Document:

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                                                                  EXHIBIT 10.75

                                                                 [JPMORGAN LOGO]

JPMorgan Chase Bank
P.O. Box 161
60 Victoria Embankment
London EC4YO JP
England

                                                          August 11, 2003

To: CADENCE DESIGN SYSTEMS, INC.
2655 Seely Avenue
San Jose, CA 95134
Attention: Treasurer
Telephone No.: (408) 943-1234
Facsimile No.: (408) 943-0513

Re: Call Option Transaction

Reference:

         The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMORGAN CHASE BANK, LONDON
BRANCH ("JPMORGAN") AND CADENCE DESIGN SYSTEMS, INC. ("COUNTERPARTY") on the
Trade Date specified below (the "TRANSACTION"). This letter agreement
constitutes a "Confirmation" as referred to in the ISDA Master Agreement
specified below. This Confirmation shall replace any previous letter and serve
as the final documentation for this Transaction.

         The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "EQUITY DEFINITIONS"), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. Certain
defined terms used herein have the meanings assigned to them in the Offering
Memorandum dated August 11, 2003 (the "OFFERING MEMORANDUM") relating to the USD
350,000,000 principal amount of Zero Coupon Zero Yield Senior Convertible Notes
due August 15, 2023, (the "CONVERTIBLE NOTES") issued by the Counterparty
pursuant to an Indenture to be dated August 15, 2003 between Counterparty and
J.P. Morgan Trust Company, National Association, as trustee (the "INDENTURE").
In the event of any inconsistency between the terms defined in the Offering
Memorandum and this Confirmation, the Confirmation shall govern.

         Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon the
parties' entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.

1.       This Confirmation evidences a complete and binding agreement between
JPMorgan and the Counterparty as to the terms of the Transaction to which this
Confirmation relates. In addition, JPMorgan and the Counterparty agree to make
all reasonable efforts to promptly negotiate, execute, and deliver an agreement
in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
"AGREEMENT"), with such modifications as JPMorgan and the Counterparty will in
good faith agree together with related schedules. Upon the execution by JPMorgan
and the Counterparty of such an agreement, this Confirmation will supplement,
form a apart of, and be subject to, that agreement. All provisions contained or
incorporated by reference in that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until JPMorgan and the
Counterparty execute such agreement, this Confirmation, together with all other
documents referring to an Agreement (each a "CONFIRMATION") confirming
transactions (each a "TRANSACTION") entered into between JPMorgan and the
Counterparty (notwithstanding

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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                                                                 [JPMORGAN LOGO]

anything to the contrary in a Confirmation), shall supplement, form a part of,
and be subject to an agreement in the form of the Agreement as if JPMorgan and
the Counterparty had executed an agreement in such form (but without any
Schedule except for the election of the laws of the State of New York as the
governing law and United States dollars as the Termination Currency and Second
Method and Loss as the payments on early termination) on the Trade Date of the
first such Transaction between JPMorgan and the Counterparty. In the event of
any inconsistency between provisions of that agreement and this Confirmation,
this Confirmation will prevail for the purpose of the Transaction to which this
Confirmation relates. The parties hereby agree that if they have not executed an
Agreement within 60 days from the Trade Date it shall constitute an Additional
Termination Event under the Agreement in respect of which the Counterparty is
the sole Affected Party and this Transaction is the sole Affected Transaction.

2.         The terms of the particular Transaction to which this Confirmation
relates are as follows:

General Terms:

         Trade Date:                          August 11, 2003

         Option Style:                        "Modified American", as set forth
                                              under "Exercise and Valuation"
                                              below

         Option Type:                         Call

         Buyer:                               Counterparty

         Seller:                              JPMorgan

         Shares:                              The common stock of Counterparty,
                                              par value USD 0.01 per Share
                                              (Exchange symbol "CDN")

         Number of Options:                   A number equal to the Conversion
                                              Rate (as defined in the Offering
                                              Memorandum, but without regard to
                                              Section 13.08 and Section 13.13 of
                                              the Indenture), multiplied by the
                                              number of USD 1,000 principal
                                              amount of Convertible Notes (each
                                              such USD 1,000 principal amount, a
                                              "CONVERTIBLE NOTE")

         Option Entitlement:                  One Share per Option

         Strike Price:                        USD 15.65

         Premium:                             USD 110,998,055

         Premium Payment Date:                August 15, 2003

         Exchange:                            The New York Stock Exchange

         Related Exchange(s):                 The principal exchange(s) for
                                              options contracts or futures
                                              contracts, if any, with respect to
                                              the Shares

Exercise and Valuation:

         Exercise Period:                     Notwithstanding the Equity
                                              Definitions, the Exercise Period
                                              shall be, in respect of the
                                              Exercise Options, each

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       2
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                                                                 [JPMORGAN LOGO]

                                              period commencing from the date a
                                              Notice of Conversion is submitted
                                              to the Counterparty by a holder of
                                              Convertible Notes to and including
                                              the third Exchange Business Day
                                              following the Conversion Date for
                                              such Convertible Notes. For the
                                              avoidance of doubt, only a number
                                              of options equal to the Exercise
                                              Options shall be exercisable
                                              hereunder, and only during the
                                              Exercise Period for such Exercise
                                              Options.

         Exercise Options:                    A number of Options equal to the
                                              Conversion Rate (but without
                                              regard to any adjustment under
                                              Section 13.08 and Section 13.13 of
                                              the Indenture) of Convertible
                                              Notes surrendered to Counterparty
                                              for conversion times the number of
                                              such Convertible Notes.

         Expiration Time:                     The Valuation Time

         Expiration Date:                     In respect of any Exercise
                                              Options, the earlier of August 15,
                                              2008 and the final day of the
                                              Exercise Period in respect of such
                                              Exercise Options.

         Multiple Exercise:                   Applicable; and means that
                                              Counterparty may exercise, with
                                              respect to an Exercise Period and
                                              the Exercise Options relating to
                                              such Period, a number of Options
                                              not less than one (1) and not
                                              greater than such Exercise
                                              Options.

         Automatic Exercise:                  Applicable; and means that a
                                              number of Options not previously
                                              exercised hereunder equal to the
                                              Exercise Options shall be deemed
                                              to be exercised on the Expiration
                                              Date for the Exercise Period
                                              relating to such Exercise Options;
                                              provided that Counterparty has
                                              notified JPMorgan (in writing or
                                              orally) of the Conversion Date and
                                              the number of such Exercise
                                              Options one Exchange Business Day
                                              prior to such Expiration Date.

         Valuation Time:                      At the close of trading of the
                                              regular trading session on the
                                              Exchange

Settlement Terms:

         Physical Settlement:                 Applicable; provided that if and
                                              to the extent Counterparty is
                                              required to deliver cash in lieu
                                              of fractional Shares (or any
                                              fractional Shares) with respect to
                                              the settlement of Convertible
                                              Notes, the Calculation Agent shall
                                              adjust the settlement terms
                                              hereunder to account for delivery
                                              by JPMorgan to Counterparty of
                                              such cash or fractional Shares in
                                              the amount of such required
                                              delivery obligation.

         Settlement Date:                     For any Exercise Options relating
                                              to the conversion of Convertible
                                              Notes, the settlement date for
                                              Shares to be

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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                                                                 [JPMORGAN LOGO]

                                              delivered under such Convertible
                                              Notes under the terms of the
                                              Indenture.

         Failure to Deliver:                  Applicable

3. Additional Terms applicable to the Transaction:

   Adjustments applicable to the Transaction:

    Potential Adjustment Events:              Notwithstanding Section 9.1(e) of
                                              the Equity Definitions, a
                                              "Potential Adjustment Event" means
                                              any occurrence of any event or
                                              condition, as set forth in Section
                                              13.06 of the Indenture that would
                                              result in an adjustment to the
                                              Conversion Rate of the Convertible
                                              Notes; provided that in no event
                                              shall there be any adjustment
                                              hereunder as a result of an
                                              adjustment to the Conversion Rate
                                              pursuant to Section 13.08 and
                                              Section 13.13 of the Indenture.

    Method of Adjustment:                     Calculation Agent Adjustment, and
                                              means that, notwithstanding
                                              Section 9.1(c) of the Equity
                                              Definitions, upon any adjustment
                                              to the Conversion Rate of the
                                              Convertible Notes pursuant to the
                                              Indenture (other than Section
                                              13.08 and Section 13.13 of the
                                              Indenture), the Calculation Agent
                                              will make a corresponding
                                              adjustment to any one or more of
                                              the Strike Price, Number of
                                              Options, the Option Entitlement
                                              and any other variable relevant to
                                              the exercise, settlement or
                                              payment for the Transaction.

Extraordinary Events applicable to the Transaction:

         Merger Events:                       Notwithstanding Section 9.2(a) of
                                              the Equity Definition, a "Merger
                                              Event" means the occurrence of any
                                              event or condition set forth in
                                              Section 8.01 of the Indenture.

         Consequence of Merger Events:        Notwithstanding Section 9.3 of the
                                              Equity Definition, upon the
                                              occurrence of a Merger Event, the
                                              Calculation Agent shall make a
                                              corresponding adjustment in
                                              respect of any adjustment under
                                              the Indenture to any one or more
                                              of the nature of the Shares,
                                              Strike Price, Number of Options,
                                              the Option Entitlement and any
                                              other variable relevant to the
                                              exercise, settlement or payment
                                              for the Transaction.

