INTERLAND INC /MN/
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>interland8k206ex101.txt
<DESCRIPTION>FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
<TEXT>
                                                                    EXHIBIT 10.1


      FIRST AMENDMENT TO EMPLOYMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS


     THIS FIRST  AMENDMENT TO EMPLOYMENT  AGREEMENT AND MUTUAL RELEASE OF CLAIMS
(hereinafter the "Agreement") is entered into by and among Interland, Inc. ("the
Company"),  and William Pemble ("Employee") and amends the Employment  Agreement
(defined below).

                                   BACKGROUND

     Employee  and the  Company are parties to an  Employment  Agreement,  dated
December 23, 2005 ("Employment Agreement"). Employee and Company desire to amend
the  Employment  Agreement,  providing  for a  termination  date for  Employee's
employment  and a cash payment by the Company to satisfy all of its  obligations
pursuant  to Section 5 of the  Employment  Agreement  in  exchange  for a mutual
general release of claims.

     NOW,  THEREFORE,  in consideration of this recital,  the mutual  agreements
contained  herein  and  other  good and  valuable  consideration,  the  receipt,
adequacy and  sufficiency of which is hereby  acknowledged,  the parties to this
Agreement hereby agree, promise and covenant as to each of the following:

     1. Term of Employment.  Section 2.2 of the Employment  Agreement is amended
to reflect the fact that the Employee's term of employment shall end on February
7, 2006 ("Termination Date").

     2. Warranties of the Parties.

     (a)  Each of the  parties  represents  and  warrants  that  she/he or it is
          legally viable and competent to enter into this Agreement,  is relying
          on  independent  judgment and the advice of legal  counsel and has not
          been  influenced,  pressured  or coerced to any extent  whatsoever  in
          making this Agreement by any representations or statements made by the
          Company  and/or any person or persons  representing  the Company,  and
          that the individuals executing this Agreement on her/his or its behalf
          are authorized to do so.

     (b)  Employee  represents  and  warrants  that  she/he  or it has not sold,
          assigned,  transferred,  conveyed or otherwise  disposed of all or any
          part of the claims released hereunder,  whether known or unknown,  nor
          has she/he,  nor anyone acting on her/his  behalf,  filed or initiated
          any  charge or claim  against  the  Company in any  administrative  or
          judicial proceeding.

     (c)  Employee  further warrants and represents that she/he has not made any
          false  statements  or   misrepresentations  in  connection  with  this
          Agreement.

     3. Specific Consideration Provided to Employee.

     (a)  In exchange  for the  release  provided  hereunder  and other good and
          valuable  consideration,  upon the expiration of the revocation period
          provided  for  herein,   Employee  shall  receive  a  single  lump-sum
          severance   payment  of  ninety-two   thousand  five  hundred  dollars
          ($92,500.00)  (the  "Severance  Payment"),  less all legally  required
          deductions and  withholdings,  which shall be paid in accordance  with
          the Company's  standard  payroll  practices  and policies.  As further
          consideration  for such  release,  Company  undertakes  to execute and
          deliver  to  Web  Internet,   LLC  that  certain  First  Amendment  to

<PAGE>

          Transition Services Agreement of even date herewith.  The Company will
          reimburse  Employee for all of  Employee's  reasonable  and  necessary
          Company-related  expenses  incurred  through the  Termination  Date in
          accordance with the Employment Agreement.

     (b)  The  severance  obligations  set forth in this  Section  are the total
          payment and  satisfaction  of all claims,  liabilities and obligations
          under  this  Agreement  and  the  Employment  Agreement.  Accordingly,
          Employee  understands  and warrants that no further amount is or shall
          be due or claimed  to be due from the  Company  and/or  from any other
          person or entity released in Section 4 below with respect to any claim
          or claims released in Section 4 below, including,  but not limited to,
          any and all claims  for  attorneys'  fees and the costs of  litigation
          that she/he may have under any federal, state or local law, common law
          or in equity.

     (c)  Employee agrees to be responsible  for, and to pay in a timely manner,
          all  federal,  state and local  taxes that may be due on all  payments
          hereunder,  and she/he  further  agrees to indemnify and hold harmless
          the Company from any and all costs and  expenses  that it may incur in
          the future if any federal,  state, or local  government  agency or any
          other person or entity asserts that any  withholding,  taxes, or other
          amounts  should have been paid by the Company in connection  with this
          payment,  and such  indemnification  shall include, but not be limited
          to, any taxes,  interest,  penalties,  and reasonable  attorneys' fees
          incurred by the Company in connection therewith.

