Document:

Exhibit 10.14 

 

 

SEPARATION AGREEMENT, WAIVER AND RELEASE

 

 

Convera Technologies, including its officers, directors, stockholders, employees, agents, representatives, parent Convera Corporation, subsidiaries, affiliates, divisions, successors and assigns (collectively referred to as “Convera” or the “Company”) and Kurt C. Gastrock (“Employee”) hereby make and voluntarily enter into this Separation Agreement, Waiver and Release (the “Agreement”).

 

	
            1.
 	
            Employee’s employment with Convera will terminate without cause, as defined in Section 7 of his October 25, 2005 offer letter from Convera, (the “Offer Letter”) on February 1, 2007 (the “Notice Date”).  On the Notice Date, Employee will resign from all positions he holds with Convera.
 

	
            2.
 	
            Pursuant to Section 7 of the Offer Letter, in consideration for the Employee executing the Convera standard form of release and covenants not to compete or solicit employees or customers, set forth in Sections 5, 9 and 11 below, Convera shall within one (1) business day of expiration of the Revocation Period set forth in Section 17:
 

	
             
  	
            (a)
 	
            pay Employee unpaid Base Salary, if any, and accrued but unused vacation time, if any, due and owing as of the Notice Date, in accordance with Convera’s standard policies and practices, less normal payroll deductions, including deduction of any federal, state or local taxes that Convera may be required to collect or withhold (“Withholding Adjustments”);
 

	
             
  	
            (b)
 	
            begin making severance payments (“the Separation Allowance”) to Employee in an amount equal to 12 months of his $300,000 annual base salary.  The Separation Allowance will be paid according to Convera’s normal semi-monthly payroll schedule during the 12 months following the Notice Date (“Severance Period”) and the gross amount of each payment for each full pay period will be equal to the Employee’s annual  base salary as of the Notice Date divided by  twenty-four. The Separation Allowance is  subject to Withholding Adjustments; 
 

	
             
  	
            (c)
 	
            approve bonus payments, as set forth in Section 1b of the Offer Letter, to Employee as earned for the period from Fiscal Year 2007 Q2 through Q4.  Such bonus payments shall be calculated in accordance with the terms of Section 1b of the Offer Letter, are subject to the Executive Bonus Plan and payable no earlier than March 15, 2007;
 

	
             
  	
            (d)
 	
            reimburse Employee for any outstanding, reasonable and authorized out-of-pocket business expenses incurred through the Notice Date by Employee on Convera’s behalf, in accordance with its standard policies and practices.
 

 

 

Separation Agreement, Waiver and Release

 

 

	
             
  	
            (e)
 	
            pay any COBRA premiums on behalf of Employee through January 31, 2008 (“COBRA Payment Period”), provided Employee is eligible for such benefits.  At the conclusion of the COBRA Payment Period, Employee may be eligible to continue to receive coverage under COBRA provided that the Employee makes timely premium payments in accordance with COBRA.  If at any time during the COBRA Payment Period Employee secures other employment providing health insurance benefits, or if Employee secures health insurance benefits from any other source, Employee will immediately notify Convera in writing and Convera’s obligations under this provision of the Agreement shall cease.  Employee will receive additional information regarding COBRA under separate cover;
 

	
             
  	
            (f)
 	
            make bonus payments, as set forth in Section 1b of the Offer Letter, to Employee for Fiscal Year 2008 Q 1 through Q 4.  Such bonus payments shall be paid in equal quarterly payments and be equal in total to the full annual bonus paid to Employee for Fiscal Year 2007.  These bonus payments are  payable at the same time that Employee’s quarterly bonuses would have been paid had he remained employed by Convera;
 

	
             
  	
            (g)
 	
            allow Employee to continue vesting of his stock options granted October 5, 2006 (500,000 options) (“Stock Options”) per the regular vesting schedule set forth in Section 3a of the Offer Letter through the duration of the Severance Period as follows:
 

i. 62,500 vesting on April 5, 2007 at a strike price of $4.685 per share; and 

ii. 62,500 vesting on October 5, 2007 at a strike price of $4.685 per share.

All of such vested Stock Options referenced in this Section 2(g) shall be exercisable through the close of business on January 31, 2008, and the right to exercise shall terminate on that date.

