<PAGE>

                                                                   EXHIBIT 10.8

              CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
              AND FILED SEPARATELY WITH THE COMISSION. CONFIDENTIAL TREATMENT
              HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

              VAUTOMATION INCORPORATED SYNTHESIZABLE SOFT CORE AGREEMENT
                                 NUMBER: 10-24-97-01

This Agreement is entered into on 11-4-97 (Effective Date) between
VAutomation Incorporated (VAutomation), 20 Trafalgar Sq., Nashua, NH 03063
and Pixelworks, Incorporated (Customer), 8100 SW Nyberg Road, Tualatin, OR
97062.

1.     DEFINITIONS

       (a)    "Intellectual Property" means all intellectual property related
to the Soft Cores, including without limitation soft cores, hard cores,
licensed software, documentation or other proprietary materials and
information described on the License Key for the Soft Core.

       (b)    "Services" means the consulting, hardware or software
engineering or other services which are described in the statements of work
for the attachment(s) to this Agreement.

       (c)    "Soft Core(s)" means those reusable pre-designed synthesizable
components for the design of integrated circuits set forth in attachment A.

       (d)    "Customer's Products" means any integrated circuits (i)
designed, manufactured, or marketed by Customer that incorporate all or any
part of a Soft Core, or (ii) designed using any Intellectual Property.

       (e)    "License Key" means one or more documents (in physical or
electronic form) provided to Customer by VAutomation which list:  (i) the
version number of the Soft Core licensed to Customer; (ii) the design
materials and information provided for each Soft Core licensed to Customer
and/or (iii) the codes which the Customer must input to the installation
software to complete the installation process. A sample License Key is
attached as Exhibit A.

       (f)    "End User" shall mean a customer of Customer who purchases or
agrees to purchase from Customer integrated circuits designed by Customer
using any Intellectual Property or incorporating any of the Soft Core.

       (g)    "Maintenance Program" shall mean the software maintenance
program, consisting of upgrade and new releases of the Soft Core and
telephone support conducted by VAutomation, as further described in Section 9.

2.     PAYMENT TERMS

Page 1 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.


<PAGE>

       (a)    License fees for Intellectual Property, fees for Services and
such other fees as may be agreed to by the parties shall be specified in the
attachment(s) to this Agreement. Customer shall pay all invoices within 30
days of date of invoice.

       (b)    Any overdue payment shall bear interest at the highest rate
then permitted by law.

3.     PURCHASE ORDER/DELIVERY TERMS

       (a)    In order to obtain Intellectual Property and Services from
VAutomation, Customer must first submit a purchase order. As part of the
purchase order, Customer must identify the Intellectual Property and Services
it wishes to obtain. All purchase orders are subject to acceptance by
VAutomation, in its sole discretion. Customer's receipt and use of all
Intellectual Property and documentation shall be governed by the terms and
conditions of this Agreement and the attachment(s) to this Agreement. Nothing
contained in any purchase order, purchaser order acknowledgment, or invoice
shall in any way negate or modify such terms or add any additional terms or
conditions, all of which are objected to. The above notwithstanding, variable
terms such as price (but not payment terms), quantity, delivery date, and
shipping instructions, as well as tax exempt status, if applicable, shall be
specified on each purchase order or acknowledgment.

       (b)    Upon the acceptance of a purchase order by VAutomation and the
satisfaction of all VAutomation prerequisites to delivery, VAutomation shall
deliver to Customer the Intellectual Property and Services as specified in
this Agreement and any attachment(s) to this Agreement.

4.     TERM AND TERMINATION

       (a)    The term of this Agreement shall begin upon the Effective Date
and shall continue until terminated in accordance with the terms of this
Agreement.

       (b)    If either party breaches a material provision and does not cure
the breach within 30 days after written notice from the other party, the
non-breaching party shall have the right to:  (i) suspend performance or
payment until the breach is cured; (ii) terminate this Agreement and/or the
attachment(s) to this Agreement; or (iii) seek a combination of (a) and (b)
and all such other remedies as are available at law or equity and are not
limited by the terms of this Agreement.

