Document:

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                                                                   EXHIBIT 10.17
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                      INTERNATIONAL DISTRIBUTOR AGREEMENT

          THIS INTERNATIONAL DISTRIBUTOR AGREEMENT ("Agreement") is made and
entered into as of the date of the last signature to this Agreement ("Effective
Date") by and between VERISITY Design, Inc., a California corporation with
principle offices at 2041 Landing Drive, Mountain View, CA 94043 ("VERISITY")
and DAVAN TECH CO., LTD., a South Korea corporation with principle offices at
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7th Fl., Duam Bldg., #174-6, Seokchon-Dong, Songpa-Ku, Seoul, Korea, 138-190
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("Distributor").

          WHEREAS, VERISITY has developed and continues to develop certain
technology and products related to the design and verifying of electronics
logics.

          WHEREAS, Distributor is engaged in the business of marketing such
products and desires to become a marketing representative for VERISITY's
Products (as defined below) in the Territory (as defined below); and

          WHEREAS, VERISITY desires to engage Distributor for the purpose of
soliciting and procuring orders for VERISITY's Products in the Territory.

          NOW, THEREFORE, the parties agree as follows:

1.   Appointment.  VERISITY hereby appoints Distributor for the term of this
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Agreement, and Distributor hereby agrees to act for VERISITY, as an exclusive
Distributor for the Products and services (as hereinafter defined) only within
the territory described in Schedule A (the "Territory"), subject to all of the
terms and conditions of this Agreement. Except as expressly allowed by VERISITY
in writing, Distributor agrees not to solicit orders, procure orders or
otherwise act as VERISITY's representative with respect to any Products or
establish or allow any office to do so unless such office is located within the
Territory and all such activity is conducted solely within the Territory.
Distributor may solicit and procure orders for Products only from customers
located and taking delivery within the Territory.

2.   Products; Prices.
     ----------------

     a.   The products and services covered by this Agreement ("Products") are
those listed on Schedule B hereto and updates, enhancements and new versions
which are substantially similar thereto and which are marketed under the same
model number and product nomenclature. Schedule B shall also include the prices
and terms of sale for the Products, which may be updated from time to time by
VERISITY.

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     b.   For purposes of this Agreement, "Software Products" are (i) computer
programs or instructions (including those fixed in electrical circuits) which
are Products or included in Products and (ii) documentation provided by VERISITY
which is related to the Product. End-User Documentation is documentation
specifically identified in writing by VERISITY as provided for end-users.
Software Products are licensed not sold; any references herein to the sale or
price of any Software Products or any copy thereof refers to the license or
license fee thereof. Distributor will in no event be entitled to receive or have
any access to any source code of the Software Products.

     c.   The prices, charges, and terms of sale of the Product shall be those
established by VERISITY. In soliciting and procuring orders for the Products,
Distributor shall quote only the prices and terms on Schedule B. Quotation of
any other prices than those in the published Price List must be authorized in
writing by VERISITY. VERISITY reserves the right, at its sole discretion, to
establish or change the prices, Price List, terms and conditions of sale,
delivery and packing charges for the Products at any time during the term of
this Agreement.

3.  Commission.
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     a.   In consideration for the covenants of Distributor contained herein,
and as the entire compensation of Distributor for its services under this
Agreement, VERISITY will pay Distributor a commission equal to a percentage (as
specified in Schedule C) of the Net Revenues (as defined below) actually
collected by VERISITY (and not subject to refund or other contingency) on
account of shipments on bona fide firm orders, acceptable to VERISITY, in the
Territory, for the Products.

     b.   Commissions will not be paid for current or future sales of spare
parts, tools or services unless such spare parts, tools or services are Products
in Schedule B. Commissions on Net Revenues received in a calendar month will be
paid within thirty (30) days after the end of such calendar month by check or
wire transfer to the account stipulated by Distributor.

     c.   For purposes of this Agreement, "Net Revenues" shall mean the revenue
actually received from the sale, license or other disposition of Products in the
Territory during the applicable month, less all applicable Deductions and
Allowances (Deductions and Allowances are defined in Schedule D attached).
Deductions and Allowances do not include withholdings of local income taxes for
which VERISITY receives credits applicable against its U.S. income taxes).

     d.   All invoices in connection with orders solicited by Distributor shall
be rendered by VERISITY directly to the customer.

     e.   Nothing in this Agreement shall be construed as limiting in any manner
VERISITY's marketing or distribution activities of any kind in the Territory.

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     f.   VERISITY shall have the right, without any liability to Distributor
for a commission, to:

          (1)  reject any order obtained by Distributor;

          (2)  approve or disapprove any credit to be extended to any customer;
and

          (3)  accept the return of Products or to make any Allowances or
Deductions as VERISITY shall deem appropriate.

     g.   All shipments are contingent upon VERISITY obtaining an appropriate
export license from the United States Department of Commerce. If requested by
VERISITY, Distributor shall provide reasonable assistance in securing such
export license.

4.   Warranty Disclaimer. TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE
     -------------------
LAW, VERISITY MAKES NO WARRANTIES TO DISTRIBUTOR WITH RESPECT TO THE PRODUCTS OR
ANY SERVICES AND DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

5.   Relationship of Parties. The parties hereto expressly understand and agree
     -----------------------
that Distributor is an independent contractor in the performance of each and
every part of this Agreement and is solely responsible for all of its employees
and agents and its labor costs and expenses arising in connection therewith and
for any and all claims, liabilities or damages or debts of any type whatsoever
that may arise on account of Distributor's activities, or those of, its
employees or agents in the performance of this Agreement. Distributor has no
authority, right or ability to bind or commit VERISITY in any way (including,
without limitation, by accepting orders) or sell any Products and will not
attempt to do so or imply that it may do so. VERISITY is in no manner associated
with or otherwise connected with the actual performance of this Agreement on the
part of Distributor, nor with Distributor's employment of other persons or
incurring of other expenses. Except as expressly provided herein, VERISITY shall
have no right to exercise any control whatsoever over the activities or
operations of Distributor.

6.   Responsibilities of Distributor. Distributor's duties hereunder are as
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follows:

     a.   Distributor shall use its best efforts to actively promote, solicit
orders for and procure orders for the Products within the Territory on a
continuing basis, shall comply with good business practices and all applicable
laws and regulations and shall diligently perform all other duties as mutually
agreed upon herein. Distributor shall be solely responsible for its own expenses
in carrying out its responsibilities under this Agreement. [Distributors efforts
shall generate Net Revenues to VERISITY of at least the minimum amounts set
forth in Schedule C (the "Minimum Amounts").] Distributor will maintain

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appropriate demonstration equipment and an adequate facility capable of handling
technical support and customer demonstrations and provide technical assistance.

     b.   In its efforts, Distributor will use VERISITY's then current names for
the Products (but will not represent or imply that it is VERISITY or is a part
of VERISITY and will obtain VERISITY's prior approval of any such use) and will
not add to, delete from or modify any sales or marketing documentation or forms
provided by VERISITY except with the prior written consent of VERISITY.
Distributor will not otherwise use or register (or make any filing with respect
to) any trademark, name or other designation relevant to the subject matter of
this Agreement anywhere in the world. Distributor will not contest anywhere in
the world the use by VERISITY or use authorized by VERISITY of any trademark,
name or other designation relevant or similar to the subject matter of this
Agreement or application or registration therefor, whether during or after the
term of this Agreement. Distributor acknowledges and agrees that Distributor has
no interest in or right to VERISITY's names, designations or trademarks, or any
label or design or other marks used in connection with VERISITY or the Products.
Distributor further acknowledges and agrees that all of its use of such
trademarks, names or other designations shall inure to the benefit of VERISITY.

     c.   Distributor shall maintain an office in the Territory and employ
sufficient qualified employees and agents, including adequate engineering and
sales staff, to assist in diligently performing all of its duties as mutually
agreed upon herein. Distributor shall attend sales conferences and take
advantage of technical training programs, if offered, by VERISITY, for such
persons at Distributor's expense.

     d.   Distributor shall keep VERISITY informed as to any problems
encountered with the Products and as to any resolutions arrived at for those
problems, and shall communicate promptly to VERISITY any and all modifications,
design changes, improvements of the Products, or new customer requirements
suggested by any entity or person solicited by or making inquiries of
Distributor or by any employee or agent of Distributor. Distributor hereby
assigns to VERISITY any and all right, title and interest in and to any such
suggested modifications, design changes or improvements of the Products held by
Distributor, without the payment of any additional consideration.

     e.   At VERISITY's request, Distributor shall promptly submit to VERISITY
reports containing pertinent information about Distributor's customers and the
Products and Distributor's activity within the Territory. VERISITY may
reasonably request information concerning customers and business volumes,
financial information and operating plans. Distributor shall advise and assist
VERISITY with respect to sales aids and furnish available information concerning
competitive products sold in the Territory.

     f.   Distributor will provide good faith sales forecasts and business
status reports to VERISITY for the Products. The forecasts will be provided in
writing and in a format specified by VERISITY on a quarterly basis before the
beginning of the new quarter.