     (d)  The Company agrees to waive the restrictions on transfer applicable to
          Employee's  153,466  shares of the Company's  common stock issuable to
          Employee  pursuant to that certain  Restricted  Stock  Agreement dated
          December 22, 2005 (the "Restricted  Shares") to the extent required to
          permit  Employee  to sell  the  Restricted  Shares  to the  purchasers
          contemplated in that certain Sale Agreement dated on or about the date
          hereof (the "Sale  Agreement").  The Company  further  agrees,  to the
          extent  that a  certificate  for  the  Shares  has  not  already  been
          delivered to  Employee,  to issue  certificates  for the Shares in the
          amounts and to the purchasers specified in the Sale Agreement upon the
          Company's receipt of a written letter of direction from Employee.

     4.  Full  Release  of all  Claims  by  Employee.  In  consideration  of the
concessions  provided  for  in  this  Agreement  and  other  good  and  valuable
consideration,  the  receipt,  adequacy,  and  sufficiency  of which  is  hereby
acknowledged,  Employee and her/his heirs,  executors,  administrators,  agents,
assigns, receivers, attorneys, servants, legal representatives, predecessors and
successors in interest, regardless of form, trustees in bankruptcy or otherwise,
wards, and any other representative or entity acting on her/his or their behalf,
pursuant  to,  or by  virtue of the  rights  of any of them,  do hereby  now and
forever unconditionally release, discharge, acquit and hold harmless the Company
and any  parent,  subsidiary  or  related  companies,  and any and all of  their
employees,  agents,  administrators,  assigns, receivers,  attorneys,  servants,


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<PAGE>

legal  representatives,  affiliates,  insurers,  predecessors  and successors in
interest,  regardless of form, trustees in bankruptcy or otherwise,and any other
representative or entity acting on its or their behalf, from any and all claims,
rights,  demands,  actions,  suits,  damages,  losses,  expenses,   liabilities,
indebtedness, and causes of action, of whatever kind or nature that existed from
the beginning of time through the  Termination  Date  (collectively,  "Claims"),
regardless of whether known or unknown,  and  regardless of whether  asserted by
Employee to date,  including,  but not limited to, all claims for or relating to
assault, battery, negligence,  negligent hiring, negligent retention,  negligent
supervision,   negligent  training,   negligent  or  intentional  infliction  of
emotional distress,  false imprisonment,  defamation (whether libel or slander),
personal injury, bodily injury, bad faith, pain and suffering, medical expenses,
wage and hour,  lost income and  earnings  (including,  but not limited to, back
pay, front pay and any other form of present or future income,  benefits  and/or
earnings),  equitable reinstatement,  breach of any express or implied contract,
breach of the covenant of good faith and fair  dealing,  workers'  compensation,
wrongful termination,  wrongful demotion,  wrongful failure to promote, wrongful
deprivation  of  a  career  opportunity,   discrimination  (including  disparate
treatment and disparate impact),  hostile work environment,  quid pro quo sexual
harassment,  retaliation,  any  request to submit to a drug or  polygraph  test,
and/or  whistleblowing,  whether said claim(s) are brought pursuant to Title VII
of the Civil  Rights Act of 1964,  the Civil Rights Act of 1991,  42 U.S.C.  ss.
1981,  the  Employee  Retirement  Income  Security  Act,  the Equal Pay Act, the
Pregnancy   Discrimination   Act,  the  Fair  Labor   Standards   Act,  the  Age
Discrimination  in Employment  Act, the  Americans  with  Disabilities  Act, the
Family and Medical Leave Act or any other constitutional,  federal,  regulatory,
state or local  law,  or under the common  law or in  equity.  Employee  further
understands  and warrants that this  Agreement  shall operate as a fully binding
and complete  resolution  of all claims as to the parties to this  Agreement and
all parties  represented  by or claiming  through such parties,  and that she/he
shall not be able to seek any monies for any claim,  whether  known or  unknown,
against any of the persons or entities released hereunder other than as provided
in Section 2.