       (c)    Should either party:  (i) become insolvent; (ii) make an
assignment for the benefit of creditors; (iii) file or have filed against it
a petition in bankruptcy or seeking reorganization; (iv) have a receiver
appointed; or (v) institute any proceedings for liquidation or winding up;
then the other party may, in addition to other rights and remedies it may
have, terminate this Agreement immediately by written notice.

       (d)    Upon termination of this Agreement or any attachment(s) to this
Agreement, the licenses, rights and covenants granted under this Agreement or
the attachment(s) and the


Page 2 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

obligations imposed by this Agreement or attachment(s) shall cease, except as
otherwise expressly set forth in this Agreement or the attachment(s). Upon
termination, Customer shall return to VAutomation or destroy the Intellectual
Property, including all copies and documentation. Customer shall provide
written notice of return or destruction to VAutomation within 30 days after
termination. Such written notice shall include a list of all Intellectual
Property returned or destroyed and shall be signed by an officer of Customer
and notarized by a notary public.

5.     INTELLECTUAL PROPERTY TRADE SECRET AND CONFIDENTALITY

       (a)    Intellectual Property constitutes or contains trade secrets and
confidential information of VAutomation or its licensors. Except as otherwise
provided in this Agreement, Customer shall not make Intellectual Property
available in any form to any other person or entity.  Customer shall take
appropriate action to protect the confidentiality of all Intellectual
Property and insure that any person permitted access to Intellectual Property
does not disclose Intellectual Property or use Intellectual Property except
as permitted by this Agreement. Customer shall not reverse assemble, reverse
compile, or otherwise reverse engineer Intellectual Property, in whole or in
part.

       (b)    It is a condition of this Agreement and the attachment(s) to
this Agreement, that Customer protect the confidentiality of all Intellectual
Property received from VAutomation under this Agreement or the attachment(s)
to this Agreement. To that end, Customer specifically promises to:  (i)
maintain in confidence all Intellectual Property; (ii) refrain from
disclosing Intellectual Property to anyone, except Customer's employees and
consultants who work with the Intellectual Property for Customer's benefit,
unless VAutomation specifically authorized disclosure in writing and in
advance of the disclosure; and (iii) not use Intellectual Property in any
manner which is contrary to the license grants contained in this Agreement or
the attachment(s) to this Agreement.

       (c)    Customer represents that it maintains a reasonable system,
including written confidentiality agreements with its employees, consistent
with industry standards, to protect its own confidential business information
and Intellectual Property will be protected by such system to the same extent.

       (d)    The obligations of this Section 5 shall survive termination or
expiration of this Agreement.

6.     LICENSE GRANT

       (a)    VAutomation grants to Customer certain personal, nonexclusive,
nontransferable licenses to use Intellectual Property. The licenses granted
to Customer are:  (i) a license to design and simulate Customer's Products;
(ii) if authorized on the License Key, a license to copy and distribute
Intellectual Property to End-Users as a part of Customer's cell library,
subject to all of


Page 3 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

the requirements of this Agreement; (iii) a license to make and sell or
otherwise commercially distribute Customer's Projects world-wide to
End-Users; and (iv) a license to have Customer's Products manufactured and/or
tested world-wide for Customer by a foundry, provided such manufacture is
pursuant to designs furnished by Customer, that such integrated circuits so
manufactured are only for sale by Customer to End-Users and further provided
that the foundry is subject to a written agreement with Customer which
requires the foundry to protect the confidentiality of the Intellectual
Property including but not limited to an obligation to only disclose
Intellectual Property to those employees of the foundry with a need to know.

       (b)    VAutomation will deliver the License key to Customer after
VAutomation's receipt from Customer of an executed copy of this Agreement,
all the information required to generate the License Key and a purchase order
meeting the requirements of this Agreement. VAutomation may include on the
media with the Intellectual Property additional data or software, including
one or more Soft Cores not currently licensed to Customer and to which the
License Key will not permit access. Inclusion of such additional data or
software in no way implies a license from VAutomation and Customer may not
decode or use such data or software unless a License Key subsequently
obtained from VAutomation specifically authorizes such access and use.

