SUNNYVALE, Calif.--(BUSINESS WIRE)--April 23, 2004 -- Monolithic System Technology, Inc. (MoSys), (Nasdaq:MOSY) the industry's leading provider of high density SoC embedded memory solutions, today charged Synopsys, Inc. (Nasdaq:SNPS) with breach of contract following the abrupt termination of a merger agreement by Synopsys in April, 2004.
The complaint seeks to force Synopsys to complete the merger agreement or otherwise seeks monetary damages arising from the breach of the merger agreement.
"Synopsys waited until the last minute to pull out of a lawful agreement, causing significant damage to our company and our stockholders," said Fu-Chieh Hsu, Chairman and CEO. "While we regret our only alternative is litigation, we believe this merger is still important for both companies and we are prepared to move forward to close the transaction. We hope the management of Synopsys will recognize not only its contractual obligations but also the benefits it has repeatedly asserted about this merger."
The lawsuit, filed in the Chancery Court of the State of Delaware, describes a long and detailed process that began in October 2003 and proceeded through various stages of due diligence leading to a signed merger agreement on February 23, 2004. Synopsys issued a tender offer for shares of MoSys on March 22, 2004, and by April 16, the date the tender offer was scheduled to expire, 89 percent of the outstanding shares were tendered, well over the 50 percent threshold required by the agreement.
Instead of accepting the tendered shares Synopsys terminated the agreement. Although the company said that if asked it would explain the reasons it was entitled to terminate the agreement, Synopsys has yet to provide that explanation.
"Following the announcement of the merger agreement the leadership of Synopsys made numerous public statements about the benefits of the merger and why it would benefit their shareholders," Dr. Hsu stated. "We were completely unaware of any issues that would constitute a legitimate reason to breach our agreement as we had discussed all the significant aspects of our business and operations that Synopsys had inquired about."
The lawsuit alleges that, in the absence of any explanation, Synopsys may have engaged in obtaining confidential information to gain an unfair and illegal advantage in competing with MoSys at some future point when Synopsys enters the memory business.
The suit asks the court to enforce the merger agreement or, alternatively, to award damages to compensate MoSys and its stockholders for the harm caused by the decision of Synopsys to breach the agreement.
Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and markets innovative memory technologies for semiconductors. MoSys' patented 1T-SRAM technologies offer a combination of high density, low power consumption, high speed and low cost unmatched by other available memory technologies. The single transistor bit cell used in 1T-SRAM memory results in the technology achieving much higher density than traditional four or six transistor SRAMs while using the same standard logic manufacturing processes. 1T-SRAM technologies also offer the familiar, refresh-free interface and high performance for random address access cycles associated with traditional SRAMs. In addition, these technologies can reduce operating power consumption by a factor of four compared with traditional SRAM technology, contributing to making them ideal for embedding large memories in System on Chip (SoC) designs. MoSys' licensees have shipped more than 50 million chips incorporating 1T-SRAM embedded memory technologies, demonstrating excellent manufacturability in a wide range of silicon processes and applications. MoSys is headquartered at 1020 Stewart Drive, Sunnyvale, California 94085. More information is available on MoSys' website at http://www.mosys.com.
This press release may contain forward-looking statements about the Company including, without limitation, benefits and performance expected from use of the Company's 1T-SRAM technology.
Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include but are not limited to, customer acceptance of our 1T-SRAM technologies, the timing and nature of customer requests for our services under existing license agreements, the timing of customer acceptance of our work under such agreements, the level of commercial success of licensees' products such as the Nintendo GAMECUBE and cell phone hand sets, ease of manufacturing and yields of devices incorporating our 1T-SRAM, our ability to enhance the 1T-SRAM technology or develop new technologies, the level of intellectual property protection provided by our patents, the vigor and growth of markets served by our licensees and customers, the impact of the Company's acquisition of ATMOS Corporation on future operating results and operations of the Company, the impact of the termination by Synopsys of its agreement to acquire the Company, and other risks identified in the Company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as other reports that MoSys files from time to time with the Securities and Exchange Commission. MoSys undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.
1T-SRAM(R) is a MoSys trademark registered in the U.S. Patent and Trademark Office. All other trade, product, or service names referenced in this release may be trademarks or registered trademarks of their respective holders.
SOURCE: Monolithic System Technology, Inc.