<PAGE>
 
                                                                   EXHIBIT 10.17

**Confidential treatment has been requested for certain portions of this
document.


                                AMENDMENT NO. 4

                                       TO

                           OEM REMARKETING AGREEMENT

This Amendment to OEM Remarketing Agreement (this "Amendment") is entered into
                                                   ---------                  
as of October 11, 1996 (the "Effective Date") by and between Cooper & Chyan
                             --------------                                
Technology, Inc., a Delaware corporation with principal offices at 1601 South De
Anza Boulevard, Suite 100, Cupertino, California 95014 ("CCT"), and Mentor
                                                         ---              
Graphics Corporation, an Oregon corporation with principal offices at 8005 S.W.
Boeckman Road, Wilsonville, Oregon 97070-7777 ("Mentor Graphics").
                                                ---------------   

                                    RECITALS
                                    --------
                                        
   A.  CCT and Mentor Graphics entered into that certain OEM Remarketing
       Agreement dated January 27, 1992, amended on January 27, 1994, November
       8, 1994 and May 9, 1995 (as amended to date, the "OEM Agreement").
                                                         -------------   

   B.  CCT and SETO Software GmbH, now a wholly owned subsidiary of Mentor
       Graphics ("SETO"), entered into that certain Router Partner Distribution
                  ----                                                         
       Agreement dated January 15, 1996 (the "SETO Agreement").
                                              --------------   

   C.  The parties hereto desire to amend the OEM Agreement and provide for the
       assignment to and assumption by Mentor Graphics of the SETO Agreement.

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

1. Definitions.  Section 1(e) of the OEM Agreement is deleted in its entirety
   -----------                                                               
and replaced by the following:

   (e) "Board Station" means the Mentor Graphics Board Station CAD system used
       on Unix based platforms for the computer-aided design and layout of
       printed circuit boards and multi-chip modules.

2. Product Development and Porting.   Section 2 of the OEM Agreement and
   -------------------------------                                      
Attachment B to the OEM Agreement are deleted in their entirety.

3. Term of Agreement.  Section 3 of the OEM Agreement is deleted in its entirety
   -----------------                                                            
and replaced by the following:

       3. Term of Agreement.  This Agreement takes effect on the Effective Date
          -----------------                                                    
       of this Agreement and expires March 31, 1998,  unless terminated earlier
       in accordance with its terms.  This Agreement will automatically remain
       in effect for additional 
<PAGE>

     [**] Confidential treatment has been requested for certain portions of
          this document.
 
       periods of six (6) months, unless either party gives the other party
       notice at least six (6) months prior to the automatic renewal date.

4. Grant of Licenses.   Section 5.2 of the OEM Agreement is deleted in its
   -----------------                                                      
entirety.

5. Royalties and Payment.  Section 6.1 of the OEM Agreement is deleted in its
   ---------------------                                                     
entirety and replaced by the following:

       6.1 Mentor Graphics shall pay CCT royalties, as specified in Attachment
                                                                    ----------
           A, for each copy of the CCT Products sublicensed under Sections
           -
           5.1(a) or (b).  Mentor Graphics will be responsible for paying all
           shipping costs, insurance charges, and miscellaneous charges
           associated with CCT Product distribution and sublicensing.

           Cumulative royalty payments payable to CCT under this Section 6.1
           shall be payable [**].  All payments due under this Agreement are
           to be made by wire transfer to:

                    Cooper & Chyan Technology, Inc.
                    First National Bank of Boston
                    100 Federal Street
                    Boston, MA 02110
                    ABA # 011000390
                    A/C # 532-72010

           or to any other bank that an authorized officer of CCT designates in
           writing.

           Mentor Graphics shall prepare and deliver to CCT, (i) within forty-
           five (45) days after the end of each calendar quarter, a report
           detailing Mentor Graphics' distribution activity for the quarter,
           itemizing the number of copies of each CCT Product distributed and/or
           sublicensed by Mentor Graphics during such quarter and including a
           calculation of the royalties due to CCT pursuant to this Section 6,
           and (ii) within fifteen (15) days after the end of each calendar
           month, a report, which may be preliminary and unaudited, detailing
           Mentor Graphics' distribution activity for the month, itemizing the
           number of copies of each CCT Product distributed and/or sublicensed
           by Mentor Graphics during such month including the geographic
           distribution of such sublicenses by continent and, within the United
           States, by region.