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     g.   Distributor will coordinate with customers in establishing irrevocable
letters of credit to VERISITY through the bank specified by VERISITY for payment
of the Products. Distributor shall also assist VERISITY in the collection of
payment should the need arise.

     h.   Distributor will supply updates of VERISITY software to those
customers who are under warranty or annual maintenance at no charge, and which
updates will be supplied by VERISITY to the Distributor.

     i.   Distributor will obtain the appropriate signatures on the evaluation
agreement as shown in Schedule G by any customer before the installation of any
evaluation software at the customer site and return same to VERISITY within ten
(10) days of such installation. Furthermore, Distributor will obtain the
appropriate signatures on any technology license agreements as shown in Schedule
H by any customer on each sale of Products and return same to VERISITY within
ten (10) days of such installation.

     j.   Distributor will not engage in, cause or permit the reverse
engineering, disassembly or recompilation or similar manipulation of the
Products; provided, however, that the foregoing restriction is limited so that
it prohibits such activity only to the maximum extent such activity may be
prohibited without violating applicable law relating to computer software.

     k.   Distributor will not modify or otherwise alter the Products and shall
not remove any legal notices from any portions of the Products.

     l.   Distributor warrants and represents that it has no intention of
exporting or reexporting outside the Territory any Products, customer designs,
customer verification environment, whether for demonstration purposes or not, or
Proprietary Information (defined below), any part thereof or any direct product
thereof, whether directly or indirectly, and understands that it may not do so
under this Agreement. Distributor agrees not to, and not to allow, export or
reexport of any Product or Proprietary Information or any part thereof or any
direct product thereof directly or indirectly from the U.S. or elsewhere, (a) in
violation of any such restrictions, laws or regulations or (b) without all
required licenses and proper authorizations, to Cuba, Libya, North Korea, Iran,
Iraq or Rwanda or to any Group D:1 or E:2 country (or any national of such
country) specified in the then current Supplement No. 1 to part 740 of the U.S.
Export Administration Regulations (or any successor supplement or regulations).
Licensee shall promptly execute any documents required by Licensor to comply
with U.S. export requirements or demonstrate to Licensor its compliance with
such requirements. Without limitation of the foregoing, Distributor agrees to
commit no act which, directly or indirectly, would violate the U.S. Foreign
Corrupt Practices Act (regarding, among other things, payments to government
officials) or any United States law, regulation, or treaty

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or any other international treaty agreement, relating to national security or to
the export or reexport of any of the Products or associated technical data or
products thereof to which the United States adheres. Distributor agrees to
indemnify VERISITY against any claim, demand action, proceeding, investigation,
loss, liability, cost and expense (including attorneys' fees) suffered or
incurred by VERISITY and arising out or related to any violation (whether
intentional or unintentional) by Distributor of any of the warranties or
covenants in this section.

     m.   Distributor understands that VERISITY is not bound to any price
(whether or not on Schedule B) with respect to an order until VERISITY has
accepted such order and Distributor will not imply or represent anything to the
contrary to any person or entity; in any event VERISITY will not be liable to
Distributor for and Distributor will have no rights with respect to any price
change (whether before or after acceptance of an order) or any other matter with
respect to the dealings between VERISITY and customers.

     n.   Distributor shall maintain at each office in the Territory sufficient
Products for demonstration purposes. VERISITY will consign or make available to
Distributor certain demonstration products on an as-needed basis. In no event
shall Distributor be supplied with more than the amount of demonstration
products which VERISITY deems necessary hereunder in its sole discretion.

     o.   During the term of this Agreement, and for a period of ninety (90)
days after termination of this Agreement, Distributor shall not:

          (1)  represent, assist, or provide either directly or indirectly
marketing services of any sort, to any individual, firm, corporation,
partnership, or other entity which manufactures or distributes products which
are competitive with the Products;

          (2)  market directly or indirectly in the Territory products which are
competitive with the Products;

          (3)  solicit orders for, or deal in, used goods or equipment
previously manufactured by VERISITY without written authorization from VERISITY;
or

          (4)  have any financial or managerial interest in another company
which represents products directly competitive to those offered by VERISITY.

          Distributor may, however, represent within the Territory, an
individual, firm, corporation, partnership, or other entity which manufactures
or distributes products which are complimentary or related to the Products. [A
copy of the list of products currently sold by Distributor, either for itself or
for the account of a third party is attached as Schedule F hereto and is true,
accurate and complete. Distributor shall provide VERISITY with thirty (30) days
prior written notice of any additions it wishes to make to Schedule F.]

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     p.   During the term of this Agreement and for a period of one (1) year
after the termination or expiration of this Agreement, as the case may be,
Distributor shall not, directly or indirectly, solicit the employment or
services of any employee, representative or agent of VERISITY, or encourage such
employees, representatives or agents to leave VERISITY.

     q.   Distributor warrants and represents to VERISITY that neither this
Agreement (or any term hereof) nor the performance of or exercise of rights
under this Agreement, is contrary to, in conflict with, ineffective under, or
requires registration or approval or tax withholding under, or affects
VERISITY's proprietary rights under, any law or regulation of any organization,
country, group of countries or political or governmental entity located within
or including all or a portion of the Territory. Distributor will take no action
inconsistent with the foregoing warranty and will indemnify VERISITY from any
losses, damages, claims, settlements, attorneys fees and other expenses incurred
by VERISITY which arise due to any allegation or action of any person or entity
inconsistent with the foregoing warranty. Furthermore, Distributor agrees to
give VERISITY adequate notice of any change in legislation in the Territory
which may materially affect the contractual relationship of the Parties.

     r.   Distributor agrees to hold harmless, defend and indemnify VERISITY and
its officers, directors, employees, agents and servants from and against any and
all claims, damages and expenses, including reasonable legal fees and expenses,
of whatever kind and nature directly or indirectly arising out of or on account
of or resulting from Distributor's activities, including but without limitation,
any unauthorized representations of Distributor, or out of Distributor's failure
to comply with its obligations under this Agreement.

     s.   The failure by Distributor to comply with any of its obligations as
set forth in this Section 6 shall constitute a breach of this Agreement and
shall entitle VERISITY to give notice to Distributor requiring it to cure such
breach. If any such breach is not cured within thirty (30) days after such
notice is given, this Agreement shall, at VERISITY's option, terminate
immediately in accordance with Section 8.a.(3).

7.   Duties of VERISITY.  VERISITY shall have the following responsibilities
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during the term of this Agreement:

     a.   VERISITY shall provide Distributor, at VERISITY's expense, with
current marketing advice, sales aids, and a reasonable supply of any applicable
printed marketing materials for the Products. Any printed materials, equipment,
or spare parts furnished by VERISITY to Distributor shall be and remain at all
times the property of VERISITY.

     b.   VERISITY reserves the right, at any time, to change or modify the
design of or discontinue any of the Products, or parts thereof, or add Products
and to change its service policies, or its financial requirements. VERISITY
shall inform Distributor within

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a reasonable time of any changes in the Products, the prices, and marketing and
sale documentation.

     c.   VERISITY may conduct advertising campaigns for the Products the scope
and nature of which will be determined at VERISITY's sole discretion. Upon
request of Distributor, VERISITY will send Distributor duplicate copies of all
invoices and any customer acknowledgements.

     d.   With respect to each payment of commissions hereunder, VERISITY shall
provide Distributor with an accounting of the orders for which payment is made
(which shall be limited to the invoice number, customer name, calculation of Net
Revenues and rate of commissions for each order).

8.   Term and Termination. Subject to the provisions for termination as provided
     --------------------
herein, this Agreement shall commence on the Effective Date and shall be for a
term of [*] years, and shall be automatically renewed for successive one (1)
year terms thereafter unless either of the parties hereto gives to the other
party written notice of its election to terminate this Agreement at least ninety
(90) days prior to the expiration of the then current term. Nothing contained
herein shall preclude VERISITY's right of termination pursuant to this Section
8. Distributor understands that after termination of this Agreement, it shall
have no right whatsoever to continue as VERISITY's representative of Products
regardless of any undocumented continuation of the relationship with VERISITY.

     a.   This Agreement may be terminated by VERISITY for cause immediately
upon the occurrence of any of the following events:

          (1)  If Distributor ceases to do business, or otherwise terminates its
business operations or if there is a material change in control of Distributor;
or

          (2)  If Distributor fails to secure or renew any license, permit
authorization or approval for the conduct of its business in any significant
country or area of the Territory, or if any such license, permit, authorization
or approval is revoked or suspended; or

          (3)  If Distributor breaches any provision of this Agreement and
(except in the case of a compromise of Proprietary Information where termination
shall be effective immediately upon notice) fails to fully cure such breach
within thirty (30) days or such longer time as is provided herein of written
notice from VERISITY describing the breach; or

          (4)  If Distributor seeks protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against Distributor; or

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

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          (5)  If the Net Revenues during any period (with the exception of the
first year following the initial signing of the contract, where the review will
be at the end of the first year of the contract) are less than the Minimum
Amount for that period or if the rate of Net Revenues received is such that
VERISITY reasonably believes such Minimum Amount will not be timely achieved;
provided VERISITY gives Distributor at least thirty (30) days written notice of
termination; or

          (6)  If this willful misconduct, wrongful act, willful neglect or bad
faith on the part of the Distributor, its officer agents or employees which
VERISITY considers to be detrimental to the best interest of VERISITY.
Violations of the U.S. law on export of technical data and commodities is
considered a wrongful act for the purposes of this clause.

     b.   VERISITY shall incur no liability whatsoever for any damage, loss or
expenses of any kind suffered or incurred by Distributor arising from or
incident to any termination of this Agreement by VERISITY which complies with
the terms of the Agreement whether or not VERISITY is aware of any such damage,
loss or expenses.

     c.   Upon termination of this Agreement by either party or naturally at the
end of the term:

          (1)  All rights and licenses of Distributor and all obligations of
VERISITY hereunder shall terminate, except rights to payments accrued prior to
termination (including during any applicable notice period).

