EXHIBIT 10.20
Rev. 3.3 - 6/30/00
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SETTLEMENT AGREEMENT
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This Settlement Agreement (hereinafter "Agreement") is between Crystal
Semiconductor Corporation ("Crystal"), a corporation of the State of Delaware,
having its principal place of business at 4210 S. Industrial Drive, Austin,
Texas 78744 and OPTi, Inc., ("OPTi"), a corporation of the State of California,
having its principal place of business at 3393 Octavius Drive, Santa Clara,
California 95054. The Effective Date of this Agreement is June 24, 2000, on
which date Crystal and OPTi orally agreed to this Agreement.
WHEREAS, Crystal filed a patent infringement lawsuit on January 10, 1997, in
the United States District Court for the Western District of Texas, Austin
Division, captioned Crystal TriTech Microelectronics International PTE Ltd.,
(the TriTech Microelectronics defendants hereafter referred to as "TriTech")
Civil Action No. A 97 CA 026 SS (hereafter the "OPTi Action"), in which Crystal
alleged infringement of United States Patent No. 4,746,899; United States Patent
No. 4,851,841; and United States Patent No. 5,220,483.
WHEREAS, on May 17, 1999 the jury in the OPTi Action, inter alia, returned a
verdict against OPTi in the amount of $4,732,345 for lost profits damages; an
amount of $10,659,906 for price erosion damages; and an amount of $4,000,000
for reasonable royalty damages.
WHEREAS, on July 23, 1999 the judge entered Judgement against OPTi in the
amount of $4,000,000 plus costs, plus post-judgement interest. The Judgement
denied the jury verdicts of over $15,300,000 in lost profit and price erosion
damages, and denied prejudgement interest.
WHEREAS, both Crystal and OPTi have appealed the July 23, 1999 Judgement to
the United States Court of Appeals for the Federal Circuit. Crystal's appeal is
assigned Appeal NO. 99-1559, and OPTi's appeal is assigned Appeal No. 99-1560.
These two appeals and an appeal by TriTech were consolidated into one appeal
captioned Crystal Semiconductor Corporation v. TriTech Microelectronics
International, Inc. and TriTech Microelectronics International PTE Ltd. and OPTi
Inc. 99-1558, -1559, -1560, 00-1006 (the "Appeal Action"). In the Appeal Action
Crystal appeals to have the jury's lost profits and price erosion verdicts
reinstated, plus the ordering of prejudgement interest. OPTi appeals to have
its liability under U.S. 4,746,899 reduced to zero.
WHEREAS, Crystal filed an action in California Superior Court on September
9, 1998 captioned Crystal Semiconductor Corporation v. OPTi Inc. and Does 1
through 1050, No. CV776536, seeking to compel OPTi to preserve assets sufficient
to pay a final judgement in the OPTI action ("the California State Court
Action").
WHEREAS, OPTi has transferred to Crystal shares of Tripath stock ("Tripath
Stock") as collateral to cover the amount of the fiscal award to Crystal of
damages caused by OPTi's infringement in the OPTi Action.
WHEREAS, the Parties mutually desire to compromise and settle and to resolve
all of their disputes arising from the OPTi Action, while leaving intact and
unaffected (except for any offset to avoid double compensation to Crystal)
Crystal's claims against TriTech, including those claims where TriTech has been
adjudicated to be jointly and severally liable with OPTi;
THEREFORE, in consideration of good and valuable consideration and of the
covenants and other terms set forth herein, the Parties agree to enter into this
Agreement.
A. Crystal agrees as follows:
1. Crystal agrees and covenants to seek any and all recovery from the
OPTi Action solely from TriTech, and not from OPTi, expressly including any
portion of the awards determined to be joint and several as between TriTech and
OPTi.
2.1 Crystal agrees to discharge forty-two percent (42%) of the
monetary obligations owed to Crystal by OPTi, corresponding to forty-two percent
(42%) of OPTi's acts of infringements, upon receipt of the first payment
required by paragraph B.2. Crystal agrees to discharge another twenty-nine
percent (29%) of the monetary obligations owed to Crystal by OPTi, corresponding
to the twenty-nine percent (29%) of OPTi's acts of infringements, upon receipt
of the second payment required by paragraph B.2. Crystal agrees to discharge
the final twenty-nine percent (29%) of OPTi's acts of infringements, upon
receipt of the third and final payment required by paragraph B.2.
3. Crystal agrees to return to OPTi the Tripath Stock upon receipt of
the third and final payment required by paragraph B.2.
B. OPTi agrees as follows:
1. OPTi agrees to pay to Crystal a total royalty amount of $7.0 million
for all acts of infringement found to have been committed by OPTi in the OPTi
Action. OPTi agrees to pay this amount according to three royalty payments as
scheduled in paragraph B.2. These royalty amounts are the result of a
settlement of a dispute, to achieve (i) immediate resolution of the dispute and
(ii) immediate peace between Crystal and OPTi, and are independent of, and
unaffected by, the eventual outcome of the Appeal Action.
