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Exhibit 10.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This
Settlement Agreement and Mutual Release (the "Agreement") is made
and
entered into as of the 29th day of March, 2006 ("the Effective
Date") by and
between SCHNEIDER ELECTRIC SA, ("Schneider Electric"), a French
corporation, and
SQUARE D COMPANY ("Square D"), a Delaware corporation, for
themselves and their
divisions, subsidiaries, operating companies and affiliates
(hereinafter
collectively referred to as "Schneider") on the one hand, and AMI
Semiconductor,
Inc., a Delaware corporation, and AMI Semiconductor Belgium BVBA, a
Belgian
corporation, for themselves and their divisions, subsidiaries,
operating
companies and affiliates (hereinafter collectively referred to as
"AMI") on the
other hand. Schneider and AMI are collectively referred to as the
"Parties."
RECITALS
WHEREAS, AMI is the manufacturer and sole supplier of a certain
custom
computer chip known as the application specific integrated circuit,
which is
incorporated into a certain Square D circuit breaker known as the
arc fault
circuit interrupter ("AFCI").
WHEREAS, Square D's AFCIs are designed, in part, to detect
electrical arcs
from broken or damaged electrical wires or insulation, and to shut
off power to
the circuit before the arcing leads to overheating or a fire.
WHEREAS, Schneider has asserted certain claims against AMI related
to AMI's
manufacture and sale of certain application specific integrated
circuits
manufactured in Pocatello, Idaho between approximately March 2004
through
September 2004 that were incorporated as a component in certain
AFCIs
(hereinafter, "the ASICs"). Schneider has claimed that the ASICs
were not in
conformity with Square D's requirements and specifications and
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contained a condition that results in the delamination of the ASICs
when the
AFCIs are installed in the field. As a result of this alleged
nonconformity,
Schneider initiated a recall of the AFCIs containing the ASICs in
cooperation
with the U.S. Consumer Product Safety Commission. Schneider's
claims in
connection with the ASICs are referred to hereinafter as the
"Dispute".
WHEREAS AMI DENIES SCHNEIDER'S CLAIMS RELATED TO the ASICS AND THE
DISPUTE.
WHEREAS, the Parties have entered into an Agreement in Principle
dated
March 1, 2006 ("the Agreement in Principle") in order to settle the
Dispute,
which is attached hereto as Exhibit A and incorporated by reference
herein.
WHEREAS, the Parties have entered into this Agreement to complete
the
documentation of the settlement reached pursuant to the Agreement
in Principle.
NOW
THEREFORE, in consideration of the promises and mutual
covenants
contained herein, it is agreed by each of the Parties as
follows:
AGREEMENT
1.
INCORPORATION OF
RECITALS. The foregoing Recitals to this Agreement
are incorporated by reference as if fully set forth here as Section
1 of this
Agreement, with the same force and effect as if recited here at
length.
2.
PAYMENT BY AMI.
AMI shall pay a total of Five Million U.S. Dollars (US
$5,000,000.00) to Schneider. As of the time of this Agreement, AMI
has paid
Schneider the sum of One Million, Three Hundred Thousand U.S.
Dollars (US
$1,300,000.00). The remainder shall be paid within five business
days after the
execution of the Agreement, representing the full and final amount
to be paid to
settle the Dispute. The payments shall be made via wire transfer
per wire
instructions provided to AMI by Schneider or by immediately
collectible funds
such as certified check payable to the order of Schneider.
2
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3.
ATTORNEYS' FEES
AND COSTS. Schneider and AMI shall be liable for and
shall pay their own attorneys' fees and costs relating to or
arising out of this
Agreement and the Dispute.
4.
(a) RELEASE BY SQUARE D AND SCHNEIDER ELECTRIC, SA OF AMI
SEMICONDUCTORL INC.
AND AMI SEMICONDUCTOR BELGIUM BVBA. Except as set forth
in
Section 4(c) of this Agreement, Schneider Electric, SA and Square D
for
themselves and on behalf of their parents, divisions, operating
companies,
affiliates, employees, representatives, shareholders,
directors,
successors, and assigns, individually and collectively, hereby
release and
forever discharge AMI Semiconductor, Inc. and AMI Semiconductor
Belgium
BVBA, and each of their officers, directors, employees,
affiliates,
subsidiaries, shareholders, representatives, successors,
assignees,
accountants, and attorneys from any and all known judgments,
damages,
liens, liabilities, demands, lawsuits, arbitrations, fees, losses,
and
fixed or contingent
expenses, of any kind which Schneider Electric, SA and
Square D, their parents, divisions, operating companies,
affiliates,
employees, representatives, shareholders, directors,