6. Stock Purchase Rights.   Section 6.3 of the OEM Agreement is deleted in its
   ---------------------                                                      
entirety.

7. Price Warranty.   The first three sentences of Section 8 of the OEM Agreement
   --------------                                                               
are deleted in their entirety and replaced by the following:

       8.  Price Warranty.  For new agreements with other parties after the
           --------------                                                  
           Effective Date, CCT guarantees that Mentor Graphics pricing and
           discounts for the CCT Products shall be at least as favorable, in the
           aggregate, as the most favorable pricing and discounts for CCT
           Products extended to other similarly situated OEM's that purchase a
           comparable volume of licenses of CCT Products 

                                       2
<PAGE>
 
           ("Comparable Channels").  If CCT, after the Effective Date, extends
             -------------------
           prices or discounts to any Comparable Channel that are more
           favorable, in the aggregate, than the pricing and discounts extended
           to Mentor Graphics under this Agreement, then Mentor Graphics shall
           receive corresponding prices and discounts effective as of the date
           on which such prices and discounts are extended to such other
           Comparable Channel.

8. Status of the Parties.   Sections 11.1, 11.3 and 11.4 of the OEM Agreement
   ---------------------                                                     
and Attachment G to the OEM Agreement are deleted in their entirety.  Section
11.1 of the OEM Agreement is replaced with the following:

      11.1 Mentor Graphics agrees that during the term of this Agreement it
           will actively and aggressively promote the sale of licenses of the
           CCT Products to its customers for use with Board Station.  Mentor
           Graphics will not directly or indirectly sell any autorouting
           products, either on a stand alone basis or bundled with other
           products, for use with Board Station other than the CCT Products,
           except for Mentor Graphic's existing grid-based routing product.
           Notwithstanding the foregoing, Mentor Graphics may sell the
           Interconnectix routing technology provided that such technology is
           bundled with the Interconnectix synthesis tool suite and is not sold
           as a stand alone router.

           CCT agrees that during the term of this Agreement it will not
           directly or indirectly (except through OEMs, VARs and distributors)
           sell (i) licenses of the CCT Products, either on a stand alone basis
           or bundled with other products, for use with Board Station to the
           existing customers of Mentor Graphics, or (ii) licenses of any
           translator designed to provide an interface between the CCT Products
           and Board Station.  CCT further agrees that during the term of this
           Agreement it will not sell, as a stand alone layout system, the
           product known in the marketplace as "CBDS" (regardless of whether
           such product is renamed) to the existing customers of Mentor Graphics
           using Board Station who are not also existing users of CBDS.
           Notwithstanding the foregoing, CCT may sell products that integrate
           and include tools from, or other portions of, the CBDS code or
           derivatives thereof.

           Each of Mentor Graphics and CCT agree (i) that within fifteen (15)
           business days after the execution of this Amendment they will notify
           their respective sales and marketing personnel of the covenants in
           the preceding two paragraphs, and (ii) that such notification shall
           contain instructions to faithfully honor such covenants.

           In the event that either party commits a breach of any of the terms
           or conditions of this Section 11.1 then, the other party may, in its
           sole discretion, (i) terminate this Agreement in accordance with the
           terms of Section 25, (ii) immediately terminate the provisions of
           this Section 11.1 in their entirety upon written notice to the
           breaching party (in which case all of Section 11.1 will be deemed
           deleted from this Agreement and the other provisions of this
           Agreement will remain in full force and effect), or (iii) seek
           equitable or other relief pursuant to the dispute resolution
           procedures described in Section 27.3.  Any such termination of this
           Agreement or termination of the provisions of

                                       3
<PAGE>
 
**Confidential treatment has been requested for certain portions of this
document.

           this Section 11.1 will be a non-exclusive remedy for any breach of
           this Section 11.1 and will be without prejudice to any other right or
           remedy of such party.

