COLLABORATION AGREEMENT

COLLABORATION AGREEMENT



BETWEEN - -------



SGS-THOMSON MICROELECTRONICS S.r.l., a company incorporated and existing under - ----------------------------------- the laws of Italy, having its registered office at 20041 Agrate Brianza, Via C. Olivetti 2 (hereinafter referred to as "SGS-THOMSON")



also acting for the benefit of other Affiliated Companies of SGS-THOMSON MICROELECTRONICS N.V.



(Affiliated companies shall mean companies in which SGS-THOMSON MICROELECTRONICS N.V. holds directly or indirectly at least 50% of the share capital or voting rights and major external design teams subcontracted by an SGS-THOMSON company to create products in SGS-THOMSON Technologies)



on the first part AND - ---



VLSI LIBRARIES, INC., a company incorporated and existing under the laws of the State of California, U.S.A. having its registered office at 2077 Gateway Place, San Jose, CA 95110-1016 (hereinafter referred to as "VLI")

on the second part







COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 1 of 9 SGS-THOMSON LOGO







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* SGS-THOMSON is willing to establish a long term collaboration with a

qualified supplier in the field of memories, libraries and associated

technologies;



* VLI is available to enter into such collaboration in order to become a key

supplier of SGS-THOMSON and provide it with memories, libraries and some

design tools particularly, but not limited to, for the HCMOS7 and HCMOS8

processes;



* the Parties hereto intend to fix some general terms and conditions under

which the above mentioned collaboration has to be carried on.







Now, it is hereby agreed and declared as follows:







1. PREMISES



The Premises hereto constitute an integral part of this Collaboration Agreement.





2. DEFINITIONS



As used for the purposes of this Collaboration Agreement, in the singular or the plural, the following terms and expressions shall have the following means:



a) "SGS-THOMSON TECHNOLOGY" shall mean any technology developed by SGS-THOMSON

such as, but not limited to, HCMOS7, HCMOS8, etc., as well as technologies

derived by SGS-THOMSON from such technologies, such as, but not limited to,

HCMOS7A, HCMOS7S, HF7CMOS, BICMOS7, HCMOS8A, HCMOS8S, HF8CMOS, BICMOS8,

etc., and layout specifically related to the above technologies, especially

for memories.







COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 2 of 9



SGS-THOMSON LOGO







b) "PRODUCTS" shall mean the products developed by VLI for use with SGS-

THOMSON Technology, such as, but not limited to, RAM and ROM Generators,

Libraries of Standard Cells, Macroblocks, etc.



c) "Front-End Data" shall mean:

Simulation Models

Timing Information

Bounding Box Generator

Schematic Icons

Specification Level Documentation

relating to the Products.



d) "Product Data" shall mean:

Layout Level Data

Schematic Level Data with transistor sizing

Design Details

Critical Path Generators

Design Documentation

Transistor Level Netlists or Equivalent Models

relating to the Products.



e) "DESIGN DATA" shall mean the Design Details (in particular Schematics,

Simulation Results, Layout) and Documentation included in the Product Data.



f) "VLI GENERAL TECHNOLOGY" shall mean:

Design styles

Design architectures

Electrical schematics without transistor sizing

Layout styles

Analysis and verification techniques and tools

Tools for automatic layout assembly

Tools for automatic design verification and characterization

relating to the Products.



g) "VLI COMPETITORS" shall mean the companies listed in Appendix whose

business could include the design and sale in third parties of libraries of

circuits (standard cells, generators) and whose business could include the

design and sale of Electronic the Design Automation tools to third parties.

The list of VLI competitors is attached hereto as Appendix. From time to

time, VLI may propose to SGS-THOMSON an update of Appendix which will enter

into force upon its written approval by SGS-THOMSON.







COLLABORATION AGREEMENT December 4,1996 SGS-Thomson Microelectronics 3 of 9 SGS-THOMSON LOGO







3. OBJECTIVES



The objectives of this Collaboration Agreement between SGS-THOMSON and VLI are the development and supply by VLI to SGS-THOMSON of memories, libraries and associated technologies according to the development and supply orders issued from time to time by SGS-THOMSON during the term of this Collaboration Agreement.