       (c)    If Customer or any End-User uses the Intellectual Property in
any manner not specified in the License Key, VAutomation will necessarily
incur damages which will be difficult to accurately estimate. In the event of
such a breach, VAutomation shall be entitled to receive from Customer
liquidated damages in a sum equal to the full list price for the soft Core in
question. The parties agree that such amount is reasonable in light of the
anticipated harm that would be caused by such a breach and that such amount
is not a penalty.

       (d)    VAutomation and its licensors retain all title to and ownership
of the Intellectual Property and all copies of Intellectual Property made by
Customer regardless of the form or media in or on which the original and
copies may exist. VAutomation and its licensors retain all title to and
ownership of modifications and updates of Intellectual Property made by
VAutomation and its licensors and provided to Customer. VAutomation shall
also retain all title to and ownership of modifications to Intellectual
Property made by Customer and revealed to VAutomation by the Customer.
Customer retains all ownership rights in any modifications to Intellectual
Property made by the Customer and not revealed to VAutomation.

       (e)    The licenses granted to Customer under this Agreement and are
not a sale of the Intellectual Property or any copy of the Intellectual
Property or of any ownership interest in the Intellectual Property.


Page 4 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

7.     CONDITIONS TO OBLIGATIONS OF VAUTOMATION

       (a)    Customer agrees that VAutomation has no control over the
specific applications and use Customer will make of Intellectual Property
which VAutomation licenses to Customer. Customer understands that third
parties may hold patents in technology which relate to the Intellectual
Property and/or Customer's Products. Customer acknowledges and agrees
therefore, that it is Customer's obligation to obtain all necessary licenses
from third party patent holders, and that Customer's fulfillment of that
obligation is an express condition to VAutomation granting Customer the
licenses set forth in this Agreement. Customer warrants and represents that
it will obtain all such third party patent holder licenses.

       (b)    If Customer fails to obtain all necessary licenses from third
party patent holders, this Agreement may be terminated by VAutomation with
prior written notice and expiration of a 30 day cure period. In the event of
such termination, those provisions of this Agreement which by their terms
survive termination shall continue in force and effect. Customer shall
indemnify and hold VAutomation, its connection with any claim against
VAutomation relating to any allegation that Customer's Products infringe the
patent or other intellectual property rights, or that the Intellectual
Property infringes the patent rights, of any third party. This obligation to
indemnify and hold harmless shall survive any termination or expiration of
this Agreement.

       (c)    If a patent infringement claim is made against Customer's
Products, VAutomation shall, whenever possible, provide Customer with all
reasonable information and assistance to settle or defend the claim. This
assistance shall not imply any liability of VAutomation. Any costs and
expenses incurred by VAutomation in providing such assistance shall be borne
by or reimbursed by Customer.

8.     MODIFICATIONS AND COPYING

       (a)    Customer may modify or translate Intellectual Property for its
internal use.

       (b)    Customer may copy Intellectual Property only to the extent
necessary for archival and backup purposes, for internal use and for
furnishing to semiconductor manufacturers (including Customer) in accordance
with this Agreement. Customer's right to copy and use Intellectual Property,
in any form or media except semiconductor devices, is at all times and in
each instance conditioned upon Customer reproducing on each copy all
copyright notices and proprietary legends of VAutomation and its licensors.

9.     MAINTENANCE PROGRAM

       (a)    VAutomation shall provide support and maintenance for a period
of one year from the date of shipment. This initial year of support and
maintenance is included in the project license fee.


Page 5 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-21-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

       (b)    Upon expiration of the initial year of support and maintenance,
and annually thereafter, the Maintenance program shall automatically renew
for additional one year terms unless Customer terminates the Maintenance
Program by written notice to VAutomation given no less than 60 days prior to
the expiration of the then current year. VAutomation shall invoice Customer
on an annual basis for the applicable support and maintenance fees.

       (c)    VAutomation may change, correct and add to the Soft Cores from
time to time at its discretion. Changes, corrections and additions shall be
sent to Customer pursuant to the schedule and method selected by VAutomation
provided Customer has a paid-up Maintenance Program in place at the time the
changes, corrections or additions are released.

