Settlement Agreement - Convera Corp. and Intel Corp.
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT ("Agreement") is made as of December 23,
2003, (the "Effective Date") by and between Convera Corporation, including its
subsidiaries and affiliates ("Convera") and Intel Corporation, a Delaware
corporation ("Intel Corporation") (individually, each a "Party" and
collectively, the "Parties").
WHEREAS, Intel incurred certain costs on behalf of Convera and
believes that Convera otherwise owes to Intel an aggregate of approximately
Four Million Dollars ($4,000,000.00) (the "Liability");
WHEREAS, Intel has demanded that Convera pay the Liability;
WHEREAS, Convera has disputed, in whole or part, its obligation to pay
Intel in connection with the Liability; and
WHEREAS, the Parties desire to reach a mutually satisfactory and
legally binding settlement agreement with respect to the Liability.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound hereby, it is
understood and agreed as follows:
1. Settlement Payment. Subject to the terms and conditions of this
Agreement, Convera shall pay Intel Three Million Two Hundred Fifty
Thousand Dollars ($3,250,000.00) (the "Settlement Amount") over a two
(2) year period in equal monthly payments, commencing as of January
2004 and terminating November 2005 (i.e., 24 monthly payments of
$135,416.67) (the "Repayment Period") in full satisfaction of any and
all obligations Convera may have to Intel which arise from or are
related to the Liability (the "Released Claims"), and Intel releases
Convera from any and all Released Claims that Intel may have against
Convera other than Convera's obligations under this Agreement.
Notwithstanding the foregoing, if Convera's "Cash Liquidity" (as
defined below) does not equal at least thirteen million dollars
($13,000,000.00) at the end of any of Convera's fiscal quarters during
the Repayment Period, then Intel shall have the right to demand from
Convera payment in full of the Settlement Amount then outstanding,
which Convera shall pay to Intel within ten (10) business days of
Intel's written demand thereof pursuant to this Agreement. For
purposes of this Agreement, the term "Cash Liquidity" shall mean,
collectively, cash, short-term investments and accounts receivable.
2. Treatment of Subtenant Payments. If Intel brokers a sublease with a
third party for the facilities located at 23245 NW Evergreen Parkway,
Hillsboro, Oregon (the "RC4 Space") on behalf of Convera during the
term of this Agreement, then Convera shall divide with and distribute
to Intel fifty percent (50%) of all such sublease proceeds received by
Convera until such time as the total of such proceeds received by
Convera is equal to a maximum of One Million Five Hundred Thousand
Dollars ($1,500,000.00) (the "Maximum") (i.e., Intel shall receive up
to Seven Hundred Fifty Thousand Dollars ($750,000.00) in proceeds from
such RC4 Space sublease) (the "Sublease Incentive"). The Sublease
Incentive shall automatically expire when the total of such sublease
proceeds equals the Maximum, and thereafter Convera shall exclusively
retain for itself any such sublease proceeds exceeding the Maximum.
Convera shall make such distributions to Intel in arrears within
thirty (30) days of Convera's receipt of such payments from such
subtenant(s). The foregoing distribution obligation shall only arise
if and when the subtenant pays Convera pursuant to any such sublease.
The Sublease Incentive is independent of the Settlement Amount and any
such sublease proceeds distributed to Intel by Convera shall not be
treated as a set-off against the Settlement Amount. The use of the
term "sublease" and "subtenant" in the singular herein shall be deemed
to be inclusive of the plural to the extent that Intel brokers more
than one sublease on behalf of Convera for the RC4 Space. The proceeds
of all such Intel-brokered subleases shall be aggregated for purposes
of calculating whether Convera has distributed the Maximum to Intel.
Notwithstanding the foregoing, Convera and Intel agree that should
Intel owe a broker's fee or commission ("Fee") to any third party
responsible for finding a subtenant for the RC4 Space, then Convera
and Intel shall split equally the costs of the Fee. Such payment by
Convera shall be in addition to any amounts that Convera would pay to
Intel pursuant to the foregoing Sublease Incentive.
3. No Admission of Liability. Execution of this Agreement and compliance
with its terms, as provided above, do not constitute an admission of
liability or wrongdoing by either Party.
4. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the Parties and supersedes all prior negotiations,
understandings and agreements, proposed or otherwise, written or oral,
concerning the subject matter hereof. Furthermore, no modification of
this Agreement shall be binding unless in writing signed by each of
the Parties hereto.
5. Severability. Should any provision of this Agreement be declared
illegal or unenforceable by any court of competent jurisdiction and if
such provision cannot be modified to be enforceable, such provision
shall immediately become null and void, leaving the remainder of this
Agreement in full force and effect.
6. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the state of Delaware,
without regard to its conflicts of law principles.
7. Notices. Any notice, demand or communication to be made under or with
respect to this Agreement shall be in writing and shall be addressed
as follows:
If to Convera:
Mr. Chris M. Mann, CFO Convera Corporation
1921 Gallows Road Vienna, Virginia 22182
Email: cmann@convera.com
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If to Intel: Intel Corporation
Attn. Post Contract Management
JF3-149
2111 N.E. 25th Avenue
Hillsboro,OR 97124-5961
Email: post.contracts.management@intel.com
With a Copy to:
Office of General Counsel
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Email: legal.hotline@intel.com
All notices or other communications shall be delivered personally
(effective upon receipt) or by reputable overnight delivery service
(effective upon delivery), or by facsimile with confirmation of
receipt (effective upon receipt of such confirmation), or by certified
mail, postage prepaid, return receipt requested (effective 3 days
after posting), and in all cases a copy shall be forwarded by email at
the addresses shown in this Agreement or as amended.
8. Assignment; Effect of Change of Control. This Agreement shall not be
assigned by Convera without Intel's prior written consent, at Intel's
sole discretion. Notwithstanding the Repayment Period described in
Section 1, if at any time prior to Convera's full payment of the
Settlement Amount a third party seeks to acquire all, or substantially
all, of the assets or stock of Convera (i.e., at least 50% of
Convera's voting stock) or to merge with
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Convera, or any other corporate transactional event that would
result in Allen & Company, Incorporated losing its controlling voting
stock interest in and control of the board of directors of Convera to
one or more third parties (such events collectively referred to as a
"Change of Control Event"), then Convera shall pay, prior to the
closing of such Change of Control Event, the remainder of the then
outstanding Settlement Amount to Intel in a single, lump sum cash
payment pursuant to this Agreement.
IN WITNESS WHEREOF, the aforesaid Parties have hereunto set their hands and
seals as of the date written below.
CONVERA CORPORATION
By:/s/ PATRICK C. CONDO
_______________________________
Title:
Date:
INTEL CORPORATION
By: /s/ JOHN VINCENT
________________________________
Title:__________________________
Date:____________________________