To this purpose SGS-THOMSON will agree with VLI proper work plannings that will in particular state, for each development and supply work required by SGS- THOMSON, the specific development and commercial tasks, the time schedule, and the related costs. The work plannings, duly signed by SGS-THOMSON and VLI Authorized Representative, will be annexed to this Collaboration Agreement and will constitute an integral part of it. It is understood that the work plannings will be governed by the provisions of this Collaboration Agreement, unless specific provisions will be agreed and inserted; in such case the provisions of the work plannings will prevail.







4. PROJECT LEADERS



Each Party shall designate a Project Leader who will have the responsibility of all the technical and operative aspects of any work planning agreed upon between the Parties. Each Party hereby also designates Authorized Representatives, who will have the responsibility of all the operative and contractual aspects of the Collaboration Agreement



* SGS-THOMSON designates as Authorized Representative [*** Redacted].



* VLI designates as Authorized Representatives Mr. Mark Templeton and Mr.

Dhrumil Gandhi.



All communications or informations either in oral or written form have to be addressed to the Authorized Representatives and/or the Project Leaders, as the case may be, at the following address or at other places, as may be designated by the Parties during the course of the Collaboration Agreement.



* SGS-THOMSON Microelectronics

via C. Olivetti 2

20041 Agrate Brianza (Mi)







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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.



SGS-THOMSON LOGO







* VLSI Libraries Inc.

2077 Gateway Place

San Jose

USA, 95110-1016 California







5. TERM AND TERMINATION



This Collaboration Agreement shall become effective as of December 1st 1996 and shall continue in full force and effect until December 31st 2000, unless terminated ear-lier in accordance with the provision of this Section 5. The present Collaboration Agreement will expire in the following cases:



a) by means of a written notice of termination to be given by the Authorized

Representative, in case a Party breaches any of its obligations in the

performance of this Collaboration Agreement, and the relevant breach is not

cured within 90 days from the written notice by the non breaching Party;



b) by advance notice to be served by a Party to the other at least 4 months

before the expiration of any year of duration of this Collaboration

Agreement. In any case such termination shall not affect, unless different

agreements in writing are agreed upon between the Parties, the contractual

activities relevant to work plannings still in progress at the date;



c) the termination of this Agreement as a result of breach of VLI shall not

prevent SGS-THOMSON from using the deliverables and information provided by

VLI for having the work performed by a third Party. In any event, VLI will

not be liable to SGS-THOMSON for an amount exceeding SGS-THOMSON's payments

to VLI for the deliverable which is the subject of the breach.





6. COMPENSATION



SGS-THOMSON will recognize VLI, for the contractual activities duly performed in accordance with the agreed work plannings, the amounts that will be fixed in the development and supply orders issued in reference to the said documents.



The payments will be normally due at [*** Redacted] from the date of issue of the relevant invoices from VLI, subject to the approval in writing by SGS- THOMSON Authorized Representative within such period. The money remittance will be performed in USA







COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 5 of 9



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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.



SGS-THOMSON LOGO







unless another currency will be agreed upon between the Parties, to the Bank account previously indicated by VLI.





7. MAINTENANCE



VLI agrees to provide maintenance [*** Redacted] for [*** Redacted] following the delivery of any complete product. During this period, VLI will use its commercial efforts to support SGS-THOMSON and will dedicate resources to SGS- THOMSON issues with a higher priority than other VLI customers.





8. RIGHT OF USE



a) Products, including Design Data, Front-End Data and Product Data can be

used without restriction within SGS-THOMSON sites and sites of Affiliated

Companies. SGS-THOMSON undertakes to ensure that Design Data, Front-End

Data and Product Data shall be considered as proprietary information and as

such shall receive the same degree of protection as SGS-THOMSON proprietary

SGS-THOMSON shall ensure that its customers that access the Products at

SGS-THOMSON deign centers, shall sign appropriate non-disclosure agreements

relating to the protection of Confidential Information.



b) SGS-THOMSON may distribute without restriction the Front-End Data, for use

outside SGS-THOMSON sites by design houses or customers.



c) Design Data, Front-End Data and Product Data could be given out to any

third Party who would have products manufactured under its own designs, by

a foundry company not wholly owned by SGS-THOMSON subject to a common

agreement between SGS-THOMSON and VLI.



d) Nothing in this Collaboration Agreement shall authorize SGS-THOMSON to

distribute Product Data to VLI Competitors.



e) Nothing in this Collaboration Agreement shall authorize VLI to make, have

made, use, and sell the Products, Design Data, Front-End Data, Product Data

and information developed and supplied for SGS-THOMSON under the work

programs referred to this Collaboration Agreement, without the SGS-

THOMSON's prior written authorization.

