OEM AGREEMENT
                                    BETWEEN
                          VLSI LIBRARIES INCORPORATED
                                      AND
                                SYNOPSYS, INC.


This OEM Agreement ("Agreement") is entered into and effective this 6th of
December, 1996 ("Effective Date"), by and between VLSI Libraries Incorporated, a
California corporation with principal offices at 2077 Gateway Place, San Jose,
CA 95110-1016 ("VLSI") and Synopsys, Inc., a Delaware corporation with principal
offices at 700 E. Middlefield Road,  Mountain View, California 94043-4033
("Synopsys").


                                   RECITALS

A.   VLSI has developed and markets memory generators and standard cell
     libraries and Synopsys has developed and markets a unique and proprietary
     approach for creating high density, high speed. complex gate arrays using
     its proprietary cell architecture ("CBA /TM/" Technology).

B.   VLSI and Synopsys, desire to enter into a relationship whereby Synopsys
     shall be authorized to license VLSI's (i) [***Redacted] that have been
     modified to provide a highly integrated link with Synopsys' CBA Technology
     and (ii) [***Redacted].

C.   In consideration of the mutual promises contained herein. the parties agree
     as follows:


                                   AGREEMENT


1.   DEFINITIONS

1.1  "Bug Fix" means an embodiment of the Licensed Software that corrects
      -------
     Errors.

1.2  "Change of Control" means (a) the acceptance by VLSI or the Controlling
      -----------------
     Shareholders of any offer from any person or group to acquire any shares of
     voting stock which would result in such person (other than a Controlling
     Shareholder) or group (other than a group consisting entirely of
     Controlling Shareholders) owning or having the right to acquire (i) more
     than 50% of the voting stock of VLSI than outstanding or (ii) all or
     substantially all of the assets of VLSI, or (b) the approval by VLSI's
     board of directors of any merger or consolidation of VLSI with or into any
     other entity in which VLSI stockholders prior to such transaction do not
     hold more than 50% of the voting power in the surviving entity.

1.3  "Confidential Information" means (i) any information disclosed by one party
      ------------------------
     to the other pursuant to this Agreement. which is in written, graphic,
     machine-readable or other tangible form and is marked "Confidential,"
     "Proprietary" or in some other manner to indicate its confidential nature,
     (ii) oral information disclosed by one party to the other pursuant to this
     Agreement, provided that such information is designated as confidential at
     the time of disclosure and reduced to a written summary by the disclosing
     party, within thirty (30) days after its oral disclosure. which is marked
     in a manner to indicate its confidential nature and delivered to the
     receiving party; and (iii) the existence of and terms and conditions of
     this Agreement. Notwithstanding any failure to so identify it, however. all
     source code will be deemed "Confidential Information" hereunder.
     Notwithstanding the above, Confidential 

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
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     Information shall not include information which: (i) was generally known
     and available at the time it was disclosed or becomes generally known and
     available through no fault of the receiver, (ii) was known to the receiver.
     without restriction, at the time of disclosure as shown by the files of the
     receiver in existence at the time of disclosure-, (iii) is disclosed with
     the prior written approval of the discloser; (iv) was independently
     developed by the receiver without any use of the Confidential Information
     and by employees or other agents


                                       1.
<PAGE>
 
     of the receiver who have not been exposed to the Confidential Information.
     provided that the receiver can demonstrate such independent development by
     documented evidence prepared contemporaneously with such independent
     development. (v) becomes known to the receiver. without restriction. from a
     source other than the discloser without breach of this Agreement by the
     receiver and otherwise not in violation of the discloser's rights: or (vi)
     is disclosed pursuant to the order or requirement of a court.
     administrative agency, or other governmental body, provided, that the
     receiver shall provide prompt advance notice thereof to enable the
     discloser to seek a protective order or otherwise prevent such disclosure.

1.4  "Controlling Shareholders" means Scott Becker, Duane Hook, John Milecki,
      ------------------------
     Daniel I. Rubin and Mark Templeton.

1.4  "Documentation" means any user manuals. reference manuals. release,
      -------------
     application and methodology notes, written utility programs and other
     materials in any form provided for use with the Licensed Software.