	
             
  	
            (h)
 	
            cancel all of Employee’s stock options referenced in Section 3a of the Offer Letter and granted to Employee on November 9, 2005;
 

	
             
  	
            (i)
 	
            allow Employee to receive a nonforfeitable and vested interest in 20% (equal to 40,000 shares) of Employee’s Deferred Stock per Section 7 of the Offer Letter.  
 

	
            3.
 	
            Convera further confirms that it shall:
 

 

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Separation Agreement, Waiver and Release

 

 

	
             
  	
            (a)
 	
            notify Principal Financial Group, which holds Employee’s 401(k) funds, if applicable, of Employee’s employment termination.  If the value of Employee’s account is between $1,000 and $5,000, Employee must make an immediate decision regarding the disposition of his funds. If no decision is made, the funds will be rolled into the Principal Bank Safe Harbor IRA. Account values of less than $1,000 will be paid in cash;
 

	
             
  	
            (b)
 	
            offer Employee the opportunity to convert term life or supplemental life insurance coverage, if applicable; and
 

	
            4.
 	
            Employee acknowledges and agrees that the payments and benefits provided under this Agreement are in excess of any amounts which may be due to Employee based on Employee’s employment with Convera or under any policy, plan or procedure of Convera (including its predecessors, Excalibur Technologies, Inc. and/or Intel Corporation’s Interactive Media Services division (collectively, “Predecessors”), or under any prior agreement, whether written or oral, between Employee and Convera or its Predecessors, and that Employee shall receive no benefits additional to those set forth above.
 

	
            5.
 	
            This Agreement constitutes full and final settlement of any and all claims Employee has or may have, whether known or unknown,  arising out of or relating in any way to Employee’s  employment with or separation from Convera.  In exchange for the payments and benefits provided for in this Agreement, including the Separation Allowance, and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, Employee hereby unconditionally releases Convera from any and all claims, causes of action, liability, costs, expenses, demands, charges, fines, penalties, attorney’s fees, duties or obligations of any kind whatsoever arising out of or relating to Employee’s employment by or separation from Convera, whether known or unknown now existing, including but not limited to, claims of discrimination or breach of
contract, and claims based in whole or in part on the Civil Rights Act of 1991, the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, Executive Order 11246, The Equal Pay Act of 1963, the Rehabilitation Act of 1973, the Fair Labor Standards Act, the Age Discrimination in Employment Act of 1967, The Civil Rights Act of 1866, the Family & Medical Leave Act, the Sarbanes-Oxley Act, the Virginia Human Rights Law, the Virginia Equal Pay Act, or under any other employee relations law, employee benefits law or applicable federal, state, local, foreign or other law or regulations in any jurisdiction, or causes of action sounding in tort or in contract or any other cause of action arising under the common law of the State of Virginia, including but not limited to any claims for wages, commissions, bonuses, expense reimbursement or other forms of compensation, monetary or equitable relief, damages of any nature and/or attorney’s fees.
 

 

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Separation Agreement, Waiver and Release

 

 

	
            6.
 	
            Employee agrees and acknowledges that information and materials in written, oral, magnetic, photographic, optical or other form or created during the period of Employee’s employment or engagement with Convera or its Predecessors are proprietary to Convera and are highly sensitive in nature (the “Confidential Information”).  Such Confidential Information is any information not in the public domain, including but not limited to:
 

	
             
  	
            (a)
 	
            All data, documents, materials, drawings and information received in tangible form and marked “Proprietary” or “Confidential”;
 

	
             
  	
            (b)
 	
            Any and all ideas, concepts, know-how, methods, techniques, structures, information and materials relating to existing software products and software in various states of research and development including, but not limited to,  source code, object and load modules, requirements specifications, design specification, design notes, flow charts, coding sheets, annotations, documentation, technical and engineering data, laboratory studies, benchmark test results, and the structures, organization, sequence, designs, formulas and algorithms which reside in the software and which are not generally known independently to the public or within the industries or trades in which Convera competes;
 

	
             
  	
            (c)
 	
            Internal business procedures and business plans, including analytical methods and procedures, licensing techniques, manufacturing information and procedures such as formulations, processes and equipment, technical and engineering data, vendor names, other vendor information, purchasing information, financial information, service and operational manuals and related documentation, ideas for new products and services and other such information which relates to the way Convera conducts its business which is not generally known to the public;
 

