Exhibit 10.1

SETTLEMENT AGREEMENT

          This Settlement Agreement (“Agreement”) is entered into as of the 3rd
day of February, 2011 by and between CornerWorld Corporation (“CornerWorld”) and
Ned B. Timmer (“Timmer”). CornerWorld and Timmer are sometimes collectively
referred to herein as the “Parties” or individually as a “Party.”

RECITALS

          WHEREAS bona fide disputes and controversies exist between the
Parties, both as to liability and the amount thereof, if any, and by the reason
of such disputes and controversies, CornerWorld filed a lawsuit entitled
CornerWorld Corporation v. Ned Timmer, Case No. 1:09-CV-1124, which is pending
in the United States District Court for the Western District of Michigan,
Southern Division, in which Timmer also has pending counterclaims; Timmer filed
a lawsuit entitled Ned Timmer v. Woodland Holdings Corp., et. al., Case No.
1:10-CV-0793, which is pending in the United States District Court for the
Western District of Michigan, Southern Division; and Timmer filed an arbitration
with the American Arbitration Association (“AAA”) which is captioned Ned Timmer
v. Woodland Holdings Corporation, Case No. 13 494 Y 03033 10. The legal
proceedings are collectively referred to as the “Actions;”

          WHEREAS, the Parties vigorously deny the claims asserted in the
Actions; and,

          WHEREAS, the Parties desire to settle fully and finally, in the manner
set forth in this Agreement, all claims and causes of action of any kind
whatsoever which have arisen, or which may arise, prior to, or at the time of,
the execution of this Agreement, including, but in no way limited to, any and
all claims and controversies which were asserted in or which could have been
asserted in the Actions;

          NOW THEREFORE, in consideration of the Recitals and the mutual
promises, covenants and agreements set forth herein and in full compromise,
release and settlement, accord and satisfaction, and discharge of all the claims
or causes of action, known or unknown, possessed by or belonging to the Parties
hereto, the Parties covenant and agree as follows:

          1.       Releases by Timmer. Timmer hereby releases and forever
discharges CornerWorld, its predecessors, successors, subsidiaries, including
but not limited to Woodland Holdings Corp. and its subsidiaries, affiliates,
officers, directors, employees, attorneys, insurers, agents, representatives and
assigns, past, present or future (“CornerWorld Released Parties”), from any and
all claims, losses, liabilities, obligations, suits, debts, liens, contracts,
agreements, promises, demands and damages, of any nature whatsoever, that Timmer
may now have related to or arising out of the Actions or which could have been
asserted in the Actions. This release will only be effective upon Closing
(section 15). This release shall not include claims based on the collection of
the Note.

          2.       Releases by CornerWorld. CornerWorld (acting on behalf of
itself and its subsidiaries), hereby releases and forever discharges Timmer and
his predecessors, successors, attorneys, insurers, agents, representatives and
assigns, past, present or future, from any and all claims, losses, liabilities,
obligations, suits, debts, liens, contracts, agreements, promises, demands and
damages, of any nature whatsoever, that

 

 

   

 

 

SETTLEMENT AGREEMENT

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CornerWorld may now have, or hereafter may have, related to or arising out of
the Actions or which could have been asserted in the Actions. This release will
only be effective upon Closing (section 15).

            3.       Covenants Not To Sue. The Parties each covenant as follows:

 

 

 

 

a.

Timmer, for himself, and on behalf of his current and former heirs, spouse,
successors, assigns, legal representatives, guardians, executors,
administrators, insurers, servants, and agents, as applicable, COVENANTS NOT TO
SUE AT ANY TIME IN THE FUTURE, except as may be required by law or compulsory
process, against CornerWorld and/or the CornerWorld Releasees based upon any of
the claims released in paragraph 1 of this Agreement.

 

 

 

 

b.

CornerWorld for itself and its subsidiaries, COVENANT NOT TO SUE AT ANY TIME IN
THE FUTURE, except as may be required by law or compulsory process, against
Timmer, or his current and former heirs, successors, assigns, legal
representatives, guardians, executors, administrators, insurers, servants, and
agents, as applicable based upon any of the claims released in paragraph 1 of
this Agreement.

            4.       Confidentiality. The Parties agree to keep the terms,
amount, and fact of this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL and will
not communicate or otherwise disclose to any person other than to immediate
family members, tax accountants, and/or attorneys provided that each third party
agree to abide by the terms of this paragraph, except as may be required by law
or compulsory process; except, however, that in response to a direct
solicitation the Parties hereto may disclose the fact that there is an agreement
that covers their business activities and the duration and scope thereof.

            5.       Monetary Settlement Terms. Subject to the conditions and/or
contingencies set forth in this Agreement, CornerWorld agrees pay to Timmer
Seven Million Eight Hundred Thousand Dollars and No Cents ($7,800,000.00) as
follows:

 

 

 

 

a.

A lump sum payment of Six Million Dollars and No Cents ($6,000,000.00) (the
“Lump Sum Payment”) to be made via wire transfer pursuant to wire transfer
instructions to be provided by Timmer;

 

 

 

 

b.

A five (5) year junior secured note for One Million Eight Hundred Thousand
Dollars and No Cents ($1,800,000.00) (the “Note”);

 

 

 

 

 

 

i.

The Note shall be payable in five (5) annual payments of $360,000 with the first
payment becoming due April 30, 2012 and the last payment becoming due April 30,
2016;

 

 

 

 

 

 

ii.

The Note shall bear interest at 10% which shall start accruing on the date of
the Note and which shall be paid based on a 365 day year on a quarterly basis
with payments beginning April 30, 2011;

 

 

 

 

 

 

iii.

The payments on the Note are contingent upon Timmer’s agreement to refrain

 

 

   

 

 

SETTLEMENT AGREEMENT

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from disclosing to anyone after December 1, 2010, the terms, provisions or
existence of any patent license agreements, including without limitation, patent
license agreements, to which the Company or any of its affiliates is a party (as
either licensor or licensee), except as required by law or court order, and then
only to the extent so required, and such Note payments shall immediately cease
if such disclosure is made by Timmer;

 

 

 

 

iv.

The Note shall be secured by existing collateral held by Timmer as set forth in
the Pledge and Security Agreements dated February 23, 2009 made by CornerWorld
Corporation, CornerWorld, Inc., Enversa Companies, LLC, Woodland Holdings Corp.,
Woodland Wireless Solutions Ltd., S Squared LLC, West Michigan Co-Location
Services, LLC, and T2 TV, LLC in favor of Ned B. Timmer;

 

 

 

 

v.

Subject to Paragraph 7, Timmer understands and agrees that while the Note is
secured by existing collateral as explained in Paragraph 5(b)(iv) above, Timmer
will be a junior and/or subordinated secured creditor, meaning that his security
interests will be subordinate to the third party lender or lenders who provide
the new financing for the Lump Sum Payment and associated transaction fees set
forth in Paragraph 5a above (but subordinate only as to the amount of the Lump
Sum Payment and associated transaction fees) and present secured creditors IU
Investments, LLC and Internet University, Inc. In the event that the lender or
lenders providing the financing for the Lump Sum Payment is replaced, the
financing is assumed by another lender, and/or the Lump Sum Payment is otherwise
refinanced, Timmer understands and agrees that he will remain in a junior or
subordinated position to such lender(s) at all times that financing exists for
the Lump Sum Payment;

 

 

 

 

vi.

The Note, Inter-Creditor Agreement(s) and Pledge and Security Agreement(s) shall
be in a form to be agreed upon by the Parties;

 

 

 

 

vii.

CornerWorld shall deliver at closing fully executed copies of the agreements
signed by each pledgor under the Pledge and Security Agreements referenced in
subsection iv of this section revising the Pledge and Security Agreements to
reflect that they secure the Note; and

 

 

 

 

viii.

Prior to Closing, Timmer and HCC shall designate an amount to be allocated and
paid to HCC for its stock and its 2.6326190% interest in the Purchase Money Note
pursuant to the Assignment Of Interest In Purchase Money Note executed by Ned B.
Timmer and HCC effective February 23, 2009.

 

 

 

 

c.

The Parties further agree that prior to the funding of the Lump Sum Payment and
the final closing of this settlement agreement, neither the Lump Sum Payment nor
the Note will be reduced by any principal and interest payments made to Timmer.

           6.       Cancellation of Secured Debenture and Purchase Money Note.
In exchange for the Lump Sum

 

 

   

 

 

SETTLEMENT AGREEMENT

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Payment and the Note, as set forth in Paragraph 5 above, Timmer agrees and
understands that the Secured Debenture and Purchase Money Note effective as of
February 23, 2009 will be cancelled and/or terminated at Closing. As such,
Timmer agrees that upon the funding of the Lump Sum Payment, he shall forward
original copies of the Secured Debenture and Purchase Money Note marked
“cancelled” and “paid in full.”