           In the event that (i) the functionality of the Interconnectix routing
           technology referred to in the first paragraph of this Section 11.1 is
           enhanced or updated such that it provides routing functionality that
           is substantially equivalent to that provided by the CCT Products and
           such enhanced or updated technology is marketed, or (ii) Mentor
           Graphics fails during any quarter to timely make payments of
           royalties due pursuant to Section 6.1 (or to make payments in the
           form of nonrefundable prepayments of royalties) that, in the
           aggregate, are at least equal to the minimum cumulative amounts for
           each quarter as follows:

<TABLE> 
<CAPTION> 
               For the period:          Minimum Cumulative Amount
               ---------------          -------------------------
               <S>                      <C> 

               10/1/96 - 12/31/96          $[              ]**
               10/1/96 - 3/31/97           $[              ]**
               10/1/96 - 6/30/97           $[              ]**
               10/1/96 - 9/30/97           $[              ]**
               10/1/96 - 12/31/98          $[              ]**
               10/1/96 - 3/31/98           $[              ]**
</TABLE> 

           then, CCT may, in its sole discretion, immediately terminate the
           provisions of this Section 11.1 in their entirety upon written notice
           to Mentor Graphics (in which case all of Section 11.1 will be deemed
           deleted from this Agreement and the other provisions of this
           Agreement will remain in full force and effect).

9.   Distribution.   Sections  12.2, 12.3 and 12.4 of the OEM Agreement are
     ------------                                                          
deleted in their entirety.

10.  Continuing Support and Source Code.   The last sentence of Section 17.6,
     ----------------------------------                                      
the last sentence of Section 17.7 and all of Section 21 of the OEM Agreement are
deleted in their entirety.  The Escrow Agreement attached as Attachment F to the
OEM Agreement shall be terminated.  Mentor Graphics and CCT shall execute, and
shall instruct the Escrow Agent to execute, a Termination Amendment to such
Escrow Agreement in the form attached to this Amendment as Exhibit B.
                                                           --------- 

11.  Termination and Default.   Section 25.3 of the OEM Agreement is amended to
     -----------------------                                                   
replace "Section 17.7 and 17.8 Maintenance and Support" with "Section 17.8
Maintenance and Support", and to delete "Section 21.3 Escrow of Source Code" and
"Attachment F Escrow Agreement." Section 25.4 of the OEM Agreement is deleted in
its entirety.

12.  Disputes.  The second sentence of Section 27.3 of the OEM Agreement is
     --------                                                              
deleted in its entirety and replaced by the following:

                                       4
<PAGE>
 
       If the representatives are unable to resolve the dispute in a mutually
       satisfactory manner within the next five working days, either party may
       submit the dispute to an arbitration in accordance with the commercial
       arbitration rules of the American Arbitration Association ("AAA Rules")
                                                                   ---------  
       then in effect, including, without limitation the expedited procedures
       described in Rules 53-57 of the AAA Rules.  The American Arbitration
       Association will have the authority to select an arbitrator from a list
       of arbitrators who are lawyers experienced in the representation of
       software companies; provided, however, that such arbitrator cannot be the
                           --------  -------                                    
       legal counsel to any party and each party will have the opportunity to
       make such reasonable objection to any of the arbitrators listed as such
       party may wish and that the American Arbitration Association will select
       the arbitrator from the list of arbitrators as to whom neither party
       makes any such objection.  Each party shall pay one-half (1/2) of the
       compensation to be paid to the arbitrator in any such arbitration and
       one-half (1/2) of the costs of transcripts and other expenses of the
       arbitration proceedings; provided, however, that in the event that the
                                --------  -------                            
       arbitrator finds that one party has substantially prevailed in the
       arbitration, the prevailing party shall be entitled to an award of
       attorney's fees and costs, arbitrator's fees and costs, and all other
       costs of arbitration to be paid by the losing party.  For any claim
       submitted to arbitration, the burden of proof shall be as it would be if
       the claim were litigated in a judicial proceeding.  The arbitrator shall
       have the power to grant equitable relief.  Any judgment upon the award
       rendered by the arbitrator may be entered in any court having
       jurisdiction of the subject matter thereof.

13.  Nonassignment.  Section 27.7 of the OEM Agreement is deleted in its
     -------------                                                      
entirety and replaced by the following:

       27.7  Nonassignment.  This Agreement is not assignable by either party
             -------------                                                   
       without the prior written consent of the other except to a successor to
       all or substantially all of the business of such party by reason of
       merger, sale of assets or other form of acquisition.

