NVIDIA 2013 Annual Report Download - page 237

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
93
Capital lease obligations include building and office equipment lease obligations. The building lease relates to our data
center in Santa Clara, California. Future minimum lease payments under the building capital lease total $25.8 million over
the remaining lease term, including predetermined rent escalations, and are included in the future minimum lease payment
schedule below:
Future Capital
Lease Obligations
(In thousands)
Fiscal Year:
2015................................................................................................................................................... $ 5,168
2016................................................................................................................................................... 5,303
2017................................................................................................................................................... 5,453
2018................................................................................................................................................... 5,607
2019................................................................................................................................................... 5,767
2020 and thereafter............................................................................................................................ 26
Total.............................................................................................................................................. $ 27,324
Present value of minimum lease payments....................................................................................... $ 20,417
Current portion.................................................................................................................................. $ 2,917
Long-term portion............................................................................................................................. $ 17,500
Litigation
3dfx
On December 15, 2000, NVIDIA and one of our indirect subsidiaries entered into an Asset Purchase Agreement, or
APA, to purchase certain graphics chip assets from 3dfx. The transaction closed on April 18, 2001. That acquisition, and
3dfx's October 2002 bankruptcy filing, led to four lawsuits against NVIDIA: two brought by 3dfx's former landlords, one
by 3dfx's bankruptcy trustee and the fourth by a committee of 3dfx's equity security holders in the bankruptcy estate. The
two landlord cases have been settled with payments from the landlords to NVIDIA, and the equity security holders' lawsuit
was dismissed with prejudice and no appeal was filed. Accordingly, only the bankruptcy trustee suit remains outstanding
as more fully explained below.
In March 2003, the Trustee appointed by the Bankruptcy Court to represent 3dfx's bankruptcy estate served a complaint
on NVIDIA asserting claims for, among other things, successor liability and fraudulent transfer and seeking additional
payments from us. The Trustee's fraudulent transfer theory alleged that NVIDIA had failed to pay reasonably equivalent
value for 3dfx's assets, and sought recovery of the difference between the$70.0 million paid and the alleged fair value, which
difference the Trustee estimated to exceed $50.0 million. The Trustee's successor liability theory alleged NVIDIA was
effectively 3dfx's legal successor and therefore was responsible for all of 3dfx's unpaid liabilities.
On October 13, 2005, the Bankruptcy Court heard the Trustee's motion for summary adjudication, and on December
23, 2005, denied that motion in all material respects and held that NVIDIA may not dispute that the value of the 3dfx
transaction was less than $108.0 million. The Bankruptcy Court denied the Trustee's request to find that the value of the
3dfx assets conveyed to NVIDIA was at least $108.0 million.
In early November 2005, after several months of mediation, NVIDIA and the Official Committee of Unsecured Creditors,
or the Creditors' Committee, agreed to a Plan of Liquidation of 3dfx, which included a conditional settlement of the Trustee's
claims against us. This conditional settlement was subject to a confirmation process through a vote of creditors and the
review and approval of the Bankruptcy Court. The conditional settlement called for a payment by NVIDIA of approximately