1.5  "End User" means an entity who acquires the Licensed Software for personal
      --------
     use. with no rights granted to subsequently sell or sublicense to others.

1.6  "Error" means a defect which causes the Licensed Software not to perform
      -----
     substantially in accordance with the specification set forth in Exhibit A.

1.7  "Licensed Software" means collectively the VLSI Libraries and VLSI
      -----------------
     Products.

1.8  "Updates" means a version of the Licensed Software that delivers
      -------
     enhancements. improvements, architectural changes or new features and/or
     functionality to the Licensed Software.

1.9  "VLSI Libraries" means VLSI's [***Redacted] as more fully described
      --------------
     in Exhibit A, as amended from time to time, including any Bug Fixes or
     Updates.

1.10 "VLSI Products" means VLSI's [***Redacted] products that have been
      -------------
     [***Redacted] as more fully described in Exhibit A, as amended from time to
     time, including any Bug Fixes or Updates.


2.   SYNOPSYS' RIGHTS TO THE LICENSED SOFTWARE

2.1  Appointment. VLSI hereby grants Synopsys a nonexclusive. nontransferable,
     -----------
     worldwide, right to distribute the Licensed Software in object code form
     and Documentation to End Users in accordance with the restrictions set
     forth herein. through any and all Synopsys normal distribution channels.
     However, Synopsys and its agents shall be the exclusive sellers of the VLSI
     Products. VLSI agrees that the Licensed Software, including Bug Fixes and
     Updates, shall contain its best available technology, consistent with
     Synopsys' market needs and the target resale price. Synopsys agrees to
     enter into written agreements with its distributors and resellers; binding
     them to the restrictions contained herein. The Licensed Software and the
     porting services will be sold under the Synopsys brand name as Synopsys
     products.

2.2  Software License and Other Restrictions.  The Licensed Software is subject
     to license

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.

<PAGE>
 
     and not sale.  Each reference in this Agreement to a "purchase" or "sale"
     of the Licensed Software, or like terms. shall mean a "license" of the
     Licensed Software.  VLSI shall retain full title to the Licensed Software
     (including all intellectual property rights embodied therein) and all
     copies thereof.  End Users may use the licensed Software in accordance with
     the provisions of an end user license agreement in a form mutually
     acceptable to VLSI and Synopsys.  Synopsys agrees that the Licensed
     Software will be sold only in conjunction with the sale of CBA Technology
     to an End User or to End User's who are current CBA Technology licensee's.
     Synopsys will include appropriate proprietary notices on or in the Licensed
     Software to protect Synopsys' and VLSI' intellectual property rights in the
     Licensed Software.



                                       2.
<PAGE>
 
2.3  Internal Use License. VLSI hereby grants Synopsys and its subsidiaries,
     --------------------
     distributors and resellers, at no charge, a nonexclusive, nontransferable.
     worldwide. right and license to copy and use the Licensed Software in
     connection with the manufacturing, testing, demonstration. training,
     marketing, technical support of the Licensed Software and other tasks
     incidental to the rights granted under this Agreement and supporting End
     Users in their use of the Licensed Software.

2.4  Design Center License. VLSI hereby grants Synopsys, its subsidiaries and
     ---------------------
     its certified third party design centers, at no charge. a nonexclusive.
     nontransferable. worldwide right and license to copy and use the Licensed
     Software to provide design services to its customers.

2.5  End User Support. Synopsys shall be solely responsible for all maintenance
     ----------------
     and support obligations to its End Users.

2.6  Manufacturing and Distribution. Manufacturing and distribution of the
     ------------------------------
     Licensed Software and Documentation shall be the responsibility of
     Synopsys. VLSI shall provide master copies of the Licensed Software and
     Documentation.


3.   VLSI OBLIGATIONS AND RIGHTS TO SYNOPSYS SOFTWARE

3.1  Development Work. In order for Synopsys to act as an OEM of the VLSI
     ----------------
     Products. certain engineering tasks related to modifying the VLSI Products
     for Synopsys' CBA Technology (set forth in Exhibit C. as may be amended
     from time to time) must first be performed by VLSI. VLSI agrees to use its
     best commercial efforts to perform the engineering tasks set forth in
     Exhibit C, as may be amended from time to time, in accordance with the
     schedules set forth in Exhibit C.