14.  Severability.  Section 27.10 of the OEM Agreement is deleted in its
     ------------                                                       
entirety and replaced by the following:

       27.10  Severability.  If any provision of this Agreement is found
              ------------                                              
       invalid, illegal or unenforceable, such provision will be enforced only
       to the maximum extent permissible, and the other provisions of this
       Agreement will remain in full force and effect.  Notwithstanding the
       foregoing, if any provision of Section 11.1 is found invalid, illegal or
       unenforceable, all of Section 11.1 will be deemed deleted from this
       Agreement and the other provisions of this Agreement will remain in full
       force and effect.

15.  Attachments.   Section 27.14 of the OEM Agreement is amended to delete
     -----------                                                           
"Attachment B CCT Product Development and Porting", "Attachment F Escrow
Agreement", and "Attachment G List of Competitors", and "Attachment I CCT
Domestic Distributor Price List."

16.  Equitable Relief.   A new Section 27.15 is added to the OEM Agreement as
     ----------------                                                        
follows:

       27.15  Equitable Relief.  The parties agree that, due to the potentially
              ----------------                                                 
       large size of the market for the sophisticated software licensed
       hereunder, the subject matter of this 

                                       5
<PAGE>
 
       Agreement is of inestimable value. Accordingly, the parties hereto will
       have the right to preliminary and permanent injunctive relief and/or
       specific performance to remedy violations of the provisions of this
       Agreement.

17.  CCT Products and Royalties.  Attachment A to the OEM Agreement is deleted
     --------------------------                                               
in its entirety and replaced by the new Attachment A, attached as Exhibit A to
                                                                  ---------   
this Amendment.

18.  SETO Agreement.  Upon execution of this Amendment, CCT agrees to execute,
     --------------                                                           
and Mentor Graphics agrees to execute and cause SETO to execute, the Assignment
of Router Partner Distribution Agreement in the form attached hereto as Exhibit
                                                                        -------
C providing for the assignment to and assumption by Mentor Graphics of the SETO
-                                                                              
Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment through the
signatures of their duly authorized representatives as set forth below.

COOPER & CHYAN TECHNOLOGY, INC.         MENTOR GRAPHICS CORPORATION

    /s/ROBERT D. SELVI                      /s/CHARLES TRYON
By: ______________________________      By: _______________________________

       Robert D. Selvi                        Charles Tryon
Name: ____________________________      Name: _____________________________

        Chief Financial Officer                 Director of Contracts
Title: ___________________________      Title: ____________________________

                                       6
<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------
**Confidential treatment has been requested for certain portions of this
document.

                                  ATTACHMENT A

                           CCT PRODUCTS AND ROYALTIES

1. Mentor Graphics shall pay royalties and fees based on a discount from CCT's
   then-current license fee schedules for the SPECCTRA for Unix Products listed
   in the current attachments to this Exhibit A.

2. Mentor Graphics shall receive a [                    ]** discount from CCT's 
   then-current domestic end-user prices listed in CCT's then-current license
   fee schedule.  With respect to each one year period following the Effective 
   Date, the royalties payable by Mentor Graphics to CCT shall equal a 
   [                  ]** discount off CCT's then-current domestic end-user 
   prices solely with respect to licenses of CCT Products occurring after the 
   cumulative royalties received in such year by CCT from Mentor Graphics for 
   new Product licenses (excluding maintenance) exceed $[                  ]**. 
   All above discounts apply to the Product license only.

   A copy of the appropriate CCT license fee schedules and product descriptions,
   effective as of the date of this Agreement, is appended to this Exhibit A.
                                                                   --------- 

3. CCT reserves the right to amend the published license fee schedule at any
   time.  Mentor Graphics will have thirty (30) days written notice prior to any
   price change.

4. For discontinued CCT Products, Mentor Graphics will follow CCT's product
   discontinuation policy.  For example, if a CCT Product is discontinued and
   CCT is replacing it with another CCT Product at no charge, then Mentor
   Graphics will similarly replace existing CCT Products without charge and no
   royalty shall be payable to CCT for such replacement.

5. Software licenses may be transferred from the workstation where a CCT Product
   is then-currently installed to a different workstation.  Mentor Graphics
   shall pay CCT a one-time transfer fee per license per transfer should Mentor
   Graphics adopt CCT's software security scheme for CCT Products and require
   changes to the authorization scheme to facilitate a license transfer.