	
             
  	
            (d)
 	
            Patents, copyrights, trade secrets, trademarks, service marks, and the like;
 

	
             
  	
            (e)
 	
            Any and all customer and marketing information and materials, such as strategic data, including marketing and development plans, forecasts and           forecast assumptions and volumes, and future plans and potential strategies which have been or are being discussed; financial data, including price and cost objectives, price lists, pricing policies and procedures, and quoting policies and procedures; and customer data, including customer lists, names of existing, past or prospective customers and their representatives, data provided by or about prospective, existing or past customers, customer service information and materials, data about the terms, conditions and expiration dates of existing contracts with customers and the type, quantity and specifications of products and services purchased, leased or
licensed by customers of Convera; and
 

 

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Separation Agreement, Waiver and Release

 

 

	
             
  	
            (f)
 	
            Any and all information and materials in Convera’s possession or under its control from any other person or entity to which it is obligated to treat as confidential or proprietary.
 

	
            7.
 	
            Employee represents and warrants that he has complied with and will continue to comply with the provisions of any employment, non-compete and/or confidentiality agreement or similar agreements previously entered into between Employee and Convera or its Predecessors (collectively the “Employee Confidentiality Agreement”) and herein expressly reaffirms the enforceability of the same.  Employee expressly confirms that he knows of no reason why any promise or obligation set forth in any Employee Confidentiality Agreement should not be fully enforceable against Employee.  In addition, Employee affirms that Employee has not done or in any way been a party to, or knowingly permitted, and will not engage in or permit any of the following:
 

	
             
  	
            (a)
 	
            Disclosure of any Confidential Information or trade secrets of Convera;
 

	
             
  	
            (b)
 	
            Retention of any trade secrets or Confidential Information of Convera;
 

	
             
  	
            (c)
 	
            Copying or otherwise reproducing any Confidential Information of Convera; or
 

	
             
  	
            (d)
 	
            Retention of any materials or personal property (including any documents or other written materials, or any items of computer or other hardware, or any software, or any office equipment) belonging to, or in the possession of, Convera.
 

	
            8.
 	
            Employee will deliver to Convera all materials embodying trade secrets or Confidential Information and all other tangible or intangible property of Convera, on or before the Notice Date.
 

	
            9.
 	
            Employee agrees that for a period of twelve (12) months following the Notice Date he will not solicit or induce, or attempt to solicit or induce, any current or future employee of Convera to leave Convera for any reason and Employee agrees that he will not attempt to contact Convera's clients or potential clients of which he is aware with regard to Convera's products and business.  Employee further agrees and acknowledges that all work performed, created and conceived relating to Employee’s scope of employment or Convera’s or the Predecessors’ scope of employment while in the employ of Convera or the Predecessors, was done so pursuant to the Work Made for Hire Doctrine and as such, as between Employee and Convera, is the property of Convera.
 

	
            10.
 	
            Employee acknowledges that by virtue of Employee’s employment by Convera, and over the course of that employment, Employee has obtained trade secrets and Confidential Information of Convera, the use or disclosure of which would cause 
 

 

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Separation Agreement, Waiver and Release

 

 

irreparable harm to Convera.  Employee further acknowledges that money damages are not a sufficient remedy for breach of this Agreement and that Convera shall be entitled, in addition to any and all other remedies available to Convera, the entry of preliminary injunctive relief as a remedy for such breach without the need to post a bond and without proof of actual damages.  In the event that Convera is required to enforce its rights under this Agreement and prevails, Employee agrees that Convera shall be entitled to recover all costs and fees incurred.

	
            11.
 	
            Employee confirms that, for a period of twelve (12) months following the Notice Date, he will not accept employment or consultancy with the following companies: Autonomy, Endeca or Fast Company and their respective successors, if any.
 

	
            12.
 	
            Except as provided herein and except with respect to any Employee Confidentiality Agreement, including any similar agreements or non-compete agreements or arrangement signed by Employee and Convera, which will remain in full force and effect to the extent not inconsistent with this Agreement, this Agreement supersedes, cancels and replaces any other agreement between Employee and Convera.  Any right or entitlement in effect or available to Employee under any such other agreement is hereby unconditionally and irrevocably waived by Employee to the maximum extent permissible.  Notwithstanding the foregoing, any agreement between Employee and Convera and/or the Predecessors, by which Employee has assigned intellectual property to Convera shall remain in effect.  
 

