AVANT CORP, S-4, 1996-09-09

AVANT CORP
S-4, 1996-09-09
PREPACKAGED SOFTWARE

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1996
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
AVANT! CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 7372 94-3133226
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION INDUSTRIAL IDENTIFICATION NUMBER)
OF INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
---------------
1208 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 738-8881
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
GERALD C. HSU
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AVANT! CORPORATION
1208 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 738-8881
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
WITH COPIES TO:
ROBERT V. GUNDERSON, JR., ESQ. JOSHUA PICKUS, ESQ.
STEVEN M. SPURLOCK, ESQ. ROBERT V.W. ZIPP, ESQ.
GUNDERSON DETTMER STOUGH VENTURE LAW GROUP
VILLENEUVE FRANKLIN & HACHIGIAN, LLP A PROFESSIONAL CORPORATION
600 HANSEN WAY, SECOND FLOOR 2800 SAND HILL ROAD
PALO ALTO, CALIFORNIA 94306 MENLO PARK, CALIFORNIA 94025
(415) 843-0500 (415) 854-4488
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As promptly as practicable after this Registration Statement becomes
effective and the effective time of the merger (the "Merger") of a wholly-
owned subsidiary of Avant! Corporation ("Avant!") with and into Meta-Software,
Inc., as described in the Agreement and Plan of Reorganization, dated as of
August 22, 1996, attached as Appendix A to the Joint Proxy
Statement/Prospectus forming a part of this Registration Statement.
---------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.0001................ 5,079,365 $32.625 $165,714,283 $57,143
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Represents the number of shares of Avant! common stock, $.0001 par value
("Avant! Common Stock"), issuable in connection with the Merger.
(2) Estimated pursuant to Rule 457(f) under the Securities Act of 1933, as
amended, based on the average of the high and low prices per share of
Avant! Common Stock on September 4, 1996, as reported on The Nasdaq
National Market.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

AVANT! CORPORATION

1208 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 738-8881

, 1996

Dear Stockholder:

A Special Meeting of Stockholders (the "Special Meeting") of Avant!
Corporation, a Delaware corporation ("Avant!"), will be held at ,
California, on , 1996 at local time.

At the Special Meeting you will be asked to consider and vote upon a
proposal (the "Avant! Share Issuance Proposal") to issue shares of Avant!
common stock, $.0001 par value (the "Avant! Common Stock"), in connection with
the merger (the "Merger") of Natasha Merger Corporation, a California
corporation and a wholly-owned subsidiary of Avant!, with and into Meta-
Software, Inc., a California corporation ("Meta"). In the Merger, each share
of Meta's common stock, no par value (the "Meta Common Stock"), outstanding as
of the closing of the Merger (other than shares as to which dissenters' rights
have been perfected under California law) will be converted into the right to
receive a fraction of a share of Avant! Common Stock, the numerator of which
is 5,079,365, and the denominator of which is equal to the sum of the
aggregate number of shares of Meta Common Stock issued and outstanding as of
the closing of the Merger and the aggregate number of shares of Meta Common
Stock issuable upon exercise of all options (the "Meta Stock Options")
outstanding as of the closing of the Merger. In addition, all Meta Stock
Options and subscription rights, together with the underlying Meta stock
plans, will be assumed by Avant! and all Meta Stock Options will be converted
into options to purchase shares of Avant! Common Stock. If the Merger is
approved, the Avant! Board of Directors intends to increase the size of the
Avant! Board from five to six directors and to appoint Shawn M. Hailey, the
President and Chief Executive Officer of Meta, to fill the vacancy created by
such action.

Morgan Stanley & Co. Incorporated, the investment banking firm retained by
the Avant! Board of Directors to render a financial opinion in connection with
the Merger, has rendered its opinion that as of the date of its opinion and
based upon the factors and the assumptions described in such opinion, the
consideration to be paid to the security holders of Meta Common Stock pursuant
to the Merger was fair from a financial point of view to Avant!.

YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND THE
TRANSACTIONS RELATED THERETO AND HAS UNANIMOUSLY DETERMINED THAT THEY ARE FAIR
TO AND IN THE BEST INTERESTS OF AVANT! AND ITS STOCKHOLDERS. AFTER CAREFUL
CONSIDERATION, YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE AVANT! SHARE ISSUANCE PROPOSAL.

In the material accompanying this letter, you will find a Notice of Special
Meeting of Stockholders, a Joint Proxy Statement/Prospectus relating to the
actions to be taken by Avant! stockholders at the Special Meeting and a proxy
card. The Joint Proxy Statement/Prospectus more fully describes the Avant!
Share Issuance Proposal and includes information about Avant! and Meta.

ALL STOCKHOLDERS ARE INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY THEN WITHDRAW YOUR
PROXY AND VOTE IN PERSON. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND
VOTED AT THE SPECIAL MEETING.

Sincerely,

/s/ Gerald C. Hsu
_____________________________________
Gerald C. Hsu
Chairman of the Board,
President and Chief Executive Officer
<PAGE>

AVANT! CORPORATION

1208 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 738-8881

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

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON , 1996

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

Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of Avant! Corporation, a Delaware corporation ("Avant!"), will be
held on , 1996 at , local time, at , California, for the following
purposes:

(1) To consider and vote upon a proposal (the "Avant! Share Issuance
Proposal") to issue shares of Avant! Common Stock in connection with the
merger (the "Merger") of Natasha Merger Corporation, a California
corporation and a wholly-owned subsidiary of Avant!, with and into Meta-
Software, Inc., a California corporation ("Meta"), pursuant to which, among
other things, (a) Meta will become a wholly-owned subsidiary of Avant!, (b)
each share of Meta's common stock, no par value (the "Meta Common Stock"),
outstanding as of the closing of the Merger (other than shares as to which
dissenters' rights have been perfected under California law) will be
converted into the right to receive a fraction of a share of Avant! common
stock, $.0001 par value (the "Avant! Common Stock"), the numerator of which
is 5,079,365, and the denominator of which is equal to the sum of the
aggregate number of shares of Meta Common Stock issued and outstanding as
of the closing of the Merger and the aggregate number of shares of Meta
Common Stock issuable upon exercise of all options (the "Meta Stock
Options") outstanding as of the closing of the Merger, and (c) all Meta
Stock Options and subscription rights, together with the underlying Meta
stock plans, will be assumed by Avant! and all Meta Stock Options will be
converted into options to purchase shares of Avant! Common Stock. The
Merger is more fully described in the accompanying Joint Proxy
Statement/Prospectus; and

(2) To transact such other business as may properly come before the
Special Meeting or any postponements or adjournments thereof.

Only stockholders of record at the close of business on , 1996 are
entitled to notice of and to vote at the Special Meeting, or at any
postponements or adjournments thereof. The affirmative vote of a majority of
the outstanding shares of Avant! Common Stock represented at the Special
Meeting, in person or by proxy, is required to approve the Avant! Share
Issuance Proposal.

A complete list of stockholders entitled to vote at the Special Meeting will
be available for examination at Avant!'s principal executive offices, for any
purposes germane to the Special Meeting, during ordinary business hours, for a
period of at least ten days prior to the Special Meeting.

IMPORTANT

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN
THE UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON. IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AND VOTED AT THE SPECIAL MEETING.

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Gerald C. Hsu
-----------------------------------
Gerald C. Hsu
Chairman of the Board, President and
Sunnyvale, California Chief Executive Officer
, 1996
<PAGE>

META-SOFTWARE, INC.

1300 WHITE OAKS ROAD
CAMPBELL, CALIFORNIA 95008
(408) 369-5400

, 1996

Dear Shareholder:

A Special Meeting of Shareholders (the "Special Meeting") of Meta-Software,
Inc., a California corporation ("Meta"), will be held at the principal
executive offices of Meta, 1300 White Oaks Road, Campbell, California, on
, 1996 at local time.

At the Special Meeting you will be asked to consider and vote upon a
proposal (the "Meta Merger Proposal") to approve an Agreement and Plan of
Reorganization dated August 22, 1996 (the "Plan of Reorganization"), among
Meta, Avant! Corporation, a Delaware corporation ("Avant!"), and Natasha
Merger Corporation, a California corporation and a wholly-owned subsidiary of
Avant! ("Merger Sub"), pursuant to which (a) Merger Sub will be merged with
and into Meta, following which Meta will become a wholly-owned subsidiary of
Avant!, (b) each share of Meta's common stock, no par value (the "Meta Common
Stock"), outstanding as of the closing of the Merger (other than shares as to
which dissenters' rights have been perfected under California law) will be
converted into the right to receive a fraction of a share of Avant! common
stock, par value $.0001 per share (the "Avant! Common Stock"), the numerator
of which is 5,079,365, and the denominator of which is equal to the sum of the
aggregate number of shares of Meta Common Stock issued and outstanding as of
the closing of the Merger and the aggregate number of shares of Meta Common
Stock issuable upon exercise of all options (the "Meta Stock Options")
outstanding as of the closing of the Merger (the "Merger Exchange Ratio"), and
(c) all Meta Stock Options and subscription rights, together with the
underlying Meta stock plans, will be assumed by Avant! and all Meta Stock
Options will be converted into options to purchase shares of Avant! Common
Stock. If the Merger is approved, the Avant! Board of Directors intends to
increase the size of the Avant! Board from five to six directors and to
appoint Shawn M. Hailey, the President and Chief Executive Officer of Meta, to
fill the vacancy created by such action.

Wessels, Arnold & Henderson, L.L.C., the investment banking firm retained by
the Meta Board of Directors to perform certain financial advisory services in
connection with the Merger, has rendered its opinion that as of August 22,
1996 the Merger Exchange Ratio was fair from a financial point of view to the
holders of Meta Common Stock.

YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND THE
TRANSACTIONS RELATED THERETO AND HAS UNANIMOUSLY DETERMINED THAT THEY ARE FAIR
TO AND IN THE BEST INTERESTS OF META AND ITS SHAREHOLDERS. AFTER CAREFUL
CONSIDERATION, YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE META MERGER PROPOSAL.