     5. Full  Release  of all Claims by the  Company.  In  consideration  of the
concessions  provided  for  in  this  Agreement  and  other  good  and  valuable
consideration,  the  receipt,  adequacy,  and  sufficiency  of which  is  hereby
acknowledged,  the Company and any parent,  subsidiary or related companies, and
any and all of their  employees,  agents,  administrators,  assigns,  receivers,
attorneys, servants, legal representatives,  affiliates,  insurers, predecessors
and  successors  in interest,  regardless  of form,  trustees in  bankruptcy  or
otherwise, and any other representative or entity acting on its or their behalf,
do hereby now and forever unconditionally  release,  discharge,  acquit and hold
harmless Employee and her/his heirs, executors, administrators, agents, assigns,
receivers,   attorneys,   servants,  legal  representatives,   predecessors  and
successors in interest, regardless of form, trustees in bankruptcy or otherwise,
wards, and any other representative or entity acting on her/his or their behalf,
pursuant to, or by virtue of the rights of any of them, from any and all Claims,
regardless of whether known or unknown,  and  regardless of whether  asserted by
the Company to date,  arising  out of or in any way  connected  with  Employee's
employment  or any other  relationship  with or  interest  in the  Company.  The
Company further  understands and warrants that this Agreement shall operate as a


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<PAGE>

fully  binding and complete  resolution  of all claims as to the parties to this
Agreement and all parties  represented by or claiming through such parties,  and
that it shall not be able to seek any  monies for any  claim,  whether  known or
unknown, against any of the persons or entities released hereunder

     6.  Covenant  Not-to-Sue.  Employee and the Company each covenant and agree
not  to  file  or  initiate  a  lawsuit   against  the  Company  and   Employee,
respectively,  in regard  to any  claims,  demands,  causes  of  action,  suits,
damages,  losses and expenses,  arising from acts or omissions of the Company or
Executive made by or before the Termination  Date, and neither  Employee nor the
Company  will ask any  other  person or entity  to  initiate  such a lawsuit  on
her/his/its  behalf. If Employee breaches this covenant and agreement,  Employee
must  immediately  repay and refund to the Company all payments  she/he received
pursuant to Section 3. If Employee or the Company  breaches  this  covenant  and
agreement, Employee or the Company, as the case may be, shall also indemnify and
hold harmless the Company and Employee, any related companies,  and any of their
officers,  owners,  directors,  employees  and  agents  from  any and all  costs
incurred by any and all of them, including their reasonable  attorneys' fees, in
defending against any such lawsuit.

     7.  Exclusion  from  Release  and  Covenants  Not to Sue.  The  Company and
Employee  acknowledge  and agree  that  nothing  in this  Agreement  (including,
without  limitation the releases and covenants  contained in Sections 5, 6 and 7
of this Agreement) shall in any way affect the rights of the parties arising out
of or relating to that certain Asset Purchase  Agreement dated November 29, 2005
by and among the Company,  Executive and Web Internet LLC, a California  limited
liability company.

     8. Return of Company Property.  Employee further  promises,  represents and
warrants  that she/he will return to the Company,  on or before the  Termination
Date:  (a) all property of the Company,  including,  but not limited to, any and
all files, records, credit cards, keys,  identification  cards/badges,  computer
access codes,  computer  programs,  instruction  manuals,  equipment  (including
computers) and business plans; (b) any other property which Employee prepared or
helped to prepare in connection with Employee's employment with the Company; and
(c) all documents,  including logs or diaries, all tangible materials, including
audio and video tapes, all intangible  materials (including computer files), and
any and all copies or duplicates  of any such tangible or intangible  materials,
including  any  duplicates,  copies,  or  transcriptions  made of audio or video
tapes,  whether  in  handwriting  or  typewritten,  that are in the  possession,
custody or control of Employee or her/his attorneys,  agents, family members, or
other representatives, which are alleged to support in any way any of the claims
Employee has released  under this  Agreement,  including but not limited to, all
audio and videotapes involving any officer,  director,  shareholder,  executive,
manager, employee, agent, representative or attorney of the Company.

     9. No Voluntary  Assistance.  Employee and the Company hereby  covenant and
agree that she/he/it will not voluntarily  assist,  support,  or cooperate with,
directly or  indirectly,  any entity or person  alleging or pursuing  any claim,
administrative  charge,  or cause of action  against  the  Company or  Employee,
including without limitation by providing testimony or other information,  audio
or video recordings, or documents,  except under compulsion of law. If compelled
to testify,  nothing contained herein shall in any way inhibit or interfere with


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<PAGE>

Employee or the  Company  providing  completely  truthful  testimony.  Nor shall
anything herein prevent  Employee's or the Company's full  cooperation  with any
investigation  or other  proceeding by the EEOC or any other  federal,  state or
local governmental agency.