       (d)    A VAutomation representative shall be available by telephone
during VAutomation's normal business hours at VAutomation's designated
support center to assist Customer in using Intellectual Property. Customer
may contact the designated support center to discuss End-Users use of the
Intellectual Property. If a problem cannot be resolved over the telephone,
Customer shall provide VAutomation with written documentation of the problem.
VAutomation shall evaluate the problem and use commercially reasonable
efforts to provide a temporary work-around solution within ten business days
of receipt of complete documentation. VAutomation shall endeavor to correct
the problem within 30 business days.

       (e)    The  Maintenance Program excludes, without limitation, repair
or service resulting from (i) neglect, misuse or damage to the media
containing the Intellectual Property; (ii) alterations or modifications to
the Intellectual Property not authorized by and revealed to VAutomation;
(iii) the failure of Customer to provide and to maintain a suitable
installation environment and facilities; (iv) the use of the Intellectual
Property for purposes other than as expressly permitted by this Agreement; or
(v) distribution of the Intellectual Property excelt in compliance with this
Agreement. VAutomation shall maintain and provide service for only the
current release and one prior release of the Soft Core except that
VAutomation shall maintain and service Customer's Intellectual Property for
not less than one year from the date of delivery regardless of release.

10.    CONSIDERATION

       (a)    In consideration for the rights and licenses granted Customer
under this Agreement and in consideration for the first year of service under
the Maintenance Program, Customer shall pay a project license fee in the
amount set forth in the attachment. Payment of such fee entitles Customer to
use the Soft Core to create one new production design.

       (b)    A Re-Use Fee as set forth in attachment A shall be paid to
VAutomation by Customer for each new design using a Soft Core. A new design
is created when a circuit is produced to mask for the first time. A design
derivative which results in a change to both the circuit and the mask is also
a new design. A process shrink of an existing design to produce a new


Page 6 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

mask without a change in the circuit or a design spin to rework errors, where
1,000 or fewer units of the erred version were produced, is not a new design.

       (c)    Customer shall provide VAutomation with an annual report of all
Re-Use Fees in the form set forth in Exhibit B to this Agreement. VAutomation
shall invoice Customer for Re-Use Fees based upon the report provided  by
Customer. Customer shall pay all invoices within 30 days of date of invoice.

       (d)    A Maintenance fee as set forth in attachment A shall be paid to
VAutomation by Customer annually upon completion of the initial year of
Maintenance as provided in (a) unless terminated as described in section
9(b). Payment of such fee entitles Customer to the Maintenance Program as
described in section 9.

11.    AUDIT RIGHTS

       (a)    Customer shall keep full, clear and accurate records with
respect to the number and identity of each different design by Customer for
which a Re-Use Fee is due. Such records shall be sufficient to enable
VAutomation to determine the amount of Re-Use Fees to be paid to VAutomation
pursuant to this Agreement. In addition to the above information, Customer
shall also maintain evidence of all necessary licenses from third party
patent holders.

       (b)    VAutomation shall have the right, acting itself or at its
option or at the request of the Customer, through an independent auditor, to
examine and audit at all reasonable times all such records and such other
records and accounts as may, under recognized accounting practices, contain
information bearing upon Customer's compliance with the terms of this
Agreement and upon the amount of Re-Use Fees owed to VAutomation. If any such
audit shall disclose that such Re-Use Fees have been underpaid by more than
5%, Customer shall bear the cost of that audit. If any such audit shall
disclose that Customer has failed to obtain necessary licenses from third
party patent holders, VAutomation shall have the right to immediately
terminate this Agreement, any or all attachment(s) to this Agreement and all
licenses granted under either this Agreement or the attachment(s) as provided
in Section 6 of this Agreement.

       (c)    VAutomation or the independent auditor shall keep in confidence
all information gained as a result of any audit. VAutomation or the
independent auditor shall only use or disclose such information as shall be
necessary to enforce VAutomation's rights in accordance with this Soft Core
Attachment.

12.    INFRINGEMENT INDEMNIFICATION.

       (a)    VAutomation represents and warrants that Intellectual Property
does not infringe any United States, European Community or Japanese
copyrights or misappropriate any trade secret of any third party. VAutomation
further represents and warrants that Intellectual Property


Page 7 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.


<PAGE>

is the original work of VAutomation and its licensors and was developed
without access to or knowledge of any third party confidential materials.

