a party or subject to, including,
without limitation, that certain Employment Agreement, dated as of
July 28, 2000,
between Xxxxx X. Xxxxxx and Interliant Texas, that certain Employment
Agreement, dated as of July 28, 2000, between Xxxxxx X. Xxxx and
Interliant Texas, hat certain Employment Agreement, dated as of July
28, 2000, between Xxxxxxxx X. Xxxxx and Milestone Services, Inc., and
those certain Intellectual Property, Proprietary Information and
Non-Solicitation Agreements between each of Xxxxxxx X. Xxxxxxx, Xxxxx
X. Xxxxxxx, and Xxxxxxxx X. Xxxxx, respectively, and Interliant;
provided, however, that a sale, merger, combination or other
consolidation of Interliant or its business or assets with or into any
other entity that continues to operate the business of Interliant, in
whole or in part, after giving effect to such sale, merger,
combination or other consolidation, shall not be considered a
cessation of all operations of Interliant for purposes of the
foregoing.
9.4. Counterparts; Reproduction of Agreement. This Agreement may be signed
in one or more counterparts, each of which shall be considered an
original, but all of which together form one and the same instrument.
Once signed, any reproduction of this Agreement made by reliable means
(for example, photocopy or facsimile) is considered an original,
unless prohibited by local law; provided, however, that this shall not
preclude either party from requiring the exchange of original
signatures.
9.5. General Interpretative Provisions. Terms for which meanings are
defined in this Agreement shall apply equally to the singular and
plural forms of the terms defined. The term "including," whenever used
in any provision of this Agreement, means including but without
limiting the generality of any description preceding or succeeding
such term. Each reference to a party shall include a reference to such
party's permitted successors and assigns. The headings of this
Agreement are for reference only and shall not affect the meaning or
interpretation of this Agreement.
9.6. Effective Date. This Agreement shall be effective as of the date
first above written.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
INTERLIANT TEXAS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx,
Vice President
INTERLIANT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Chief Financial Officer
SHAREHOLDERS:
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx