OEM AGREEMENT

Exhibit 10.12



OEM AGREEMENT

VLSI LIBRARIES INCORPORATED

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").







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:









1. DEFINITIONS



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

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1.2 "Change of Control" means (a) the acceptance by VLSI or the Controlling

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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

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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.

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







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,

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Daniel I. Rubin and Mark Templeton.



1.4 "Documentation" means any user manuals. reference manuals. release,

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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

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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

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substantially in accordance with the specification set forth in Exhibit A.



1.7 "Licensed Software" means collectively the VLSI Libraries and VLSI

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1.8 "Updates" means a version of the Licensed Software that delivers

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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

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in Exhibit A, as amended from time to time, including any Bug Fixes or



1.10 "VLSI Products" means VLSI's [***Redacted] products that have been

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[***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,

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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



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.





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.







2.3 Internal Use License. VLSI hereby grants Synopsys and its subsidiaries,

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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

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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

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and support obligations to its End Users.



2.6 Manufacturing and Distribution. Manufacturing and distribution of the

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Licensed Software and Documentation shall be the responsibility of

Synopsys. VLSI shall provide master copies of the Licensed Software and





3. VLSI OBLIGATIONS AND RIGHTS TO SYNOPSYS SOFTWARE



3.1 Development Work. In order for Synopsys to act as an OEM of the VLSI

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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

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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

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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

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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.

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 determ ...