3.2  Porting Services. During the term of this Agreement. VLSI agrees to provide
     ----------------
     porting services to customize the Licensed Software for use with Synopsys'
     customer's foundry processes. VLSI agrees to perform such porting, services
     in a diligent and timely manner according to specifications and schedules
     mutually agreed upon by the parties. Synopsys will be responsible for
     providing VLSI with the necessary customer information.

33   License to Synopsys Products.  Synopsys hereby grants VLSI, at no charge, a
     ----------------------------
     nonexclusive, nontransferable, right and license to use internally the
     Synopsys products set forth in Exhibit D, as may be amended from time to
     time by mutual agreement of the parties, for the purpose of verifying
     integration with Synopsys' CBA Technology and to provide support to
     Synopsys CBA licensees who have licensed the Licensed Software from
     Synopsys.  VLSI's use of the Synopsys products shall be pursuant to the End
     User Software License set forth in Exhibit B.


4.   CONSIDERATION

4.1  Royalty Advance. Synopsys agrees to advance VLSI [*** Redacted] against 
     ---------------
     royalties payable to VLSI under Section 4.4 below. Such advance is payable
     to VLSI within fifteen (15) working days of the Effective Date. In the
     event. VLSI is unable to successfully modify the VLSI Products for
     Synopsys' CBA Technology as set forth in Section 3.1 and Synopsys
     reasonably determines, after

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
     consultation with VLSI that VLSI will be unable to complete the required
     modification, VLSI agrees to return the entire advance to Synopsys within
     fifteen (15) working days of such determination. VLSI agrees that 
     [*** Redacted] of the royalty amounts otherwise payable by Synopsys to VLSI
     pursuant to Section 4.4 below shall be retained by Synopsys to offset this
     advance until the entire amount of the advance has been fully offset.

4.2  List Price. Synopsys and VLSI will [*** Redacted] sold by Synopsys to 
     [*** Redacted] pursuant to this Agreement [*** Redacted] and after

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.

                                       3.
<PAGE>
 
     Synopsys holds discussions with its key customers and sales organization.
     Based on the parties' current understanding of the market and current
     expectations of the product specifications. the [***Redacted] for the
     VLSI Products and VLSI Libraries [***Redacted]:

     (i)  VLSI Products
          -------------

          (1)  [***Redacted] versions of the [***Redacted] including
               [***Redacted] will have a [***Redacted] of [*** Redacted]:

          (2)  [***Redacted] versions of the [***Redacted] will have a
               [***Redacted] of [*** Redacted]:

          (3)  [***Redacted] versions of [***Redacted] will have a
               [***Redacted] of [*** Redacted]: and

     (ii) VLSI Libraries. The [***Redacted] will have a [***Redacted]
          --------------
          of [*** Redacted].

4.3  Fees/Discounts. Synopsys will pay VLSI a fee on Licensed Software
     --------------
     distributed to End Users pursuant to this Agreement. Fees shall be
     determined by [*** Redacted] of the VLSI Products and VLSI libraries.
     Synopsys will receive [*** Redacted] from the [*** Redacted] of all VLSI
     Products sold and a [*** Redacted] from the [*** Redacted] of [***Redacted]
     sold. This fee includes all costs and expenses associated with
     the porting services required to customize the Licensed Software for use
     with Synopsys' specific customer's foundry processes.

4.4  Royalty.
     -------

     (a)  VLSI Products. Subject to Section 4.7, Synopsys will pay to VLSI a
          -------------
          royalty calculated as [*** Redacted] of the royalty Synopsys
          receives from its CBA licensees that is attributable to the sale of
          VLSI Products. Royalty owed to Synopsys by such CBA licensees are
          calculated in one of two ways as follows:

          (i)  Synopsys receives [***Redacted] based on [***Redacted] using
               [***Redacted] and [***Redacted] (collectively the "Combined
               Product") which is currently targeted to be [*** Redacted]
               depending on the customer. In this case, Synopsys will pay VLSI a
               royalty that is [***Redacted] by Synopsys [***Redacted] by
               [***Redacted]. This [***Redacted] of the Combined Product which
               is attributable to the VLSI Products. For example, if Synopsys
               [*** Redacted] based on the Combined Product and the [***
               Redacted] then VLSI would [*** Redacted] for that [*** Redacted].