          7.       Debt Owed to IU Investments, LLC and Internet University,
Inc. by CornerWorld and/or its subsidiaries. The Parties agree and understand
that as of March 30, 2011, the debt owed to IU Investments, LLC and Internet
University, Inc. shall be $665,000 and $1,764,199, respectively, and shall not
be paid down below the lesser of (a) the current principal balance (as of the
date of funding the Lump Sum Payment closing), or (b) the balance owed on
Timmer’s junior secured note until December 2012, and then the balances owed may
only be paid down, if the Note is not in default. Finally, it is understood and
agreed that if any additional amounts are advanced and/or loaned by IU
Investments, LLC and Internet University, Inc. to CornerWorld and/or its
subsidiaries, such amounts will not have priority over Timmer in any collateral
held jointly by Timmer and IU Investments, LLC and Internet University, Inc.;
rather, those additional amounts will be subordinated to the Note.

          8.       Return of Collateral Stock Certificates/Membership Interests.
Timmer and HCC agree that at Closing, they shall return all stock certificates
and/or records of membership interests of CornerWorld or its subsidiaries which
he has in his possession, including, but not limited to, certificates in
Woodland Holdings Corporation, T2TV, LLC, West Michigan Co-Location Services,
LLC, Woodland Wireless Solutions, LTD and S Squared, LLC, T2 Communications, LLC
and Phone Services and More, LLC. CornerWorld agrees to reasonably cooperate
with Timmer to extent required for Timmer to perfect his security interest, as
subordinated, in his collateral.

          9.       CornerWorld Stock, Stock Options and Warrants. Timmer and HCC
agree that at Closing, they shall return all common stock in his possession,
including but not limited to 31,450,000 shares held by the Ned Timmer Trust and
2,100,000 shares in the name of Ned Timmer. Upon return of the aforementioned
certificates, Timmer acknowledges that he is solely responsible for filing the
required Form 4 within two business days with the SEC detailing his disposition
of shares. In addition, HCC shall return all stock including 400,000 shares held
by HCC Foundation, stock options and/or warrants (including warrants to purchase
2,750,000 shares) which are either in his possession or HCC’s possession. Timmer
further agrees that he will never purchase, own or control, either directly or
indirectly (e.g., through HCC), any CornerWorld stock.

          10.      Control Agreements. The Parties agree that at Closing, the
control agreements for deposit accounts held by CornerWorld, Inc., Enversa
Companies, LLC, S Squared, LLC, West Michigan Co-Location Services, LLC and T2
TV, LCC and presently in place at Fifth Third Bank by virtue of the Collateral
Perfection Agreements entered into by, between and/or among the Parties, will be
extinguished and CornerWorld is free to establish deposit accounts for itself
and any of its subsidiaries at any bank of its choosing.

          11.      Resignations by Timmer. Contemporaneous with the Closing,
Timmer agrees to immediately tender his resignation from both the Board of
Directors of CornerWorld and as the Chief Operating Officer of Woodland Holdings
Corp. Timmer further agrees that by tendering his resignation of employment as
Chief Operating Officer of Woodland Holdings Corp., his employment agreement
will also be terminated.

 

 

   

 

 

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          12.      Non-Disclosure, Non-Solicitation, and Non-Competition
Covenants. Timmer agrees and covenants, that until the expiration of five (5)
years from the date of funding of the Lump Sum Payment, he will not disclose,
solicit and/or compete as follows:

 

 

 

 

a.

By virtue of his ownership interests in, membership on the Board of Directors,
and/or employment with CornerWorld and/or its subsidiaries, Timmer has knowledge
of confidential, proprietary and/or trade secret information, including, but not
limited to business processes, financial information, pricing, and/or license
agreements. He agrees that for the reasonable time period set forth above, he
shall not, directly or indirectly, including through third parties, disclose any
confidential, proprietary and/or trade secret information relating to
CornerWorld and/or its subsidiaries;

 

 

 

 

b.

During the reasonable time period set forth above, Timmer shall not directly or
indirectly, including through third parties, compete with any business of
CornerWorld and/or its subsidiaries, or have any other direct or indirect
ownership in any businesses which compete with CornerWorld and/or its
subsidiaries, including, but not limited to, any 611 roaming service,
television, telephone and/or internet business, save for his ownership interest
in FTTP, without the express prior written consent of the Chief Executive
Officer of CornerWorld; and

 

 

 

 

c.

During the reasonable time period set forth above, Timmer shall not recruit or
hire, or attempt to recruit or hire, directly or by assisting others, any
current employee of CornerWorld and/or its subsidiaries, unless he is given
express written permission of the Chief Executive Officer of CornerWorld.

          13.      Non-Solicitation Covenant. CornerWorld agrees and covenants,
that until the expiration of five (5) years from the date of funding of the Lump
Sum Payment, neither it nor its subsidiaries will recruit or hire, or attempt to
recruit or hire, directly or by assisting others, any employee of Timmer or his
companies, unless it is given express written permission by Timmer.