2. OPTi agrees to pay to Crystal royalties for its acts of infringement
from the OPTi Action as follows: The first royalty payment in the amount of
$3.0 million is for forty-two percent (42%) of the acts of infringement and is
due on or prior to June 24, 2000. The second royalty payment in the amount of
$2.0 million is for twenty-nine (29%) of the acts of infringement and is due in
August on or prior to August 8, 2000. The third and final royalty payment in
the amount of $2.0 million is for the remaining twenty-nine percent (29%) of the
acts of infringement and is due in October on or prior to October 15, 2000.
OPTi agrees to electronically transfer the payments on the dates specified to
Crystal's bank as follows:
Acct. No. 4801897513
Cirrus Logic, Inc.
2
Wells Fargo Bank
AGA# 121000248
C. Both parties mutually agree as follows:
1.1. It is the intent and agreement of the parties that the District
Court's July 23, 1999 Judgment in the OPTi Action remain in full force and
effect against OPTi (including the injunction), except for the amount of damages
against OPTi, which has been liquidated by this Settlement Agreement, regardless
of the outcome of the Appeal Action. Within ten days of the Effective Date of
this Agreement, the parties will take appropriate action to have the District
Court enter an Order to this effect.
1.2. It is the intent and agreement of the parties to have OPTi
dismissed as a party to Crystal's appeal in the Appeal Action and to dismiss
OPTi's cross-appeal in the Appeal Action without affecting the effect or
enforceability of the Judgment of the District Court, except as modified in
paragraph C.1.1. Within ten days of the Effective Date of this Agreement,
Crystal and OPTi will move jointly in the Federal Circuit to have OPTi dismissed
as a party to Crystal's appeal (without any effect on the substantive issues in
Crystal's appeal) and to dismiss OPTi's cross appeal on terms consistent with
this paragraph and with paragraph C.1.1.
1.3. Upon receipt by Crystal of the last payment required by
paragraph B.2, Crystal and OPTi agree to release and forever discharge each
other, and their past and present officers, directors, attorneys, subsidiaries,
successors, and parent companies (collectively "the Released Parties"), from any
and all claims, demands, obligations, losses, causes of action, costs, expenses,
attorney fees and liabilities of any nature whatsoever, which either OPTi or
Crystal has or claims to have against any or all of the Released Parties arising
out of the OPTi Action.
1.4. Upon receipt of the last payment described in paragraph B.2,
Crystal and OPTi agree to dismiss with prejudice all claims now pending in the
California State Court action, and to release each other from all claims that
were brought or could have been brought in that action up to the date of the
dismissal of that action. The parties will move jointly with ten business days
of receipt of the last payment to dismiss this action.
2. If any provision of this Agreement is found to be
unenforceable, it shall not affect the enforceability of the remaining
provision, and the court shall enforce all remaining provisions to the extent
permitted by law.
3. Crystal and OPTi agree that this Agreement and its terms are
confidential and agree further not to disclose the terms and conditions of this
Agreement, except as required by law, and after notice to the other party
hereto. The existence of this agreement, including the identity of the other
party, but not the terms, may be disclosed.
4. This Agreement shall bind and benefit Crystal and OPTi, and
each of their respective parents, successors, and assigns.
5. This Agreement shall be deemed to have been entered into in the
State of
Texas and shall be construed and interpreted in accordance with the laws of that
state. The parties further agree that the United States District Court for the
Western District of Texas shall be the proper and exclusive forum for any action
or proceeding arising out of or related to this Agreement. Any proceeding to
enforce, or to resolve disputes arising under or relating to, this Agreement
shall be brought in that court. If for some reason these federal courts are
found to lack jurisdiction, then the state courts of the state of Texas in
Travis County shall be the proper and exclusive forum for any action or
proceeding arising out of or related to this Agreement. Each Party agrees to
accept service of process by registered mail addressed to its registered agent.
In any such proceeding, neither Party shall assert that such court lacks
jurisdiction over it or the subject matter of the proceeding.
6. Each party agrees that if suit is necessary to enforce this
Agreement, then the prevailing Party will recover all costs and expenses
sustained on account of such action, including the cost of attorney fees and all
other necessary costs and expenses of such action or proceeding.
7. This Agreement may be signed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
8. This Agreement will not be binding upon the Parties until it has
been signed herein below by or on behalf of all parties hereto. No amendment or
modification hereof shall be valid or binding upon the Parties unless made in
writing and signed as aforesaid. This document embodies the entire
understanding of the Parties regarding the subject matter hereof, and merges all
prior discussions between them, and none of the Parties shall be bound by any
conditions, definitions, warranties, understandings or representations with
respect to the subject matter hereof other than as expressly provided herein.
9. This Agreement was prepared jointly by the Parties and shall not
be construed against any Party.
10. All Parties shall bear their own attorneys' fees, costs and
expenses associated with the OPTi Action and the Appeal Action and any other
matters covered herein.
11. Each party agrees to execute and provide such documents for the
benefit of the other as are necessary to effect the agreed upon provisions found
herein.
IN WITNESS WHEREOF, the Parties hereto, through their respective designated
representatives who have authority to execute this Agreement on their behalf,
have caused this Agreement to be duly signed and executed as of the dates below.
CRYSTAL SEMICONDUCTOR CORPORATION
Date: By: Signature Illegible
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Title:
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OPTI, INC.
Date: July 7, 2000 By: Signature Illegible
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Title: President & CEO
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