	
            13.
 	
            This Agreement may not be changed or altered, except by a writing signed by Convera and Employee.  If any portion of this Agreement should ever be determined to be unenforceable, it is agreed that this will not affect the enforceability of any other clause or the remainder of the Agreement.  Further, any material breach of this Agreement by Convera or Employee that is proven in a court of law shall excuse the other from further performance of this Agreement.  If Convera shall prove in a court of law that Employee has breached this Agreement, Convera is entitled to full reimbursement of any of the payments or benefits provided for in Paragraph 2, without limitation upon any other rights or remedies Convera may have under this Agreement or applicable law.  Such reimbursement shall not be construed as indicating that Convera has an
adequate remedy at law or be used in any way to contest a claim for injunctive relief.
 

	
            14.
 	
            This Agreement shall be governed by and, for all purposes, construed and enforced in accordance with the laws of the State of Virginia applicable to contracts made and to be performed in such state, without regard to conflict of law principles.  Convera and Employee agree that the federal or state courts of the State of Virginia shall have sole and exclusive jurisdiction over any claim or cause 
 

 

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Separation Agreement, Waiver and Release

 

 

of action relating to this Agreement or Employee’s employment by Convera or the termination of such employment, and Employee hereby consents to accept service of process as provided under Virginia law or by registered mail, return receipt requested, and waives any objection to personal jurisdiction of Employee in the state or federal courts of the State of Virginia.  

	
            15.
 	
            Employee agrees that the terms and conditions of this Agreement are sensitive and are not to be disclosed by Employee to any current, future or past employees of Convera.  In addition, Employee agrees that he will not in any manner, oral or written, disparage Convera in any way.  Convera agrees that no authorized representative of the Company will in any manner, oral or written, disparage Employee in any way.  Any violation of this provision proven in a court of law shall be deemed a material breach of this Agreement.  
 

ACKNOWLEDGMENTS

	
            16.
 	
            I acknowledge that, as of the date of my signature affixed hereto and with the exception of matters that have been previously disclosed in public filings, I have no actual, personal knowledge of any legal action or threatened legal action against Convera, any accounting irregularities or other financial improprieties at Convera, or any violation or threatened violation of any of Convera’s policies or procedures or law by myself or any officers, directors, stockholders, employees, agents, representatives, parent Convera Corporation, subsidiaries, affiliates, divisions, successors and assigns of Convera.
 

	
            17.
 	
            I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”).  I also acknowledge that the consideration given for the waiver and release in Paragraph 2 of this Agreement, including my waiver of any claims arising under the ADEA, constitutes good, valid and sufficient consideration in exchange for such waiver and release.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply to any rights or claims that may arise after the execution date of this Agreement; (b) I have been advised hereby that I have the right to, and should, consult with an attorney prior to executing this Agreement; (c) I have twenty-one (21) days to
consider, execute and return this Agreement (although I may choose to voluntarily execute and return this Agreement earlier); (d) I have seven (7) days following the execution of this Agreement by the parties to revoke the Agreement (the “Revocation Period”); and (e) this Agreement shall not be effective until the date upon which the Revocation Period has expired, which shall be the eighth (8th) day after this Agreement is executed by me, provided that the Company has also executed this Agreement by that date (“Effective Date”).
 

 

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Separation Agreement, Waiver and Release

 

 

I AGREE TO THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT AND RELEASE.  I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND RELEASE AND UNDERSTAND ALL OF ITS TERMS, INCLUDING THE FULL AND FINAL RELEASE OF CLAIMS SET FORTH ABOVE.  I FURTHER ACKNOWLEDGE THAT I HAVE VOLUNTARILY ENTERED INTO THIS AGREEMENT AND RELEASE, THAT I HAVE NOT RELIED UPON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS AGREEMENT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY AND ENCOURAGED TO HAVE THIS AGREEMENT AND RELEASE REVIEWED BY AN ATTORNEY.