          (2)  Distributor shall immediately:

          (a)  discontinue any use of the name, logotype, trademarks or slogans
of VERISITY and the trade names or other designations of any of the Products;

          (b)  discontinue all representations or statements from which it might
be inferred that any relationship exists between VERISITY and Distributor;

          (c)  cease to promote, solicit orders for or procure orders for
Products (but not act in any way to damage the reputation of VERISITY or any
Product);

          (d)  return to VERISITY at Distributor's expense all Products,
demonstration units, samples, instruments, equipment, spare parts, catalogues
and literature of VERISITY then in possession of Distributor; and

          (e)  return to VERISITY all Proprietary Information (as defined below)
in Distributor's possession, custody or control in whatever form held (including
copies or embodiments of Proprietary Information or relating to Proprietary
Information) upon termination of this Agreement, or at any time or from time to
time, upon written request by VERISITY.

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     (3)  The following provisions of this Agreement shall remain in effect
after termination (including, without limitation, the natural expiration
hereof): 4, 6.o, 6.p, 9, 11 and 12.

          (a)  After termination (by expiration or otherwise) of this Agreement
for any reason whatsoever, promptly after receipt of the applicable Net Revenues
and all Deductions and Allowances have been determined and applied, VERISITY
shall pay Distributor all commissions earned (as provided in Section 3 above)
but not previously paid to Distributor prior to the termination date.

          (b)  Distributor's acceptance of its final commission check from
VERISITY shall be in full satisfaction of all amounts due to Distributor
hereunder and a full and complete discharge by Distributor of any and all
liabilities of VERISITY.

9.   Proprietary Information; Proprietary Rights
     -------------------------------------------

     a.   Distributor acknowledges that, in the course of performing its duties
under this Agreement, it may obtain information relating to Products and to
VERISITY which is of a confidential and proprietary nature ("Proprietary
Information"). Such Proprietary Information may include, without limitation,
chip design and chip test objects and technologies, computer codes, software,
computer hardware, circuits, trade secrets, know-how, inventions, techniques,
processes, programs, algorithms, schematics, data, customer lists, financial
information and sales and marketing plans. Distributor and its employees and
agents shall, at all times, both during the term of this Agreement and after its
termination, keep in trust and confidence all such Proprietary Information, and
shall not use such Proprietary Information other than in the course of its
duties as expressly provided in this Agreement, nor shall Distributor or its
employees or agents disclose any such Proprietary Information to any person
without VERISITY's prior written consent. Distributor acknowledges that any such
Proprietary Information received by Distributor shall be received as a fiduciary
of VERISITY.

     b.   Distributor shall not be bound by this Section 9 with respect to
information Distributor can document (i) at the date hereof has entered or later
enters the public domain as a result of no act or omission of Distributor or its
employees, or agents or (ii) is lawfully received by Distributor from third
parties without restriction and without breach of any duty of nondisclosure by
any such third party.

     c.   VERISITY and its licensors retain all right, title and interest in and
to (i) all copyrights, patent rights, trade secret rights and other proprietary
rights in the Products, all copies and derivative works thereof (by whomever
produced) and all related documentation and materials, (ii) all of VERISITY's
service marks, trademarks, tradenames or any other designations and (iii) all
other proprietary rights in the Products.

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     d.   VERISITY hereby grants Distributor a nontransferable license only to
demonstrate in the Territory the Products solely to bona fide clients
considering ordering such Products in strict accordance with all the terms of
this Agreement and solely to the extent necessary to fulfill the purposes of
this Agreement.

     e.   Distributor shall bind in writing its employees who have access to
Proprietary Information to hold such information in confidence and not to
disclose any thereof except as expressly allowed herein.

10.  Intellectual Property Indemnification. VERISITY shall hold Distributor and
     -------------------------------------
its officers, directors, agents and employees harmless from liability resulting
from infringement by the Product of any patent issued as of the Effective Date
of this Agreement or any trademark or copyright, provided VERISITY is promptly
notified of any and all threats, claims and proceedings related thereto and
given reasonable assistance and has sole control over the defense and all
negotiations for a settlement or compromise; VERISITY will not be responsible
for any settlement it does not approve in writing.  THE FOREGOING IS IN LIEU OF
ANY WARRANTIES OF NONINFRINGEMENT, WHICH ARE HEREBY DISCLAIMED.

11.  Liability Limitation.  TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE
     --------------------
LAW, VERISITY WILL NOT BE LIABLE UNDER ANY SECTION OR SUBJECT MATTER OF THIS
AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY (I) INCIDENTAL OR CONSEQUENTIAL DAMAGES OR (II) COST OF
PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES.

12.  Miscellaneous.
     -------------

     a.   Assignment Binding Effect.  Neither this Agreement nor any right or
          -------------------------
obligation hereunder is capable of being assigned by Distributor without the
prior written consent of VERISITY and any purported transfer or assignment will
be void.  VERISITY may assign its rights and duties hereunder.  Except as
otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the successors and assigns (whether by operation of law, merger,
change of control or otherwise) of the parties.

     b.   Counterparts.  This Agreement may be executed in two or more
          ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.

     c.   Severability. If any provision of this Agreement is held to be illegal
          ------------
or unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force and
effect and enforceable.

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     d.   Modification.  Except as otherwise expressly provided herein, any
          ------------
provision of this Agreement may be amended and the observance of any provision
of this Agreement may be waived (either generally or any particular instance and
either retroactively or prospectively) only with the written consent of VERISITY
and Distributor.

     e.   Governing Law. This Agreement shall be governed by and construed under
          -------------
the laws of the State of California and the United States without regard to the
conflict of laws provisions thereof and without regard to the United Nations
Convention on the International Sales of Goods.  Unless waived by VERISITY in
writing for the particular instance (which VERISITY may do at its option), the
sole jurisdiction and venue for actions related to the subject matter hereof
shall be the Superior Court of the State of California for Santa Clara County or
the United States District Court for the Northern District of California.  Both
parties consent to the jurisdiction of such courts and agree that process may be
served in the manner provided herein for giving of notices or otherwise as
allowed by California law.  In any action or proceeding to enforce rights under
this Agreement, the prevailing party shall be entitled to recover costs and
attorneys' fees.

     f.   Arbitration. Any dispute or claim arising out of or in connection with
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this Agreement shall be finally settled by binding arbitration.  Any arbitration
shall be initiated and conducted in San Jose, California, under the commercial
rules and auspices of the American Arbitration Association.  Any arbitration
shall be conducted by three (3) arbitrators, at least one of whom shall have
recognized expertise in the field of semiconductor testing.  The arbitrators
shall apply California law to the merits of any dispute or claim, without
reference to state rules of conflicts of law or arbitration.  Judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.  Notwithstanding the foregoing, the Parties may apply to
any court of competent jurisdiction for injunctive relief without breach of this
arbitration provision.

     g.   Applicable Language.  The official test of the Agreement is in the
          -------------------
English language, and if a translation is made to any other language, such
translation shall be solely for the convenience of the Parties, it being agreed
that in the construction and interpretation of the Agreement, the executed
English language test shall govern.  Each Party declares that its representative
who signs this Agreement on its behalf understands the contents thereof.

     h.   Notice. Any notice required or permitted under this Agreement shall be
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given in writing and shall be deemed effectively given:  (i) immediately upon
personal delivery or facsimile transmission to the parties to be notified, (ii)
one (1) day after deposit with a commercial overnight courier with tracking
capabilities or (iii) three (3) days after deposit with the United States Postal
Service, by registered or certified mail, postage prepaid and addressed to the
party to be notified (Attn:  President) at the address

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<PAGE>

indicated for such party on the signature page hereof, or at such other address
as the party may designate by ten (10) days advanced written notice to the other
party.

     i.   Entire Agreement.  This Agreement is the sole agreement between the
          ----------------
parties with respect to the subject matter hereof.  This Agreement supersedes
all prior agreements or discussions between the parties with respect to
distribution, marketing and/or service of any products of or distributed by
VERISITY.

     j.   Remedy for Breach.  Termination of this Agreement shall not be an
          -----------------
exclusive remedy for breach of this Agreement and, whether or not termination is
effected, all other remedies will remain available.

          IN WITNESS WHEREOF, the parties have entered into this Agreement
effective as of the date first above written.

                                        VERISITY Design, INC.

                                        Signature: /s/ Moshe Gavrielov
                                                   ---------------------------

                                        Name:      Moshe Gavrielov

                                        Title:     President and CEO

                                        Address:   2041 Landings Drive
                                                   Mountain View, CA 94043

                                        Date:      11/10/99
                                                   ---------------------------

                                             Distributor:  Davan Tech Co., Ltd.