       (b)    If notified promptly of any such claim or action brought
against Customer for copyright infringement or trade secret misappropriation,
VAutomation will defend or cause to be defended such action at its expense
and will pay any costs or damages awarded against Customer in such action,
provided that VAutomation has control of the defense and all negotiations for
settlement and Customer provides VAutomation with prompt notice of the claim
all reasonable information and assistance to settle or defend the claim.

       (c)    If a final injunction is obtained against the Customer's use of
any Intellectual Property by reason of copyright infringement or trade secret
misappropriate, VAutomation will, at its option and its expense, either (i)
procure for Customer the right to continue using such Intellectual Property
or the infringing portions of Intellectual Property, or (ii) replace or
modify Intellectual Property or the infringing portions of Intellectual
Property, so that they become non-infringing, or (iii) if in VAutomation's
opinion neither of the above is commercial feasible, VAutomation will accept
return of the infringing Intellectual Property and refund an amount equal to
the sum paid by the Customer for the infringing Intellectual Property.

       (d)    VAutomation will have no liability for any claim of copyright
infringement arising from (i) the combination of Intellectual Property with
Customer or third party materials, unless it is determined by a court of
competent jurisdiction that the Intellectual Property is the infringing
element of such claim; or (ii) the modification or translation of
Intellectual Property or any portion of the Intellectual Property.

       (e)    To the knowledge of VAutomation, there is no action, suit,
claim, proceeding or investigation pending or threatened against or affecting
VAutomation, any of its subsidiaries, officers or directors at law or in
equity, or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign
regarding the Intellectual Property other than those disclosed to the
Customer in Attachment B. VAutomation has disclosed to the Customer, in
Attachment B, any and all claims on the Intellectual Property or for the use
of the Intellectual Property known to VAutomation as of the Effective Date.

       (f)    VAUTOMATION MAKES NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY
THAT THE INTELLECTUAL PROPERTY IS FREE FROM ANY CLAIM OF INFRINGEMENT OF ANY
THIRD PARTY'S PATENT RIGHTS.

13.    WARRANTY AND DISCLAIMER

Except as specifically set forth in the attachment(s) to this Agreement, the
Intellectual Property and Services are provided "as is" without warranty of
any kind, either express, implied or


Page 8 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>

statutory, including without limitation, any warranty with respect to title,
merchantability or fitness for any particular purpose. VAutomation does not
warrant that the Intellectual Property will meet Customer's requirements or
that the Intellectual Property will be error-free. Except as specifically
provided in this Agreement, VAutomation is not obligated to support any
Intellectual Property that it provides under this Agreement.

14.    DAMAGE LIMITATION

Except for claims under section 12 above, VAutomation shall not be liable for
any claims against Customer by any other party. Except for a willful or
grossly negligent breach by Customer of any of its duties under this
Agreement or any breach by Customer of section 5 (confidentiality) or section
6 (license grant), neither party shall be liable for special, incidental or
consequential damages of any kind resulting from breach of this Agreement.
Except with respect to claims under section 12 above, VAutomation's aggregate
liability for all cases or controversies arising out of the subject matter of
this Agreement shall not exceed the amount paid to VAutomation by Customer
hereunder.

15.    LIFE ENDANGERING APPLICATIONS

Intellectual Property is not designed, made, or intended for use in any
application where failure or inaccuracy might cause death or personal injury.
Customer represents, warrants and covenants that the Intellectual Property
shall not be used in any pplication where failure or inaccuracy might cause
death or personal injury. If Customer uses Intellectual Property for such
applications, Customer will indemnify and hold harmless VAutomation, its
suppliers and its licensors from any claims, loss, cost, damage, expense, or
liability, including attorneys' fees, arising out of or in connection with
the use and performance of Intellectual Property in such applications.

16.    GENERAL

       (a)    Severability. If any provision of this Agreement is held to be
ineffective, unenforceable or illegal for any reason, such decision shall not
affect the validity or enforceability of any or all of the remaining portions
thereof.

       (b)    Nonassignment. This Agreement may not be transferred or
assigned by the Customer, by operation of law or otherwise without the prior
written consent of an authorized representative of VAutomation.