Additional Termination Events:            If an event of default with respect to
                                          Counterparty shall occur under the
                                          terms of the Convertible Notes as set
                                          forth in Section 5.01 of the
                                          Indenture, then such event shall
                                          constitute an Additional Termination
                                          Event applicable to this Transaction
                                          and, with respect to such event (i)
                                          Counterparty shall be deemed to be
                                          Affected Party and JPMorgan shall be
                                          deemed to be the party that is not the
                                          Affected Party and (ii) JPMorgan shall
                                          be the party entitled to designate an
                                          Early Termination Date pursuant to
                                          Section 6(b) of the Agreement.

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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                                                                 [JPMORGAN LOGO]

Payments on Early Termination:                Second Method and Loss

  4. Calculation Agent:                       JPMorgan, whose calculations and
                                              determinations shall be made in
                                              good faith and in a commercially
                                              reasonable manner, including with
                                              respect to calculations and
                                              determinations that are made in
                                              its sole discretion.

  5. Account Details:

         (a)      Account for payments to Counterparty:

                  Cadence Design Systems, Inc.
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________

                  Account for delivery of Shares to Counterparty:

                  Mellon Investor Services
                  235 Montgomery Street, 23rd Floor
                  San Francisco, CA 94104
                  Cadence Design Systems Book Memo Treasury Reserve Account
                  Comment: When you are ready to deliver shares contact Cadence
                  FIRST.

         (b)      Account for payments to JPMorgan:

                  JPMorgan Chase Bank, New York
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________

                  Account for delivery of Shares from JPMorgan:

                  DTC 060

  6. Offices:

The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is
not a Multibranch Party.

The Office of JPMorgan for the Transaction is: New York

                  JP Morgan Chase Bank
                  London Branch
                  P.O. Box 161
                  60 Victoria Embankment
                  London EC4Y 0JP, England

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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<PAGE>

                                                                 [JPMORGAN LOGO]

  7. Notices: For purposes of this Confirmation:

         (a)      Address for notices or communications to Counterparty:

                  Cadence Design Systems, Inc.
                  Attention: Treasurer
                  Telephone No.: (408) 943-1234
                  Telecopy No.: (408) 943-0513

                  Address for notices or communications to JPMorgan:

                  JPMorgan Chase Bank
                  277 Park Avenue, 11th Floor
                  New York, NY 10172
                  Attention: Kevin J. Moran
                  EDG Corporate Marketing
                  Telephone No.: (212)622-6707
                  Telecopy No.:  (212)622- 8534

  8. Other Provisions:

         (a)      No Reliance, etc. Each party represents that (i) it is
                  entering into the Transaction evidenced hereby as principal
                  (and not as agent or in any other capacity); (ii) neither the
                  other party nor any of its agents are acting as a fiduciary
                  for it; (iii) it is not relying upon any representations
                  except those expressly set forth in the Agreement or this
                  Confirmation; (iv) it has not relied on the other party for
                  any legal, regulatory, tax, business, investment, financial,
                  and accounting advice, and it has made its own investment,
                  hedging, and trading decisions based upon its own judgment and
                  upon any view expressed by the other party or any of its
                  agents; and (v) it is entering into this Transaction with a
                  full understanding of the terms, conditions and risks thereof
                  and it is capable of and willing to assume those risks.

         (b)      Share De-listing Event. If at any time during the period from
                  and including the Trade Date, to and including August 15,
                  2008, the Shares cease to be listed on the Exchange for any
                  reason (other than a Merger Event) and are not immediately
                  re-listed as of the date of such de-listing on The New York
                  Stock Exchange, The American Stock Exchange or the Nasdaq
                  National Market System (or their respective successors) (the
                  "SUCCESSOR EXCHANGE"), then Cancellation and Payment shall
                  apply, and the date of the de-listing shall be deemed the date
                  of termination for purposes of calculating any payment due
                  from one party to the other in connection with the
                  cancellation of this Transaction. If the Shares are
                  immediately re-listed on a Successor Exchange upon their
                  de-listing from the Exchange, this Transaction shall continue
                  in full force and effect, provided that the Successor Exchange
                  shall be deemed to be the Exchange for all purposes hereunder.
                  In addition, the Calculation Agent shall make any adjustments
                  it deems necessary to the terms of the Transaction in
                  accordance with Calculation Agent Adjustment method as defined
                  under Section 9.1(c) of the Equity Definitions.

         (c)      Repurchase Notices. Counterparty shall, on any day on which
                  Counterparty effects any repurchase of Shares, promptly give
                  JPMorgan a written notice of such repurchase (a "REPURCHASE
                  NOTICE") if following such repurchase, the Options Equity
                  Percentage as determined on such day is (i) greater than 5%
                  and (ii) greater by 0.5% than the Options

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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<PAGE>

                                                                 [JPMORGAN LOGO]

                  Equity Percentage included in the immediately preceding
                  Repurchase Notice (or, in the case of the first such
                  Repurchase Notice, greater than the Options Equity Percentage
                  as of the date hereof). The "OPTIONS EQUITY PERCENTAGE" as of
                  any day is the fraction (A) the numerator of which is the
                  product of the Number of Options and the Option Entitlement
                  and (B) the denominator of which is the number of Shares
                  outstanding on such day. Counterparty agrees to indemnify and
                  hold harmless JPMorgan and its affiliates and their respective
                  officers, directors, employees, affiliates, advisors, agents
                  and controlling persons (each, an "INDEMNIFIED PERSON") from
                  and against any and all losses (including losses relating to
                  JPMorgan's hedging activities as a consequence of becoming, or
                  of the risk of becoming, a Section 16 "insider", including
                  without limitation, any forbearance from hedging activities or
                  cessation of hedging activities and any losses in connection
                  therewith with respect to this Transaction), claims, damages,
                  judgments, liabilities and expenses (including reasonable
                  attorney's fees), joint or several, to which an Indemnified
                  Person actually incurs as a result of Counterparty's failure
                  to provide JPMorgan with a Repurchase Notice on the day and in
                  the manner specified in this Section 8(c), and to reimburse,
                  within 30 days, upon written request, each of such Indemnified
                  Persons for any reasonable legal or other expenses incurred in
                  connection with investigating, preparing for, providing
                  testimony or other evidence in connection with or defending
                  any of the foregoing. If any suit, action, proceeding
                  (including any governmental or regulatory investigation),
                  claim or demand shall be brought or asserted against the
                  Indemnified Person, such Indemnified Person shall promptly
                  notify the Counterparty in writing, and the Counterparty, upon
                  request of the Indemnified Person, shall retain counsel
                  reasonably satisfactory to the Indemnified Person to represent
                  the Indemnified Person and any others the Counterparty may
                  designate in such proceeding and shall pay the fees and
                  expenses of such counsel related to such proceeding.
                  Counterparty shall not be liable for any settlement of any
                  proceeding effected without its written consent, but if
                  settled with such consent or if there be a final judgment for
                  the plaintiff, Counterparty agrees to indemnify any
                  Indemnified Person from and against any loss or liability by
                  reason of such settlement or judgment. Counterparty shall not,
                  without the prior written consent of the Indemnified Person,
                  effect any settlement of any pending or threatened proceeding
                  in respect of which any Indemnified Person is or could have
                  been a party and indemnity could have been sought hereunder by
                  such Indemnified Person, unless such settlement includes an
                  unconditional release of such Indemnified Person from all
                  liability on claims that are the subject matter of such
                  proceeding on terms reasonably satisfactory to such
                  Indemnified Person. If the indemnification provided for in
                  this paragraph (c) is unavailable to an Indemnified Person or
                  insufficient in respect of any losses, claims, damages or
                  liabilities referred to therein, then Counterparty under such
                  paragraph, in lieu of indemnifying such Indemnified Person
                  thereunder, shall contribute to the amount paid or payable by
                  such Indemnified Person as a result of such losses, claims,
                  damages or liabilities. The remedies provided for in this
                  paragraph (c) are not exclusive and shall not limit any rights
                  or remedies which may otherwise be available to any
                  Indemnified Party at law or in equity. The indemnity and
                  contribution agreements contained in this paragraph (c) shall
                  remain operative and in full force and effect regardless of
                  the termination of this Transaction.

         (d)      Material Non-Public Information. Counterparty represents and
                  warrants that each of it and its Affiliates is not, on the
                  date hereof, in possession of any material non-public
                  information with respect to Counterparty.

         (e)      Eligible Contract Participant. Counterparty represents and
                  warrants that it is an "eligible contract participant" (as
                  such term is defined in Section 1(a)(12) of the Commodity
                  Exchange Act, as amended (the "CEA") because one or more of
                  the following is true:

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       7
<PAGE>

                                                                 [JPMORGAN LOGO]

                  Counterparty is a corporation, partnership, proprietorship,
                  organization, trust or other entity and:

                           (A)      Counterparty has total assets in excess of
                                    USD 10,000,000;

                           (B)      the obligations of Counterparty hereunder
                                    are guaranteed, or otherwise supported by a
                                    letter of credit or keepwell, support or
                                    other agreement, by an entity of the type
                                    described in Section 1a(12)(A)(i) through
                                    (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or
                                    1a(12)(C) of the CEA; or

                           (C)      Counterparty has a net worth in excess of
                                    USD 1,000,000 and has entered into this
                                    Agreement in connection with the conduct of
                                    Counterparty's business or to manage the
                                    risk associated with an asset or liability
                                    owned or incurred or reasonably likely to be
                                    owned or incurred by Counterparty in the
                                    conduct of Counterparty's business.

         (f)      Regulation M. The Counterparty was not on the Trade Date and
                  is not on the date hereof engaged in a distribution, as such
                  term is used in Regulation M under the Securities Exchange Act
                  of 1934, as amended ("EXCHANGE ACT"), of any securities of
                  Counterparty, other than a distribution meeting the
                  requirements of the exception set forth in sections 101(b)(10)
                  and 102(b)(7) of Regulation M. The Counterparty shall not,
                  until the fifth Exchange Business Day immediately following
                  the Trade Date, engage in any such distribution.