                                        Signature: /s/ Sancho Park
                                                   ---------------------------

                                        Name:      Sancho Park

                                        Title:     Executive Director

                                        Address:   7th Floor, Duam Building,
                                                   #174-6, Seokchon-Dong,
                                                   Songpa-Gu, Seoul, Korea

                                        Date:      10/5/99
                                                    ---------------------------

                                      -13-
<PAGE>

                                  SCHEDULE A

The Territory consists of the following areas only: South Korea

                                      -14-
<PAGE>

                                  SCHEDULE B

The attached price list is [*] As an example;

US Price = [*]

South Korea Price = [*]

The Representative Company can provide its customer [*]

The Representative Company shall update the attached US price list [*]

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

                                      -15-
<PAGE>

           VERISITY Korean Specman Price List - Revised Final Version

<TABLE>
<CAPTION>
Product Number          Product Name          List Price         Remarks
<S>                     <C>                    <C>               <C>
SM1000                  Specman Elite         [*]                Product Floating

SM1000T                 Node Transfer         [*]                Node Transfer

SM1000M                 Maintenance           [*]                1 Year Maintenance
</TABLE>

Specman Simulator Interfaces

<TABLE>
<S>                 <C>                              <C>
SM1021              Verilog XL interface             [*]

SM1022              Leapfrog interface               [*]

SM1023              QuickHDL interface               [*]

SM1024              Modelsim interface               [*]

SM1025              VSS interface                    [*]

SM1026              VCS interface                    [*]

SM1027              Speedsim interface               [*]

SM1028              NC Verilog interface             [*]
</TABLE>

[*]

<TABLE>
<S>               <C>                                                      <C>
SM1301            License upgrade to World wide--Wide Area Network         [*]

SML1012           [*]                                                      [*]

TR1000            Specman Basic Training Held at Verisity's headquarters   [*]
                  in Mt. View, CA
</TABLE>

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

                                      -16-
<PAGE>

                                  SCHEDULE C

I.  COMMISSION PERCENTAGES

    The commission percentages will be as follows:

          Business Year      Commission Rate                  Remarks
          -------------      ---------------                  -------
                         Products*   Maintenance*
                         ------------------------
          FY1999            [*]         [*]         Based on the final PO amount
          FY2000            [*]         [*]         Based on the final PO amount
          FY2001            [*]         [*]         Based on the final PO amount

          [*]

          [*]

    Over Achievement Incentive Plan Quarterly

          [*]

    Compensation after termination notice

          Order for 3 months          [*]Based on the final PO amount
          Order for 3 to 6 months     [*]Based on the final PO amount

          *Davan Tech will provide Verisity, at the time of termination, with a
    list of all ongoing sales activities which are anticipated to lead to orders
    within the next 6 months.

II. Sales Quarter
    (Required minimum order amounts stated in Net Revenues)

                      Fiscal Year                      Sales Quarter
                      -----------                      -------------
          1999:       July 1, 1999 Dec. 31, 1999            [*]
          2000:       Jan. 1, 2000-Dec. 31, 2000            [*]
          2001:       Jan. 1, 2001-Dec. 31, 2001            [*]

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

                                      -17-
<PAGE>

                                  SCHEDULE D

                  DEDUCTIONS AND ALLOWANCES FROM NET REVENUES

  (1) Deductions.  Shall include the following:
      ----------

      [*]

  (2) Allowances: Set-Offs and Charge-Backs.  Net Revenues shall not include any
      -------------------------------------
      revenues from the sale of any Product for which any of the following occur
      ("Allowances"):

      [*]

[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
                                      -18-
<PAGE>

                                  SCHEDULE E

             DEMONSTRATION PRODUCTS, CONFIGURATIONS AND DISCOUNTS

                                Not Applicable

                                      -19-
<PAGE>

                                  SCHEDULE F

                LIST OF APPROVED THIRD PARTY PRODUCTS OR LINES

                                Not Applicable

                                      -20-
<PAGE>

                                  SCHEDULE G

                         SOFTWARE EVALUATION AGREEMENT

This Software Evaluation Agreement (this "Agreement") is entered into as of
_____________ (the "Effective Date") by and between VERISITY Design, Inc.
("VERISITY") and Davan Tech ("Licensee").  The parties agree as follows, with
                 ----------
the capitalized terms not otherwise defined having the meaning given them in
Appendix A:

1.  License Rights
    --------------

    1.1    Licensed Programs. VERISITY hereby grants to Licensee a non-
exclusive, non-assignable, non-transferable right and license, without the right
to sublicense, (i) to use one copy of VERISITY LTD.'s proprietary software
product _________________ (the "Licensed Program") in object code form in
accordance with the documentation on a single computer located at Licensee's
facility in __________________________, solely for the purpose of evaluating the
VERISITY LTD. Technology, and (ii) to use one set of the Documentation at the
Processing Site in connection with the use of the Licensed Program.

    1.2    VERISITY Design Objects.  VERISITY hereby grants Licensee a non-
exclusive, non-assignable, non-transferable right and license, without right to
sublicense, (i) to use and incorporate VERISITY LTD.  Design Objects into
Licensee's integrated circuit designs solely for the purpose of evaluating the
VERISITY LTD. Technology, (ii) to use the VERISITY Technical Data in connection
with integration and verification of the VERISITY LTD.Design Objects and (iii)
to make, have made and test a reasonable number of Test Chips.  Nothing in this
Agreement shall be interpreted as giving Licensee any right to sell, license, or
otherwise distribute any integrated circuit design incorporating any of the
VERISITY LTD. Technology.

2.  Installation, Fees, and Support
    -------------------------------

    2.1    Initial Installation.  Within a reasonable time after VERISITY has
received from Licensee an executed copy of this Agreement, VERISITY will deliver
to Licensee the Licensed Program and the Documentation.  Licensee will install
the Licensed Program on the designated computer in accordance with the standard
installation procedures set forth in the Documentation.

    2.2    License Fee.  In consideration of the license rights granted herein,
Licensee agrees to pay to VERISITY a license fee of $____________ (the "License
Fee").  Payment of the License Fee will be due 30 days after date of invoice.

    2.3    Technical Support.  VERISITY will provide Licensee with technical
assistance in the installation and use of the VERISITY LTD. Technology and will
work

                                      -21-
<PAGE>

with Licensee to resolve with VERISITY any problems Licensee encounters in using
the VERISITY LTD. Technology.

3.  Restrictions
    ------------

    3.1    No Duplication, Modification or Reverse Engineering.  Except as
expressly authorized herein, Licensee may not (i) duplicate all or any portion
of the VERISITY LTD. Technology, (ii) modify the VERISITY LTD. Technology, or
(iii) incorporate any portion of the VERISITY LTD. Technology into any other
program or product.  Licensee acknowledges that VERISITY considers the source
code of the Licensed Program and its underlying algorithms to constitute
valuable trade secrets of VERISITY and, therefore, Licensee will not at any time
attempt to reverse engineer, disassemble, decompile or otherwise reduce the
Licensed Program or any component thereof to human-readable form, nor will
Licensee attempt to examine or copy, in whole or in part, any of the underlying
algorithms of the Licensed Program.

    3.2    Ownership.  Nothing in this Agreement shall affect the exclusive
ownership by VERISITY, or its licensors, of the VERISITY LTD. Technology or any
patents, trademarks, copyrights or other intellectual property rights pertaining
to the VERISITY LTD. Technology.  Licensee will not exceed the scope of the
licenses granted herein.

    3.3    U.S. Government Restricted Rights.  The VERISITY LTD. Technology is
provided with Restricted Rights.  Use, duplication, or disclosure by the U.S.
Government is subject to restrictions as set forth in subparagraph (c)(1)(ii) of
the Rights in Technical Data and Computer Software clause at DFARS 252.227-7013
or subparagraphs (c)(l) and (c)(2) of the Commercial Computer Software-
Restricted Rights at 48 CFR 52.227-19, as applicable.  Manufacturer is VERISITY
Design, Inc., whose address is 2041 Landing Drive, Mountain View, CA  94043.

4.  Limited Warranty
    ----------------

    4.1    Limited Warranty.  VERISITY warrants that the media on which the
VERISITY LTD. Technology is delivered will be free from defects in materials and
workmanship under normal use and service for a period of 30 days from the date
of delivery to Licensee.  Licensee's exclusive remedy and VERISITY's sole
obligation under this warranty shall be for VERISITY to redeliver on defect-free
media that portion of the VERISITY LTD. Technology that does not meet this
warranty.

    4.2    Warranty Exclusions.  Any unauthorized modification or attempted
modification of the VERISITY LTD. Technology by Licensee shall terminate the
warranty obligations of VERISITY under this Section 4.  VERISITY does not
warrant that the VERISITY LTD. Technology will meet Licensee's design
requirements, that it will operate in the combinations that may be selected for
use by Licensee, that the

                                      -22-
<PAGE>

operation of the VERISITY LTD. Technology will be uninterrupted or error-free,
or that any Test Chips will operate error-free or will be commercially
manufacturable.

    4.3    Warranty Disclaimer.  VERISITY'S ENTIRE LIABILITY AND LICENSEE'S
EXCLUSIVE REMEDY AS TO DEFECTS, PERFORMANCE, OR NONPERFORMANCE OF THE VERISITY
LTD. TECHNOLOGY AND THE DELIVERED MEDIA SHALL BE THE WARRANTIES AND REMEDIES SET
FORTH IN THIS SECTION 4, REGARDLESS OF THE THEORY OF CLAIM OR FORM OF ACTION.
THE WARRANTIES SET FORTH IN THIS SECTION 4 ARE THE ONLY WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, THAT ARE MADE BY VERISITY, AND VERISITY DISCLAIMS ALL
OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY, TITLE, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY VERISITY, ITS AGENTS, OR ITS
EMPLOYEES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THE
WARRANTIES IN THIS AGREEMENT.