       (c)    Taxes. Unless otherwise specifically provided in the
attachment(s) to this Agreement, the amount of any present or future sales,
revenue, excise or other tax or duty applicable to Intellectual Property and
Services covered by this Agreement, or the possession or use of Intellectual
Property (including but not limited to any withholding taxes imposed on
royalties by any country), shall be added to the prices and fees otherwise
due and shall be paid by


Page 9 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.


<PAGE>

Customer. In lieu of such payment, Customer shall provide VAutomation with a
tax exemption certificate acceptable to the appropriate taxing authorities.
If VAutomation is required to pay any such tax at any time, Customer shall
reimburse VAutomation within 30 days after receipt of invoice.

       (d)    Governing Law. This Agreement shall be governed by the laws of
the State of New Hampshire, exclusive of any New Hampshire law or principle
which would apply the law of any other state or country.

       (e)    Waiver. No failure or delay on the part of either party in the
exercise of any power, right or privilege under this Agreement shall operate
as a waiver of such power, right or privilege, nor shall any single or
partial exercise of any such power, right or privilege preclude any other or
further exercise of that or of any other right, power or privilege.

       (f)    Notice. Any notice required or permitted to be given will be in
writing and may be personally served, or sent by facsimile or mail and will
be deemed to have been given: if personally given when served, if by
facsimile machine to the proper facsimile number and confirmed by mail, or
when mailed, by certified mail - return receipt requested on the fifth
business day after deposit in the United States mail with postage prepaid and
properly addressed as follows or at such other address that either party
provides by advance written notice to the other party.

         If to Customer:                           If to VAutomation:

         Attn:  Allen Alley                        VAutomation Inc.
         8100 SW Nyberg Rd., Suite 100             20 Trafalgar Sq., Suite 443
         Tualatin, OR 97062                        Nashua, NH 03063
         Ph:  503-612-6700
         Fax:  503-612-6713                        With a copy to:
         E-mail:  allena@pixelworksinc.com
                                                   William Contente, Esq.
         With a copy to:                           Lucash, Gesmer &
                                                   Updegrove, LLP
                                                   40 Broad Street
         Bill Campbell                             Boston, MA 02109
         Ater Wynne LLP                            Ph:  617-350-6800
         222 SW Columbia, Suite 1800               Fax:  617-350-6878
         Portland, OR 97201-6618                   Ph:  603-882-2282
         Ph:  503-226-1191                         Fax:  603-882-1587
         Fax:  503-226-0079

       (g)    Export Controls. Customer understands that VAutomation is
subject to regulation by United States government agencies, which prohibit
export or diversion of Intellectual Property,


Page 10 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.


<PAGE>

information about Intellectual Property, and direct products of Intellectual
Property to certain countries and certain persons. Regardless of any
disclosure Customer makes to VAutomation of an ultimate destination of
Intellectual Property or direct products of Intellectual Property, Customer
warrants that it will not export in any manner, either directly or
indirectly, any Intellectual Property or direct product of Intellectual
Property, without first obtaining all necessary approval from appropriate
United States government agencies. Customer acknowledges that the regulation
of product export is in continuous modification by the United States Congress
and administrative agencies. Customer agrees to complete all documents and to
meet all requirements arising out of such modifications.

       (h)    Other Licenses. Nothing contained in this Agreement shall be
construed as conferring by implication, estoppel or otherwise upon either
party any license or other right except the licenses and rights expressly
granted under this Agreement. Without limiting the generality of the
foregoing, Customer shall have no right to sublicense or to distribute
Intellectual Property to any third party, except those rights specifically
granted in this Agreement and then provided such distribution and
sublicensing is carried out in accordance with all the requirements contained
in this Agreement.

       (i)    Entire Agreement. This Agreement and its attachments contain
the entire agreement and understanding of the parties with respect to this
subject matter and supersedes all prior agreements, understandings and
representations. No addition or modification to this Agreement is valid
unless made in writing and signed by authorized representatives of the
parties.

       (j)    Construction of Agreement. Customer acknowledges that it was
given the opportunity to have this Agreement and the attachments to this
Agreement reviewed by legal counsel. Customer and VAutomation agree that the
rule of contract construction that interprets ambiguities against the drafter
is inapplicable to this Agreement and the attachments to this Agreement.