         (g)      No Manipulation. The Counterparty is not entering into this
                  Transaction to create actual or apparent trading activity in
                  the Shares (or any security convertible into or exchangeable
                  for the Shares) or to raise or depress or otherwise manipulate
                  the price of the Shares (or any security convertible into or
                  exchangeable for the Shares).

         (h)      Number of Repurchased Shares. Counterparty represents that it
                  could have purchased Shares, in an amount equal to the product
                  of the Number of Options and the Option Entitlement, on the
                  Exchange or otherwise, in compliance with applicable law, its
                  organizational documents and any orders, decrees, contractual
                  agreements binding upon Counterparty, on the Trade Date.

         (i)      Board Authorization. Each of this Transaction and the issuance
                  of the Convertible Notes was approved by its board of
                  directors and publicly announced, solely for the purposes
                  stated in such board resolution and public disclosure and,
                  prior to any exercise of Options hereunder, Counterparty's
                  board of directors will have duly authorized any repurchase of
                  Shares pursuant to this Transaction. Counterparty further
                  represents that there is no internal policy, whether written
                  or oral, of Counterparty that would prohibit Counterparty from
                  entering into any aspect of this Transaction, including, but
                  not limited to, the purchases of Shares to be made pursuant
                  hereto.

         (j)      Transfer or Assignment. Neither party may transfer any of its
                  rights or obligations under this Transaction without the prior
                  written consent of the non-transferring party; provided that
                  if, as determined at JPMorgan's sole discretion, its
                  "beneficial ownership" (within the meaning of Section 16 of
                  the Exchange Act and rules promulgated thereunder) exceeds 8%
                  of Counterparty's outstanding Shares, JPMorgan may transfer or
                  assign a number of Options sufficient to reduce such
                  "beneficial ownership" to 7.5% to any third party with a
                  rating for its long term, unsecured and unsubordinated
                  indebtedness of A+ or better by Standard and Poor's Rating
                  Group, Inc. or its successor ("S&P"), or A1 or

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

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                                                                 [JPMORGAN LOGO]

                  better by Moody's Investor Service, Inc. ("MOODY'S") or, if
                  either S&P or Moody's ceases to rate such debt, at least an
                  equivalent rating or better by a substitute agency rating
                  mutually agreed by Counterparty and JPMorgan. If, in the
                  discretion of JPMorgan, JPMorgan is unable to effect such
                  transfer or assignment after its commercially reasonable
                  efforts on pricing terms reasonably acceptable to JPMorgan and
                  within a time period reasonably acceptable to JPMorgan,
                  JPMorgan may designate any Exchange Business Day as an Early
                  Termination Date with respect to a portion (the "TERMINATED
                  PORTION") of this Transaction, such that its "beneficial
                  ownership" following such partial termination will be equal to
                  or less than 8%. In the event that JPMorgan so designates an
                  Early Termination Date with respect to a portion of this
                  Transaction, a payment shall be made pursuant to Section 6 of
                  the Agreement as if (i) an Early Termination Date had been
                  designated in respect of a Transaction having terms identical
                  to this Transaction and a Number of Options equal to the
                  Terminated Portion, (ii) the Counterparty and JPMorgan shall
                  both be Affected Parties with respect to such partial
                  termination and (iii) such Transaction shall be the only
                  Terminated Transaction. Notwithstanding any other provision in
                  this Confirmation to the contrary requiring or allowing
                  JPMorgan to purchase, sell, receive or deliver any shares or
                  other securities to or from Counterparty, JPMorgan may
                  designate any of its affiliates to purchase, sell, receive or
                  deliver such shares or other securities and otherwise to
                  perform JPMorgan's obligations in respect of this Transaction
                  and any such designee may assume such obligations. JPMorgan
                  shall be discharged of its obligations to Counterparty to the
                  extent of any such performance.

         (k)      Amendment. Paragraph (i) of Section 9.7(b) of the Equity
                  Definitions is hereby amended for purposes of this Transaction
                  by replacing "two-year" with "90 calendar day".

         (l)      Damages. Neither party shall be liable under Section 6.10 of
                  the Equity Definitions for special, indirect or consequential
                  damages, even if informed of the possibility thereof.

         (m)      Early Unwind. In event the sale of Convertible Notes is not
                  consummated with the initial purchasers for any reason by the
                  close of business in New York on August 15, 2003 (or such
                  later date as agreed upon by the parties) (August 15, 2003 or
                  such later date as agreed upon being the "EARLY UNWIND DATE"),
                  this Transaction shall automatically terminate (the "EARLY
                  UNWIND"), on the Early Unwind Date and (i) the Transaction and
                  all of the respective rights and obligations of JPMorgan and
                  Counterparty under the Transaction shall be cancelled and
                  terminated and (ii) each party shall be released and
                  discharged by the other party from and agrees not to make any
                  claim against the other party with respect to any obligations
                  or liabilities of the other party arising out of and to be
                  performed in connection with the Transaction either prior to
                  or after the Early Unwind Date; provided that Counterparty
                  shall purchase from JPMorgan on the Early Unwind Date all
                  Shares purchased by JPMorgan or one or more of its affiliates
                  and assume, or reimburse the cost of, derivatives entered into
                  by JPMorgan or one or more of its affiliates in connection
                  with hedging this Transaction. The Purchase price paid by the
                  Counterparty shall be JPMorgan's actual cost of such Shares
                  and derivatives as JPMorgan informs Counterparty and shall be
                  paid in immediately available funds on the Early Unwind Date.
                  JPMorgan and Counterparty represent and acknowledge to the
                  other that, subject to the proviso included in the preceding
                  sentence, upon an Early Unwind, all obligations with respect
                  to the Transaction shall be deemed fully and finally
                  discharged.

         (n)      Role of Agent. Each party agrees and acknowledges that (i)
                  J.P. Morgan Securities Inc., an affiliate of JPMorgan
                  ("JPMSI"), has acted solely as agent and not as principal with
                  respect to this Transaction and (ii) JPMSI has no obligation
                  or liability, by way of guaranty, endorsement or otherwise, in
                  any manner in respect of this Transaction (including, if
                  applicable, in respect of the settlement thereof). Each party
                  agrees it will

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                     BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

                                       9
<PAGE>

                                                                 [JPMORGAN LOGO]

                  look solely to the other party (or any guarantor in respect
                  thereof) for performance of such other party's obligations
                  under this Transaction.

         (o)      Additional Provisions.

                  (i) Section 9.6(a)(ii) of the Equity Definitions is hereby
                  amended by (1) deleting from the third line thereof the word
                  "or" after the word "official" and inserting a comma therefor,
                  and (2) deleting the period at the end of subsection (ii)
                  thereof and inserting the following words therefor " or (C) at
                  JPMorgan's option, the occurrence of any of the events
                  specified in Section 5(a)(vii) (1) through (9) of the ISDA
                  Master Agreement with respect to that Issuer."

                  (ii) Notwithstanding Section 9.7 of the Equity Definitions,
                  everything in the first paragraph of Section 9.7(b) of the
                  Equity Definitions after the words "Calculation Agent" in the
                  third line through the remainder of such Section 9.7 shall be
                  deleted and replaced with the following:

                  "based on an amount representing the Calculation Agent's
                  determination of the fair value to Buyer of an option with
                  terms that would preserve for Buyer the economic equivalent of
                  any payment or delivery (assuming satisfaction of each
                  applicable condition precedent) by the parties in respect of
                  the relevant Transaction that would have been required after
                  that date but for the occurrence of the Nationalization or
                  De-Listing Event, as the case may be."

         (p)      Alternative Calculations and Payment on Early Termination and
                  on Certain Extraordinary Events. If JPMorgan shall owe
                  Counterparty any amount pursuant to Sections 9.3, 9.6 or 9.7
                  of the Equity Definitions or pursuant to any early termination
                  hereunder or under the Agreement or pursuant to Section
                  6(d)(ii) of the Agreement or otherwise (a "PAYMENT
                  OBLIGATION"), JPMorgan may, in its sole discretion, satisfy
                  any such Payment Obligation by the Share Termination
                  Alternative (as defined below) by giving irrevocable
                  telephonic notice to Counterparty, confirmed in writing within
                  one Currency Business Day, between the hours of 9:00 a.m. and
                  4:00 p.m. New York local time on the Announcement Date or
                  Early Termination Date, as applicable ("NOTICE OF SHARE
                  TERMINATION"). Upon Notice of Share Termination no later than
                  8:00 a.m. on the Exchange Business Day immediately following
                  the Announcement Date or Early Termination Date, as
                  applicable, the following provisions shall apply:

                  Share Termination               Applicable and means that
                  Alternative:                    JPMorgan shall deliver to
                                                  Counterparty the Share
                                                  Termination Delivery Property
                                                  on the date when the Payment
                                                  Obligation would otherwise be
                                                  due pursuant to Section 9.7 of
                                                  the Equity Definitions or
                                                  Section 6(d)(ii) of the
                                                  Agreement, as applicable (the
                                                  "SHARE TERMINATION PAYMENT
                                                  DATE"), in satisfaction of the
                                                  Payment Obligation in the
                                                  manner reasonably requested by
                                                  Counterparty free of payment.

                  Share Termination Delivery      A number of Share Termination
                  Property:                       Delivery Units, as calculated
                                                  by the Calculation Agent,
                                                  equal to the Payment
                                                  Obligation divided by the
                                                  Share Termination Unit

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       10
<PAGE>

                                                                 [JPMORGAN LOGO]

                                              Price. The Calculation Agent shall
                                              adjust the Share Termination
                                              Delivery Property by replacing any
                                              fractional portion of a security
                                              therein with an amount of cash
                                              equal to the value of such
                                              fractional security based on the
                                              values used to calculate the Share
                                              Termination Unit Price.