Shawn M. Hailey, Meta's President and Chief Executive Officer, and Kim L.
Hailey, Meta's Vice President of Engineering, the beneficial owners of an
aggregate of 7,481,201 shares of Meta Common Stock (approximately % of the
outstanding Meta Common Stock) have agreed to vote in favor of the Meta Merger
Proposal.

In the materials accompanying this letter, you will find a Notice of Special
Meeting of Shareholders, a Joint Proxy Statement/Prospectus relating to the
actions to be taken by Meta shareholders at the Special Meeting and a proxy
card. The Joint Proxy Statement/Prospectus more fully describes the Meta
Merger Proposal and includes information about Meta and Avant!.

ALL SHAREHOLDERS ARE INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY THEN WITHDRAW YOUR
PROXY AND VOTE IN PERSON. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND
VOTED AT THE SPECIAL MEETING.

Sincerely,

/s/ Shawn M. Hailey
-------------------------------------
Shawn M. Hailey
Chairman of the Board, President
and Chief Executive Officer
<PAGE>

META-SOFTWARE, INC.
1300 WHITE OAKS ROAD
CAMPBELL, CALIFORNIA 95008
(408) 369-5400

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

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON , 1996

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

Notice is hereby given that a Special Meeting of Shareholders (the "Special
Meeting") of Meta-Software, Inc. a California corporation ("Meta"), will be
held on , 1996, at , local time, at the principal executive offices
of Meta, 1300 White Oaks Road, Campbell, California, for the following
purposes:

(1) To consider and vote upon a proposal (the "Meta Merger Proposal") to
approve an Agreement and Plan of Reorganization dated August 22, 1996 (the
"Plan of Reorganization"), among Meta, Avant! Corporation, a Delaware
corporation ("Avant!"), and Natasha Merger Corporation, a California
corporation and a wholly-owned subsidiary of Avant! ("Merger Sub"), and
related Agreement of Merger to be entered into between Meta and Merger Sub,
pursuant to which, among other things, (a) Merger Sub will be merged with
and into Meta (the "Merger"), following which Meta will become a wholly-
owned subsidiary of Avant!, (b) each share of Meta's common stock, no par
value (the "Meta Common Stock"), outstanding as of the closing of the
Merger (other than shares as to which dissenters' rights have been
perfected under California law) will be converted into the right to receive
a fraction of a share of Avant! common stock, $.0001 par value (the "Avant!
Common Stock"), the numerator of which is 5,079,365, and the denominator of
which is equal to the sum of the aggregate number of shares of Meta Common
Stock issued and outstanding as of the closing of the Merger and the
aggregate number of shares of Meta Common Stock issuable upon exercise of
all options (the "Meta Stock Options") outstanding as of the closing of the
Merger, and (c) all Meta Stock Options and subscription rights, together
with the underlying Meta stock plans, will be assumed by Avant! and all
Meta Stock Options will be converted into options to purchase shares of
Avant! Common Stock. The Merger is more fully described in the accompanying
Joint Proxy Statement/Prospectus; and

(2) To transact such other business that may properly come before the
Special Meeting or any postponements or adjournments thereof.

Only shareholders of record at the close of business on , 1996 are
entitled to notice of and to vote at the Special Meeting, or at any
postponements or adjournments thereof. The affirmative vote of a majority of
the outstanding shares of Meta Common Stock is required to approve the Meta
Merger Proposal. Shawn M. Hailey, Meta's President and Chief Executive
Officer, and Kim L. Hailey, Meta's Vice President of Engineering, the
beneficial owners of an aggregate of 7,481,201 shares of Meta Common Stock
(approximately % of the outstanding Meta Common Stock) have agreed to vote
in favor of the Meta Merger Proposal.

Under the California General Corporation Law (the "CGCL"), a shareholder who
objects to the Merger can assert statutory dissenters' rights to dissent from
and obtain payment of the fair value of his or her Meta Common Stock by strict
compliance with the requirements of the CGCL. See "The Proposed Merger and
Related Transactions--Dissenters' Rights" in the Joint Proxy
Statement/Prospectus for a more detailed description of dissenters' rights
with respect to the Merger.

A complete list of shareholders entitled to vote at the Special Meeting will
be available for examination at Meta's principal executive offices, for any
purposes germane to the Special Meeting, during ordinary business hours, for a
period of at least ten days prior to the Special Meeting.

IMPORTANT

ALL SHAREHOLDERS ARE INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY THEN WITHDRAW YOUR
PROXY AND VOTE IN PERSON. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED
AND VOTED AT THE SPECIAL MEETING.

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ William E. Alford
_______________________________________
William E. Alford
Secretary

Campbell, California
, 1996

PLEASE DO NOT SEND IN ANY
SHARE CERTIFICATES AT THIS TIME.
<PAGE>

AVANT! LOGO META LOGO

AVANT! CORPORATION

JOINT PROXY STATEMENT
---------------
PROSPECTUS

AVANT! CORPORATION

SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 1996

META-SOFTWARE, INC.

SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 1996

This Joint Proxy Statement/Prospectus of Avant! Corporation, a Delaware
corporation ("Avant!"), and Meta-Software, Inc., a California corporation
("Meta"), is being used (a) to solicit proxies on behalf of the Board of
Directors of Avant! from holders of the outstanding Avant! common stock,
$.0001 par value ("Avant! Common Stock"), in connection with a Special Meeting
of Stockholders to be held on , 1996 at a.m., local time, at (the
"Avant! Special Meeting"), and (b) to solicit proxies on behalf of the Board
of Directors of Meta from holders of the outstanding Meta common stock, no par
value ("Meta Common Stock"), in connection with a Special Meeting of
Shareholders to be held on , 1996 at a.m., local time, at the principal
executive offices of Meta, 1300 White Oaks Road, Campbell, California (the
"Meta Special Meeting"). The Joint Proxy Statement/Prospectus and the
accompanying proxies are first being mailed to stockholders of Avant! and
shareholders of Meta on or about , 1996.

At the Avant! Special Meeting, stockholders of Avant! will be asked to
consider and vote upon a proposal (the "Avant! Share Issuance Proposal") to
issue shares of Avant! Common Stock to shareholders of Meta in connection with
the merger (the "Merger") of Natasha Merger Corporation, a California
corporation and a wholly-owned subsidiary of Avant! ("Merger Sub"), with and
into Meta pursuant to the terms of an Agreement and Plan of Reorganization
dated August 22, 1996, a copy of which is attached to this Joint Proxy
Statement/Prospectus as Appendix A (the "Plan of Reorganization").

At the Meta Special Meeting, shareholders of Meta will be asked to consider
and vote upon a proposal (the "Meta Merger Proposal") to approve the Plan of
Reorganization, pursuant to which (a) Merger Sub will be merged with and into
Meta, following which Meta will become a wholly-owned subsidiary of Avant!,
(b) each share of Meta Common Stock outstanding as of the closing of the
Merger (other than shares as to which dissenters' rights have been perfected
under California law ("Dissenting Shares")) will be converted into the right
to receive a fraction of a share of Avant! Common Stock, the numerator of
which is 5,079,365, and the denominator of which is equal to the sum of the
aggregate number of shares of Meta Common Stock issued and outstanding as of
the closing of the Merger, and the aggregate number of shares of Meta Common
Stock issuable upon exercise of all options (the "Meta Stock Options")
outstanding as of the closing of the Merger (the "Merger Exchange Ratio"), and
(c) all Meta Stock Options and subscription rights, together with the
underlying Meta stock plans (the "Meta Stock Plans"), will be assumed by
Avant! and all Meta Stock Options will be converted into options to purchase
shares of Avant! Common Stock.

This Joint Proxy Statement/Prospectus also constitutes the prospectus of
Avant! under the Securities Act of 1933, as amended (the "Securities Act"),
for the offering of up to 5,079,365 shares of Avant! Common Stock in
connection with the Merger. Avant! Common Stock is traded on The Nasdaq
National Market under the symbol "AVNT." On , 1996, the closing sale price
of the Avant! Common Stock as reported on The Nasdaq National Market was $
per share. The information set forth in this Joint Proxy Statement/Prospectus
concerning Avant! and Merger Sub has been furnished by Avant!, and the
information set forth in this Joint Proxy Statement/Prospectus concerning Meta
has been furnished by Meta.

---------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 15 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED CAREFULLY BY BOTH AVANT! STOCKHOLDERS AND META SHAREHOLDERS IN
EVALUATING THE MERGER AND THE ACQUISITION OF SECURITIES OFFERED HEREBY.

THE SHARES OF AVANT! COMMON STOCK TO BE ISSUED IN CONNECTION WITH THE MERGER
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