	
            CONVERA TECHNOLOGIES
 	
            KURT C. GASTROCK
 

 

 

	
            By: ______________________________________
 	
            ________________________
 

	
             
 	
            Authorized Signature
 	
            Employee’s Signature
 

 

 

	
            Dated: ___________________________________
 	
            Dated: __________________
 

 

 

 

 

8Exhibit 10.15 

 

 

SECOND AMENDMENT TO LEASE AGREEMENT

 

THIS SECOND AMENDMENT TO LEASE AGREEMENT (the Second Amendment), dated for reference purposes only January 17, 2007 (Effective Date), is made and entered into by and between Convera Corporation, a Delaware corporation (Tenant) and MCR Aston, LLC (Landlord) (Tenant and Landlord, collectively, Parties) with reference to the following:

 

RECITALS

 

	
            A.
 	
            Tenant is the tenant under a lease (Lease) dated July 3, 2001 executed by Aston Views, LLC (Original Landlord), pursuant to which Lease Tenant leases certain Premises (as defined in the Lease) located within an office building located at 1808 Aston Avenue, Carlsbad, California, 92008 (Building).
 

 

	
            B.
 	
            On December 21, 2004, Original Landlord transferred its interest in the Building  to Integrated Capital Technologies, Integrated Capital Enterprises, LLC, and MCR 6212, LLC as tenants in common (collectively, Previous Landlord).
 

 

	
            C.
 	
            On January 1, 2007, Previous Landlord transferred its interest in the Building to Landlord.
 

 

	
            D.
 	
            Tenant and Landlord now wish to amend the Lease as set forth herein.
 

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby covenant and agree as follows:

 

1.            Premises.  Paragraph 3 of the Basic Lease Provisions and Paragraph 1 of the main body of the Lease are modified as follows:  

(a)          Surrender of Space on First Floor.  Tenant shall surrender 2,239 rentable square feet of space on the first floor as depicted on Exhibit A, attached hereto and incorporated herein (First Floor Surrender Space).  Tenant’s surrender of the First Floor Surrender Space shall occur all at the same time (i.e., not on an incremental basis), and the timing of such surrender shall be at Tenant’s discretion, provided that such surrender shall occur after the Effective Date and before March 1, 2007.  Tenant shall continue to pay Rent on the First Floor Surrender Space until such space is surrendered to Landlord.

(b)          Surrender of Space on Second Floor.  Tenant shall surrender 2,231 rentable square feet of space on the second floor as depicted on Exhibit A. (Second Floor Surrender Space).  Tenant’s surrender of the Second Floor Surrender Space shall occur all at the same time (i.e., not on an incremental basis), and the timing of such surrender shall be at Tenant’s discretion, provided that such surrender shall occur after the Effective Date and before March 1, 2007.  Tenant shall continue to pay Rent on the Second Floor Surrender Space until such space is surrendered to Landlord.

 

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(c)          Retained Space.  Tenant shall retain and continue to pay Rent on approximately 2,808 rentable square feet of space on the first floor and 23,133 rentable square feet of space on the second floor, for a total of 25,941 rentable square feet (Retained Space).

2.            Premises Modifications.  As soon as reasonably practicable, Landlord shall, at Landlord’s sole expense, construct the proposed Premises including (1) the provision of a double-door entrance to the building corridor at a mutually agreeable location, (2) demising the IT room from the relinquished space, (3) relocating existing cabinetry as necessary due to the location of the new demising wall, and (4) providing exterior double doors with a concrete pad to the parking lot similar to Tenant’s existing exterior double doors at a mutually agreeable location.  There shall be no Rent abatement during the period of such construction.

3.            Parking Spaces.  Paragraph 3 of the Basic Lease Provisions is amended as follows: Upon the Effective Date, Tenant shall be entitled to a total of 109 unreserved parking spaces.

4.            Rentable Square Footage.  Paragraph 3 of the Basic Lease Provisions is amended as follows: Commencing upon the Effective Date, the Rentable Square Footage at any given time shall equal the sum of the Retained Space plus the First Floor Surrender Space not yet surrendered plus the Second Floor Surrender Space not yet surrendered.

5.            Rental Schedule. Paragraph 5 of the Basic Lease Provisions is amended as follows:  Upon the Effective Date, Base Rent shall be in the amount of $2.03 per square foot of Rentable Square Footage per month (plus utilities), and the Base Rent shall increase March 1, 2008 and each twelve month anniversary thereafter by three percent (3%) of the then-prevailing Base Rent amount.