          (ii) Synopsys receives a [***Redacted] which is currently targeted to
               be [*** Redacted]. In this case, Synopsys will pay VLSI a royalty
               [*** Redacted]. It is anticipated that this method of calculating
               royalties will apply [***Redacted]

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
               [***Redacted] and the royalty attributable to VLSI products 
               [***Redacted]. VLSI agrees that it shall be entitled to 
               [***Redacted]

                                      4.
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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
     (b)  VLSI Libraries. In the event that Synopsys does receive royalties on
          --------------
          the VLSI Libraries then Synopsys will pay VLSI a royalty equal to
          [*** Redacted] of the royalty received by Synopsys and
          attributable to the VLSI Libraries.

     (c)  Design Center Use. In connection with the design center activities
          -----------------
          authorized pursuant to Section 2.4 above. Synopsys will pay to VLSI a
          royalty calculated as [*** Redacted] of the royalty Synopsys receives
          from its CBA licensees that is attributable to the sale of VLSI
          Products.

4.5  Payment. Subject to Section 4.7, fees under Section 4.3 shall be due and
     -------
     payable to VLSI upon acceptance of the Licensed Software by Synopsys' CBA
     licensee. Upon notification from Synopsys that the Licensed Software has
     been accepted. VLSI shall invoice Synopsys and such invoice shall be due
     and payable thirty (30) days from receipt. Royalty payments under Section
     4.4 (except for royalty amounts retained by Synopsys pursuant to Section
     4.1 above) shall be made within [***Redacted] calendar days after the end
     of each calendar quarter in which Synopsys receives a royalty payment from
     its CBA licensees that is attributable to the sale of VLSI Products.

4.6  Reports, Records and Audit Rights. With each royalty payment, Synopsys will
     ---------------------------------
     deliver to VLSI a written report setting forth in reasonable detail the
     information necessary to determine the accuracy of the calculation of the
     royalties payable. Upon at least thirty (30) days prior written notice and
     not more than once annually, VLSI's independent auditors who are reasonably
     acceptable to Synopsys and who have entered into appropriate nondisclosure
     agreements may inspect and audit such records during Synopsys' normal
     business hours. VLSI shall bear the cost and expense of the audit:
     provided, however, in the event of an underpayment to VLSI of 
     [*** Redacted] or more, Synopsys shall reimburse VLSI the reasonable costs
     and expenses of any such audit as well as the unpaid royalty amounts.

4.7  Exception. In the event Synopsys is unable to license the Licensed Software
     ---------
     to certain customers within the license and royalty parameters established
     by this Agreement, VLSI and Synopsys agree to negotiate in good faith to
     find mutually agreeable terms.

4.8  Preferred Treatment. If, during the Term of this Agreement, either party
     -------------------
     enters into an OEM agreement with a third party relating to memory products
     that contains terms that, considered as a whole, are more favorable to the
     counterparty than the terms of this Agreement, the parties agree that this
     Agreement will be deemed to be modified by the appropriate party to include
     such terms.


5.   MAINTENANCE AND SUPPORT

     VLSI shall provide Synopsys will standard support and maintenance services,
     including without limitation, Updates and Bug Fixes, to be provided to
     Synopsys and Synopsys' customers, at no charge, to the same extent and on
     the same schedule that VLSI makes them available to VLSI's other customers.

6.   CONFIDENTIALITY

     Each party shall treat as confidential all Confidential Information of the
     other party, shall not use such Confidential Information except as
     expressly set forth herein or otherwise authorized in writing, shall
     implement reasonable procedures to prohibit the disclosure, unauthorized
     duplication, misuse or removal of the other 


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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
     party's Confidential Information and shall not disclose such Confidential
     Information to any third party without the prior written consent of the
     disclosing party. Without limiting the foregoing, each party shall use at
     least the same procedures and degree of care that it uses to prevent the
     disclosure of its own

                                       5.