---------------
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS , 1996.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION..................................................... 2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE......................... 2
TRADEMARKS................................................................ 3
FORWARD-LOOKING STATEMENTS................................................ 3
SUMMARY................................................................... 4
The Parties to the Proposed Merger...................................... 4
Avant! Special Meeting of Stockholders.................................. 5
Meta Special Meeting of Shareholders.................................... 5
The Merger.............................................................. 6
Market Price Data....................................................... 14
Risk Factors............................................................ 15
Selected Historical and Pro Forma Financial Information................. 15
Selected Historical Financial Data...................................... 16
Avant!, Meta and Anagram Unaudited Selected Pro Forma Condensed Combined
Financial Data......................................................... 17
Comparative Per Share Data.............................................. 18
RISK FACTORS.............................................................. 19
Litigation Risk......................................................... 19
Uncertainty Relating to Integration of Operations and Product Lines;
Management of Growth................................................... 20
Dependence Upon Key Personnel........................................... 21
Competition............................................................. 21
Integration of Technologies and Product Lines........................... 21
Potential Fluctuations in Quarterly Results............................. 22
Potential Volatility of Stock Price..................................... 22
Cost of Integration; Transaction Expenses............................... 22
Potential Dilutive Effect to Stockholders............................... 23
Shares Eligible for Public Sale......................................... 23
Product Concentration................................................... 23
Risks Associated with International Licensing........................... 23
Dependence Upon Distributors and Manufacturer's Representatives......... 24
New Products and Rapid Technological Change............................. 24
Dependence Upon Semiconductor and Electronics Industries;
General Economic and Market Conditions................................. 25
Limitations on Protection of Intellectual Property and Proprietary
Rights................................................................. 25
Risk of Product Defects................................................. 26
Dependence Upon Relationship with Synopsys.............................. 26
Rights of Holders of Meta Common Stock Following the Merger............. 26
Concentration of Stock Ownership; Change of Control Provisions.......... 26
INTRODUCTION.............................................................. 27
VOTING AND PROXIES........................................................ 27
Date, Time and Place of Avant! Special Meeting and Meta Special
Meeting................................................................ 27
Record Date and Outstanding Shares...................................... 27
Voting Proxies.......................................................... 28
Avant! Stockholder Vote Required........................................ 28
Meta Shareholder Vote Required.......................................... 28
Solicitation of Proxies; Expenses....................................... 28
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE PROPOSED MERGER AND RELATED TRANSACTIONS (RELATED TO PROPOSALS FOR
BOTH AVANT! AND META)................................................... 29
DESCRIPTION OF MERGER AND PLAN OF REORGANIZATION......................... 29
General............................................................... 29
Material Contacts and Board Deliberations............................. 29
Reasons for the Merger................................................ 31
Opinions of Financial Advisors........................................ 33
Conversion of Meta Shares............................................. 39
Assumption of Meta Options and Subscription Rights.................... 40
Exchange of Certificates.............................................. 41
Operations Following the Merger; Management of Combined Company....... 42
Representation Warranties and Covenants............................... 42
Other Offers.......................................................... 44
Resale of Avant! Common Stock; Agreements with Affiliates............. 45
Interests of Certain Persons in the Merger............................ 45
Conditions to the Merger.............................................. 45
Shareholders Agreement................................................ 47
Closing............................................................... 47
Termination........................................................... 47
Expenses and Termination Fees......................................... 48
Amendment............................................................. 49
Certain Federal Income Tax Considerations............................. 49
Accounting Treatment.................................................. 51
DISSENTERS' RIGHTS....................................................... 51
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS.............. 53
AVANT! BUSINESS.......................................................... 61
Introduction.......................................................... 61
Recent Developments................................................... 61
Industry Background................................................... 62
Technology and Architecture........................................... 63
Products.............................................................. 65
Customers............................................................. 65
Sales and Marketing................................................... 66
AVANT! MANAGEMENT........................................................ 67
MARKET PRICES OF AVANT! COMMON STOCK; DIVIDENDS.......................... 68
META BUSINESS............................................................ 69
Overview.............................................................. 69
Industry Background................................................... 69
Products and Services................................................. 70
Customers............................................................. 72
Sales and Marketing................................................... 72
Customer Service and Support.......................................... 73
Research and Development.............................................. 73
Competition........................................................... 73
Proprietary Rights.................................................... 74
Employees............................................................. 74
Property.............................................................. 75
Legal Proceedings..................................................... 75
</TABLE>

ii
<PAGE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
META SELECTED FINANCIAL DATA............................................. 76
META MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................................................... 78
Overview.............................................................. 78
Results of Operations................................................. 79
Quarterly Results..................................................... 83
Liquidity and Capital Resources....................................... 85
MARKET PRICE OF META'S COMMON STOCK; DIVIDENDS........................... 86
MANAGEMENT OF META....................................................... 87
Executive Officers and Directors...................................... 87
Compensation of Directors............................................. 87
Executive Compensation................................................ 88
CERTAIN TRANSACTIONS..................................................... 89
STOCK OWNERSHIP OF META MANAGEMENT AND PRINCIPAL META SHAREHOLDERS....... 90
DESCRIPTION OF AVANT! CAPITAL STOCK...................................... 91
Common Stock.......................................................... 91
Preferred Stock....................................................... 91
Antitakeover Effects of Provisions of the Certificate of
Incorporation,
Bylaws and Delaware Law.............................................. 91
Registration Rights................................................... 92
Transfer Agent and Registrar.......................................... 92
COMPARISON OF RIGHTS OF HOLDERS OF AVANT! COMMON STOCK AND HOLDERS OF
META COMMON STOCK....................................................... 93
LEGAL MATTERS............................................................ 99
EXPERTS.................................................................. 99
ANAGRAM, INCORPORATED FINANCIAL STATEMENTS............................... F-1
META-SOFTWARE, INC. INDEX TO FINANCIAL STATEMENTS........................ F-17
</TABLE>

APPENDICES
A--Agreement and Plan of Reorganization
B--Opinion of Morgan Stanley & Co. Incorporated
C--Opinion of Wessels, Arnold & Henderson, L.L.C.
D--Chapter 13 of the California General Corporation Law

iii
<PAGE>

AVAILABLE INFORMATION

Avant! and Meta are each subject to the informational reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith, each files reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy statements and other information may be inspected and copied at
the public reference facilities maintained by the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
regional offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and at Seven World Trade Center (13th
Floor), New York, New York 10048. Copies of such material may be obtained by
mail from the Public Reference Section of the SEC at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC also
makes electronic filings publicly available on the Internet within 24 hours of
acceptance. The SEC's Internet address is http://www.sec.gov. The SEC web site
also contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The Avant! Common
Stock and the Meta Common Stock are quoted on The Nasdaq National Market, and
the reports, proxy statements and other information referred to above can also
be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.

Avant! has filed with the SEC a registration statement on Form S-4,
including this Joint Proxy Statement/Prospectus and other information (herein,
together with all amendments and exhibits, referred to as the "Registration
Statement"), under the Securities Act, with respect to the shares of Avant!
Common Stock to be issued to holders of Meta Common Stock in the Merger. This
Joint Proxy Statement/Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information,
reference is hereby made to the Registration Statement. Copies of the
Registration Statement and the exhibits and schedules thereto may be
inspected, without charge, at the offices of the SEC, or obtained at
prescribed rates from the Public Reference Section of the SEC at room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or obtained
from the SEC web site.

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS JOINT PROXY
STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF
THIS JOINT PROXY STATEMENT/PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF AVANT! OR META SINCE SUCH DATE. THIS JOINT PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES OF AVANT! TO BE
ISSUED IN THE MERGER, OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents previously filed with the SEC by Avant! pursuant to
the Exchange Act are incorporated herein by reference:

1. Avant!'s Annual Report on Form 10-K for the year ended December 31,
1995, filed with the SEC on March 29, 1996;

2. Avant!'s 1995 Proxy Statement for the Annual Meeting of Stockholders
held on May 30, 1996, filed with the SEC on April 26, 1996;

3. Avant!'s Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, filed with the SEC on May 14, 1996;

4. Avant!'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1996, filed with the SEC on August 14, 1996; and

5. The description of Avant!'s Common Stock contained in Avant!'s
Registration Statement on Form 8-A filed with the SEC on April 12, 1995.

2
<PAGE>

All reports and definitive proxy or information statements filed by Avant!
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the date of this Joint Proxy Statement/Prospectus and prior to the date of
the Meta Special Meeting shall be deemed to be incorporated by reference into
this Joint Proxy Statement/Prospectus from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Joint Proxy Statement/Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Joint Proxy Statement/Prospectus.

THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES CERTAIN DOCUMENTS OF
AVANT! BY REFERENCE THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH
DOCUMENTS (NOT INCLUDING EXHIBITS THERETO) ARE AVAILABLE TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS
IS DELIVERED, UPON ORAL OR WRITTEN REQUEST, WITHOUT CHARGE, DIRECTED TO JOHN
P. HUYETT, CHIEF FINANCIAL OFFICER, AVANT! CORPORATION, 1208 EAST ARQUES
AVENUE, SUNNYVALE, CALIFORNIA 94086, TELEPHONE NUMBER (408) 738-8881. IN ORDER
TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, SUCH REQUESTS SHOULD BE MADE BY
, 1996.

TRADEMARKS

ArcCell, VeriCheck, VeriView and LTL are registered trademarks of Avant!,
and Aquarius, Hercules, Planet, Solar and Star are trademarks of Avant!.
MetaTestchip is a registered trademark of Meta, and HSPICE, MASTER Toolbox,
PERSONAL Toolbox, MetaCircuit, Meta-Software, Meta I/O, MetaWaves, MetaLink,
MetaManager, Silicon to HDL, and ATEM/Device Model Builder are trademarks of
Meta. Meta-Software and Meta-Labs are service marks of Meta. This Joint Proxy
Statement/Prospectus also includes trademarks of companies other than Avant!
and Meta.

FORWARD-LOOKING STATEMENTS

This Joint Proxy Statement/Prospectus contains forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act ("Forward-Looking Statements"). Actual results could differ
materially from those projected in the Forward-Looking Statements as a result
of the factors set forth under "Risk Factors" herein. In connection with
Forward-Looking Statements that appear herein, shareholders of Meta should
carefully review the factors set forth in this Joint Proxy
Statement/Prospectus under "Risk Factors."

3
<PAGE>

SUMMARY

This Joint Proxy Statement/Prospectus relates to the merger of Merger Sub
with and into Meta, and the issuance of shares of Avant! Common Stock, to the
shareholders of Meta upon the closing of the Merger. The following is intended
as a summary of the information contained in this Joint Proxy
Statement/Prospectus, is not intended to be a complete statement of all
material features of the proposals to be voted on and is qualified in its
entirety by the more detailed information and financial statements and related
notes appearing elsewhere in this Joint Proxy Statement/Prospectus or
incorporated herein by reference. Capitalized terms used but not defined in
this Summary have the meanings given to them elsewhere in this Joint Proxy
Statement/Prospectus.

THE PARTIES TO THE PROPOSED MERGER

Avant!. Avant! develops, markets and supports integrated circuit design
automation ("ICDA") software for the physical design of high-density, high-
performance integrated circuits ("ICs"). Avant!'s product architecture is
designed to solve the problems inherent in submicron (less than 1.0-micron
feature size) and deep submicron (less than 0.5-micron feature size) IC design
and to offer improved time to market, reduced development and manufacturing
costs and enhanced IC performance when compared to previous generations of ICDA
software. Avant!'s product architecture consists of an efficient unified
hierarchical physical design database, a set of proprietary technologies shared
by the Avant! physical design products, an interactive physical design
floorplanner, an interactive unified layout editor and a common graphical user
interface. Avant!'s products, Aquarius, Hercules, Planet, Solar and Star, are
designed to be compatible with the most commonly used ICDA tools and to be
easily integrated into the customer's existing design environment and
methodology. Avant! markets its products to major customer accounts worldwide
through its direct sales force, distributors and manufacturer's representatives
and offers comprehensive customer service, training and support. End users of
Avant!'s products include a number of leading electronics companies, such as
Alcatel, Cirrus Logic, GoldStar, Matsushita, Motorola, National Semiconductor,
Samsung, Sony and Yamaha. Avant!'s principal executive offices are located at
1208 East Arques Avenue, Sunnyvale, California 94086, and its telephone number
is (408) 738-8881.