6.            Extended Term.  Paragraph 4 of the Basic Lease Provisions and Paragraph 2 of the main body of the Lease are amended as follows:  The duration of Initial Term is extended to February 28, 2012 (with such amended Initial Term being referred to herein as the Extended Term).  The provisions in the Lease and in this Second Amendment pertaining to the Initial Term shall apply equally to the Extended Term, except as otherwise expressly provided herein.

7.            Tenant’s Option to Terminate.  Notwithstanding the provisions of Section 6 above, Tenant shall have a one-time option to terminate the Lease on February 28, 2010.  Tenant shall exercise such option, if at all, by (a) giving Landlord notice of Tenant’s election to exercise no sooner than May 31, 2009 or later than August 31, 2009, and (b) paying at such time to Landlord the unamortized portion of funds expended by Landlord for all Lease Commissions paid to Studley pertaining to this Second Amendment. 

8.            Tenant’s Operating Expense Percentage.  Paragraph 7 of the Basic Lease Provisions is amended to provide that, for all years commencing on or after the Effective Date, Tenant’s Operating Expense Percentage shall be 31.2%.

9.            Base Year.  Paragraph 6 of the Basic Lease Provisions is amended as follows: For all years commencing on or after the Effective Date, the Base Year shall be the calendar year 2007, such Base Year shall be grossed up, if necessary, to assume 95% occupancy.

 

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10.          Condition of the Premises.  The provisions of Paragraph 1.4 of the Lease shall be interpreted to apply to only the Premises as contemplated in the original Lease.

11.          Option to Extend Lease Term.  Paragraph 38 of the Lease Addendum shall be of no further force or effect.

12.         Right of First Refusal.  Paragraph 41 of the Lease Addendum shall be of no further force or effect.

13.          Notice.  Paragraph 14 of the Basic Lease Provisions is amended to provide that the Landlord notice shall be sent to Guy W. McRoskey, Esq., 1808 Aston Avenue, Suite 180, Carlsbad, CA 92008.

14.          Brokerage Fees.  Landlord shall pay a commission of 1% to Grubb & Ellis |BRE Commercial and 4% to Studley.  Such payments shall not be made until the Letter of Credit is in place pursuant to Section 16 below.

15.          Recapture of Brokerage Fees.  The aggregate unamortized (on a pro-rata basis) Lease Commissions paid by Landlord to BRE and Studley which pertain to the Extension Term shall be subject to immediate recapture by Landlord upon any breach or default by Tenant under the Lease which remains uncured through the applicable cure period.

16.          Letter of Credit.  The following provisions shall apply, subject to any qualification set forth in Section 17 below:

(a)          In General.  As soon as possible, but no later than January 22, 2007 (LC Date), Tenant shall deliver to Landlord, as protection for the full and faithful performance by Tenant of all of its obligations under this Lease as a result of any breach or default by Tenant under this Lease, an irrevocable and unconditional negotiable standby Letter of Credit (Letter of Credit) payable in the City of Los Angeles, California, running in favor of Landlord and issued by a solvent, nationally recognized bank with a long term rating of BBB or higher, under the supervision of the Superintendent of Banks of the State of California, or a national banking association, in the amount of Four Hundred and Fifty Thousand Dollars ($450,000) (Letter of Credit Amount). Tenant shall pay all
expenses, points, or fees incurred by Tenant in obtaining the Letter of Credit. 

(b)          Letter of Credit Subject to Landlord Approval.  The form and terms of the Letter of Credit and the bank issuing the same (Bank) shall be acceptable to Landlord, in Landlord’s reasonable discretion.

(c)          Reduction in Letter of Credit Amount.  Landlord and Tenant agree to cooperate to reduce the Letter of Credit Amount according to the following schedule:

(1)          Provided that there is then no uncured event of material Default, the Letter of Credit Amount shall be reduced by Fifty Thousand Dollars on March 1, 2009.

(2)           Provided that there is then no uncured event of material Default, the Letter of Credit Amount shall be reduced by Fifty Thousand Dollars on March 1, 2010.

 

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(3)          Provided that there is then no uncured event of material Default, the Letter of Credit Amount shall be reduced by Fifty Thousand Dollars on March 1, 2011.

(d)          Certain Mandatory Provisions.  The Letter of Credit shall be drafted such that:

(1)          The Letter of Credit shall be “callable” at sight, irrevocable, and unconditional.