5.  Limitation of Liability
    -----------------------

    5.1    VERISITY Liability.  NEITHER VERISITY NOR ANYONE ELSE WHO HAS BEEN
INVOVERSITYED IN THE CREATION, PRODUCTION OR DELIVERY OF THE VERISITY LTD.
TECHNOLOGY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, OR
INCIDENTAL DAMAGES (INCLUDING DAMAGES FOR LOST PROFITS, BUSINESS INTERRUPTION,
LOSS OF BUSINESS INFORMATION, COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES,
OR TECHNOLOGY, AND THE LIKE) ARISING OUT OF THIS AGREEMENT OR THE USE OF OR
INABILITY TO USE THE VERISITY LTD. TECHNOLOGY, EVEN IF VERISITY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.  IN NO CASE SHALL VERISITY'S AGGREGATE
LIABILITY FOR ALL MATTERS ARISING OUT OF THE SUBJECT MATTER OF THIS AGREEMENT,
WHETHER IN CONTRACT, TORT OR OTHERWISE, EXCEED THE LICENSE FEES PAID TO VERISITY
FOR THE VERISITY LTD. TECHNOLOGY.  LICENSEE ACKNOWLEDGES THAT THE FOREGOING
LIMITATION REFLECTS A BARGAINED-FOR ALLOCATION OF RISK AND THAT LICENSEE'S
AGREEMENT TO THE PROVISIONS OF THIS ARTICLE 5 IS A PRE-CONDITION TO AND A
MATERIAL INDUCEMENT FOR VERISITY TO ENTER INTO THIS AGREEMENT AND LICENSE THE
USE OF THE VERISITY LTD. TECHNOLOGY TO LICENSEE.

6.  Term and Termination
    --------------------

    6.1    Term of the Agreement. This Agreement will begin on the Effective
Date and expire at the end of ______ days unless it is terminated earlier in
accordance with Section 6.2 or renewed in accordance with Section 6.4.

    6.2    Early Termination.  VERISITY may terminate this Agreement if Licensee
commits any breach or default and fails to provide an acceptable remedy of such
breach within 10 days after receipt of written notice of such breach from
VERISITY.  Licensee

                                      -23-
<PAGE>

may terminate this Agreement at any time by returning the VERISITY LTD.
Technology to VERISITY.

    6.3    Upon Termination.  Upon termination of this Agreement, all licenses
granted to Licensee will be terminated.  Within ten days following the
termination, Licensee must return the original of the Licensed Program to
VERISITY and destroy and account for all copies thereof.

    6.4    Renewal.  Upon request of Licensee and a showing that additional time
is needed to fully evaluate the VERISITY LTD. Technology, VERISITY may, at its
option, extend this Agreement for up to 30 days.

    6.5    Survival. The rights and obligations of the parties under Sections 3,
4.3, 5.1, 6.3, 6.5, 7, 8, and 9 shall survive the expiration or termination of
this Agreement.

7.  Proprietary Information
    -----------------------

    7.1    Definition.  Proprietary Information of a party means information and
data in written, graphic or machine-readable form and marked "confidential" or
with a similar proprietary legend.  "Proprietary Information" of VERISITY
includes, regardless of form and without the necessity of any proprietary
legend, the VERISITY LTD. Technology.

    7.2    Obligation.  Each party shall use the same degree of care and
safeguards that it takes with its own Proprietary Information of a similar
nature, but in no event less than a reasonable degree of care (i) to prevent the
publication, communication, or dissemination of the Proprietary Information of
the other party to any third party and (ii) to prevent any use of such
Proprietary Information not authorized herein.  The obligations of this Section
7.2 will survive the termination or expiration of this Agreement and will expire
five (5) years from such termination or expiration.

    7.3    Exclusions.  The provisions of Section 7.2 will not apply to any
Proprietary Information of the disclosing party that:  (i) is known by the
receiving party without restriction prior to the time of disclosure; (ii) is
generally known and available in the public domain through no fault of the
receiving party; (iii) is developed independently by the receiving party using
no Proprietary Information of the disclosing party; or (iv) is rightfully
received by the receiving party without restriction from a third party that is
under no obligation of confidentiality; In addition, the receiving party may
disclose Proprietary Information of the disclosing party with the prior written
approval of the disclosing party or to a court or other government body of
competent jurisdiction when required to do so by such body provided it uses
reasonable efforts to give prompt prior notice to the disclosing party and to
limit disclosure to that which is legally required.

    7.4    Injunctive Relief. Each receiving party expressly agrees that
monetary damages would be inadequate to compensate the disclosing party for any
breach of any

                                      -24-
<PAGE>

provision of this Article 7, that any such breach or threatened breach will
cause irreparable injury to the other party, and that, in addition to any other
remedies that may be available to it in law or in equity, the disclosing party
shall be entitled to obtain injunctive relief against the threatened or
continuing breach of any provision of this Article 7 without the necessity of
proving actual damages.

8.  General
    -------

    8.1    Scope of Agreement; Amendment.  This Agreement is the complete and
exclusive statement of the agreement between the parties with respect to the
subject matter hereof and supersedes all other written or oral communications
between the parties with respect to the license and use of the VERISITY LTD.
Technology.  This Agreement may be amended only by a written document signed by
both parties.  The terms and conditions of this Agreement will not be modified
by any purchase order issued by Licensee in connection with its license of the
VERISITY LTD. Technology, even if such purchase order states that its terms
shall prevail.

    8.2    No Waiver.  Neither party will, by mere lapse of time, without giving
notice or taking other action, be deemed to have waived any breach by the other
party of any of the provisions of this Agreement.  Further, the waiver by either
party of a particular breach of this Agreement by the other will neither be
construed as nor constitute a continuing waiver of such breach or of other
breaches of the same or any other provision of this Agreement.

    8.3    Assignment.  Licensee represents that it is acting on its own behalf
and is not acting as an agent for or on behalf of any third party, and further
agrees that it may not assign its rights or obligations under this Agreement, by
operation of law or otherwise, without VERISITY's prior written consent, which
shall not be unreasonably withheld.

    8.4    Governing Law; Unenforceability.  All questions concerning the
validity, operation, interpretation, and construction of this Agreement will be
governed by and determined in accordance with the laws of the State of
California, without regard to its conflict of laws provisions.  The parties
agree that the United Nations Convention on Contracts for the International Sale
of Goods is specifically excluded from application to this Agreement.  If a
court of competent jurisdiction determines that any provision of this Agreement
is invalid, illegal, or otherwise unenforceable, such provision shall be
enforced as nearly as possible in accordance with the stated intention of the
parties, while the remainder of this Agreement shall remain in full force and
effect.  To the extent any provision cannot be enforced in accordance with the
stated intentions of the parties, such provision shall be deemed not to be a
part of this Agreement.

                                      -25-
<PAGE>

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above:

VERISITY Design, Inc.                        [Licensee]:

By: s/b Moshe Gavrielov                      By: /s/ indecipherable
   -----------------------------                ------------------------
Name:                                        Name:
Title:                                       Title:

                                      -26-
<PAGE>

                                  Appendix A

                                  Definitions

VERISITY Technical Data means all of the following, in whatever form, provided
by VERISITY to Licensee or generated by Licensee's use of the Licensed Program:
[*]

Documentation means VERISITY's standard user documentation for the Licensed
Program.

VERISITY LTD. Technology means the Licensed Program, the VERISITY Design
Objects, the VERISITY Technical Data and the Documentation.

Test Chip means [*]

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

                                      -27-
<PAGE>

                                  SCHEDULE H

                         TECHNOLOGY LICENSE AGREEMENT

                                      N/A

                                      -28-<PAGE>

                                                                   EXHIBIT 10.34
                                                                   -------------

                         Technology Exchange Agreement
           Addendum to Software License and Volume Purchase Agreement
            between LSI Logic Corporation and Verisity Design, Inc.

This Technology Exchange Agreement (Agreement) is effective January _1, 2000
                                                                     -
("Effective Date") between Verisity Design, Inc., a California corporation, with
its principal place of business at 2041 Landings Drive, Mountain View, CA 94043
(Verisity) and LSI Logic Corporation, a Delaware corporation, with its principal
place of business at 1551 McCarthy Boulevard, Milpitas California 95035 (LSI
Logic).

                                    RECITAL

This Agreement is made to supplement and modify that certain Software License
and Volume Purchase Agreement dated December 11, 1998 by and between the parties
(the "VPA").  The terms and conditions of the VPA are hereby incorporated by
reference.  Any conflicts between the VPA and this Agreement shall be resolved
in favor of this Agreement.

LSI Logic, through its wholly owned subsidiary Mint Technology, Inc. (Mint), has
developed Mintsim software tool consisting of the files set forth in Exhibit A
(Mintsim) for the purpose of enabling its customers to develop ASICs.  LSI Logic
wishes to provide a viable path for the Mint verification engineers to
transition Mintsim based environments to a commercially viable and broadly
supported solution at a rate commensurate with Mint's business requirements
(consistent with the emerging LSI Logic methodology flow) at low overall cost.

LSI Logic wishes to retain the benefits of the significant added-value elements
that exist in Mintsim today (e.g. multiple process simulation and scalability)
through enhancements to Specman Elite.

Verisity has developed an industry leading, fully productized, state of the art
functional verification tool suite, including Specman Elite, Invisible Specman,
IP Cover, and Verisity's proprietary "e" language.  Collectively, Invisible
Specman and IP Cover are referred to herein as the "Invisible Specman Package."