On August 18, 1996, Avant! entered into a definitive agreement to acquire
Anagram, Inc. ("Anagram"), a developer of simulation and analysis ICDA software
for high-performance deep submicron ICs. Pursuant to the terms of the
agreement, a wholly-owned subsidiary of Avant! will be merged with and into
Anagram, whereby Anagram will become a wholly-owned subsidiary of Avant! (the
"Anagram Acquisition"). In addition, upon the closing of the Anagram
Acquisition (the "Anagram Closing") (i) all of the fully-diluted shares of
Anagram capital stock (other than Dissenting Shares) will be exchanged for
approximately 2,414,000 shares of Avant! Common Stock, with (ii) each option to
purchase shares of Anagram capital stock outstanding immediately prior to the
Anagram Closing being assumed by Avant!. All Anagram stock options will be
converted into options to purchase shares of Avant! Common Stock. The Anagram
Acquisition is expected to be accounted for as a pooling of interests. The
Anagram Closing is conditioned upon the issuance of a permit by the California
Department of Corporations for the issuance of securities in the Anagram
Acquisition, and other standard closing conditions. Prior to the Anagram
Closing each of Avant! and Anagram has consented, among other things, to carry
on their respective businesses in the usual, regular and ordinary course. The
Anagram Closing is expected to be consummated on or before September 30, 1996;
however, no assurance can be given that the Anagram Acquisition will be
consummated by such time, if at all. In the event that the Anagram Closing is
delayed, the integration of Anagram's and Avant!'s business, operations and
employees could be interrupted and the costs related thereto would likely
increase. In addition, to the extent the Anagram Closing fails to be
consummated, the business, and thus the operating results, of the combined
company could be materially adversely affected. See "Risk Factors--Uncertainty
Relating to Integration of Operations and Related Products; Management of
Growth"and "--Cost of Integration; Transaction Expenses."

4
<PAGE>

Meta. Meta develops, markets and supports simulation and library generation
software products for use in IC design. Meta's products include HSPICE, an
industry leading circuit simulator in use at over 1,500 commercial customer
sites worldwide, and MASTER Toolbox, an automated cell characterization and
library generation program introduced in late 1994. Meta's products assist IC
designers in ascertaining whether semiconductor devices based on their designs
will meet functional and performance specifications when fabricated in silicon.
Meta believes that its products can be used to reduce time to market, enhance
IC performance, lower design costs and validate designs across multiple
foundries. Meta markets its products worldwide through a direct sales force and
selected distributors and sales representatives and offers comprehensive
service and training. Meta's customers include AMD, Fujitsu, Motorola, Samsung,
Silicon Graphics, Sun Microsystems and Texas Instruments. Meta's principal
executive offices are located at 1300 White Oaks Road, Campbell, California
95008, and its telephone number is (408) 369-5400.

Merger Sub. Merger Sub is a wholly-owned subsidiary of Avant! with no
business operations other than in connection with facilitating the Merger.
Merger Sub's principal executive offices are located at 1208 East Arques
Avenue, Sunnyvale, California 94086, and its telephone number is (408) 738-
8881.

AVANT! SPECIAL MEETING OF STOCKHOLDERS

Time, Date and Purpose. The Avant! Special Meeting will be held at ,
California, on , 1996 at , local time. The purpose of the meeting is to
consider and vote upon a proposal to issue shares of Avant! Common Stock to
shareholders of Meta in connection with the Merger (the "Avant! Share Issuance
Proposal").

Record Date; Vote Required. The record date for determining stockholders of
Avant! entitled to notice of and to vote at the Avant! Special Meeting is ,
1996 (the "Avant! Record Date"). On the Avant! Record Date there were
shares of Avant! Common Stock outstanding, held by approximately holders
of record. Each share of Avant! Common Stock entitles the holder thereof to one
vote upon all matters submitted to a vote of stockholders. The presence at the
Avant! Special Meeting in person or by proxy of the holders of a majority of
the outstanding shares of Avant! Common Stock constitutes a quorum.

The affirmative vote of the holders of a majority of the outstanding shares
of Avant! Common Stock represented at the Avant! Special Meeting, in person or
by proxy, is required to approve the Avant! Share Issuance Proposal. A vote in
favor of the Avant! Share Issuance Proposal constitutes a vote in favor of the
assumption by Avant! of all Meta Stock Options and subscriptions rights, which,
as adjusted to give effect to the Merger Exchange Ratio, will become options
and subscription rights to purchase Avant! Common Stock, together with the
underlying Meta Stock Option Plans. On the Avant! Record Date, Avant!
directors, executive officers and their affiliates held in the aggregate
approximately % of the outstanding shares of Avant! Common Stock entitled to
vote at the Avant! Special Meeting. See "Voting and Proxies."

META SPECIAL MEETING OF SHAREHOLDERS

Time, Date and Purpose. The Meta Special Meeting will be held at the
principal executive offices of Meta, 1300 White Oaks Road, Campbell,
California, on , 1996, at local time. The purpose of the meeting is to
consider and vote upon a proposal to approve the Plan of Reorganization and the
transactions contemplated thereby, including the Merger (the "Meta Merger
Proposal").

Record Date; Vote Required. The record date for determining shareholders of
Meta entitled to notice of and to vote at the Meta Special Meeting is ,
1996 (the "Meta Record Date"). On the Meta Record Date there were shares of
Meta Common Stock outstanding, held by approximately holders of

5
<PAGE>

record. Each share of Meta Common Stock entitles the holder thereof to one vote
upon all matters submitted to a vote of shareholders. The presence at the Meta
Special Meeting in person or by proxy of a majority of the outstanding shares
of Meta Common Stock constitutes a quorum.

The affirmative vote of the holders of a majority of the outstanding shares
of Meta Common Stock is required for the approval of the Meta Merger Proposal.
On the Meta Record Date, Meta directors, executive
officers and their affiliates held in the aggregate approximately % of the
outstanding shares of Meta Common Stock entitled to vote at the Meta Special
Meeting. Shawn M. Hailey, Meta's President and Chief Executive Officer, and Kim
L. Hailey, Meta's Vice President of Engineering, the holders of an aggregate of
7,481,201 shares of Meta Common Stock (approximately % of the outstanding
Meta Common Stock) have agreed to vote their shares in favor of the Meta Merger
Proposal. See "Voting and Proxies."

THE MERGER

General. At the time and on the date the Agreement of Merger is filed with
the Office of the Secretary of State of the State of California (respectively,
the "Effective Time" and the "Effective Date" of the Merger), Merger Sub will
be merged with and into Meta, all of the business, assets, liabilities and
obligations of Merger Sub will be assumed by Meta, the separate existence of
Merger Sub will cease and Meta will become a wholly-owned subsidiary of Avant!.
In addition, at the Effective Time of the Merger, (a) each share of Meta Common
Stock outstanding as of the closing of the Merger (other than Dissenting
Shares) will be converted into the right to receive a fraction of a share of
Avant! Common Stock, the numerator of which is 5,079,365, and the denominator
of which is equal to the sum of the aggregate number of shares of Meta Common
Stock issued and outstanding as of the closing of the Merger and the aggregate
number of shares of Meta Common Stock issuable upon exercise of all Meta Stock
Options (the "Merger Exchange Ratio") and (b) all Meta Stock Options and
subscription rights, together with the underlying Meta Stock Plans, will be
assumed by Avant! and converted into options and subscription rights to
purchase shares of Avant! Common Stock at an exercise price based upon the
Merger Exchange Ratio. The Merger Exchange Ratio is estimated to be 0.435 to
one, based upon Meta Common Stock and Meta Stock Options outstanding at June
30, 1996. The Merger Exchange Ratio will not be affected by fluctuations in the
market price of the Avant! Common Stock or Meta Common Stock prior to the
closing of the Merger. No fractional shares of Avant! Common Stock will be
issued in the Merger, and cash will be paid in lieu of the issuance of
fractional shares. See "The Proposed Merger and Related Transactions--
Description of Merger and Plan of Reorganization--Conversion of Meta Shares."

An aggregate of up to 5,079,365 shares of Avant! Common Stock will be issued
in the Merger. In connection therewith, Avant! will assume outstanding options
and subscription rights to purchase an aggregate of approximately 1,515,226
shares of Meta Common Stock (based on the number of shares subject to
outstanding Meta Stock Options on June 30, 1996), which, as adjusted to give
effect to the Merger Exchange Ratio, will become options and subscription
rights to purchase an aggregate of approximately 660,639 shares of Avant!
Common Stock. The conversion will be effected by multiplying the number of
shares of Meta Common Stock subject to each Meta Stock Option and subscription
right immediately prior to the Merger by the Merger Exchange Ratio, and
dividing the exercise price of each such option and subscription right by the
Merger Exchange Ratio. If a holder of a Meta Stock Option or subscription right
were to exercise such option or subscription right after June 30, 1996 and
before the Effective Time of the Merger, each share of Meta Common Stock issued
pursuant to such option or subscription right will be converted into the right
to receive a fraction of a share of Avant! Common Stock equal to the Merger
Exchange Ratio. See "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Description of Merger and Plan of
Reorganization--Assumption of Meta Options."

The following table presents the fully-diluted equity interests in the
combined company of Avant! stockholders and Meta shareholders on a pro forma
combined basis as of June 30, 1996 (exclusive of shares issuable upon the
exercise of outstanding options and subscription rights to purchase shares of
Avant! Common Stock and Meta Common Stock), assuming the closing of the Merger
and the issuance of Avant! Common Stock to the Meta shareholders in connection
therewith:

6
<PAGE>

<TABLE>
<CAPTION>
SHARES %
-------------- -----
(IN THOUSANDS)
<S> <C> <C>
Avant! stockholders(1)................................. 21,365 80.8%
Meta shareholders...................................... 5,080 19.2%
------ -----
Total pro forma Avant! stockholders.................... 26,445 100.0%
====== =====
</TABLE>
- ----------------
(1) Includes approximately 2,414,000 shares to be issued to acquire all of the
fully-diluted capital stock of Anagram. See "Avant!--Business--Recent
Developments."