         Share Termination Unit Price:        The value to JPMorgan of property
                                              contained in one Share Termination
                                              Delivery Unit on the date such
                                              Share Termination Delivery Units
                                              are to be delivered as Share
                                              Termination Delivery Property, as
                                              determined by the Calculation
                                              Agent in its discretion by
                                              commercially reasonable means and
                                              notified by the Calculation Agent
                                              to JPMorgan at the time of
                                              notification of the Payment
                                              Obligation.

         Share Termination Delivery Unit:     One Share or, if a Merger Event
                                              has occurred and a corresponding
                                              adjustment to this Transaction has
                                              been made, a unit consisting of
                                              the number or amount of each type
                                              of property received by a holder
                                              of one Share (without
                                              consideration of any requirement
                                              to pay cash or other consideration
                                              in lieu of fractional amounts of
                                              any securities) in such Merger
                                              Event, as determined by the
                                              Calculation Agent.

         Failure to Deliver:                  Applicable

         Other applicable provisions:         If this Transaction is to be Share
                                              Termination Settled, the
                                              provisions of Sections 6.6, 6.7,
                                              6.8 and 6.10 (as modified above)
                                              of the Equity Definitions will be
                                              applicable, except that all
                                              references in such provisions to
                                              "Physically-Settled" shall be read
                                              as references to "Share
                                              Termination Settled" and all
                                              references to "Shares" shall be
                                              read as references to "Share
                                              Termination Delivery Units".
                                              "Share Termination Settled" in
                                              relation to this Transaction means
                                              that Share Termination Settlement
                                              is applicable to this Transaction.

(q)      Governing Law. New York law (without reference to choice of law
         doctrine).

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       11
<PAGE>

                                                                 [JPMORGAN LOGO]

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY
10172-3401, or by fax on 212 622 8519 (PLEASE NOTE THIS NEW FAX NUMBER).

                                 Very truly yours,

                                       J.P. Morgan Securities Inc., as agent for
                                       JPMorgan Chase Bank

                                       By: /s/ Nicola Mudge
                                           --------------------
                                       Authorized Signatory
                                       Name: NICOLA MUDGE

         Accepted and confirmed
         as of the Trade Date:

         CADENCE DESIGN SYSTEMS, INC.

         By:___________________
         Authorized Signatory
         Name:

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS ON NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
   REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y5N HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

<PAGE>

                                                                 [JPMORGAN LOGO]

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P. Morgan Securities Inc., 277 Park Avenue. 11th Floor, New York, NY
10172-3401, or by fax on 212 622 8519 (PLEASE NOTE THIS NEW FAX NUMBER).

                                    Very truly yours,

                                       J.P. MORGAN SECURITIES INC., AS AGENT FOR
                                       JPMORGAN CHASE BANK

                                       By:_______________________
                                       Authorized Signatory
                                       Name:

         Accepted and confirmed
         as of the Trade Date:

         CADENCE DESIGN SYSTEMS, INC.

         By: /s/ William Porter
             -----------------------
         Authorized Signatory
         Name:

                  WILLIAM PORTER
                  SR. VP &CFO

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
  INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED COMMERCIAL
                                      BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, LISA.<PAGE>
                                                                   EXHIBIT 10.76

                                                                 [JPMORGAN LOGO]

JPMorgan Chase Bank
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

                                                                 August 27, 2003

TO: CADENCE DESIGN SYSTEMS, INC.
2655 Seely Avenue
San Jose, CA 95134
Attention: Treasurer
Telephone No.: (408) 943-1234
Facsimile No.: (408) 943-0513

Re: Warrants

Reference:

         The purpose of this letter agreement is to confirm the terms and
conditions of the Warrants issued by CADENCE DESIGN SYSTEMS, INC. ("COMPANY") to
JPMorgan Chase Bank, London Branch ("JPMORGAN") on the Trade Date specified
below (the "TRANSACTION"). This letter agreement constitutes a "Confirmation" as
referred to in the ISDA Master Agreement specified below. This Confirmation
shall replace any previous letter and serve as the final documentation for this
Transaction.

         The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "EQUITY DEFINITIONS"), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Transaction shall be deemed to be a Share Option Transaction within the meaning
set forth in the Equity Definitions.

         Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon the
parties' entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.

1.       This Confirmation evidences a complete and binding agreement between
JPMorgan and the Company as to the terms of the Transaction to which this
Confirmation relates. In addition, JPMorgan and the Company agree to make all
reasonable efforts to promptly negotiate, execute, and deliver an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
"AGREEMENT"), with such modifications as JPMorgan and the Company will in good
faith agree together with related schedules. Upon the execution by JPMorgan and
the Company of such an agreement, this Confirmation will supplement, form a part
of, and be subject to, that agreement. All provisions contained or incorporated
by reference in that agreement upon its execution will govern this Confirmation
except as expressly modified below. Until JPMorgan and the Company execute such
agreement, this Confirmation, together with all other documents referring to an
Agreement (each a "CONFIRMATION") confirming transactions (each a "TRANSACTION")
entered into between JPMorgan and the Company (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject to
an agreement in the form of the Agreement as if JPMorgan and the Company had
executed an agreement in such form (but without any Schedule except for the
election of the laws of the State of New York as the governing law and United
States dollars as the Termination Currency and Second Method and Loss as the
payments on early termination) on the Trade Date of the first such Transaction
between JPMorgan and the Company. In the event of any inconsistency between
provisions

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
             INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

<PAGE>

of that agreement and this Confirmation, this Confirmation will prevail for the
purpose of the Transaction to which this Confirmation relates. The parties
hereby agree that if they have not executed an Agreement within 60 days from the
Trade Date it shall constitute an Additional Termination Event under the
Agreement in respect of which the Company is the sole Affected Party and this
Transaction is the sole Affected Transaction.

2.       The terms of the particular Transaction to which this Confirmation
         relates are as follows:

General Terms:

       Trade Date:                         August 27, 2003

       Warrants:                           American-style equity call warrants
                                           to be issued by the Company to
                                           JPMorgan, each giving the holder the
                                           right to purchase one Share at the
                                           Strike Price. For the purposes of
                                           Equity Definitions, each Warrant
                                           shall be deemed to be a Call Option.

       Buyer:                              JPMorgan

       Seller:                             Company

       Shares:                             The common stock of Company, par
                                           value USD 0.01 per Share (Exchange
                                           symbol "CDN")

       Number of Warrants:                 4,471,530

       Warrant Entitlement:                One Share per Warrant

       Multiple Exercise:                  Applicable

       Minimum Number of Warrants:         1

       Maximum Number of Warrants:         4,471,530

       Strike Price:                       USD 23.08

       Premium:                            USD 10,346,000

       Premium Payment Date:               August 29, 2003

       Exchange:                           The New York Stock Exchange

       Related Exchange(s):                The principal exchange(s) for options
                                           contracts or futures contracts, if
                                           any, with respect to the Shares

Exercise and Valuation:

       Expiration Time:                    The Valuation Time

       Expiration Date:                    For any Daily Number of Warrants,
                                           each date specified as such in Annex
                                           A hereto. If there is a Market
                                           Disruption Event on any Expiration
                                           Date, then the Calculation Agent
                                           shall determine the Reference Price
                                           or

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
            INCORPORATED LIMITED WITH LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                        2

<PAGE>

                                           Settlement Price for such Expiration
                                           Date, as the case may be, on the
                                           basis of its good faith estimate of
                                           the trading value for the relevant
                                           Shares.

        Automatic Exercise:                Applicable

Valuation applicable to each Warrant:

       Valuation Time:                     At the close of trading of the
                                           regular trading session on the
                                           Exchange

       Valuation Date:                     The Exercise Date

Settlement Terms applicable to
 the Transaction:

Method of Settlement:                      Net Share Settlement; and means that,
                                           on each Settlement Date, Company
                                           shall deliver to JPMorgan, the Share
                                           Delivery Quantity of Shares for such
                                           Settlement Date to the account
                                           specified hereto free of payment
                                           through the Clearance System.

Share Delivery Quantity:                   For any Settlement Date, a number of
                                           Shares, as calculated by the
                                           Calculation Agent, equal to the Net
                                           Share Settlement Amount for such
                                           Settlement Date divided by the
                                           Settlement Price for such Settlement
                                           Date, plus cash in lieu of any
                                           fractional shares.

Net Share Settlement Amount:               For any Settlement Date, the Daily
                                           Number of Warrants specified in Annex
                                           A with respect to the Expiration Date
                                           corresponding to such Settlement Date
                                           multiplied by the Strike Price
                                           Differential for such Settlement
                                           Date.

Strike Price Differential:                 (a) If the Settlement Price for any
                                           Expiration Date is greater than the
                                           Strike Price, an amount equal to the
                                           excess of such Settlement Price over
                                           the Strike Price; or

                                           (b) If such Settlement Price is less
                                           than or equal to the Strike Price,
                                           zero.

Settlement Price:                          For any Expiration Date, the closing
                                           price per Share on the Exchange at
                                           the Valuation Time on the Valuation
                                           Date.

Settlement Date:                           For any Expiration Date, the date
                                           defined as such in Section 6.2 of the
                                           Equity Definitions, subject to
                                           Section 8(q)(i) hereof.

Failure to Deliver:                        Applicable

Other Applicable Provisions:               The provisions of Sections 6.6, 6.7,
                                           6.8 and 6.10 of the Equity
                                           Definitions will be applicable,
                                           except that all references in such
                                           provisions to "Physically-Settled"
                                           shall be read as references to "Net
                                           Share Settled". "Net

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
            INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE,NEW YORK, USA.