LSI Logic is in the business of manufacturing ASICs which are designed by LSI
Logic and/or its customers using intellectual property owned by or licensed to
LSI Logic, known as "Cores."

LSI desires to obtain additional licenses to Specman Elite (and enhanced
versions of Specman Elite).  In addition, LSI Logic desires to acquire a license
to the Invisible Specman Package and Verisity desires to grant such a license on
the terms and conditions set forth in this Agreement and the VPA.  LSI Logic
desires to grant limited sublicenses to the Invisible Specman Package to its
customers.  For the purposes of applying the terms and conditions of the VPA to
this Agreement, the Invisible Specman Package shall be deemed a "Licensed
Program" as that term is used in the VPA.

                                       1
<PAGE>

                                   AGREEMENT

The parties agree as follows:

1.  Ownership And License Rights For Mintsim.

    1.1 Ownership Rights. Upon the execution of this Agreement, LSI Logic will
sell, assign, and transfer to Verisity any and all of LSI Logic's right, title
and ownership interest to all current and prior versions of Mintsim software
(LSI warrants that Exhibit A lists all of the files contained in the Mintsim
software) and existing Mintsim documentation (collectively "Mintsim"), including
any and all domestic and foreign patents or patent applications concerning
Mintsim and any divisions, continuations, continuations-in-part, and continuing
prosecution applications and the inventions therein disclosed. LSI Logic agrees
to sign all papers, make all rightful oaths, and do all acts that may be
necessary in connection with perfecting the ownership transfer described in this
Section 1.1.

    1.2 License Rights. LSI Logic will retain a copy of the current version of
Mintsim in the form in which it is transferred to Verisity and will have a
perpetual, irrevocable, non-exclusive, worldwide, paid up right and license to
modify and use the retained version of Mintsim internally and in consulting
services engagements. For a period of one month after the execution of this
Agreement LSI Logic will also have the right to sell single seat licenses for
the retained version of Mintsim to those existing customers listed in Exhibit B,
under an "as-is" license agreement that (i) does not permit copying other than
for internal use, (ii) does not include any right to sublicense or otherwise
transfer Mintsim code to any third party other than to a consultant for use in
support of such customer's own ASIC development, and (iii) does not contain any
warranties or create any support obligations on the part of Verisity. LSI Logic
shall have no other right to license or distribute Mintsim software for
commercial use. Verisity shall have no warranty obligation or any obligation to
provide support services for Mintsim licensed or distributed at any time by LSI
Logic. LSI Logic will indemnify Verisity for any claims or damages that arise
out of any third party's claim for Mintsim support, or any claim by an LSI Logic
licensee or LSI Logic customer of Mintsim (including claims related to any third
party's allegation of infringement of intellectual property) provided that
Verisity promptly notifies LSI Logic of any third party claim or action, and
grants LSI Logic the sole control of the defense of any such action, including
all negotiations for its settlement or compromise.

    1.3 Non-infringement Warranty And Indemnity. LSI Logic represents and
warrants that it has the right, including all government consents and approvals,
to assign Mintsim on the terms and conditions set forth in this Agreement, and
that to the best of its knowledge Mintsim as assigned does not infringe, and has
not been accused of infringement of, any United States patent or copyright or
misappropriate any trade secret of a third party. LSI Logic does not represent
or warrant that Mintsim as assigned does not infringe any United States patent
or copyright or misappropriate any true secret of a third party. Notwithstanding
the foregoing, LSI Logic represents and warrants that those aspects of Mintsim
that LSI Logic requests Verisity to incorporate into Specman Elite do not
infringe any United States patent or copyright or misappropriate any trade
secret of a third party LSI Logic will indemnify and hold Verisity harmless from
and against all damages, liabilities, costs and expenses (including reasonable
fees of counsel and other professionals) incurred by Verisity arising out of a
breach of the warranty in

                                       2
<PAGE>

this Section 1.3, provided that Verisity promptly notifies LSI Logic of any
third party claim or action , and grants LSI Logic the sole control of the
defense of any such action, including all negotiations for its settlement or
compromise. If Verisity is a defendant in such action, it may participate at its
expense.

2.   1.4 No Other Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 1,
     MINTSIM AND THE ASSOCIATED DOCUMENTATION IS FURNISHED "AS IS." LSI LOGIC
     EXPRESSLY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY,
     AS TO ANY ASPECT OF MINTSIM OR ITS OPERATION, INCLUDING WITHOUT LIMITATION,
     WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, DESIGN,
     CONDITION, CAPACITY, PERFORMANCE, TITLE, AND NON-INFRINGEMENT OF THIRD
     PARTY RIGHTS.Specman Elite Technology Enhancement.

     2.1 Enhancements To Be Performed By Verisity. Verisity will enhance future
versions of Specman Elite to support the following key Mintsim features: (a)
multiple process simulation and scalability and (b) automatic mapping of
addresses to hardware accesses. Verisity will consider input from the Mintsim
user community in order to align the actual enhancements with the customer
needs. This enhanced version of Specman Elite will be referred to as Specman
Plus. Specman Plus will be owned solely and completely by Verisity. LSI Logic
will allocate key Mint personnel as required for providing definition of Mintsim
related enhancements for Specman Plus as set forth in Section 3.2.

     2.2 LSI Logic Input And Access To Specman Development. LSI Logic will have
the opportunity to provide inputs to and promptly be appraised of future Specman
product family development plans through an interface in regular meetings with a
senior Verisity engineer who is knowledgeable concerning Verisity's Specman
development plans going forward. LSI Logic will be provided with early access to
Specman "beta" code as soon as it is available.

3.   Support And Transition Of Mintsim To Specman Plus.

     3.1 Transition Plan Development. Verisity will work closely with LSI Logic
to build and execute a robust plan for the transition of Mintsim features to
Specman Plus. Key Mint personnel designated by LSI Logic will meet with Verisity
on a quarterly basis, as required, for the purpose of providing inputs for the
definition of Mintsim related enhancements for Specman Plus. Unless otherwise
agreed to by LSI Logic, the quarterly review will be held at the Mint facility
in Massachusetts.

     3.2 Consulting Services For Transition. In order to assist LSI Logic in its
transition from Mintsim to Specman Plus, Verisity may offer consulting services
to certain designated Mint engineers on how they might develop an applications
envelope that will reside on top of Specman Plus and will support the basic Mint
Julep API (Poke, Peek, SetEvent, etc.) and on how they might generate a Mint
specific customized version of Verification Advisor (Verisity's HTML based
verification knowledge transfer system) that reflect the recommended LSI Logic
and Mint verification methodologies. Verisity's consulting services to
designated Mint engineers

                                       3
<PAGE>

will be available for up to 10 person days within the first 180 days after the
Effective Date of this Agreement.

     3.3 Product Promotion. LSI Logic will actively promote Specman Plus to Mint
customers following its production release.

4.  Specman Elite License Purchases.

     4.1 Quantity Of Licenses. Subject to LSI Logic's compliance with the terms
and obligations of this Agreement, Verisity shall grant to LSI Logic the
following licenses:

         4.1.1 In the first year of this Agreement (i.e., for a period of one
year following the Effective Date) LSI Logic will have a cumulative total of [*]
nonexclusive, nontransferable, worldwide Specman Elite licenses for the term
specified below (which total includes licenses previously purchased by LSI Logic
prior to this Agreement ("Pre-existing Licenses").

         4.1.2 LSI Logic will have a cumulative total of [*] licenses during the
second year (i.e., an additional [*] licenses).

         4.1.3 LSI Logic will have a cumulative total of [*] licenses in the
third year.

     4.2 These Specman Elite licenses can be upgraded, [*], to Specman Plus when
it becomes available.

5.  Terms Of The Specman Elite Licenses.

     5.1 Specman Elite is a Licensed Program for the purposes of applying the
terms of the VPA.

     5.2 In addition to the terms of the VPA, and subject to LSI Logic's
compliance with the terms and obligations of this Agreement, LSI Logic may make
its licensed copies of Specman Elite available for LSI Logic internal use by its
subsidiaries, development groups, field organizations and authorized
distributors. In addition, Specman Elite may be used in providing consulting
services to Mint customers. Usage of Specman Elite at Mint customer sites as
part of consulting engagements will be permitted under one of the following
paradigms, at the discretion of LSI Logic:

         5.2.1 Projects done exclusively by Mint personnel with no access to the
software by Mint customers.

         5.2.2 Projects done primarily by Mint personnel with limited customer
access both in terms of the duration and the number of customers allowed access
to the Specman tool. Such customer access will be only for the purpose of that
customer's assistance to Mint personnel.

         5.2.3 Projects done by a combination of Mint personnel and Mint's
customers. In cooperative projects of this nature the Mint engineers will have
access both to the customers'

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

                                       4
<PAGE>

and to LSI Logic's Specman tools. The customer engineers will have access only
to their own Specman licenses. LSI Logic, at its discretion, may refer its
customers to Verisity for purchases of Specman Licenses from Verisity [*]. The
training of the Mint customer engineers will be done by Verisity's trainers.

     5.3 Any copy of Specman Elite that will be accessed by a Mint customer must
be hosted at that customer's site. Under no circumstances will a customer be
permitted to remotely access a copy of Specman Elite at any other site. Any
third party gaining access to any copy of a Licensed Program licensed to LSI
Logic must be bound to confidentiality agreements no less protective of
Verisity's intellectual property than this Agreement. LSI Logic will indemnify
Verisity for any damages that arise out of the failure of any third party to
whom LSI Logic gives such access to comply with such confidentiality agreements.