Exchange of certificates evidencing Meta Common Stock for certificates
evidencing Avant! Common Stock will be made upon surrender of certificates
evidencing Meta Common Stock to Harris Trust Company of California, Avant!'s
exchange agent.

CERTIFICATES SHOULD NOT BE SURRENDERED FOR EXCHANGE PRIOR TO THE RECEIPT OF
THE NECESSARY APPROVALS OF THE AVANT! STOCKHOLDERS AT THE AVANT! SPECIAL
MEETING AND OF THE META SHAREHOLDERS AT THE META SPECIAL MEETING. IN ADDITION,
FORMER META SHAREHOLDERS SHOULD NOT SURRENDER THEIR CERTIFICATES UNTIL THEY ARE
PROVIDED WITH A LETTER OF TRANSMITTAL AND RELATED INSTRUCTIONS AND MATERIALS
FOR THE EXCHANGE OF THEIR CERTIFICATES AFTER THE EFFECTIVE TIME. SEE "THE
PROPOSED MERGER AND RELATED TRANSACTIONS--DESCRIPTION OF MERGER AND PLAN OF
REORGANIZATION (RELATED TO PROPOSALS FOR BOTH AVANT! AND META)--EXCHANGE OF
CERTIFICATES."

Material Contacts and Board Deliberations. Beginning in early May 1996,
representatives of Avant! and Meta conducted a series of meetings to consider
the possibility of a strategic transaction or business combination between the
two companies. The Meta Board met on May 23, 1996 and considered such
possibilities and determined to study such possibilities further. At a special
meeting of the Meta Board held on May 31, 1996, special intellectual property
litigation counsel ("Special Counsel") presented a preliminary report to the
Meta Board regarding the pending litigation between Avant! and Cadence Design
Systems, Inc. ("Cadence"). At a special meeting of the Meta Board held June 4,
1996, the Meta Board further discussed a possible business combination with
Avant! and received a detailed report from Special Counsel on the pending
litigation between Avant! and Cadence, after which Meta's Board determined not
to actively pursue continued discussions. On July 12, 1996, Meta held
discussions with its representatives to review the current status of certain
issues relating to the potential transaction. On July 19, 1996, representatives
of the Boards of Meta and Avant! met informally to discuss further the
potential business combination, and determined not to proceed with the
potential transaction at such time.

On August 15, 1996, Avant! announced the signing of a binding letter of
intent regarding the Anagram Acquisition. On August 19, 1996, the Meta Board
again discussed a possible business combination with Avant! in light of recent
developments, including the proposed Anagram Acquisition. After a detailed
discussion of the costs and benefits of a business combination with Avant!, as
well as possible alternative transactions, the Meta Board retained Wessels,
Arnold & Henderson, L.L.C. ("WA&H") to evaluate the fairness of the proposed
transaction from a financial point view. On the same date, the parties began
the exchange of legal, financial, sales, marketing and product development
documents in response to due diligence requests. Also on August 19, 1996,
representatives from Avant! and Meta, as well as representatives of WA&H and
the companies' respective legal counsel, met and Avant! and Meta tentatively
agreed upon a purchase price subject to approval of their respective Boards.
Over the course of the next several days, representatives of the two companies,
as well as representatives of WA&H and the companies' respective legal counsel,
conducted due diligence review and continued discussions regarding the possible
business combination. On August 21, 1996, the Avant! Board and the Meta Board
met separately, and discussed the terms of the proposed transactions. On August
22, 1996, the Meta Board and the Avant! Board met separately, at which time
each Board concluded that the Merger was fair and in the best interests of
their respective companies and stockholders and approved and adopted the Plan
of

7
<PAGE>

Reorganization. The Plan of Reorganization was then executed by Meta and Avant!
on August 22, 1996. For a more detailed discussion of the background of the
Merger, see "The Proposed Merger and Related Transactions--Description of
Merger and Plan of Reorganization--Material Contacts and Board Deliberations."

Avant!'s Reasons for the Merger. The Avant! Board of Directors believes that
the Merger will be potentially beneficial in several respects. In reaching its
determination to recommend approval of the Merger and related transactions, the
Avant! Board considered a number of factors, including, but not limited to, the
following:

. The combination of Avant! with Meta will create a combined company with
significantly greater resources, a more complete product offering for
the physical design, verification and simulation of ICs and greater
sales and marketing capabilities than those of Avant! alone, and may
enable the combined company to compete more effectively with competitors
having greater resources and broader product offerings than Avant!.

. The Merger will expand Avant!'s software product offerings into
simulation and library generation software products for use in IC
design.

. The Merger will permit Avant! to broaden and diversify its product
offerings with complementary software tools that it currently does not
offer, which may to reduce the risk of dependence on individual
products.

. Avant! believes that the management team of the combined company will
have greater depth and experience than that of either company standing
alone.

. A larger combined customer base and complementary distribution channels
will provide leverage for expanded sales and marketing opportunities for
the combined company.

In the course of its deliberations, the Avant! Board of Directors reviewed
and considered the terms and conditions of the Plan of Reorganization and the
presentations by Avant!'s executive officers. The Avant! Board also considered
the following potentially negative factors: (a) the adverse effects on the
operating results of the combined company due to the expenses expected to be
incurred, primarily in the fourth quarter of 1996, in connection with the
Merger, including costs of integrating the businesses of Meta and Avant! and
transaction expenses arising from the Merger; and (b) the risk that benefits
sought to be achieved in the Merger will not be realized, which may materially
adversely affect the combined company's business, operating results and
financial condition. See "The Proposed Merger and Related Transactions (Related
to Proposals for Both Avant! and Meta)--Description of the Merger and Plan of
Reorganization--Reasons for the Merger."

The Avant! Board of Directors has unanimously approved the Merger and the
transactions related thereto and has unanimously determined that they are fair
to, and in the best interests of, Avant! and its stockholders. After careful
consideration, the Avant! Board of Directors unanimously recommends that
stockholders vote FOR the Avant! Share Issuance Proposal. See "The Proposed
Merger and Related Transactions (Related to Proposals for Both Avant! and
Meta)--Description of Merger and Plan of Reorganization--Reasons for the
Merger."

Meta's Reasons for the Merger. The Meta Board of Directors believes that the
Merger will be potentially beneficial in several respects. In reaching its
determination to recommend approval of the Merger and related transactions, the
Meta Board considered a number of factors, including, but not limited to, the
following:

. The complementary products of Avant! and Meta will permit the combined
company to offer a broader, more complete suite of IC design products,
including products for physical design, verification and simulation,
thereby addressing a perceived growing customer preference for bundled
products and reducing dependence on any individual product or product
line.

. Avant!'s customer base and sales and distribution network offer expanded
sales and marketing opportunities for the Meta products. Meta believes
that the broader product offerings of the combined

8
<PAGE>

company may facilitate adoption of Meta products by major semiconductor
manufacturers, a customer base that Meta has not fully penetrated to
date.

. The combination of Meta and Avant! will create a combined company with
significantly greater resources and greater sales and marketing
capabilities than those of Meta alone, and may enable the combined
company to compete more effectively with competitors having greater
resources and broader product offerings than Meta.

. Competition in the market for simulation and library generation products
would likely increase as a result of increasing consolidation in the
market, particularly in light of the Anagram Acquisition, thereby
substantially increasing the risks of remaining independent.

The Board of Directors of Meta also considered a number of potentially
negative factors in its deliberations concerning the Merger, including, but not
limited to, (i) the possible effects of any adverse outcome in the pending
litigation between Cadence and Avant!, (ii) the loss of control over the future
operations of Meta following the Merger, (iii) the risk that the benefits
sought to be achieved in the Merger will not be achieved, (iv) the risk that
the operations of Meta and Avant! will not be effectively integrated or that
potential synergies expected to result from the consolidation of the operations
of the companies will not occur and (v) the risk that the Anagram Acquisition
may not occur, and/or that the operations of Avant! and Anagram will not be
effectively integrated or that potential synergies expected to result from the
consolidation of those operations of the companies will not occur.

After lengthy consideration of the risks and potential benefits from the
Merger, the Meta Board of Directors has unanimously approved the Merger and the
transactions related thereto and has unanimously determined that they are fair
to, and in the best interests of, Meta and its shareholders. After careful
consideration, the Meta Board of Directors unanimously recommends that
shareholders vote FOR the Meta Merger Proposal. See "The Proposed Merger and
Related Transactions (Related to Proposals for Both Avant! and Meta)--
Description of Merger and Plan of Reorganization--Reasons for the Merger."

There can be no assurance that as a result of the Merger any of the foregoing
benefits will be achieved or that the above potentially negative factors, among
others, will not adversely affect the business, operating results or financial
condition of the combined company. There can be no assurance that stockholders
of Avant! would not achieve greater returns on investment were Avant! not to
consummate the Merger. There is also no assurance that shareholders of Meta
would not achieve greater returns on investment if Meta were to remain an
independent company. See "Risk Factors" and "The Proposed Merger and Related
Transactions (Related to Proposals for Both Avant! and Meta)--Description of
Merger and Plan of Reorganization--Unaudited Pro Forma Condensed Combined
Financial Statements."

Opinions of Financial Advisors. On September 9, 1996, Morgan Stanley & Co.
Incorporated ("Morgan Stanley") rendered its opinion (the "Morgan Stanley
Opinion") to the Avant! Board that, as of such date, the consideration to be
paid to the holders of Meta Common Stock was fair from a financial point of
view to the Avant! stockholders. The holders of Avant! Common Stock are urged
to read the full text of the Morgan Stanley Opinion, a copy of which is set
forth as Appendix B to this Joint Proxy Statement/Prospectus, for descriptions
of the procedures followed, assumptions made, matters considered and
limitations on the review undertaken by Morgan Stanley in connection with
rendering such opinion. See "The Proposed Merger and Related Transactions
(Related to Proposals for Both Avant! and Meta)--Description of Merger and Plan
of Reorganization--Opinions of Financial Advisors" and "Appendix B."