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
     Confidential Information of like importance to prevent the disclosure of
     Confidential Information disclosed to it by the other party under this
     Agreement. but in no event less than reasonable care.


7.   WARRANTY

     VLSI warrants and represents that (i) VLSI is the sole and exclusive owner
     of VLSI Products, VLSI Libraries and Licensed Software and the rights
     granted to Synopsys in this Agreement: (ii) the Licensed Software is or
     will be the original product of VLSI. (iii) to the best of VLSI's
     knowledge, the VLSI Products.  VLSI Libraries and Licensed Software does
     not and will not infringe any patent, copyright, trademark, trade secret or
     other proprietary right of any third party: (iv) VLSI has not previously
     granted and will not grant any rights to any third party that are
     inconsistent with or present a conflict of interest with the rights granted
     to Synopsys herein: and (v) VLSI has the right and full power to enter into
     this Agreement, to carry out its obligations under this Agreement and to
     grant the rights granted to Synopsys.

8.   INTELLECTUAL PROPERTY INFRINGEMENT

8.1  Indemnification. Except as provided in Section 8.3 below, VLSI will, at its
     ---------------
     own expense and at Synopsys' request, defend any claim or action brought
     against Synopsys and its subsidiaries, agents, distributors, resellers and
     end users, to the extent it is based on a claim that the VLSI Products.
     VLSI Libraries, Licensed Software and/or Documentation provided under this
     Agreement infringes or violates any patent, copyright, trademark, trade
     secret or other proprietary right of a third party, and VLSI will indemnify
     and hold Synopsys and its subsidiaries, agents, distributors, resellers and
     end users harmless from and against any damages, costs and fees reasonably
     incurred (including reasonable attorneys' fees) that are attributable to
     such claim or action. Synopsys will provide VLSI with: (i) prompt written
     notification of the claim or action-, (ii) sole control and authority over
     the defense or settlement thereof, and (iii) all available information.
     assistance and authority, at VLSI's expense, to settle and/or defend any
     such claim or action.

8.2  Limited Remedies. If the VLSI Products, VLSI Libraries, Licensed Software
     ----------------
     and/or Documentation becomes, or in the opinion of VLSI is likely to
     become, the subject of an infringement claim or action, VLSI may at its
     sole option: (i) procure, at no cost to Synopsys, the right to continue
     using such VLSI Products, VLSI Libraries, Licensed Software and/or
     Documentation: or (ii) replace or modify the VLSI Products. VLSI Libraries,
     Licensed Software and/or Documentation to render them noninfringing,
     provided there is no material loss of functionality.

8.3  Exceptions. VLSI will have no liability under this Section 8 for any claim
     ----------
     or action where: (i) such claim or action would have been avoided but for
     modifications of the VLSI Products. VLSI Libraries, Licensed Software
     and/or Documentation, or portions thereof, made by Synopsys or a third
     party after delivery to Synopsys and/or its customer; (ii) such claim or
     action would have been avoided but for the combination or use of the VLSI
     Products, VLSI Libraries, Licensed Software and/or Documentation, or
     portions thereof, with other products, processes or materials; or (iii)
     such claim or action would have been avoided but for the product
     characteristics resulting from instruction or requirements provided by
     Synopsys.

9.   TERM AND TERMINATION

9.1  Term. This Agreement shall commence as of the Effective Date and shall
     ----
     expire in 
<PAGE>
 
     five (5) years unless terminated earlier as provided herein. Synopsys has
     the option to extend the initial term of the Agreement for an additional
     eighteen (18) months.

                                       6.
<PAGE>
 
9.2  Termination for Cause. Either party has the right to terminate this
     ---------------------
     Agreement immediately upon written notice at any time if:

     (a)  the other party breaches or is in default of any obligation hereunder,
          which default is incapable of cure or which. being capable of cure,
          has not been cured with thirty (30) days after receipt of written
          notice from the nondefaulting party or within such additional cure
          period as the nondefaulting party may authorize: or

     (b)  the other party: (i) becomes insolvent; (ii) fails to pay its debts or
          perform its obligations in the ordinary course of business as they
          mature. (iii) admits in writing its insolvency or inability to pay its
          debts or perform its obligations as they mature: or (iv) makes an
          assignment for the benefit of creditors.