     5.4 Each individual license may be re-hosted up to two times each year to
facilitate the transfer of Specman licenses between Mint project engagements. In
addition a steering team consisting of an executive from LSI Logic and from
Verisity will meet as necessary, but not less than once per year, to review the
license usage model and rehosting restrictions described above.

6.   Invisible Specman Package License Purchases.

     6.1 Quantity Of Licenses. Subject to LSI Logic's compliance with the terms
and obligations of this Agreement, Verisity shall grant to LSI Logic the
following licenses:

         6.1.1 In the first year of this Agreement (i.e., for a period of one
year following the Effective Date) LSI Logic will have a cumulative total of [*]
nonexclusive, nontransferable, worldwide Invisible Specman Package licenses for
the term specified below (i.e, [*] Invisible Specman Package used to wrap each
of [*] different Cores). LSI Logic may use the Cores wrapped with an Invisible
Specman Package to a maximum of [*] uses on Customer projects. Each type of
wrapped Core used in a project shall count as a separate use on a Customer
project, but multiple uses of a single type of wrapped Core on a Customer
project shall only count as one use. A "Respin," i.e., an interim product in
which certain previously identified errors in a product have been corrected,
will not be counted against the total number of allowed projects (so long as the
initial version of that project is counted). A "Revision," i.e., an updated
version of a Core with certain new functions and/or features, will be counted
against the total number of allowed Cores if the original version of the Core is
not replaced by the Revision in all projects.

               (a) A "Customer" is a purchaser, assignee, licensee, or
transferee of an integrated circuit device or integrated circuit design
services. Customers may include "LSI Logic Affiliates" which include
subsidiaries and affiliates of LSI Logic in which LSI Logic owns at least 50% of
the outstanding voting securities. Customers do not include, and LSI Logic may
not sublicense the Invisible Specman Package to, the EDA companies listed in
Exhibit C ("Competitors"). Verisity may add additional EDA companies to the list
of Competitors at any time upon written notice.

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

                                       5
<PAGE>

         6.1.2 LSI Logic will have a cumulative total of [*] Invisible Specman
Packages during the second year (i.e.,an additional [*] Packages). These
Invisible Specman Packages can be used on [*] additional Customer projects.

         6.1.3 LSI Logic will have a cumulative total of [*] Invisible Specman
Packages during the third year. These Invisible Specman Packages can be used on
[*] additional Customer projects.

7.   Terms Of The Invisible Specman Package Licenses.

     7.1 The Invisible Specman Package is a Licensed Program for the purposes of
applying the terms of the VPA. Notwithstanding anything in this Agreement or the
VPA to the contrary, Sections 1(a) and 1(b) of the VPA do not apply to the
Invisible Specman Package.

     7.2 License. LSI Logic (including Mint) may only use the Invisible Specman
Package to verify that it performs satisfactorily with a Core or to verify the
integration of a Core in a Customer design, provided that: (i) LSI Logic's use
of the Invisible Specman Package is confined to a client workstation or computer
owned or leased by LSI Logic; and (ii) LSI Logic makes no use of the Invisible
Specman Package for other than those specifically allowed above and, except as
allowed above, will not make any use thereof to offer the benefits or services
of the Invisible Specman Package to third parties, whether such arrangement is
in the nature of a service bureau, out-sourcing service, joint development
relationship or any other similar service or business. LSI Logic may make and
hold two copies of the Invisible Specman Package for temporary backup use and/or
archival purposes. All of LSI Logic's rights to use the Invisible Specman
Package are expressly stated herein; there are no implied rights.

     7.3 Subject to LSI Logic's compliance with the terms and conditions of this
Agreement, Verisity grants to LSI Logic, and LSI Logic accepts from Verisity the
right to grant sublicenses to a Customer, in conjunction with a product, subject
to the following:

         7.3.1 The Customer must agree to be bound by the terms and conditions
of a sublicense agreement substantially in the form of the Software Sublicense
Agreement attached hereto as Exhibit D. Any modifications to that form must be
pre-approved by Verisity.

         7.3.2 LSI Logic will provide Verisity with the company name, address
and contact name for the person responsible for integrating the Core into a
customer design (collectively "Contact Information") for the Customer.

8.   Verification Advisor License Purchases And Terms.

     8.1 Verification Advisor is a Licensed Program for the purposes of applying
the terms of the VPA.

     8.2 Subject to LSI Logic's compliance with the terms and obligations of
this Agreement, Verisity shall grant to LSI Logic one nonexclusive,
nontransferable, worldwide, paid up license to Verification Advisor (for the
term specified below) for each Specman Elite license. The

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

                                       6
<PAGE>

license will include the right to generate and use customized versions of
Verification Advisor that reflect the recommended LSI Logic and Mint
verification methodologies.

9.   Additional License Purchases.

     9.1 In the event that expanded usage of Specman Elite/Specman Plus and
Invisible Specman Package beyond the initial program is required by LSI Logic,
LSI Logic may purchase additional licenses in the following bundled increments:

         9.1.1 [*]

         9.1.2 [*]

         9.1.3 [*]

10.  Maintenance.

     10.1 Provided LSI Logic is current on all fees due under this Agreement,
Verisity will perform the technical support and maintenance services described
in the VPA at no additional cost. Additional services will be charged as
described in this Agreement or otherwise negotiated. As of the Effective Date,
maintenance for the Pre-existing Licenses will be provided during the term of
this Agreement as partial consideration for the fees paid pursuant to this
Agreement. The remaining balance of any maintenance due under the VPA will be
tolled during the term of this Agreement. Upon termination of this Agreement,
Verisity will continue to provide maintenance for the Pre-existing Licenses for
the balance of any maintenance period remaining pursuant to the VPA.

11.  Training.

     11.1 [*]

12.  Term.

     12.1 Sections 6(a), 6(b), and 6(c) of the VPA do not apply to the term of
this Agreement.

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

                                       7
<PAGE>

     12.2 The term of the Agreement and the licenses granted herein shall be
three years from the Effective Date upon payment of the license fees described
herein. The term of any Pre-existing License is governed by the VPA.

     12.3 Either party may terminate this Agreement if the other party fails to
perform any of its material obligations hereunder or otherwise materially
breaches this Agreement and fails to effect the cure of such failure or breach
within 30 days after written notice thereof.

13.  License Fees.

     13.1 Payments By LSI Logic. [*]

     13.2 Payments By Verisity. [*]

14.  Reversion Of Mintsim To LSI Logic.

     14.1 [*]

15.  Press Release.

     15.1 LSI Logic and Verisity will issue one joint press release to announce
LSI Logic joining the Verisity Pure IP program. A second joint press release
will be made to announce broad adoption of Specman technology by Mint at a
mutually agreed upon time.

16.  Miscellaneous.

     16.1 Applicability Of Agreement. The terms of this Agreement extend to Mint
as an integral part of LSI Logic.

     16.2 Additional Licenses. It is anticipated that the LSI Logic may desire
to acquire one or more additional licenses to the Licensed Programs. Any such
additional license will be governed by the terms and conditions of this
Agreement absent a written agreement clearly modifying the terms of this
Agreement and executed by both parties.

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

                                       8
<PAGE>

     16.3 Assignment. Except for assignment or transfer to an LSI Logic
Affiliate as part of a corporate reorganization, LSI Logic shall not have the
right to assign or otherwise transfer its rights or obligations under this
Agreement. Any assignment by LSI Logic to an LSI Logic Affiliate that will
materially change Verisity's duties or materially increase the burden or risk
imposed upon Verisity by this Agreement is prohibited unless pre-approved by
Verisity. Verisity shall have the right to assign or otherwise transfer its
rights together with all obligations under this Agreement only as a result of a
business combination including, without limitation, merger, acquisition or
otherwise in which all or substantially all of the assets and liabilities of
Verisity are acquired. Any prohibited assignment shall be void and of no effect.
Notwithstanding the foregoing, this Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto

  IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Agreement as of the date first written above.

LSI Logic CORPORATION               Verisity DESIGN, Inc.

By: /s/ Daniel M. Weep               By: /s/ Moshe Gavrielov
    ----------------------               --------------------------

Name: Daniel M. Weep                 Name: Moshe Gavrielov
      --------------------                 ------------------------

Title: VP WW Customer Eng            Title: CEO - Verisity Ltd.
       -------------------                  -----------------------

Date:   8 Feb 2000                   Date: 17 Feb 2000
      --------------------                 ------------------------

                                       9
<PAGE>

                                   EXHIBIT A

                            FILES COMPRISING MINTSIM

                                       10
<PAGE>

                                    EXHIBIT B

                         LIST OF EXISTING MINT CUSTOMER

                                      [*]

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

                                       11
<PAGE>

                                   EXHIBIT C

                              VERISITY COMPETITORS

[*]

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

                                       12
<PAGE>

                                   Exhibit D
                         Software Sublicense Agreement

Verisity Design, Inc., a California corporation, and/or its affiliates
("Verisity") is the creator and owner of (1) certain software programs generally
known as Invisible Specman and IP Cover, (2) Verisity's proprietary "e"
language, and (3) any associated documentation (collectively the "Invisible
Specman Package").  This Software Sublicense Agreement is made between you
(either the individual or a single entity referred to herein as "Customer") and
the party from whom you are sublicensing the Invisible Specman Package (the
"Licensee").  If this sublicense has been made to an entity (i.e., a
partnership, limited liability company, company, corporation, or other legal
entity), you are also representing that you have authority to enter into this
Software Sublicense Agreement on behalf of that entity.