WA&H has rendered to the Meta Board its written opinion dated August 22, 1996
(the "WA&H Opinion") that, as of such date and based on the consideration
proposed to be paid to the Meta shareholders upon completion of the Merger was
fair from a financial point of view. The full text of the WA&H Opinion, which
sets forth the procedures followed, factors considered and assumptions made as
set forth therein,

9
<PAGE>

is attached hereto as Appendix C to this Joint Proxy Statement/Prospectus and
is incorporated herein by reference and should be read carefully and in its
entirety in connection with this Joint Proxy Statement/Prospectus. The WA&H
Opinion is directed to the Meta Board, addresses only the fairness as of August
22, 1996, from a financial point of view, of the consideration proposed to be
paid to the Meta shareholders pursuant to the Plan of Reorganization and does
not constitute a recommendation to any Meta shareholder as to how such
shareholder should vote at the Meta Special Meeting. The summary of the WA&H
Opinion set forth in this Joint Proxy Statement/Prospectus is qualified in its
entirety by reference to the full text of such opinion. See "The Proposed
Merger and Related Transactions--Description of Merger and Plan of
Reorganization--Opinions of Financial Advisors" and "Appendix C."

Operations Following the Merger; Management of Combined Company. Upon
consummation of the Merger, Meta will operate as a wholly-owned subsidiary of
Avant!. The Articles of Incorporation and Bylaws of Merger Sub will become the
Articles of Incorporation and Bylaws of Meta upon consummation of the Merger.
See "The Proposed Merger and Related Transactions--Description of Merger and
Plan of Reorganization--Operations Following the Merger; Management of Combined
Company."

If the Merger is approved, the Avant! Board of Directors intends to increase
the size of the Avant! Board from five to six directors and to appoint Shawn M.
Hailey, the President and Chief Executive Officer of Meta, to fill the vacancy
created by such action. The Board of Directors of Avant! would then, in
accordance with the Plan of Reorganization, consist of Gerald C. Hsu, Y. Eric
Cho, Robert C. Kagle, Tench Coxe and Dr. Tatsuya Enomoto, all of whom are
current members of the Avant! Board of Directors, and Mr. Hailey, with Mr. Hsu
continuing to serve as Chairman of the Board, President and Chief Executive
Officer. See "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Description of Merger and Plan of
Reorganization--Interests of Certain Persons in the Merger."

Representations, Warranties and Covenants. Under the Plan of Reorganization,
Avant! and Meta made a number of representations and warranties regarding their
respective capital structures, operations, financial conditions and other
matters. Each of Avant! and Meta has agreed that, until the closing of the
Merger or the termination of the Plan of Reorganization, it will carry on its
business in the ordinary course and attempt to preserve its present business
and relationships with customers, suppliers and others, it will not take
certain actions without the other's consent and it will use its best efforts to
complete the Merger. See "The Proposed Merger and Related Transactions (Related
to Proposals for Both Avant! and Meta)--Description of Merger and Plan of
Reorganization--Representations, Warranties and Covenants."

Other Offers. Meta has agreed not to solicit, initiate discussions with or
engage in negotiations with any person relating to a possible acquisition of
Meta, except that if the Board of Directors of Meta receives an unsolicited
proposal (a "Takeover Proposal") that it reasonably believes is more favorable
to its shareholders from a financial point of view than the Merger, then the
Board of Directors of Meta will not be prevented from providing information to
or negotiating with the party making the Superior Proposal or from making such
disclosures to the Meta shareholders as may be required to discharge the
directors' fiduciary duties. However, in the event either Meta or Avant!
terminates the Plan of Reorganization following a failure of the shareholders
of Meta to approve the Plan of Reorganization, and a Takeover Proposal not
rejected or withdrawn by the third party, then Meta must promptly pay Avant! a
termination fee of $4,800,000.

See "Summary--The Merger--Expenses and Termination Fees" and "The Proposed
Merger and Related Transactions (Related to Proposals for Both Avant! and
Meta)--Description of Merger and Plan of Reorganization--Representations and
Warranties and Covenants," "--Expenses and Termination Fees" and "--Other
Offers."

Resale of Avant! Common Stock; Agreements with Affiliates. The shares of
Avant! Common Stock to be issued in the Merger have been registered under the
Securities Act and will be freely transferable, subject to certain limitations
on resale described in this Joint Proxy Statement/Prospectus. As a condition to
the obligations of the parties under the Plan of Reorganization, Avant! has
received agreements from each person or entity

10
<PAGE>

who may be deemed an affiliate (as defined in the Securities Act and the rules
and regulations thereunder) of Meta pursuant to which such persons will agree
not to sell, transfer or otherwise dispose of shares of Meta Common Stock or
Avant! Common Stock until such time after the Effective Time as Avant! has
publicly released a report including the combined financial results of Avant!
and Meta for a period of at least 30 days of combined operations of Avant! and
Meta. Furthermore, pursuant to such agreements, the affiliates of Meta will
agree to refrain from the sale or transfer of any Avant! Common Stock received
in connection with the Merger, except in accordance with the provisions of the
Securities Act and the general rules and regulations thereunder. Affiliates of
Avant! will also be subject to certain limitations on their ability to sell,
transfer or otherwise dispose of shares of Avant! Common Stock during the
period preceding and following the Merger. See "The Proposed Merger and Related
Transactions (Related to Proposals for Both Avant! and Meta)--Description of
Merger and Plan of Reorganization--Resale of Avant! Common Stock; Agreements
with Affiliates."

Interests of Certain Persons. In considering the recommendation of the Board
of Directors of Meta with respect to the Merger, shareholders of Meta should be
aware that certain members of Meta's management and Board of Directors have
interests in connection with the Merger and the agreements and transactions
contemplated thereby. See "The Proposed Merger and Related Transactions
(Related to Proposals for Both Avant! and Meta)--Description of Merger and Plan
of Reorganization--Interests of Certain Persons in the Merger."

Avant! has agreed that, after the Effective Time of the Merger, Avant! will
indemnify each officer and director of Meta serving as such on the date of the
Plan of Reorganization as provided in the California General Corporation Law
("CGCL"), the Meta Articles of Incorporation and Bylaws, and existing
indemnification agreements between Meta and such officers and directors. Avant!
has also agreed to use good faith efforts to cause to be maintained for a
period of not less than three years after the closing of the Merger the
directors' and officers' insurance policies of Meta and to cause the directors
and officers of Meta to be covered thereunder for matters occurring prior to
the closing of the Merger. See "The Proposed Merger and Related Transactions
(Related to Proposals for Both Avant! and Meta)--Description of Merger and Plan
of Reorganization--Interests of Certain Persons in the Merger."

Conditions to the Merger. The closing of the Merger is subject to various
conditions, including the approval by Avant!'s stockholders of the Avant! Share
Issuance Proposal, the approval by Meta's shareholders of the Meta Merger
Proposal, the receipt of certain consents and approvals from various third
parties and governmental agencies, including the approval of the Federal Trade
Commission and the Department of Justice pursuant to the filings made by the
parties under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, receipt of opinions of counsel to the effect that the Merger will
qualify as a reorganization under Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), the absence of a material adverse change in
the business, prospects or financial condition of Meta and/or Avant! and
receipt of a letter from KPMG Peat Marwick LLP, independent accountants, to the
effect that the Merger would be properly accounted for as a pooling of
interests in accordance with generally accepted accounting principles. Except
for matters required by law, each of the parties to the Plan of Reorganization
may, at its option, waive compliance with any condition to its obligation to
consummate the Merger. See "The Proposed Merger and Related Transactions
(Related to Proposals for Both Avant! and Meta)--Description of Merger and Plan
of Reorganization--Conditions to the Merger."

Shareholders Agreement. Shawn M. Hailey and Kim L. Hailey, the President and
Chief Executive Officer, and Vice President of Engineering, respectively, of
Meta, beneficially own an aggregate of 7,481,201 shares of Meta Common Stock,
representing % of the votes entitled to be cast by holders of shares of Meta
Common Stock issued and outstanding as of the Meta Record Date. Both
individuals have entered into a Shareholders Agreement with Avant!, pursuant to
which each has agreed to vote the shares of Meta Common Stock held by him in
favor of the approval of the Plan of Reorganization and approval of the Merger.
The vote of the shares of Meta Common Stock subject to the Shareholders
Agreement will be adequate to approve the Plan of Reorganization and the
Merger. See "The Proposed Merger and Related Transactions (Related to Proposals
for Both Avant! and Meta)--Description of Merger and Plan of Reorganization--
Shareholders Agreement."

11
<PAGE>

Closing. The Merger will be completed on the date that the Agreement of
Merger, in form reasonably satisfactory to Avant! and Meta, is filed with the
Office of the Secretary of State of the State of California. The Effective Time
is expected to occur as soon as practicable after the receipt of the necessary
approvals at the Avant! Special Meeting and the Meta Special Meeting and
satisfaction or waiver of the other conditions precedent to the Merger, as set
forth in the Plan of Reorganization. See "The Proposed Merger and Related
Transactions (Related to Proposals for Both Avant! and Meta)--Description of
Merger and Plan of Reorganization--Closing."

Termination. The Plan of Reorganization may be terminated by mutual agreement
of Avant! and Meta, or by either Avant! or Meta (i) if the closing of the
Merger has not occurred on or before January 31, 1997, (ii) as a result of a
breach by the other party of a representation, warranty, covenant or agreement
set forth in the Plan of Reorganization, which breach would result in a
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations,
results of operations or prospects of such other party, and such breach has not
been cured within ten business days after written notice from the other, (iii)
if there shall have occurred a material adverse change in the condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, operations, results of operations or prospects of the
other party and such other party shall have failed to propose a reasonably
acceptable plan to mitigate the effect of such material adverse change within
20 business days after notice of intent to terminate, (iv) if the Board of
Directors of the other party withdraws or modifies, in an adverse manner, its
recommendation of the Plan of Reorganization or the Merger, (v) if there is a
permanent injunction or order of a court or other competent authority in effect
preventing the Merger or (vi) if the required approval of the stockholders of
Avant! or shareholders of Meta is not obtained at the respective stockholder
and shareholder meetings. See "The Proposed Merger and Related Transactions
(Related to Proposals for Both Avant! and Meta)--Description of Merger and Plan
of Reorganization--Termination."