All such products, Design Data, Front-End Data, Product Data and

information will be the sole property of SGS-THOMSON, that will also retain

all the rights con-



COLLABORATION AGREEMENT December 4, 1996 SGS-Thompson Microelectronics 6 of 9



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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. SGS-THOMSON LOGO







nected therewith.

VLI will retain rights to all of VLI General Technology, which is used to

provide products to ST and to other VLI customers.







9. PERMITTED DISCLOSURE OF PROPRIETARY INFORMATION



The Parties intend to exchange on a confidential basis proprietary information such as, but not limited to, deep submicron technology and design methodology information with a view to successfully designing memories and libraries. Notwithstanding VLI and SGS-THOMSON shall have the right to disclose the third Parties on an unrestricted basis proprietary information which, at the time of disclosure is:



a) in or passes into the public domain other than by breach of this

Collaboration Agreement; or



b) known to the receiving Party prior to disclosure by the disclosing Party;



c) disclosed to the receiving Party by a third Party having the full right to

disclose; or



d) independently developed by an employee of the receiving Party to whom no

disclosure of confidential information has been made.





10. PRESS RELEASES



SGS-THOMSON and VLI will agree specific press releases and other promotional materials to publicize their relationship as well as specific successes. Any press release shall be authorized in writing by both Authorized Representatives and by SGS-THOMSON and VLI competent offices before their disclosure in the public.





11. ASSIGNMENT



This Agreement may not be assigned by other Party, without the consent of the other Party.







COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 7 of 9 SGS-THOMSON LOGO







12. APPLICABLE LAW



This Agreement shall be governed by and interpreted according to the laws of Italy.





13. DISPUTES



Any disputes which may arise between the Parties hereto in connection with this Agreement, its construction, validity, performance or non performance shall be finally settled by the Court of Milan, Italy.



All the above read, confirmed and signed







Date and place: Agrate Brianza, November 29th 1996







SGS-THOMSON Microelectronics S.r.l.



/s/ J. Monnier /s/ G. Potenza /s/ G Zocchi J. MONNIER G. POTENZA G. ZOCCHI







VLSI Libraries Inc.







COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 8 of 9





LIST OF VLI COMPETITORS







[*** Redacted]





COLLABORATION AGREEMENT December 4, 1996 SGS-Thomson Microelectronics 9 of 9



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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. SGS-THOMSON LOGO





Work Planning



HCMOS7 Phase 1

Memory Generators





BY VLSI LIBRARIES INCORPORATED

FOR SGS-THOMSON MICROELECTRONICS SRL



By the signatures of this document, the two parties agree fully to the project description defined below.



CONTENT:

1.0 Scope of the Work Planning ("Program")

2.0 Task Definition and Responsibilities

3.0 Program Management

4.0 Project Schedule and Milestones

5.0 Costs

6.0 Specific rights to use and to distribute



ACCEPTED BY:



/s/ unrecognized signature FOR SGS-THOMSON MICROELECTRONICS SRL

FOR VLSI LIBRARIES, INC.



ANNEXES:





* Statement of Work



* Generator Specifications (4)





HCMOS7 Phase 1 Work Planning December 5, 1996 SGS-Thomson Microelectronics 1 of 6 1.0 SCOPE OF THE WORK PLANNING ("PROGRAM") Within the general framework defined by the "Collaboration Agreement", VLI will develop the following [*** Redacted] Memory Generators for SGS-THOMSON's in [*** Redacted] (HCMOS7) process:



[*** Redacted]



The Program will be composed by the porting of the [*** Redacted] generators from the corresponding HCMOS6 ones.



Within this Program the "Definitions" given in Section 2 of the "Collaboration Agreement" are valid with the following specification:



* "Product" means "Generator" within this Program



* "Product Data" means "Generator Data" within this Program



2.0 TASK DEFINITION AND RESPONSIBILITIES



VLI is fully responsible for the Program execution and the deliverables according- to the Statement of Work hereafter attached. This includes actions that may be performed by SGS-THOMSON like Silicon processing (if there is any problem, it is the responsibility of VLI to draw the attention of SGS-THOMSON to the problem and to propose effective remedial action).



The split of responsibilities for all the tasks necessary to complete the Memory Generators is also described in t ...