     10. Attorneys' Fees and Costs. The parties to this Agreement,  individually
and collectively,  shall be responsible for their own attorneys' fees and costs,
and for  extinguishing  any  attorneys'  liens filed by their counsel of record.
Employee  understands  and agrees that the  payments  contemplated  in Section 3
include and encompass any and all claims with respect to attorneys' fees, costs,
and expenses for and by any and all attorneys who have represented her/him, with
whom  she/he has  consulted  or who have done  anything in  connection  with the
subject matter of this Agreement or any of the claims being released hereunder.

     11. No Admission of Liability.  The parties agree and acknowledge that this
Agreement  is a full and  complete  compromise  of the matters  released  herein
between the parties hereto;  that neither the releases nor the  negotiations for
this Agreement and the settlement  embodied herein,  including all statements or
communications made to date, shall be considered admissions by them.

     12. Enforcement of this Agreement.

     (a)  In the event of a default or breach of this  Agreement,  each party is
          free to  pursue  whatever  legal  or  equitable  remedies  that may be
          available  to  her/him  or it to  seek  judicial  enforcement  of this
          Agreement, whether by injunction,  specific performance, an action for
          damages or otherwise.

     (b)  Notwithstanding  Section 8 above,  the parties  expressly  acknowledge
          that  any  and  all  attorneys'  fees  and  expenses  incurred  in any
          proceeding  brought to enforce this  Agreement as a result of a breach
          thereof shall constitute part of the damages  recoverable for any such
          breach.  Therefore, the prevailing party in any action to enforce this
          Agreement,  in addition to any other relief granted, shall be entitled
          to  recoverits  reasonable  costs,   including,   without  limitation,
          attorneys' fees, expenses and costs.

     13. OWBPA Rights.

     (a)  Employee is advised to seek legal counsel  regarding the terms of this
          Agreement.  Employee  acknowledges that he/she has either sought legal
          counsel or has consciously decided not to seek legal counsel, contrary
          to the  Company's  advice,  regarding  the  terms  and  effect of this
          Agreement.

     (b)  Employee  acknowledges that this Agreement  releases only those claims
          that exist as of the date of Employee's execution of this Agreement.

     (c)  Employee acknowledges that he/she may take a period of 45 (forty-five)
          days  from the  date of  receipt  of this  Agreement  within  which to
          consider and sign this Agreement.

     (d)  Employee  acknowledges  that  he/she will have seven (7) days from the
          date of signing this  Agreement to revoke the  Agreement in writing in
          its entirety  ("Revocation  Period").  Employee  acknowledges that the


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<PAGE>

          Agreement  will  not  become   effective  or  enforceable   until  the
          Revocation  Period has expired.  In the event the Employee  chooses to
          revoke this Agreement, within the Revocation Period, he or she will:

          1.   Revoke the entire Agreement in a signed writing, delivered to the
               following  person on or before the seventh (7th) day after he/she
               executed the Agreement:

                                Chris Nowlin
                                Interland Human Resources
                                303 Peachtree Center Ave., Suite 500
                                Atlanta, GA  30303

          2.   Forfeit all severance and payment  rights of the Company that are
               contemplated by this Agreement; and

          3.   Return the full amount of consideration  received, if any, to the
               Company along with the signed writing.

     (e)  Employee  expressly  acknowledges  that  the  payments  and the  other
          consideration that he/she is receiving under this Agreement constitute
          material consideration for his/her execution of this Agreement.

     14.  Cooperation  of the Parties.  The parties to this  Agreement  agree to
cooperate fully and to execute any and all  supplementary  documents and to take
all  additional  actions that may be necessary or appropriate to give full force
and effect to the basic terms and intent of this  Agreement  and the  settlement
embodied herein.  Employee further agrees to fully cooperate with the Company in
any and all  investigations,  inquiries or  litigation  whether in any judicial,
administrative,  or public,  quasi-public or private forum, in which the Company
is  involved,  whether or not  Employee is a defendant  in such  investigations,
inquiries,  proceedings  or  litigation.  Employee  shall  provide  truthful and
accurate testimony, background information, and other support and cooperation as
the Company may reasonably request.



                      [Signatures appear on following page]




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<PAGE>


     IN WITNESS WHEREOF, the undersigned have executed this Agreement.



                                      EMPLOYEE:


                                      /s/ William Pemble
                                      ------------------------------------------
                                      William Pemble

                                      Date:  2-7-06
                                            ------------------------------------



                                      INTERLAND, INC.

                                      /s/ Jeffrey M. Stibel
                                      ------------------------------------------
                                      By:  Jeffrey M. Stibel

                                      Its: President and CEO

                                      Date:  2-7-06
                                            ------------------------------------







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