Expenses and Termination Fees. All costs and expenses incurred in connection
with the Plan of Reorganization and the transactions contemplated thereby
(including, without limitation, the fees and expenses of advisors, accountants
and legal counsel) will be paid by the party incurring such expense, except
that, in the event the Merger is not consummated for any reason or if the Plan
of Reorganization is terminated for any reason, other than in certain specified
circumstances relating to the conduct of Avant! in the period following
execution of the Plan of Reorganization, expenses incurred in connection with
printing the proxy materials and the Registration Statement, registration and
filing fees incurred in connection with the Registration Statement, the proxy
materials and the listing of additional shares on The Nasdaq National Market
and fees, costs and expenses associated with compliance with applicable state
securities laws in connection with the Merger will be shared equally by Avant!
and Meta.

If either (i) Avant! or Meta terminates the Plan of Reorganization following
a failure of the shareholders of Meta to approve the Plan of Reorganization
and, prior to the time of the Meta Special Meeting, and there shall have been a
Trigger Event with respect to Meta or a Takeover Proposal not rejected by Meta
or withdrawn by the third party making such Takeover Proposal or (ii) Avant!
terminates the Plan of Reorganization under certain circumstances permitted by
the Plan of Reorganization, and Meta is not entitled to terminate the Plan of
Reorganization for the same reasons, then Meta shall promptly pay Avant! a
termination fee of $4,800,000. If the Plan of Reorganization is terminated by
Meta under certain circumstances permitted by the Plan of Reorganization and
Avant! is not entitled to terminate the Plan of Reorganization for the same
reasons, then Avant! shall promptly pay Meta a termination fee of $4,800,000.
See "The Proposed Merger and Related Transactions (related to proposals for
both Avant! and Meta)--Description of Merger and Plan of Reorganization--
Expenses and Termination Fees."

Amendment. The Plan of Reorganization may be amended by the agreement of the
Boards of Directors of Avant! and Meta at any time before or after approval by
the Meta shareholders or the Avant! stockholders, except that, after such
approval, no amendment may be made which (i) alters or changes the amount or
kind of consideration to be received upon conversion of the Meta Common Stock,
(ii) alters or changes any term of the Articles of Incorporation of Merger Sub
or (iii) alters or changes any of the terms and conditions of the Plan

12
<PAGE>

of Reorganization if such alteration or change would adversely affect the
holders of Meta Common Stock or Avant! Common Stock. See "The Proposed Merger
and Related Transactions (Related to Proposals for Both Avant! and Meta)--
Description of Merger and Plan of Reorganization--Termination" and "--
Amendment."

Certain Federal Income Tax Considerations. Consummation of the Merger is
conditioned upon receipt by Avant! and Meta of opinions from their respective
legal counsel that the Merger should qualify as a reorganization for federal
income tax purposes under Section 368(a) of the Code. Provided that the Merger
does so qualify no gain or loss should be recognized for federal income tax
purposes by Meta shareholders upon their receipt of shares of Avant! Common
Stock in exchange for their shares of Meta Common Stock, except to the extent
of cash received in lieu of fractional shares or in respect of Dissenting
Shares. Such legal opinions will be subject to certain limitations and
qualifications and will be based upon certain factual assumptions and
representations. Furthermore, such legal opinions will not be binding on the
Internal Revenue Service. ALL META SHAREHOLDERS SHOULD READ CAREFULLY THE
DISCUSSION UNDER "THE PROPOSED MERGER AND RELATED TRANSACTIONS--DESCRIPTION OF
MERGER AND PLAN OF REORGANIZATION--CERTAIN FEDERAL INCOME TAX CONSIDERATIONS."
IN VIEW OF THE COMPLEXITIES OF FEDERAL INCOME AND OTHER TAX LAWS, EACH META
SHAREHOLDER SHOULD CONSULT WITH SUCH SHAREHOLDER'S TAX ADVISOR REGARDING, AMONG
OTHER THINGS, THE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF THE
MERGER APPLICABLE TO SUCH SHAREHOLDER'S SPECIFIC CIRCUMSTANCES.

The Merger will not have any tax consequences for Avant! stockholders.

Accounting Treatment. The Merger is expected to be accounted for as a pooling
of interests in accordance with the provisions of Accounting Principles Board
Opinion No. 16 on business combinations. As a condition to consummation of the
Merger, Avant! and Meta each will receive a letter from KPMG Peat Marwick LLP,
independent accountants, to the effect that, based upon certain material facts
and certain representations and warranties provided by Avant! and Meta
described in such letter, the business combination to be effected by the Merger
would be properly accounted for as a pooling of interests in accordance with
generally accepted accounting principles and all published rules, regulations
and policies of the SEC. The parties have each received preliminary letters
dated September 6, 1996 to this effect from such accounting firm. See "The
Proposed Merger and Related Transactions (Related to Proposals for Both Avant!
and Meta)--Description of Merger and Plan of Reorganization--Accounting
Treatment."

Dissenters' Rights. Under Chapter 13 of the CGCL, shareholders of Meta who
object to the Merger may, under certain circumstances and by following
prescribed statutory procedures, have the right to dissent from the Merger and
seek a determination of, and receive payment for, the "fair value" of such
holder's shares. The failure of such a dissenting shareholder to follow such
procedures, described more fully elsewhere in this Joint Proxy
Statement/Prospectus, may result in termination or waiver of such dissenters'
rights. However, no Meta shareholder will have dissenter's rights unless
Dissenting Shares represent at least five percent of the outstanding shares of
Meta Common Stock. It should be noted that if holders of more than an
insignificant number of shares of Meta Common Stock elect to exercise their
dissenters' rights, such action could adversely impact the ability of Avant! to
account for the business combination contemplated by the Merger as a pooling of
interests under generally accepted accounting principles, a condition to the
consummation of the Merger. Under the Plan of Reorganization, if Dissenting
Shares represent more than ten percent of the then outstanding shares of Meta
Common Stock, then Avant! and Merger Sub will not be obligated to consummate
and effect the Plan of Reorganization and the transactions contemplated
thereby. See "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Dissenters' Rights" for a more detailed
description of dissenters' rights with respect to the Merger.

No statutory appraisal rights are available to stockholders of Avant! in
connection with the Merger.

Comparative Rights of Shareholders. As a result of the Merger, holders of
Meta Common Stock will be exchanging their shares of a California corporation,
which is governed by the CGCL and Meta's Articles of

13
<PAGE>

Incorporation and Bylaws, for shares of Avant! Common Stock issued by a
Delaware corporation, which is governed by the Delaware General Corporation Law
("DGCL") and Avant!'s Certificate of Incorporation and Bylaws. Holders of Meta
Common Stock should be aware that certain significant differences exist between
the rights of a shareholder of a California corporation and those of a
stockholder of a Delaware corporation. See "Comparison of Rights of Holders of
Avant! Common Stock and Holders of Meta Common Stock."

MARKET PRICE DATA

The Common Stock of Avant! is traded on The Nasdaq National Market under the
symbol "AVNT," and the Common Stock of Meta is traded on The Nasdaq National
Market under the symbol "MESW." Trading of the Avant! Common Stock began on
June 7, 1995, and trading of the Meta Common Stock began on November 7, 1995.

The following table sets forth the closing sales price per share of Avant!
Common Stock and Meta Common Stock, as reported by The Nasdaq National Market
on (i) June 30, 1996, (ii) August 21, 1996, the last full trading day preceding
the date of the announcement of the execution of the Plan of Reorganization by
Avant! and Meta, and (iii) , 1996, the latest practicable trading day before
printing this Joint Proxy Statement/Prospectus, as well as the equivalent pro
forma per share value of Meta Common Stock based on the Avant! Common Stock
prices as of such date. Stockholders of Avant! and shareholders of Meta are
encouraged to obtain current market information for shares of Avant! Common
Stock and Meta Common Stock. See "Market Prices of Avant! Common Stock;
Dividends."

<TABLE>
<CAPTION>
AVANT! META META
COMMON STOCK COMMON STOCK PRO FORMA
PRICE PRICE EQUIVALENT(1)
------------ ------------ -------------
<S> <C> <C> <C>
June 30, 1996........................... $23.250 $17.250 $10.11
August 21, 1996......................... $29.500 $10.750 $12.83
, 1996............................. $ $ $
</TABLE>
- --------
(1) Represents the equivalent pro forma value of one share of Meta Common Stock
calculated by multiplying the closing sales price of one share of Avant!
Common Stock on the dates listed above by the Merger Exchange Ratio of
0.435 to one. See "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Description of Merger and Plan of
Reorganization--Conversion of Meta Shares."

14
<PAGE>

RISK FACTORS

The completion of the Merger and an investment in shares of Avant! Common
Stock each involve substantial risks. Before voting on the Meta Merger Proposal
and acquiring the securities offered hereby, shareholders of Meta should
carefully consider the information set forth in "Risk Factors" and other
information contained herein. Similarly, before voting on the Avant! Share
Issuance Proposal, stockholders of Avant! should carefully consider such
information.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following selected historical financial information of Avant! and Meta
has been derived from audited historical financial statements and should be
read in conjunction with such financial statements and the notes thereto
incorporated herein by reference (Avant!) or included elsewhere herein (Meta).
Historical operating information for periods prior to January 1, 1992, and
balance sheet data prior to December 31, 1993, for each of Avant! and Meta are
derived from financial statements not included herein. The selected pro forma
combined financial information of Avant! and Meta includes financial
information for Anagram and is derived from the unaudited pro forma condensed
combined financial statements and should be read in conjunction with such pro
forma statements and notes thereto included elsewhere in this Joint Proxy
Statement/Prospectus. For further information regarding the pro forma combined
operating results of the two companies, see "The Proposed Merger and Related
Transactions (Related to Proposals for Both Avant! and Meta)--Unaudited Pro
Forma Condensed Combined Financial Statements."