          14.      Termination of Lease Agreement. The Parties agree that 30
days after the Closing, the Lease Agreement between Woodland Holdings Corp. and
Sol Danzar Enterprises, LLC (the “Lease Agreement”) shall terminate. The Parties
further agree as follows:

 

 

 

 

a.

Within 30 days of the Closing, Woodland Holdings Corp. and/or its subsidiaries
shall vacate the property located at 301 Hoover Boulevard in Holland, Michigan
and shall leave the property in the condition required at termination set forth
in Article XVIII, Section 18.1, of the Lease Agreement;

 

 

 

 

b.

Woodland Holdings Corp. shall only owe rent through termination of the Lease
Agreement and for any month-to-month holdover tenancy; and

 

 

 

 

c.

The Parties release and forever waive the buyback and put provisions set forth
in Article VI, Sections 6.1 and 6.2, of the Lease Agreement relating to the
property located at 301-305 Hoover Boulevard in Holland, Michigan.

 

 

   

 

 

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d.

At closing, Woodland Holdings Corp. and Sol Danzar Enterprises, LLC shall
execute a lease amendment to reflect the above.

 

 

 

 

 

Within 30 days from the date of this Agreement, the parties shall walk through
the property at 301 Hoover and tag the furnishings and artwork that belong to
Sol Danzar Enterprises, LLC and Mr. or Mrs. Timmer and such property shall be
left at the property. The Sol Danzar Enterprises, LLC company records which were
stored in the vault at 301-305 Hoover Boulevard shall be returned to Timmer.

          15.      Second Closing of the Unit Purchase Agreement. The Parties
Agree that the second closing of the Unit Purchase Agreement for the purchase of
100% of the member voting units of T2 Communications, LLC and Phone Services and
More, LCC shall take place contemporaneously with the funding of the Lump Sum
Payment with no additional payment for such membership interests to be made to
Timmer. The Parties further understand and agree as follows:

 

 

 

 

a.

Upon the second closing of the Unit Purchase Agreement and funding of the Lump
Sum Payment, Timmer will not oppose and CornerWorld shall be free to shut down
and/or cause T2 Communications, LLC and/or Phone Services and More, LLC to cease
some or all operations at its sole discretion (but in compliance with applicable
state and federal laws); and

 

 

 

 

b.

Should T2 Communications, LLC and/or Phone Services and More, LLC shut down its
operations and/or cease to do business after the funding of the Lump Sum
Payment, Timmer shall:

 

 

 

 

i.

Exclusive of legal costs and/or fees, indemnify CornerWorld and/or its
subsidiaries, including, but not limited to, Woodland Holdings Corp., from any
legal proceedings (e.g., litigation or arbitration) initiated by FTTP in an
amount equal to 50% of the lesser of (a) any judgment obtained by FTTP against
T2 Communications; or (b) the value of T2 Communications’ assets at the time a
judgment is obtained by FTTP; and

 

 

 

 

ii.

As a member and/or owner of FTTP, abstain from any vote amongst its members,
owners and/or principals in which he would regularly partake, if it relates to
any decision by FTTP to initiate and/or instigate legal proceedings against T2
Communications.

          16.      Closing of the Agreement and/or Funding of the Lump Sum
Payment and its Contingencies. The Parties agree that the closing of the
Agreement and/or funding of the Lump Sum Payment shall occur on or before March
30, 2011 (the “Closing”). The Parties further agree and understand that this
closing and funding of the Lump Sum Payment is contingent upon mutual agreement
to the terms of this Agreement by January 21, 2011, execution of this Agreement
by February 28, 2011, and CornerWorld obtaining and closing on third party
financing of the Lump Sum Payment portion of the settlement proceeds by March
30, 2011. If any one of the aforementioned contingencies occurs, either Party
may refuse to perform the obligations set forth herein.

 

 

   

 

 

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          17.      Dismissal of the Legal Proceedings. Within five (5) business
days of receipt of the funding of the Lump Sum Payment, the Parties agree to
file joint motions and/or stipulations of dismissal with prejudice in the
litigation entitled CornerWorld Corporation v. Ned Timmer, Case No. 1:09-CV-1124
and Ned Timmer v. Woodland Holdings Corp., et. al., Case No. 1:10-CV-0793, which
are pending in the United States District Court for the Western District of
Michigan, Southern Division, Southern Division, without any attorney fees or
costs to any party. Further, the Parties agree that Timmer will dismiss and/or
withdraw his claim for arbitration filed with the AAA and entitled, Ned Timmer
v. Woodland Holdings Corporation, Case No. 13 494 Y 03033 10, without any
attorney fees or costs to any party.