(2)          The Letter of Credit shall be maintained in effect for the period from the LC Date and continuing until the date (Letter of Credit Expiration Date) that is one hundred and twenty (120) days after the expiration of the Extended Term; provided that Landlord shall release Tenant of any such obligation thirty (30) days after the expiration of the Extended Term if (a) there has been no uncured default or breach under the Lease at such time, (b) Tenant has not filed for Bankruptcy or been the subject of any involuntary Bankruptcy filing at or before such time, and (c) Tenant has not held over its possession of the Premises beyond the date which is seven (7) days after the expiration of the Extended Term.

(3)          The Bank shall be obligated to provide notice to Landlord of non-renewal of the Letter of Credit thirty (30) days in advance of any expiration of the Letter of Credit.

(4)          The Letter of Credit shall be fully assignable by Landlord, its successors, and assigns.

(5)          The Letter of Credit shall permit partial draws and multiple presentations and drawings.

(6)          The Letter of Credit shall be otherwise subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev), International Chamber of Commerce Publication #500, or the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. 

(7)          The Bank will honor the Letter of Credit regardless of whether Tenant disputes Landlord’s right to draw on the Letter of Credit.

(e)          Landlord’s Draw-Down Rights.  Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable:

(1)          Such amount is due to Landlord under the terms and conditions of this Lease.

(2)          Tenant has filed a voluntary petition under the U.S. Bankruptcy Code or any state bankruptcy code (collectively, Bankruptcy Code) and the same is not withdrawn within forty-five (45) days, subject, however, to the provisions of the U.S. Bank Code.

 

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(3)          An involuntary petition has been filed against Tenant under the Bankruptcy Code and the same is not withdrawn within forty-five (45) days, subject, however, to the provisions of the U.S. Bank Code.

(4)          The Bank has notified Landlord that the Letter of Credit will not be renewed or extended through the Letter of Credit Expiration Date.

(f)           Duty of Tenant to Replenish.  Tenant shall immediately, following notice thereof, replenish to the Letter of Credit the amount of any Landlord draw on the Letter of Credit.

17.          Clarification Regarding Landlord’s Remedies.  Landlord shall be entitled to draw on the Security Deposit and/or the Letter of Credit to cover all damages incurred by Tenant’s default or breach (after notice and the expiration of the applicable cure periods), including damages pertaining to past-due rent, future rent (pursuant to CA Civil Code Section 1951.2), and the recapture of brokerage fees (as set forth in Section 15 above).  Landlord can only draw upon the Letter of Credit (or Security Deposit) after notice and the expiration of the applicable cure periods.  Furthermore, Landlord can only draw upon the Letter of Credit (or Security Deposit) to the extent necessary to cure the default(s), provided that no such restriction shall apply in the
event (1) Tenant has filed a voluntary petition under the U.S. Bankruptcy Code or any state bankruptcy code (collectively, Bankruptcy Code) and the same is not withdrawn within forty-five (45) days, subject, however, to the provisions of the U.S. Bank Code, (2) an involuntary petition has been filed against Tenant under the Bankruptcy Code and the same is not withdrawn within forty-five (45) days, subject, however, to the provisions of the U.S. Bank Code, or (3) the Bank issuing the Letter of Credit has notified Landlord that the Letter of Credit will not be renewed or extended as required under the Lease.

18.          No Other Changes.  Except as herein expressly provided to the contrary, each and every term and condition of the Lease shall remain in full force and effect.

19.          Counterparts.  This Second Amendment may be executed in one or more counterpart copies, and each of which so executed, irrespective of the date of execution and delivery, shall be deemed to be an original, and all such counterparts together shall constitute one and the same instrument.

[Remainder of page left blank intentionally.]

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20.          Facsimile Signatures.  The parties agree that this Second Amendment will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile signature shall be treated in all respects as having the same effect as an original signature.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the date first above written.

 

 

	
            LANDLORD

 

MCR ASTON, LLC

a California limited liability company

 

By:__________________________

Name:________________________

Its: __________________________
 	
            TENANT

 

CONVERA CORPORATION,

a Delaware corporation 

 

By:__________________________

Name:________________________

Its: __________________________
 

 

 

6

 

EXHIBIT A

 

Surrender Space

 

(See attached)

 

7

 

 

 

8

 

 

 

9

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