                                        3

<PAGE>

                                           Share Settled" in relation to any
                                           Warrant means that Net Share
                                           Settlement is applicable to that
                                           Warrant.

3. Additional Terms applicable to the
    Transaction:

   Adjustments applicable to the
    Warrants:

    Method of Adjustment:                  Calculation Agent Adjustment

Extraordinary Events applicable to the
    Transaction:

       Consequence of Merger Events

       (a) Share-for-Share:                Alternative Obligation; provided that
                                           the Calculation Agent will determine
                                           if the Merger Event affects the
                                           theoretical value of the Transaction
                                           and if so JPMorgan in its sole
                                           discretion may elect to make
                                           adjustments to the Strike Price and
                                           any other term necessary to reflect
                                           the characteristics (including
                                           volatility, dividend practice and
                                           policy and liquidity) of the New
                                           Shares. Notwithstanding the
                                           foregoing, Cancellation and Payment
                                           shall apply in the event the New
                                           Shares are not publicly traded on a
                                           United States national securities
                                           exchange or quoted on the Nasdaq
                                           National Market System.

       (b) Share-for-Other:                Cancellation and Payment

       (c) Share-for-Combined:             Cancellation and Payment

       Nationalization or Insolvency:      Cancellation and Payment

Nationalization or Insolvency:             Cancellation and Payment

Payments on Early Termination:          Second Method and Loss

4. Calculation Agent:                      JPMorgan, whose calculations
                                           and determinations shall be made in
                                           good faith and in a commercially
                                           reasonable manner, including with
                                           respect to calculations and
                                           determinations that are made in its
                                           sole discretion.

5. Account Details:

         (a)      Account for payments to Company:

                  Cadence Design Systems, Inc.
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
            INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                        4

<PAGE>

                  Account for delivery of Shares to Counterparty:

                  Mellon Investor Services
                  235 Montgomery Street, 23rd Floor
                  San Francisco, CA 94104
                  Cadence Design Systems Book Memo Treasury Reserve Account
                  Comment: When you are ready to deliver Shares contact Cadence
                  FIRST.

         (b)      Account for payments to JPMorgan:

                  JPMorgan Chase Bank, New York
                  _________________________________
                  _________________________________
                  _________________________________
                  _________________________________

                  Account for delivery of Shares from JPMorgan:

                  DTC 060

6. Offices:

The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.

The Office of JPMorgan for the Transaction is: New York

                  JPMorgan Chase Bank
                  London Branch
                  P.O. Box 161
                  60 Victoria Embankment
                  London EC4Y 0JP, England

 7. Notices: For purposes of this Confirmation:

         (a)      Address for notices or communications to Company:

                  Cadence Design Systems, Inc.
                  Attention: Treasurer
                  Telephone No.: (408) 943-1234
                  Facsimile No.: (408)943-0513

                  Address for notices or communications to JPMorgan:

                  JPMorgan Chase Bank
                  277 Park Avenue, 11th Floor
                  New York, NY 10172
                  Attention: Kevin J. Moran
                  EDG Corporate Marketing
                  Telephone No.: (212) 622-6707
                  Facsimile No.: (212) 622-8534

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
            INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

                                        5

<PAGE>

8. Other Provisions:

         (a)      No Reliance, etc. Each party represents that (i) it is
                  entering into the Transaction evidenced hereby as principal
                  (and not as agent or in any other capacity); (ii) neither the
                  other party nor any of its agents are acting as a fiduciary
                  for it; (iii) it is not relying upon any representations
                  except those expressly set forth in the Agreement or this
                  Confirmation; (iv) it has not relied on the other party for
                  any legal, regulatory, tax, business, investment, financial,
                  and accounting advice, and it has made its own investment,
                  hedging, and trading decisions based upon its own judgment and
                  upon any view expressed by the other party or any of its
                  agents; and (v) it is entering into this Transaction with a
                  full understanding of the terms, conditions and risks thereof
                  and it is capable of and willing to assume those risks.

         (b)      Share De-listing Event. If at any time during the period from
                  and including the Trade Date, to and including the final
                  Valuation Date, the Shares cease to be listed on the Exchange
                  for any reason (other than a Merger Event) and are not
                  immediately re-listed as of the date of such de-listing on The
                  New York Stock Exchange, The American Stock Exchange or the
                  Nasdaq National Market System (or their respective successors)
                  (the "SUCCESSOR EXCHANGE"), then Cancellation and Payment
                  shall apply, and the date of the de-listing shall be deemed
                  the date of termination for purposes of calculating any
                  payment due from one party to the other in connection with the
                  cancellation of this Transaction. If the Shares are
                  immediately re-listed on a Successor Exchange upon their
                  de-listing from the Exchange, this Transaction shall continue
                  in full force and effect, provided that the Successor Exchange
                  shall be deemed to be the Exchange for all purposes hereunder.
                  In addition, the Calculation Agent shall make any adjustments
                  it deems necessary to the terms of the Transaction in
                  accordance with Calculation Agent Adjustment method as defined
                  under Section 9.1(c) of the Equity Definitions.

         (c)      Repurchase Notices. Company shall, on any day on which Company
                  effects any repurchase of Shares, promptly give JPMorgan a
                  written notice of such repurchase (a "REPURCHASE NOTICE") if
                  following such repurchase, the Warrants Equity Percentage as
                  determined on such day is (i) greater than 5% and (ii) greater
                  by 0.5% than the Warrants Equity Percentage included in the
                  immediately preceding Repurchase Notice (or, in the case of
                  the first such Repurchase Notice, greater than the Warrants
                  Equity Percentage as of the date hereof). The "WARRANTS EQUITY
                  PERCENTAGE" as of any day is the fraction (A) the numerator of
                  which is the sum of (1) the product of the Number of Warrants
                  and the Warrant Entitlement and (2) the product of the Number
                  of Warrants as defined in the Confirmation dated August 11,
                  2003 between Counterparty and JPMorgan relating to 22,357,646
                  Warrants of the Company (the "INITIAL TRANSACTION") and the
                  Warrant Entitlement as defined in the Initial Transaction, and
                  (B) the denominator of which is the number of Shares
                  outstanding on such day. Company agrees to indemnify and hold
                  harmless JPMorgan and its affiliates and their respective
                  officers, directors, employees, affiliates, advisors, agents
                  and controlling persons (each, an "INDEMNIFIED PERSON") from
                  and against any and all losses (including losses relating to
                  JPMorgan's hedging activities as a consequence of becoming, or
                  of the risk of becoming, a Section 16 "insider", including
                  without limitation, any forbearance from hedging activities or
                  cessation of hedging activities and any losses in connection
                  therewith with respect to this Transaction), claims, damages,
                  judgments, liabilities and expenses (including reasonable
                  attorney's fees), joint or several, which an Indemnified
                  Person actually incurs as a result of Company's failure to
                  provide JPMorgan with a Repurchase Notice on the day and in
                  the manner specified in this Section 8(c), and to reimburse,
                  within 30 days, upon written request, each of such Indemnified
                  Persons for any reasonable legal or other expenses incurred in
                  connection with investigating, preparing for, providing
                  testimony or other evidence in connection with or defending
                  any of the foregoing. If any suit, action,

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                        6

<PAGE>

                  proceeding (including any governmental or regulatory
                  investigation), claim or demand shall be brought or asserted
                  against the Indemnified Person, such Indemnified Person shall
                  promptly notify the Company in writing, and the Company, upon
                  request of the Indemnified Person, shall retain counsel
                  reasonably satisfactory to the Indemnified Person to represent
                  the Indemnified Person and any others the Company may
                  designate in such proceeding and shall pay the fees and
                  expenses of such counsel related to such proceeding. Company
                  shall not be liable for any settlement of any proceeding
                  effected without its written consent, but if settled with such
                  consent or if there be a final judgment for the plaintiff,
                  Company agrees to indemnify any Indemnified Person from and
                  against any loss or liability by reason of such settlement or
                  judgment. Company shall not, without the prior written consent
                  of the Indemnified Person, effect any settlement of any
                  pending or threatened proceeding in respect of which any
                  Indemnified Person is or could have been a party and indemnity
                  could have been sought hereunder by such Indemnified Person,
                  unless such settlement includes an unconditional release of
                  such Indemnified Person from all liability on claims that are
                  the subject matter of such proceeding on terms reasonably
                  satisfactory to such Indemnified Person. If the
                  indemnification provided for in this paragraph (c) is
                  unavailable to an Indemnified Person or insufficient in
                  respect of any losses, claims, damages or liabilities referred
                  to therein, then Company under such paragraph, in lieu of
                  indemnifying such Indemnified Person thereunder, shall
                  contribute to the amount paid or payable by such Indemnified
                  Person as a result of such losses, claims, damages or
                  liabilities. The remedies provided for in this paragraph (c)
                  are not exclusive and shall not limit any rights or remedies
                  which may otherwise be available to any Indemnified Party at
                  law or in equity. The indemnity and contribution agreements
                  contained in this paragraph (c) shall remain operative and in
                  full force and effect regardless of the termination of this
                  Transaction.

         (d)      Material Non-Public Information. Company represents and
                  warrants that each of it and its Affiliates is not, on the
                  date hereof, in possession of any material non-public
                  information with respect to Company.