IF YOU DO NOT AGREE TO EITHER THIS SOFTWARE SUBLICENSE AGREEMENT, OR THE END
USER SUBLICENSE AGREEMENT THAT IS INCLUDED WITH THE INVISIBLE SPECMAN PACKAGE,
YOU WILL HAVE NO RIGHT TO USE THE SOFTWARE FOR ANY REASON.

TO USE THE INVISIBLE SPECMAN PACKAGE, YOU MUST OBTAIN A SOFTWARE KEY FROM EITHER
VERISITY OR THE LICENSEE.

Background
----------

A.   Licensee has granted Customer limited rights in its intellectual property
(the "Core") for use in integrated circuits or systems design, testing and
manufacture.

B.   Customer desires to acquire a limited sublicense to the Invisible Specman
Package.

NOW THEREFORE, the parties agree as follows:

                                   ARTICLE I
                                  Sublicense.

     1.1 Sublicense. Subject to Customer's compliance with the terms and
         ----------
conditions of this Agreement, Licensee grants to Customer a nonexclusive,
nontransferable sublicense to use the Invisible Specman Package solely for
verifying the integration of a Core in a Customer design ("Design"). Customer
shall make no use of the Invisible Specman Package for other than its intended
use, and shall not use the Invisible Specman Package to verify any Core or
Design or make any use thereof to offer the benefits or services of the
Invisible Specman Package to third parties, whether such arrangement is in the
nature of a consultant, contractor, service bureau, out-sourcing service, joint
development relationship or any other similar service or business. If Customer
does not agree to the terms of this Agreement, Customer is not granted a
sublicense hereby, and customer may not use the Invisible Specman Package for
any purpose. Customer's use of the Invisible Specman Package indicates
Customer's agreement to be bound by the terms of this Agreement.

                                       13
<PAGE>

                                   ARTICLE II
                            Additional Restrictions.

     2.1  Customer may not use, copy, modify, display, sublicense or print the
Invisible Specman Package, in whole or in part, except as expressly provided in
this Agreement. Without limiting the generality of the foregoing, Customer shall
abide by the following additional restrictions on the use and copying of the
Invisible Specman Package:

     (a) No Modification. Customer shall not make any modification to, or
         ---------------
adaptation of, the Invisible Specman Package nor merge it into any other
programs or other materials. Customer shall have no access to, or rights or
license to modify, the source code for the Invisible Specman Package. Customer
shall not attempt, or allow others under its control to attempt, to obtain or
derive information from or about the Invisible Specman Package through
disassembly, decompiling, reverse engineering or other means.

     (b) Markings. All titles, trademarks, copyright notices and other
         --------
proprietary markings must be reproduced on all permitted copies of the Invisible
Specman Package. Customer shall not remove such titles, trademarks, copyright
notices or other proprietary markings.

                                  ARTICLE III
                              Proprietary Matters.

     3.1 Ownership. Customer acknowledges that as between Customer, Licensee and
         ---------
Verisity, the present and all subsequent versions of Invisible Specman Package,
including all associated copyrights, patents, trademarks, trade secrets and
other intellectual property and proprietary rights with respect thereto, are,
and at all times shall be, the sole property of Verisity and its licensors, even
if suggestions made by Customer are incorporated into subsequent versions of the
Invisible Specman Package or associated documentation.

     3.2 Unless governed by another agreement, all material, information, or
other communications submitted to Verisity or Licensee by Customer
("Communications") shall be considered non-confidential and non-proprietary.
Verisity and Licensee shall have no obligations with respect to the
Communications. Verisity, Licensee, and their designees shall be free to copy,
disclose, distribute, incorporate, and otherwise use the Communications and all
data, formulae, images, sounds, text, and other things embodied therein for any
and all purposes.

                                   ARTICLE IV
                             Term and Termination.

     4.1 License Term. Subject to the terms of this Agreement, the term of the
         ------------
sublicense granted hereunder is co-extensive with the Customer's right to verify
the integration of a product in a Design.

                                       14
<PAGE>

     4.2 Termination. Verisity may terminate this sublicense at any time for its
         -----------
convenience and in its sole discretion. Verisity shall provide notice of
termination by mail, certified mail, e-mail, facsimile, or any other reasonable
method and such notice shall be effective upon sending. Any form of notice shall
be sufficient upon actual receipt. With the exception of Article 1, all terms of
this Agreement shall survive termination.

     4.3 Return of Invisible Specman Package. Upon termination, Customer shall
         -----------------------------------
make no further use of the Invisible Specman Package; and, within 10 days after
such termination, Customer shall either destroy or return to Licensee the
originals and all copies of the Invisible Specman Package in the possession or
under the control of Customer. The foregoing obligations apply to copies of the
Invisible Specman Package in all forms, partial and complete, in all types of
media and computer memory, and whether or not modified or combined with other
materials.

                                   ARTICLE V
                                  Disclaimer.

5.1  THE INVISIBLE SPECMAN PACKAGE IS PROVIDED "AS IS," AND LICENSEE AND
VERISITY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN,
CONDITION, CAPACITY, PERFORMANCE, TITLE, AND NON-INFRINGEMENT OF THIRD PARTY
RIGHTS (INCLUDING INTELLECTUAL PROPERTY RIGHTS).  IN NO EVENT SHALL VERISITY,
LICENSEE OR THEIR SUPPLIERS BE LIABLE FOR ANY DAMAGES WHATSOEVER ARISING OUT OF
THE USE OR INABILITY TO USE THE INVISIBLE SPECMAN PACKAGE, INCLUDING LOSS OF
PROFITS, BUSINESS INTERRUPTION, LOSS OF REVENUES, LOSS OF SAVINGS, LOSS OF USE,
LOSS OR CORRUPTION OF DATA OR ANY DIRECT, GENERAL, INDIRECT, INCIDENTAL,
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER UNDER NEGLIGENCE,
TORT, CONTRACT OR OTHER THEORIES OF RECOVERY, EVEN IF VERISITY HAD BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.  NEITHER VERISITY NOR LICENSEE WARRANT THE
ACCURACY OR COMPLETENESS OF THE INFORMATION, TEXT, GRAPHICS, FORMULAE, LINKS, OR
OTHER ITEMS CONTAINED WITHIN THE INVISIBLE SPECMAN PACKAGE.  CUSTOMER ASSUMES
ANY AND ALL RISKS ASSOCIATED WITH THE USE OF THE INVISIBLE SPECMAN PACKAGE
REGARDLESS OF WHETHER SUCH RISKS ARE FORESEEABLE.  CUSTOMER EXCLUSIVELY BEARS
FULL AND COMPLETE LIABILITY AND RESPONSIBILITY FOR ITS USE AND RELIANCE ON THE
INVISIBLE SPECMAN PACKAGE, EVEN IF SUCH USE WERE TO PRODUCE INCORRECT
INFORMATION OR ERRONEOUS RESULTS.

                                       15
<PAGE>

                                   ARTICLE VI
                                    Updates

     6.1 Verisity may make changes to the Invisible Specman Package at any time
without notice to the Customer. Verisity makes no commitment to update the
Invisible Specman Package. Verisity has no obligation to provide any updates to
Customer at any time. Any updates shall be delivered (if at all) to Customer by
the Licensee. Any updates shall be covered by this Agreement.

                                  ARTICLE VII
                         Entire Agreement; Amendments.

     7.1 This Agreement constitutes the entire agreement of the parties
concerning the subject matter hereof, superseding all prior and contemporaneous
proposals, negotiations, communications and agreements, written or oral, with
respect to the subject matter of this Agreement. No representation or promise
relating to and no amendment or modification of this Agreement shall be binding
unless it is in writing and signed by an authorized representative of each
party.

                                  ARTICLE VIII
                                  Assignment.

     8.1 Except as specifically provided for herein, neither this Agreement, nor
any right or license under this Agreement, nor any Invisible Specman Package,
may be assigned, sublicensed, distributed, sold, rented, leased or otherwise
transferred by Customer to a third party.

                                   ARTICLE IX
                     Governing Law; Captions; Waiver; Etc.

     9.1 This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of California. The parties stipulate that all
litigation under this Agreement not subject to the Arbitration requirement below
will be brought in the state courts of Santa Clara County, California, or, for
matters involving federal jurisdiction, in the United States District Court for
the Northern District of California, and the parties each hereby submit to the
personal jurisdiction of such courts. If Customer is located outside of the
territory of the United States of America, the parties agree that the United
Nations Convention on Contracts for the International Sale of Goods shall not
govern this Agreement, the rights and obligations of the parties hereunder, nor
any agreement that may be executed to implement this Agreement. No waiver by
Verisity of any breach of any provision of this Agreement shall constitute a
waiver of any other breach of that or any other provision of this Agreement. In
the event that any of the

                                       16
<PAGE>

provisions contained in this Agreement are held to be unenforceable, such
provisions shall be narrowed (or deleted if necessary) to the minimum extent
necessary to make them enforceable.

                                   ARTICLE X
                            Third Party Beneficiary.

     10.1 Verisity is an intended third party beneficiary of this Agreement, and
is entitled to enforce the terms hereof as if a party hereto.

                                       17

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