Nassda Corporation develops full-chip circuit simulation and analysis software for the semiconductor industry.

The Complaint charges Nassda and certain of its officers and directors with violations of the Securities Exchange Act of 1934. According to the Complaint, Nassda began licensing its software in July 1999. Nassda's founders are all former employees of Synopsys Corporation. Synopsys filed two suits against the Company, including a Complaint in state court that alleges misappropriation of trade secrets and a suit in federal court charging patent infringement. Synopsys is the owner of United States Patent No. 5,878,053 (the ''053 patent'), entitled "Hierarchical Power Network Simulation and Analysis Tool for Reliability Testing of Deep Submicron Designs." The Complaint alleges that during the Class Period, Nassda was infringing on the Synopsys '053 patent by making, using, selling, distributing, advertising, marketing and creating source code for products, including Nassda's Hierarchical Storage and Isomorphic Matching ('HSIM') software product. Synopsys has alleged that Nassda has actively induced infringement of, or contributed to the infringement of, the '053 patent by making infringing products and creating source code for infringing products and then selling, distributing, advertising and marketing those infringing products to others. Synopsys gave Nassda actual notice of the '053 patent and sought from Nassda information that would assist Synopsys in further investigating the extent to which Nassda's products are within the scope of each claim of the '053 patent. Nassda refused to provide substantive information in response to this request. Synopsys informed Nassda that it was infringing the '053 patent, but Nassda has continued to pursue its infringing activities. Several current employees of Nassda were formerly key employees of Synopsys who left Synopsys en masse to develop Nassda's infringing product. These employees knew or should have known that their actions, in creating, selling and distributing Nassda's infringing software products, constituted patent infringement.

On January 10, 2003, a judge ruled that some of Nassda's founders copied proprietary source code from Synopsys to help develop their software. The judge found that certain former Synopsys employees viewed Synopsys products days before leaving Synopsys and then used those products to develop Nassda's programs used in semiconductor design.

These disclosures caused Nassda's stock to decline by 50% to less than $6 per share before closing at $7.10 per share on January 10, 2003, on volume of more than 5.7 million shares.

Then on Monday June 14, 2004, Nassda revealed that the California state court on June 11, 2004 issued orders against Nassda and individual Defendants named in the litigation with Synopsys. These orders limited Nassda's defenses regarding the timing and the development of the initial HSIM source code and the evidence that Nassda and the remaining individual Defendants could present at trial. The court's orders established as fact that the first 60,000 lines of source code of HSIM and all ideas and concepts reflected therein were derived from Synopsys's source code or other Synopsys materials while the individual Defendants were employed by Synopsys. The court also ruled that Nassda and the individual Defendants acted in concert to intentionally alter, destroy, lose or misplace items requested in discovery and conceal evidence. The Company's shares plummeted to below $4.00 per share on this news.

According to the Notice of Pendency and Settlement of Class Action, pursuant to an Order of the United States District Court for the Northern District of California and Rule 23 of the Federal Rules of Civil Procedure, a settlement in the amount of $9,000,000 in cash has been reached by the parties. The Settlement is subject to approval by the Court.

On August 17, 2005, the Court entered the Final Judgment and Order of Dismissal with Prejudice by Judge Susan Illston. The Stipulation and settlement is approved and the case is dismissed.