       (k)    Status as Independent Contractors. The parties are independent
contractors. Neither has the authority to bind the other to any third person
or act in any way as the representative of the other, unless otherwise
expressly agreed to in writing by authorized representatives of both parties.
This Agreement in no way prohibits VAutomation from providing Intellectual
Property to or performing Services for other parties.

       (l)    Delay. VAutomation shall not be responsible for failure or
delay where the failure or delay results from causes beyond its reasonable
control.

       (m)    Survival. The provisions of Sections 2, 4(d), 5, 6(c), 7 and 11-
16 shall survive the termination of this Agreement.


Page 11 -SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.


<PAGE>

IN WITNESS WHEREOF, the parties hereto have sealed and executed this
Agreement as follows.

LICENSOR
VAUTOMATION, INC.


By:/s/ Eric Ryherd                        Date: 11/5/97
   -----------------------------               -------------------------
       Eric Ryherd, President


CUSTOMER
PIXELWORKS, INC.


By:/s/ Allen H. Alley                     Date: 11/5/97
   -----------------------------               -------------------------
        Allen H. Alley, President
        Allen H. Alley, President


Page 12 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

                                      EXHIBIT A

                    VAUTOMATION INCORPORATED SOFT-CORE LICENSE KEY

        This is to certify that CUSTOMER is licensed by VAutomation to use the

                                 V8086 - REVISION 1.7

                        Each comprising the following files:
    VHDL/Verilog Synthesizable Source Code, VHDL/Verilog behavioral Test Bench,
   Compilation scripts/Makefile, Synthesis scripts, Release notes, Documentation

            For extraction onto CUSTOMER computers per the terms of the
                   VAutomation Synthesizable Soft Core Agreement


       V8086 Software Decoding Key:              [**]

       Purchase Order Number:                    10160

       License Agreement Number:                 10-24-97-01

                                   /s/ Eric Ryherd
                   ------------------------------------------------
                       Eric Ryherd, President, VAutomation Inc.


Page 13 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

                                      EXHIBIT B

                    VAUTOMATION SOFT CORE RE-USE FEE ANNUAL REPORT

In accordance with Section 10 (CONSIDERATION) OF THE VAutomation Incorporated
Synthesizable Soft Core Agreement number 10-24-97-01, this report is
submitted by ______________________ on ________________ and covers the period
from ___________ to ______________.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
 IC NAME AND/OR      SOFT CORE USED      DATE OF FIRST       REUSE FEE DUE
 PART NUMBER                             SILICON
-----------------------------------------------------------------------------------
 <S>                 <C>                 <C>                 <C>
                     V8086                                   None, initial project
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
</TABLE>

                  This report is hereby certified to be accurate by:


               Signature:__________________________   Date:____________
                                Name, title


Page 14 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

                                     ATTACHMENT A

Fee Schedule:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
 CORE NAME           PROJECT FEE         RE-USE FEE          ANNUAL MAINTENANCE
----------------------------------------------------------------------------------
 <S>                 <C>                 <C>                 <C>
 VZ80
----------------------------------------------------------------------------------
 V6502
----------------------------------------------------------------------------------
 V8086               [**]                [**]
----------------------------------------------------------------------------------
 V186
----------------------------------------------------------------------------------
 V960
----------------------------------------------------------------------------------
 V526
----------------------------------------------------------------------------------
 V8-uRISC
----------------------------------------------------------------------------------
 VUSB
----------------------------------------------------------------------------------
 V1394
----------------------------------------------------------------------------------

----------------------------------------------------------------------------------
</TABLE>

Payment Terms for Initial Use:
$5,000 At Receipt of Order (ARO), balance Net 90 days from shipment.

Payment Terms for Re-use:
50% At Receipt of Order (ARO), balance Net 30 days from shipment.

Delivery via:
Overnight Carrier, FOB Nashua, NH, USA


Page 15 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

<PAGE>

                                     ATTACHMENT B


Claims on the Intellectual Property or for the use of the Intellectual
Property known to VAutomation as of the Effective Date.

                                        None.


Page 16 - SYNTHESIZABLE SOFT CORE AGREEMENT NUMBER: 10-24-97-01

[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.