         (e)      Eligible Contract Participant. Company represents and warrants
                  that it is an "eligible contract participant" (as such term is
                  defined in Section 1(a)(12) of the Commodity Exchange Act, as
                  amended (the "CEA")) because one or more of the following is
                  true:

                  Company is a corporation, partnership, proprietorship,
                  organization, trust or other entity and:

                           (A)      Company has total assets in excess of USD
                                    10,000,000;

                           (B)      the obligations of Company hereunder are
                                    guaranteed, or otherwise supported by a
                                    letter of credit or keepwell, support or
                                    other agreement, by an entity of the type
                                    described in Section 1a(12)(A)(i) through
                                    (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or
                                    1a(12)(C) of the CEA; or

                           (C)      Company has a net worth in excess of USD
                                    1,000,000 and has entered into this
                                    Agreement in connection with the conduct of
                                    Company's business or to manage the risk
                                    associated with an asset or liability owned
                                    or incurred or reasonably likely to be owned
                                    or incurred by Company in the conduct of
                                    Company's business.

         (f)      Regulation M. The Company was not on the Trade Date and is not
                  on the date hereof engaged in a distribution, as such term is
                  used in Regulation M under the Securities Exchange Act of
                  1934, as amended ("EXCHANGE ACT"), of any securities of
                  Company, other than a distribution meeting the requirements of
                  the exception set forth in sections 101(b)(10) and 102(b)(7)
                  of Regulation M. The Company shall not, until the fifth

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
       INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

                                        7

<PAGE>

                  Exchange Business Day immediately following the Trade Date,
                  engage in any such distribution.

         (g)      No Manipulation. The Company is not entering into this
                  Transaction to create actual or apparent trading activity in
                  the Shares (or any security convertible into or exchangeable
                  for the Shares) or to raise or depress or otherwise manipulate
                  the price of the Shares (or any security convertible into or
                  exchangeable for the Shares).

         (h)      Board Authorization. Company represents that it is entering
                  into the Transaction, solely for the purposes stated in the
                  board resolution authorizing this Transaction and in its
                  public disclosure. Company further represents that there is no
                  internal policy, whether written or oral, of Company that
                  would prohibit Company from entering into any aspect of this
                  Transaction, including, but not limited to, the purchases of
                  Shares to be made pursuant hereto.

         (i)      Transfer or Assignment. Company may not transfer any of its
                  rights or obligations under this Transaction without the prior
                  written consent of JPMorgan. JPMorgan may transfer or assign
                  all or any portion of its rights or obligations under this
                  Transaction without consent of the Company. If JPMorgan, in
                  its sole discretion, determines that its "beneficial
                  ownership" with respect to the Initial Transaction and this
                  Transaction (within the meaning of Section 16 of the Exchange
                  Act and rules promulgated thereunder) exceeds 8% or more of
                  the Company's outstanding Shares and, in its sole discretion,
                  JPMorgan is unable after its commercially reasonable efforts
                  to effect a transfer or assignment on pricing terms and in a
                  time period reasonably acceptable to JPMorgan that would
                  reduce its "beneficial ownership" to 7.5%, JPMorgan may
                  designate any Exchange Business Day as an Early Termination
                  Date with respect to a portion (the "TERMINATED PORTION") of
                  this Transaction or the Initial Transaction, such that the its
                  "beneficial ownership" following such partial termination will
                  be equal to or less than 8%. In the event that JPMorgan so
                  designates an Early Termination Date with respect to a portion
                  of this Transaction, a payment shall be made pursuant to
                  Section 6 of the Agreement as if (i) an Early Termination Date
                  had been designated in respect of a Transaction having terms
                  identical to this Transaction and a Number of Warrants equal
                  to the Terminated Portion, (ii) the Company and JPMorgan shall
                  both be Affected Parties with respect to such partial
                  termination and (iii) such Transaction shall be the only
                  Terminated Transaction. For the avoidance of doubt, if
                  JPMorgan assigns or terminates any Warrants hereunder, each
                  Daily Number of Warrants not previously settled as set forth
                  in Annex A hereto shall be reduced proportionally, as
                  calculated by the Calculation Agent. Notwithstanding any other
                  provision in this Confirmation to the contrary requiring or
                  allowing JPMorgan to purchase, sell, receive or deliver any
                  shares or other securities to or from Company, JPMorgan may
                  designate any of its affiliates to purchase, sell, receive or
                  deliver such shares or other securities and otherwise to
                  perform JPMorgan's obligations in respect of this Transaction
                  and any such designee may assume such obligations. JPMorgan
                  shall be discharged of its obligations to Company to the
                  extent of any such performance.

         (j)      Amendment. Paragraph (i) of Section 9.7(b) of the Equity
                  Definitions is hereby amended for purposes of this Transaction
                  by replacing "two-year" with "90 calendar day".

         (k)      Damages. Neither party shall be liable under Section 6.10 of
                  the Equity Definitions for special, indirect or consequential
                  damages, even if informed of the possibility thereof.

         (1)      Dividends. If at any time during the period from and including
                  the Trade Date, but excluding the Expiration Date, an
                  ex-dividend date for a cash dividend occurs with respect to
                  the Shares (an "EX-DIVIDEND DATE"), and that dividend is
                  greater than the Regular Dividend on a per share basis then
                  the forward value of the difference between the Regular
                  Dividend and the per share cash dividend corresponding to that
                  Ex-Dividend

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
             INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
                           CHARTERED COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

                                        8

<PAGE>

                  Date shall be subtracted from the Strike Price. "REGULAR
                  DIVIDEND" shall mean USD 0.00 per Share per quarter. The
                  forward value of any such amount shall be calculated from the
                  Ex-Dividend Date through and including the Settlement Date.
                  The interest rate used for the calculation of such forward
                  values shall be the mid-market interpolated Eurodollar zero
                  coupon swap rate with a maturity corresponding to the
                  Settlement Date, as determined by JPMorgan.

         (m)      Netting and Setoff. Notwithstanding Section 2(c) of the
                  Agreement, Company waives its rights to net and offset against
                  its obligations hereunder any rights Company might have
                  against JPMorgan under any other transactions.

         (n)      Role of Agent. Each party agrees and acknowledges that (i)
                  J.P. Morgan Securities Inc., an affiliate of JPMorgan
                  ("JPMSI"), has acted solely as agent and not as principal with
                  respect to this Transaction and (ii) JPMSI has no obligation
                  or liability, by way of guaranty, endorsement or otherwise, in
                  any manner in respect of this Transaction (including, if
                  applicable, in respect of the settlement thereof). Each party
                  agrees it will look solely to the other party (or any
                  guarantor in respect thereof) for performance of such other
                  party's obligations under this Transaction.

         (o)      Additional Provisions.

                  (i) The first paragraph of Section 9.1(c) of the Equity
                  Definitions is hereby amended to read as follows: (c) 'If
                  "Calculation Agent Adjustment" is specified as the method of
                  adjustment in the Confirmation of a Share Option Transaction,
                  then following the declaration by the Issuer of the terms of
                  any Potential Adjustment Event, the Calculation Agent will
                  determine whether such Potential Adjustment Event has a
                  material effect on the theoretical value of the relevant
                  Shares or Warrants and, if so, will (i) make appropriate
                  adjustment(s), if any, to any one or more of:' and, the
                  sentence immediately preceding Section 9.1(c)(ii) is hereby
                  amended by deleting the words "diluting or concentrative".

                  (ii) Section 9.1(e)(vi) of the Equity Definitions is hereby
                  amended by deleting the words "other similar" between "any"
                  and "event"; deleting the words "diluting or concentrative"
                  and replacing them with "material"; and adding the following
                  words at the end of the sentence "or Warrants".

                  (iii) Section 9.6(a)(ii) of the Equity Definitions is hereby
                  amended by (1) deleting from the third line thereof the word
                  "or" after the word "official" and inserting a comma therefor,
                  and (2) deleting the period at the end of subsection (ii)
                  thereof and inserting the following words therefor " or (C) at
                  JPMorgan's option, the occurrence of any of the events
                  specified in Section 5(a)(vii) (1) through (9) of the ISDA
                  Master Agreement with respect to that Issuer."

                  (iv) Notwithstanding Section 9.7 of the Equity Definitions,
                  everything in the first paragraph of Section 9.7(b) of the
                  Equity Definitions after the words "Calculation Agent" in the
                  third line through the remainder of such Section 9.7 shall be
                  deleted and replaced with the following:

                  "based on an amount representing the Calculation Agent's
                  determination of the fair value to Buyer of an option with
                  terms that would preserve for Buyer the economic equivalent of
                  any payment or delivery (assuming satisfaction of each
                  applicable condition precedent) by the parties in respect of
                  the relevant Transaction that would have been required after
                  that date but for the occurrence of the Merger Event,
                  Nationalization, Insolvency or De-Listing Event, as the case
                  may be."

                    A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
       INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                          PARK AVENUE, NEW YORK, USA.

