ADIC Settles Crossroads Patent Suit for $15 Million; Lump Sum Payment to be Offset by Escrowed Shares.Business Editors REDMOND, Wash.--(BUSINESS WIRE)--June 13, 2001 Advanced Digital Information Corporation (Nasdaq:ADIC) announced today that it has reached a settlement with Crossroads Systems, Inc. in the patent lawsuit pending against Pathlight Technology, Inc., now a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of ADIC(R). In the lawsuit, Crossroads had alleged infringement by Pathlight's router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals and Gateway products. Pursuant to the Settlement Agreement, ADIC will make a $15 million lump sum Lump sum A large one-time payment of money. payment to Crossroads and receive a fully paid up license to use and resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. all technology covered by the patent in question for the life of that patent. ADIC expects that the full amount of the payment will be booked as a pre-tax charge in the current quarter and will result in a reduction in the number of shares issued in its merger with Pathlight approximately equal to the after-tax cost of the settlement. ADIC Chairman and Chief Executive Peter van Oppen commented, "We are pleased to eliminate the uncertainty that was created by this litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Especially in litigation such as this case, which involved a trial before a jury, neither party can be completely confident of their ability to prevail. We reached this settlement with Crossroads to eliminate any possibility that a verdict in the case, if it was unfavorable to Pathlight, would have a disruptive effect on our ability to deliver products to our customers." Per the terms of the Merger Agreement between Pathlight and ADIC, 1,030,000 shares of ADIC stock were held in a special escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account designed to cover any expenses or other losses that ADIC might incur in connection with the litigation, including the cost of settling this litigation. As a result of this settlement, 531,915 of those shares will be returned to ADIC and canceled. The balance of shares held in that escrow account will be distributed to former Pathlight shareholders. At yesterday's closing price of $18.33 per share, the total value of the surrendered shares equals the estimated after tax cost of the lump sum payment. Designated representatives of former Pathlight shareholders have consented to the settlement. About ADIC Advanced Digital Information Corporation (Nasdaq:ADIC) is a leading storage solutions provider to the open systems marketplace, offering a broad range of Intelligent Storage(TM) products designed to enhance organizations' abilities to store, protect, manage and use their rapidly growing network data. ADIC products include technology-independent automated storage systems, specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. storage management software, and multiple-protocol storage networking (SAN/NAS) connectivity and management tools. ADIC storage products are available through a worldwide sales force and a global network of resellers and OEMs, including Dell, EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. , Fujitsu-Siemens and IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) . Further information about ADIC is available at www.adic.com. ADIC is a registered trademark of Advanced Digital Information Corporation. All other product or service marks mentioned in this release should be considered the property of their respective owners. |
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