6. CCT Marks:                       Logo:

   SPECCTRA(R)
   SPECCTEQ(R) (Japan and Taiwan)

                                                          [LOGO]
   Trade Names:
     COOPER & CHYAN TECHNOLOGY, INC. 
     CCT 
     COOPER & CHYAN TECHNOLOGY GMBH 
     COOPER & CHYAN KABUSHIKI KAISHA 
     CCT K. K.

                                       7
<PAGE>
 
                                                                       EXHIBIT B
                                                                       ---------

                             TERMINATION AMENDMENT
                                       TO
                                ESCROW AGREEMENT

     Mentor Graphics Corporation, an Oregon corporation ("Mentor Graphics"),
Cooper & Chyan Technology, Inc., a Delaware corporation ("CCT"), and the First
Interstate Bank of Oregon ("Escrow Agent") entered into that certain Escrow
Agreement dated January 27, 1992 (the "Escrow Agreement") in connection with and
pursuant to that certain OEM Remarketing Agreement (the "OEM Agreement") between
Mentor Graphics and CCT dated of even date therewith.  Mentor Graphics and CCT
have amended the OEM Agreement to provide for termination of the Escrow
Agreement, and hereby instruct the Escrow Agent to execute this Termination
Amendment and return all copies of the Source Code to CCT in accordance with
Section 14 of the Escrow Agreement.  Pursuant to Section 10 of the Escrow
Agreement, Mentor Graphics shall remain liable for any unpaid fees of the Escrow
Agent.

In Witness Whereof, the undersigned parties have executed this Termination
Amendment to Escrow Agreement, and the Escrow Agreement shall be terminated
effective as of October 11, 1996.


MENTOR GRAPHICS CORPORATION                     COOPER & CHYAN TECHNOLOGY, INC.

    /s/CHARLES TRYON                                /s/ROBERT D. SELVI
By: _________________________                   By: __________________________

      Charles Tryon                                   Robert Selvi
Name: _______________________                   Name: ________________________

       Director of Contracts                           Chief Financial Officer
Title: ______________________                   Title: _______________________


FIRST INTERSTATE BANK OF OREGON

    /s/A. GARRETT
By: _________________________

      A. Garrett
Name: _______________________

       Vice President
Title: ______________________  

                                       8
<PAGE>
 
                                                                       EXHIBIT C
                                                                       ---------

                                 ASSIGNMENT OF
                     ROUTER PARTNER DISTRIBUTION AGREEMENT


     SETO Software GmbH ("SETO"), now a wholly owned subsidiary of Mentor
Graphics Corporation, an Oregon corporation ("MENTOR GRAPHICS"), and Cooper &
Chyan Technology, Inc., a Delaware corporation ("CCT"), entered into that
certain Router Partner Distribution Agreement dated January 15, 1996 (the "SETO
AGREEMENT") prior to Mentor Graphics' acquisition of SETO.  In connection with
and pursuant to Section 18 of Amendment No. 4 dated October 11, 1996 to the OEM
Remarketing Agreement (the "OEM AGREEMENT") between Mentor Graphics and CCT
dated January 27, 1992, SETO hereby conveys and assigns all of SETO's right,
title and interest in the SETO Agreement to Mentor Graphics, including a
transfer of all of SETO's rights and a delegation of all of SETO's obligations
thereunder, and Mentor Graphics hereby accepts such assignment, agrees to
perform all of SETO's obligations thereunder, and acknowledges that all
references therein to SETO will be deemed to be references to Mentor Graphics.

In Witness Whereof, the undersigned parties have executed this Assignment as of
October 11, 1996.


MENTOR GRAPHICS CORPORATION                     COOPER & CHYAN TECHNOLOGY, INC.

    /s/CHARLES TRYON                                /s/ROBERT D. SELVI
By: _________________________                   By: __________________________

      Charles Tryon                                   Robert D. Selvi
Name: _______________________                   Name: ________________________

       Director of Contracts                           Chief Financial Officer
Title: ______________________                   Title: _______________________

SETO SOFTWARE GmbH                              

    /s/DEAN FREED
By: _________________________                   

      Deen Freed
Name: _______________________                   

       Director
Title: ______________________                   

                                       9