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MoSys filed complaint against merger termination


Monday, April 26, 2004

Just days after Synopsys abruptly called off its merger agreement with Monolithic System Technology (MoSys), the Sunnyvale, Calif.-based company has fired back.

High-density S0C embedded memory company MoSys, today filed complaint alleging a breach of contract against its former suitor Synopsys.

The complaint, filed in the Chancery Court of the State of Delaware, seeks to force Synopsys to either complete the merger or else pay monetary damages arising from the breach of merger.

"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, in a statement announcing the complaint.

"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 complaint describes the merger process, which began in October 2003 at every step, from the beginning to the signing of the agreement. MoSys said that Synopsys had issued a tender offer for shares of MoSys, and by April 16, the date it was scheduled to expire, 89 percent of the outstanding shares were tendered ¨C well over the 50 percent threshold required by the agreement.

MoSys said in its statement that Synopsys has failed to provide an explanation of why it was entitled to terminate the agreement. It's suit further alleges that

In the absence of such an explanation by Synopsys, the lawsuit alleges that the EDA player may have sought to obtain confidential information about MoSys to gain an unfair and illegal advantage in competing with MoSys at some future point when Synopsys enters the memory business.

"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," said Hsu. "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."

By: DocMemory
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