                                        9
<PAGE>

          (p)      Alternative Calculations and Payment on Early Termination and
                   on Certain Extraordinary Events. If Company shall owe
                   JPMorgan any amount pursuant to Sections 9.3, 9.6 or 9.7 of
                   the Equity Definitions (except in the event of a
                   Nationalization or a Merger Event in which the merger
                   consideration to be paid to holders of Shares consists solely
                   of cash) or pursuant to Section 6(d)(ii) of the Agreement
                   (except in the event of an Event of Default in which Company
                   is the Defaulting Party or a Termination Event in which
                   Company is the Affected Party, other than an Event of Default
                   of the type described in Section 5(a)(iii), (v), (vi) or
                   (vii) of the Agreement or a Termination Event of the type
                   described in Section 5(b)(i), (ii), (iii), (iv), or (v) of
                   the Agreement that resulted from an event or events outside
                   Company's control) (a "PAYMENT OBLIGATION"), Company may, in
                   its sole discretion, satisfy any such Payment Obligation by
                   the Share Termination Alternative (as defined below) and
                   shall give irrevocable telephonic notice to JPMorgan,
                   confirmed in writing within one Currency Business Day,
                   between the hours of 9:00 a.m. and 4:00 p.m. New York local
                   time on the Announcement Date or Early Termination Date, as
                   applicable ("NOTICE OF SHARE TERMINATION"). Upon Notice of
                   Share Termination no later than 8:00 a.m. on the Exchange
                   Business Day immediately following the Merger Date,
                   Announcement Date or Early Termination Date, as applicable,
                   the following provisions shall apply:

                   Share Termination Alternative:          Applicable and means
                                                           that Company shall
                                                           deliver to JPMorgan
                                                           the Share Termination
                                                           Delivery Property on
                                                           the date (the "SHARE
                                                           TERMINATION PAYMENT
                                                           DATE") when the
                                                           Payment Obligation
                                                           would otherwise be
                                                           due, subject to
                                                           paragraph (q)(i)
                                                           below, in
                                                           satisfaction, subject
                                                           to paragraph (q)(ii)
                                                           below, of the Payment
                                                           Obligation in the
                                                           manner reasonably
                                                           requested by JPMorgan
                                                           free of payment.

                   Share Termination Delivery Property:    A number of Share
                                                           Termination Delivery
                                                           Units, as calculated
                                                           by the Calculation
                                                           Agent, equal to the
                                                           Payment Obligation
                                                           divided by the Share
                                                           Termination Unit
                                                           Price. The
                                                           Calculation Agent
                                                           shall adjust the
                                                           Share Termination
                                                           Delivery Property by
                                                           replacing any
                                                           fractional portion of
                                                           a security therein
                                                           with an amount of
                                                           cash equal to the
                                                           value of such
                                                           fractional security
                                                           based on the values
                                                           used to calculate the
                                                           Share Termination
                                                           Unit Price.

                   Share Termination Unit Price:           The value to JPMorgan
                                                           of property contained
                                                           in one Share
                                                           Termination Delivery
                                                           Unit on the date such
                                                           Share Termination
                                                           Delivery Units are to
                                                           be delivered as Share
                                                           Termination Delivery
                                                           Property, as
                                                           determined by the
                                                           Calculation Agent in
                                                           its discretion by
                                                           commercially
                                                           reasonable means and
                                                           notified by the
                                                           Calculation Agent to
                                                           Company at the time
                                                           of notification of
                                                           the Payment
                                                           Obligation. In the
                                                           case of a Private
                                                           Placement of Share
                                                           Termination Delivery
                                                           Units that are

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       10
<PAGE>
                                                           Restricted Shares (as
                                                           defined below) as set
                                                           for in paragraph
                                                           (q)(i) below, the
                                                           Share Termination
                                                           Unit Price shall be
                                                           determined by the
                                                           discounted price
                                                           applicable to such
                                                           Share Termination
                                                           Delivery Units. In
                                                           the case of a
                                                           Registered Settlement
                                                           of Share Termination
                                                           Delivery Units that
                                                           are Restricted Shares
                                                           (as defined below) as
                                                           set forth in
                                                           paragraph (q)(ii)
                                                           below, the Share
                                                           Termination Unit
                                                           Price shall be the
                                                           Settlement Price.

                   Share Termination Delivery Unit:        In the case of a
                                                           Termination Event or
                                                           Event of Default, one
                                                           Share or, in the case
                                                           of a Merger Event, a
                                                           unit consisting of
                                                           the number or amount
                                                           of each type of
                                                           property received by
                                                           a holder of one Share
                                                           (without
                                                           consideration of any
                                                           requirement to pay
                                                           cash or other
                                                           consideration in lieu
                                                           of fractional amounts
                                                           of any securities) in
                                                           such Merger Event. If
                                                           a Share Termination
                                                           Delivery Unit
                                                           consists of property
                                                           other than cash or
                                                           New Shares, the
                                                           Calculation Agent
                                                           will replace such
                                                           property with cash,
                                                           New Shares or a
                                                           combination thereof
                                                           as components of a
                                                           Share Termination
                                                           Delivery Unit in such
                                                           amounts, as
                                                           determined by the
                                                           Calculation Agent in
                                                           its discretion by
                                                           commercially
                                                           reasonable means, as
                                                           shall have a value
                                                           equal to the value of
                                                           the property so
                                                           replaced. If such
                                                           Merger Event involves
                                                           a choice of
                                                           consideration to be
                                                           received by holders,
                                                           such holder shall be
                                                           deemed to have
                                                           elected to receive
                                                           the maximum possible
                                                           amount of cash.

                   Failure to Deliver:                     Applicable

                   Other applicable provisions:            If this Transaction
                                                           is to be Share
                                                           Termination Settled,
                                                           the provisions of
                                                           Sections 6.6, 6.7,
                                                           6.8 and 6.10 (as
                                                           modified above) of
                                                           the Equity
                                                           Definitions will be
                                                           applicable, except
                                                           that all references
                                                           in such provisions to
                                                           "Physically-Settled"
                                                           shall be read as
                                                           references to "Share
                                                           Termination Settled"
                                                           and all references to
                                                           "Shares" shall be
                                                           read as references to
                                                           "Share Termination
                                                           Delivery Units".
                                                           "Share Termination
                                                           Settled" in relation
                                                           to this Transaction
                                                           means that Share
                                                           Termination
                                                           Settlement is
                                                           applicable to this
                                                           Transaction.

         (q)      Registration/Private Placement Procedures. If, in the
                  reasonable opinion of JPMorgan, following any delivery of
                  Shares or Share Termination Delivery Property to JPMorgan

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       11
<PAGE>

                  hereunder, such Shares or Share Termination Delivery Property
                  would be in the hands of JPMorgan subject to any applicable
                  restrictions with respect to any registration or qualification
                  requirement or prospectus delivery requirement for such Shares
                  or Share Termination Delivery Property pursuant to any
                  applicable federal or state securities law (including, without
                  limitation, any such requirement arising under Section 5 of
                  the Securities Act as a result of such Shares or Share
                  Termination Delivery Property being a "restricted securities",
                  as such term is defined in Rule 144 under the Securities Act,
                  or as a result of the sale of such Shares or Share Termination
                  Delivery Property being subject to paragraph (c) of Rule 145
                  under the Securities Act) (such Shares or Share Termination
                  Delivery Property, "RESTRICTED SHARES"), then delivery of such
                  Restricted Shares shall be effected pursuant to either clause
                  (i) or (ii) below at the election of Company, unless waived by
                  JPMorgan. Notwithstanding the foregoing, the Company shall
                  elect, prior to the first Settlement Date under Section 2
                  above, a Private Placement Settlement or Registered Settlement
                  for all deliveries of Restricted Shares pursuant to Section 2
                  above which election shall be applicable to all Settlement
                  Dates and the procedures in clause (i) or clause (ii) below
                  shall apply for all such delivered Restricted Shares on
                  aggregate basis commencing after the first Settlement Date.
                  The Calculation Agent shall make reasonable adjustments to
                  settlement terms and provisions under this Confirmation to
                  reflect a single Private Placement or Registered Settlement
                  for such aggregate Restricted Shares delivered hereunder.

                  (i)      If the Company elects to settle the Transaction
                           pursuant to this clause (i) (a "PRIVATE PLACEMENT
                           SETTLEMENT"), then deliveries of Restricted Shares by
                           the Company shall be effected in customary private
                           placement procedures with respect to such Restricted
                           Shares reasonably acceptable to JPMorgan; provided
                           that the Company may not elect a Private Placement
                           Settlement if, on the date of its election, it has
                           taken, or caused to be taken, any action that would
                           make unavailable either the exemption pursuant to
                           Section 4(2) of the Securities Act for the sale by
                           the Company to JPMorgan (or any affiliate designated
                           by JPMorgan) of the Restricted Shares or the
                           exemption pursuant to Section 4(1) or Section 4(3) of
                           the Securities Act for resales of the Restricted
                           Shares by JPMorgan (or any such affiliate of
                           JPMorgan). The Private Placement Settlement of such
                           Registered Shares shall include customary
                           representations, covenants, blue sky and other
                           governmental filings and/or registrations,
                           indemnities to JPMorgan, due diligence rights (for
                           JPMorgan or any designated buyer of the Restricted
                           Shares by JPMorgan), opinions and certificates, and
                           such other documentation as is customary for private
                           placement agreements, all reasonably acceptable to
                           JPMorgan. In the case of a Private Placement
                           Settlement, JPMorgan shall determine the appropriate
                           discount to the Share Termination Unit Price (in the
                           case of settlement of Share Termination Delivery
                           Units pursuant to paragraph (p) above) or any
                           Settlement Price (in the case of settlement of Shares
                           pursuant to Section 2 above) applicable to such
                           Restricted Shares in a commercially reasonable manner
                           and appropriately adjust the amount of such
                           Restricted Shares to be delivered to JPMorgan
                           hereunder; provided that in no event such number
                           shall be greater than 328,513,388 (the "MAXIMUM
                           AMOUNT"). Notwithstanding the Agreement or this
                           Confirmation, the date of delivery of such Restricted
                           Shares shall be the Exchange Business Day following
                           notice by JPMorgan to the Company, of such applicable
                           discount and the number of Restricted Shares to be
                           delivered pursuant to this clause (i). For the
                           avoidance of doubt, delivery of Restricted Shares
                           shall be due as set forth in the previous sentence
                           and not be due on the Share Termination Payment Date
                           (in the case of settlement of Share Termination
                           Delivery Units pursuant to paragraph (p) above) or on
                           the Settlement Date for such Restricted Shares (in
                           the case of settlement of Shares pursuant to Section
                           2 above).

