Terremark entered into a memorandum of understanding (MOU) for settlement of eight class-action lawsuits brought against it in Delaware and Florida in connection with the merger agreement it made with Verizon in January 2011.

The group of Terremark shareholders sued both companies and their executives following announcement of the merger, accusing them of striking a deal that would not maximize value for the investors. Both Terremark and Verizon denied all allegations in announcements of the settlement MOU, which both companies signed.

Terms of the settlement include extension of the tender offer period until 21 March 2011 from the original 10 March and reduction of the termination fine (in case Terremark directors decide to pull out) from $52m to $40m. Terremark also agreed to disclose more information about the events that led to signing of the merger agreement.

The settlement has yet to be approved by the court.

Verizon agreed to buy Terremark at $19 per share in cash, or a total equity value of $1.4bn. The offer represented a 35% premium on closing price of Terremark shares on the day of the deal's announcement.

The buyer said the deal would accelerate its strategy to provide "everything-as-a-service" by expanding its portfolio of cloud-based solutions. Verizon plans to keep the Terremark brand and operate the unit as a wholly owned subsidiary.

The Terremark board approved the transaction unanimously, and Verizon made agreements with three of the company's stockholders to tender their shares into the offer. These stockholders' shares represented a about 27.6% of Terremark's outstanding voting shares.