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 ...