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       12
<PAGE>

                  (ii)     If the Company elects to settle the Transaction
                           pursuant to this clause (ii) (a "REGISTRATION
                           SETTLEMENT"), then the Company shall file and use its
                           reasonable best efforts to make effective under the
                           Securities Act a registration statement or supplement
                           or amend an outstanding registration statement in
                           form and substance reasonably satisfactory to
                           JPMorgan, to cover the resale of such Restricted
                           Shares in accordance with customary resale
                           registration procedures, including covenants,
                           conditions, representations, underwriting discounts
                           (if applicable), commissions (if applicable),
                           indemnities due diligence rights, opinions and
                           certificates, and such other documentation as is
                           customary for equity resale underwriting agreements,
                           all reasonably acceptable to JPMorgan. If JPMorgan is
                           satisfied with such procedures and documentation, it
                           shall sell the Restricted Shares pursuant to such
                           registration statement during a period (the "RESALE
                           PERIOD") commencing on the Exchange Business Day
                           following delivery of such Restricted Shares (which,
                           for the avoidance of doubt, shall be any Settlement
                           Date in the case of settlement of Shares pursuant to
                           Section 2 above or the Share Termination Payment Date
                           in case of settlement of Share Termination Delivery
                           Units pursuant to paragraph (p) above) and ending on
                           the earliest of (i) the Exchange Business Day on
                           which JPMorgan completes the sale of all Restricted
                           Shares or, in the case of settlement of Share
                           Termination Delivery Units, a sufficient number of
                           Restricted Shares so that the realized net proceeds
                           of such sales exceed the Payment Obligation (as
                           defined above), (ii) the date upon which all
                           Restricted Shares have been sold or transferred
                           pursuant to Rule 144 (or similar provisions then in
                           force) or Rule 145(d)(1) or (2) (or any similar
                           provision then in force) under the Securities Act and
                           (iii) the date upon which all Restricted Shares may
                           be sold or transferred by a non-affiliate pursuant to
                           Rule 144(k) (or any similar provision then in force)
                           or Rule 145(d)(3) (or any similar provision then in
                           force under the Securities Act. If the Payment
                           Obligation exceeds the realized net proceeds from
                           such resale, Company shall transfer to JPMorgan by
                           the open of the regular trading session on the
                           Exchange on the Exchange Trading Day immediately
                           following the last day of the Resale Period the
                           amount of such excess (the "ADDITIONAL AMOUNT") in
                           cash or in a number of Shares ("MAKE-WHOLE SHARES")
                           in an amount that, based on the Settlement Price on
                           the last day of the Resale Period (as if such day was
                           the "Valuation Date" for purposes of computing such
                           Settlement Price), has a dollar value equal to the
                           Additional Amount. The Resale Period shall continue
                           to enable the sale of the Make-whole Shares. If
                           Company elects to pay the Additional Amount in
                           Shares, the requirements and provisions for
                           Registration Settlement shall apply. This provision
                           shall be applied successively until the Additional
                           Amount is equal to zero. In no even shall the Company
                           deliver a number of Restricted Shares greater than
                           the Maximum Amount.

                  (iii)    Without limiting the generality of the foregoing,
                           Company agrees that any Restricted Shares delivered
                           to JPMorgan, as purchaser of such Restricted Shares,
                           (i) may be transferred by and among JPMorgan Chase
                           Bank and its affiliates and Company shall effect such
                           transfer without any further action by JPMorgan and
                           (ii) after the minimum "holding period" within the
                           meaning of Rule 144(d) under the Securities Act has
                           elapsed after any Settlement Date for such Restricted
                           Shares, Company shall promptly remove, or cause the
                           transfer agent for such Restricted Shares to remove,
                           any legends referring to any such restrictions or
                           requirements from such Restricted Shares upon
                           delivery by JPMorgan (or such affiliate of JPMorgan)
                           to Company or such transfer agent of seller's and
                           broker's representation letters and an opinion of
                           counsel customarily delivered by JPMorgan in
                           connection with resales of restricted

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       13
<PAGE>

                           securities pursuant to Rule 144 under the Securities
                           Act, without any further requirement for the delivery
                           of any certificate, consent, agreement, opinion of
                           counsel, notice or any other document, any transfer
                           tax stamps or payment of any other amount or any
                           other action by JPMorgan (or such affiliate of
                           JPMorgan).

                  If the Private Placement Settlement or the Registration
                  Settlement shall not be effected as set forth in clauses (i)
                  or (ii), as applicable, then failure to effect such Private
                  Placement Settlement or such Registration Settlement shall
                  constitute an Event of Default with respect to which Company
                  shall be the Defaulting Party.

         (r)      DTC-Eligible Deliveries. Notwithstanding anything to the
                  contrary herein, the Company agrees that any delivery of
                  Shares or Share Termination Delivery Property shall be
                  effected by book-entry transfer through the facilities of DTC,
                  or any successor depositary, if at the time of delivery, such
                  class of Shares or class of Share Termination Delivery
                  Property is eligible to be in book-entry form at DTC or such
                  successor depositary.

         (s)      Governing Law. New York law (without reference to choice of
                  law doctrine).

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       14
<PAGE>

                                                                 [JPMORGAN LOGO]

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY
10172-3401. or by fax on 212 622 8519 (PLEASE NOTE THIS NEW FAX NUMBER).

                                     Very truly yours,

                                         J.P. MORGAN SECURITIES INC., AS AGENT
                                         FOR JPMORGAN CHASE BANK

                                         By: _______________________________
                                         Authorized Signatory
                                         Name:

         Accepted and confirmed
         as of the Trade Date:

         CADENCE DESIGN SYSTEMS, INC.

         By: -s-  William Porter
             -----------------------------
         Authorized Signatory
         Name: William Porter
               Senior Vice President and
               Chief Financial Officer

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

<PAGE>

                                                                 [JPMORGAN LOGO]

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P, Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY
10172-3401, or by fax on 212 622 8519 (PLEASE NOTE THIS NEW FAX NUMBER).

                                     Very truly yours,

                                         J.P. MORGAN SECURITIES INC., AS AGENT
                                         FOR JPMORGAN CHASE BANK

                                         By: -s- Nicola Mudge
                                             ---------------------------
                                         Authorized Signatory
                                         Name: Nicola Mudge

         Accepted and confirmed
         as of the Trade Date:

         CADENCE DESIGN SYSTEMS, INC.

         By: ________________________
         Authorized Signatory
         Name:

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

<PAGE>

                                         ANNEX A

<TABLE>
<CAPTION>
NUMBER               EXPIRATION DATE        DAILY NUMBER OF WARRANTS
------               ---------------        ------------------------
<S>                 <C>                     <C>
  l.                February 21, 2008                 74,525
  2.                February 22, 2008                 74,525
  3.                February 25, 2008                 74,525
  4.                February 26, 2008                 74,525
  5.                February 27, 2008                 74,525
  6.                February 28, 2008                 74,525
  7.                February 29, 2008                 74,525
  8.                  March 3, 2008                   74,525
  9.                  March 4, 2008                   74,525
 10.                  March 5, 2008                   74,525
 11.                  March 6, 2008                   74,525
 12.                  March 7, 2008                   74,525
 13.                 March 10, 2008                   74,525
 14.                 March 11, 2008                   74,525
 15.                 March 12, 2008                   74,525
 16.                 March 13, 2008                   74,525
 17.                 March 14, 2008                   74,525
 18.                 March 17, 2008                   74,525
 19.                 March 18, 2008                   74,525
 20.                 March 19, 2008                   74,525
 21.                 March 20, 2008                   74,525
 22.                 March 24, 2008                   74,525
 23.                 March 25, 2008                   74,525
 24.                 March 26, 2008                   74,525
 25.                 March 27, 2008                   74,525
 26.                 March 28, 2008                   74,525
 27.                 March 31, 2008                   74,525
 28.                  April 1, 2008                   74,525
 29.                  April 2, 2008                   74,525
 30.                  April 3, 2008                   74,525
 31.                  April 4, 2008                   74,525
 32.                  April 7, 2008                   74,525
 33.                  April 8, 2008                   74,525
 34.                  April 9, 2008                   74,525
 35.                 April 10, 2008                   74,525
 36.                 April 11, 2008                   74,525
 37.                 April 14, 2008                   74,525
 38.                 April 15, 2008                   74,525
 39.                 April 16, 2008                   74,525
 40.                 April 17, 2008                   74,525
 41.                 April 18, 2008                   74,525
 42.                 April 21, 2008                   74,525
 43.                 April 22, 2008                   74,525
 44.                 April 23, 2008                   74,525
 45.                 April 24, 2008                   74,525
 46.                 April 25, 2008                   74,525
 47.                 April 28, 2008                   74,525
 48.                 April 29, 2008                   74,525
 49.                 April 30, 2008                   74,525
 50.                   May 1, 2008                    74,525
 51.                   May 2, 2008                    74,525
 52.                   May 5, 2008                    74,525
 53.                   May 6, 2008                    74,525
 54.                   May 7, 2008                    74,525
 55.                   May 8, 2008                    74,525
 56.                   May 9, 2008                    74,525
 57.                  May 12, 2008                    74,525
 58.                  May 13, 2008                    74,525
 59.                  May 14, 2008                    74,525
 60.                  May 15, 2008                    74,555
</TABLE>

                     A SUBSIDIARY OF J.P. MORGAN CHASE & CO.
        INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
                                COMMERCIAL BANK.
      REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
  REGISTERED BRANCH ADDRESS 125 LONDON WALL, LONDON, EC2Y 5AJ. HEAD OFFICE 270
                           PARK AVENUE, NEW YORK, USA.

                                       16

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