          18.      Denial of Liability. By entering into this Agreement, none of
the Parties admit, and each of the Parties does specifically deny, any violation
of local, state, or federal law. The Parties further recognize that this
Agreement is entered into to compromise any claims that have been or might be
asserted by any of the Parties in connection with the Actions, and to avoid the
expense and burden of any further litigation related thereto.

          19.      Non-Disparagement. The Parties agree and expressly understand
that, consistent with the confidentiality agreement contained in Paragraph 4,
they shall not in any way, intentionally or recklessly, make any public or
private statement, comment, or communication in any form, oral, written or
electronic, about either Party, which would constitute an defamatory statement
of fact and shall decline comment on any aspect of this Agreement if contacted
by any third parties.

          20.      Non-Interference. The Parties agree and expressly understand
that upon the execution of this Agreement, they shall not in any way, directly
or indirectly, intentionally or negligently, interfere with the business of the
CornerWorld Releasees and/or Timmer Releasees in any way. The Parties further
agree that they will not contact each other, including persons employed by
CornerWorld’s subsidiaries, except through their legal counsel, except for
casual/personal contact that does not involve CornerWorld business.

          21.      Interpretation of Agreement. This Agreement, and each of its
provisions, has been reached as the result of negotiations between the Parties
and their respective attorneys. Each of the Parties expressly acknowledges and
agrees that this Agreement shall not be deemed to have been prepared by, or
drafted by, any particular Party or Parties hereto, and that the normal rule of
construction, to the effect that any ambiguities are to be resolved against the
drafting party or parties, shall not be employed in the interpretation of this
Agreement.

          22.      Severability. If any provision or term of this Agreement is
held to be illegal, invalid, or unenforceable, such provision or term shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised part of this
Agreement; and, the remaining provisions of this Agreement 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. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision or term there
shall be added automatically as a part of this Agreement another provision or
term as similar to the illegal, invalid, or unenforceable provision, as may be
possible and that is legal, valid, and enforceable.

          23.      Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Michigan.

 

 

   

 

 

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          24.      Binding Agreement. This Agreement shall be binding on, and
shall inure to the benefit of, each of the Parties and their respective past,
present and future predecessors, successors, subsidiaries, affiliates, officers,
directors, employees, attorneys, insurers, agents, representatives and assigns.

          25.      Counterparts. This Agreement may be executed simultaneously
or in any number of counterparts, each of which shall be deemed an original,
equally admissible in evidence against any Party who has signed it, all of which
together shall constitute one and the same agreement. Signatures delivered by
facsimile or email shall be deemed original signatures.

          26.      Integrated Agreement. This writing is an integrated agreement
and represents the entire understanding of the Parties relative to the subject
matter described herein. No prior or contemporaneous agreements shall be
enforceable if they materially alter, vary, or add to the terms of this
Agreement. This Agreement may not be modified except by a writing executed by
all Parties or their counsel. Each of the Parties agrees that no representation
or promise not expressly contained in this Agreement has been made and further
promises that they are not entering into this Agreement on the basis of any
promise, representation, express or implied, not otherwise contained herein.

          27.      Voluntary Consent. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto. The Parties acknowledge that:

 

 

 

 

a.

They have read this Agreement;

 

 

 

 

b.

They have been represented in the preparation, negotiation, and execution of
this agreement by legal counsel of their own choice;

 

 

 

 

c.

They understand the terms and consequences of this Agreement and of the
agreements it contains; and

 

 

 

 

d.

They are fully aware of the legal and binding effect of this Agreement.

          28.      Warranty of Authority. The persons executing this Agreement
represent and warrant that they have full authority to sign this Agreement on
behalf of the Party for which are acting and that each of said Parties will
thereby be fully bound by the terms of this Agreement. HCC joins in this
Agreement solely for purposes of agreeing to those provisions of this agreement
that explicitly relate to it.

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Ned B. Timmer

 

 

 

 

Dated: February 3, 2011

 

 

 

Ned Timmer

 

 

 

 

 

Ned B. Timmer

 

 

 

 

 

HCC Foundation, Inc.

 

 

 

 

Dated: February 3, 2011

 

 

 

/s/ Ned Timmer

 

 

 

 

 

By: Ned B. Timmer

 

 

Its: President

 

 

 

 

 

CornerWorld Corporation

 

 

 

 

Dated: February 3, 2011

 

 

 

/s/ Scott Beck

 

 

 

 

 

By: Scott Beck

 

 

Its: Chief Executive Officer

 

 

 

   

 

 

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