9.3  Termination for Convenience. Each party has the right to terminate this
     ---------------------------
     Agreement upon eighteen (18) months written notice to the other party.
     During the eighteen (18) month notice period. this Agreement will remain in
     effect and VLSI shall remain obligated to perform all services it has
     agreed to provide under this Agreement at the same level of service that it
     is providing to its customers generally ("Comparable Service").

9.4  Termination following Change of Control. In the event that VLSI gives
     ---------------------------------------
     notice of termination following a Change of Control of VLSI. Synopsys will
     take over the provision of all services that VLSI has agreed to provide
     under this Agreement under the following circumstances: (i) if VLSI fails
     to provide Comparable Service to Synopsys and such failure continues for a
     period of thirty (30) days from the receipt of notice from Synopsys
     providing evidence of VLSI's failure to provide Comparable Service: and
     (ii) VLSI elects to transfer its service obligations to Synopsys. Under
     either of such circumstances, Synopsys will be entitled to have access to
     the source code for the VLSI products marketed by Synopsys and Synopsys
     shall have the right to use and modify such source code for the purpose of
     providing support to Synopsys customers, and VLSI shall be obligated to
     provide training to Synopsys personnel in order to permit Synopsys to
     provide such services. If, following the transfer of support obligations
     from VLSI, Synopsys and not VLSI performs porting services on a sale of the
     VLSI Products, the discount to Synopsys, identified in Section 4.3 above,
     for the VLSI Products involved in such sale will be [*** Redacted] in
     lieu of the [*** Redacted] stated.

9.5  Effect of Termination.  Upon termination of this Agreement, Synopsys shall
     ---------------------
     immediately cease all manufacturing and distribution of the Licensed
     Software.  Termination will not relieve either party from any liability
     arising from any breach of this Agreement.  Neither party will be liable to
     the other for damages of any sort solely as a result of terminating this
     Agreement in accordance with its terms.  Termination of this Agreement will
     be without prejudice to any other right or remedy of either party.  The
     provisions of Sections 4, 6, 8, 9.4, 10, and 12 shall survive the
     expiration or termination of this Agreement for any reason.  All End User
     sublicenses in effect prior to the date of expiration or termination of
     this Agreement shall survive.  All other rights and obligations of the
     parties shall cease upon expiration or termination of this Agreement.

10.  LIMITATION OF LIABILITY-

     EXCEPT AS PROVIDED IN SECTION 8, UNDER NO CIRCUMSTANCES, SHALL EITHER
     PARTIES LIABILITY WITH RESPECT TO ANY CLAIM ARISING IN ANY WAY OUT OF THIS
     AGREEMENT OR THE USE OF THE LICENSED SOFTWARE AND DOCUMENTATION, HOWEVER
     CAUSED, (WHETHER ARISING 

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Omitted portions have been filed separately with the Commission.
<PAGE>
 
     UNDER A THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE); OR OTHERWISE),
     EXCEED THE TOTAL AMOUNT PAID TO VLSI BY SYNOPSYS HEREUNDER.

                                      7.

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        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
11.  ANNOUNCEMENT

     The parties agree that the existence of this Agreement and its terms and
     conditions shall not, under any circumstances, be disclosed by either party
     without the prior written consent of the other party.  The parties will
     consider announcing the existence of this Agreement and the relationship of
     the parties after VLSI has successfully integrated its products with CBA in
     several customers' processes.


12.  GENERAL PROVISIONS

12.1 Choice of Law. The rights and obligations of the parties under this
     -------------
     Agreement shall not be governed by the 1980 U.N. Convention on Contracts
     for the International Sale of Goods. This Agreement will in all respects be
     interpreted and construed in accordance with. and governed by, the laws of
     the State of California excepting that body of California law concerning
     conflicts of law provisions, regardless of the place of execution or
     performance of this Agreement.

12.2 Jurisdiction The federal and state courts within Santa Clara County,
     ------------
     California shall have exclusive jurisdiction to adjudicate any dispute
     arising out of this Agreement. Each party hereto expressly consents to the
     personal jurisdiction of. and venue in. such courts and service of process
     being effected upon it by registered mail and sent to the address set forth
     at the beginning of this Agreement.

12.3 Assignment. This Agreement may not be assigned by Synopsys without the
     ----------
     prior written consent of VLSI. Synopsys may not delegate its duties
     hereunder without the prior written consent of VLSI.

12.4 Notices. Any notice, report, approval or consent required or permitted
     -------
     hereunder shall be in writing and will be deemed to have been duly given if
     delivered personally, by facsimile, or mailed by first-class. registered or
     certified mail, postage prepaid to the respective addresses of the parties
     as set forth in this Agreement. If to Synopsys, Attention: General Counsel.
     If to VLSI, Attention: President.

12.5 No Waiver. Failure by either party to enforce any provision of this
     ---------
     Agreement will not be deemed a waiver of future enforcement of that or any
     other provision.

12.6 Independent Contractors. The relationship of VLSI and Synopsys established
     -----------------------
     by this Agreement is that of independent contractors, and nothing contained
     in this Agreement shall be construed (i) to give either party the power to
     direct or control the day-to-day activities of the other or (ii) to
     constitute the parties as partners, joint venturers, co-owners or otherwise
     as participants in a joint or common undertaking.

12.7 Severability. If for any reason a court of competent jurisdiction finds any
     ------------
     provision of the Agreement, or portion thereof. to be unenforceable, that
     provision of the Agreement will be enforced to the maximum extent
     permissible so as to effect the intent of the parties, and the remainder of
     this Agreement will continue in full force and effect.

12.8 Attorneys' Fees. The prevailing party in any action to enforce the
     ---------------
     Agreement shall 
<PAGE>
 
       be entitled to recover costs and expenses including, without limitation,
       reasonable attorneys' fees.

12.9   Injunctive Relief. The parties agree that a material breach of this
       -----------------
       Agreement adversely affecting either party's intellectual property rights
       would cause irreparable injury for which monetary damages would not be an
       adequate remedy and the non-breaching party shall be entitled to
       equitable relief in addition to any remedies it may have hereunder or at
       law.

12.10  Force Majeure. Except for the obligation to make payments hereunder,
       -------------
       nonperformance, of either party shall be excused to the extent that
       performance is rendered impossible by strike, fire, flood, governmental
       action, failure of suppliers, earthquake, or any other reason where
       failure to perform is beyond the reasonable control of the nonperforming
       party.


                                       8.
<PAGE>
 
12.12  Export Controls. Synopsys agrees and certifies that neither the Licensed
       ---------------
       Software, nor any other technical data received from VLSI will be
       exported or re-exported outside the United States except as authorized
       and as permitted by the laws and regulations of the United States.

12.12  Entire Agreement. This Agreement, including all Exhibits, constitutes the
       ----------------
       entire agreement between the parties with respect to the subject matter
       hereof, and supersedes all prior agreements or representations, oral or
       written, regarding such subject matter. This Agreement may not be
       modified or amended except in a writing signed by a duly authorized
       representative of both parties.


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives:


VLSI LIBRARIES INCORPORATED                     SYNOPSYS, INC.



By: /s/ Mark Templeton                          By:/s/ [Unreadable Signature]


Name: Mark Templeton                            Name:  [Unreadable]
      (Print)                                           (Print)

                                                       Executive Vice President,
Title: President                                Title: Office of the President



                                       9.
<PAGE>
 
                                   EXHIBIT A
                                   ---------
               LICENSED SOFTWARE DESCRIPTION AND SPECIFICATIONS

        [*** Redacted]


                                      10.

--------------
        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
                                   EXHIBIT B
                                   ---------
                          END USER LICENSE AGREEMENT



                                      11.
<PAGE>
 
                                   EXHIBIT C
                                   ---------
                             ENGINEERING SERVICES



        [*** Redacted]


                                      12.

--------------
        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.
<PAGE>
 
                                   EXHIBIT D
                                   ---------
                       SYNOPSYS PRODUCTS LICENSED TO VLSI

        [*** Redacted]


                                      13.

--------------
        *** Confidential treatment requested pursuant to a request for 
confidential treatment filed with the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.

Source: OneCLE Business Contracts.