The pro forma financial information does not purport to represent what
Avant!'s financial position or results of operations would actually have been
had the Merger and the Anagram Acquisition occurred at the beginning of the
earliest period presented or to project Avant!'s financial position or results
of operations for any future date or period. In addition, it does not
incorporate any benefits from cost savings or synergies of operations that may
be realized by the combined company.

15
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA
AVANT!

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------- ---------------
1991 1992 1993 1994 1995 1995 1996
------ ------- ------ ------- ------- ------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF INCOME DATA: (1)
Total revenue........... $2,187 $ 3,583 $8,708 $18,958 $38,004 $16,328 $27,169
Income (loss) from
operations............. (610) (1,259) (359) 2,744 6,913 4,321 6,949
Net income (loss)....... (658) (1,281) 1,342 2,260 5,065 3,428 5,593
Income (loss) per
share.................. $(0.17) $ (0.24) $ 0.12 $ 0.16 $ 0.31 $ 0.23 $ 0.32
Weighted average number
of common and common
equivalent shares
outstanding............ 3,935 5,283 11,506 13,734 16,128 15,126 17,430
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------------------ --------
1991 1992 1993 1994 1995 1996
----- ------ ------- ------- ------- --------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
DATA: (1)
Cash and cash equivalents
......................... $ 953 $4,221 $ 6,018 $ 5,830 $22,750 $ 9,303
Working capital (2)....... 171 3,979 9,432 31,970 68,784 75,612
Total assets.............. 1,813 6,246 15,041 40,247 84,212 95,704
Lease obligations, long-
term..................... -- 152 173 147 40 14
Mandatorily redeemable
convertible preferred
stock.................... -- 3,830 8,312 8,312 -- --
Stockholders' equity...... $ 646 $ 906 $ 2,294 $25,500 $73,510 $81,008
</TABLE>

META
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------- -------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS
OF INCOME DATA:
Total revenue........... $13,777 $19,652 $25,281 $10,861 $14,889
Pro forma income from
operations............. 2,165 3,231 3,046 1,974 3,794
Pro forma net income.... 1,414 2,134 2,177 1,897
Pro forma net income per
common share (3)....... $ 0.16 $ 0.22 $ 0.22 $ 0.14
Net income.............. 2,682
Net income per common
share.................. $ 0.25
Weighted average number
of common and common
equivalent shares
outstanding............ 8,834 9,792 9,866 9,792 10,622
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------- --------
1993 1994 1995 1996
------ ------- ------- --------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Cash and cash
equivalents............ $3,664 $ 3,811 $25,720 $ 3,891
Working capital (2)..... 3,098 3,854 21,942 26,967
Total assets............ 8,788 10,776 35,095 38,313
Shareholders' equity ... $4,883 $ 5,317 $23,325 $29,617
</TABLE>
- --------
(1) The consolidated statements of income data and consolidated balance sheet
data of Avant! do not give effect to the completion of the Anagram
Acquisition. Upon completion of the Anagram Acquisition, Avant! will
restate its historical financial statements to reflect the pooling of
interests of Avant! and Anagram. See "Risk Factors--Uncertainty Relating to
Integration of Operations and Product Lines; Management of Growth" and
"Avant! Business--Recent Developments."
(2) Working capital is computed as current assets less current liabilities.
(3) Pro forma net income per share is computed using pro forma net income which
reflects the assumed tax expense that would have been reported if Meta had
been a C Corporation. See Note 6 of Meta's Notes to Financial Statements.

16
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED SELECTED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------- -----------------
1993 1994 1995 1995 1996
------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
PRO FORMA CONDENSED COMBINED
STATEMENTS OF INCOME DATA:
Total revenue....................... $22,485 $38,851 $66,792 $ 27,935 $ 46,432
Income from operations.............. 1,783 5,996 11,914 6,747 13,291
Net income.......................... 2,733 4,413 8,412 5,033 9,979
Income per common share............. $ 0.17 $ 0.24 $ 0.38 $ 0.24 $ 0.41
Weighted average number of common
and common equivalent shares
outstanding........................ 15,885 18,552 21,729 20,695 23,485
</TABLE>

<TABLE>
<CAPTION>
JUNE 30,
1996
----------------
(IN THOUSANDS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C>
PRO FORMA CONDENSED COMBINED BALANCE SHEET DATA:
Cash and cash equivalents...................................... $ 15,530
Working capital(2)(3).......................................... 99,365
Total assets................................................... 139,311
Total stockholders' equity(2).................................. 107,652
Book value per share(2)(4)..................................... $ 4.70
</TABLE>
- --------
(1) The unaudited selected pro forma condensed combined financial data gives
effect to the completion of the Merger and the Anagram Acquisition as if
each occurred on January 1, 1993. See "The Proposed Merger and Related
Transactions--Unaudited Pro Forma Condensed Combined Financial Statements."
(2) Includes the effect of estimated expenses of approximately $6.3 million
expected to be incurred by the combined company in connection with the
Merger and Anagram Acquisition.
(3) Working capital is computed as current assets less current liabilities.
(4) Book value per share is computed by dividing pro forma stockholders' equity
by the pro forma number of shares of common stock outstanding at the end of
the period.

17
<PAGE>

COMPARATIVE PER SHARE DATA

The following table sets forth certain historical per share data of Avant!
and Meta and combined per share data on an unaudited pro forma and equivalent
pro forma basis, after giving effect to the Merger and the Anagram Acquisition
on a pooling of interests basis. The pro forma combined per share data gives
effect to the Merger at the estimated Merger Exchange Ratio of 0.435-to-one.
The pro forma combined per share data also includes amounts related to Anagram.
See Note 3 below. The pro forma combined per share data does not purport to
represent what Avant!'s financial position or results of operations would
actually have been had the Merger and the Anagram Acquisition occurred at the
beginning of the earliest period presented or to project Avant!'s financial
position or results of operations for any future date or period. This data
should be read in conjunction with the selected historical financial data and
pro forma condensed combined financial statements included elsewhere herein and
the separate historical financial statements and notes thereto of Avant!
incorporated herein by reference, and of Meta and of Anagram included elsewhere
herein. None of Avant!, Meta or Anagram declared any cash dividends during the
periods presented, other than S Corporation dividends declared by Meta prior to
its initial public offering in November 1995.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------ ---------------
1993 1994 1995 1995 1996
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
HISTORICAL--AVANT!
Net income........................... $ 0.12 $ 0.16 $ 0.31 $ 0.23 $ 0.32
Book value(1)........................ $ 4.62 $ 5.02
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------ ---------------
1993 1994 1995 1995 1996
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
HISTORICAL--META
Pro forma net income(2).............. $ 0.16 $ 0.22 $ 0.22 $ 0.14
Net income........................... $ 0.25
Book value(1)........................ $ 2.38 $ 2.91
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------ ---------------
1993 1994 1995 1995 1996
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PRO FORMA COMBINED PER AVANT!
SHARE(3)
Net income........................... $ 0.17 $ 0.24 $ 0.38 $ 0.24 $ 0.41
Book value(3)(4)..................... $ 5.85 $ 4.70
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------ ---------------
1993 1994 1995 1995 1996
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
EQUIVALENT PRO FORMA PER META
SHARE(3)(5)
Net income........................... $ 0.07 $ 0.10 $ 0.17 $ 0.10 $ 0.18
Book value(3)(4)..................... $ 2.54 $ 2.04
</TABLE>
- --------
(1) Historical book value per share is computed by dividing shareholders'
equity by the number of shares of common stock outstanding at the end of
each period. Pro forma book value per share is computed by dividing pro
forma stockholders' equity by the pro forma number of shares of common
stock outstanding at the end of each period. Book value per share
information as of December 31, 1993 and 1994 and June 30, 1995 is not
presented. See Note 6 of Notes to Meta's Financial Statements.
(2) Pro forma net income per share is computed using pro forma net income which
reflects the assumed tax expense that would have been reported if Meta had
been a C corporation.
(3) Gives effect to the completion of the Anagram Acquisition. See additional
information at "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Unaudited Pro forma Condensed Combined
Financial Statements."
(4) The parties anticipate that the combined company will incur direct
transaction costs and merger-related integration expenses totaling
approximately $6.3 million in connection with the Merger. Such costs
include financial advisory fees, transaction costs and other direct costs
associated with the Merger, including the following: (i) employee
termination costs; (ii) cancellation of certain lease obligations; and
(iii) legal, accounting and printing expenses. These costs are expected to
be charged to the combined company. The effects of these costs have not
been reflected in the above pro forma combined net income per share data,
but are reflected in the above book value per share data as of June 30,
1996.
(5) The unaudited equivalent pro forma combined per Meta share amounts are
calculated by multiplying the pro forma combined Avant! per share amounts
by the estimated Merger Exchange Ratio of 0.435-to-one.

18
<PAGE>

RISK FACTORS

This Joint Proxy Statement/Prospectus contains Forward-Looking Statements.
Actual results could differ materially from those projected in the Forward-
Looking Statements as a result of the factors set forth below and other
matters described elsewhere in this Joint Proxy Statement/Prospectus. The
following risk factors should be considered carefully in evaluating the
proposals to be considered and voted upon at each of the Avant! Special
Meeting and the Meta Special Meeting and the acquisition of the securities
offered hereby. For periods following the Merger, references to the services,
business, financial results or financial condition of Avant!, and references
to the "combined company," should be considered to refer to Avant! and its
subsidiaries, including Meta, unless the context requires otherwise.

LITIGATION RISK

On December 6, 1995, Cadence filed an action against Avant! and certain of
its officers in the Northern California United States District Court alleging
copyright infringement, unfair competition, misappropriation of trade secrets,
conspiracy, breach of contract, inducing breach of contract and false
advertising. The essence of the complaint is that Avant! misappropriated and
improperly copied source code from Cadence, and that Avant! has competed
unfairly by making false statements concerning Cadence and its products. The
action also alleges that Avant! induced certain individual defendants to
breach their agreements of employment and confidentiality with Cadence. In
addition to actual and punitive damages, Cadence seeks to enjoin the sale of
certain place and route products and has filed a motion to obtain a
preliminary injunction pending trial of the action. Avant! filed its
opposition to Cadence's motion on June 28, 1996. Cadence filed a reply to
Avant!'s opposition on August 27, 1996. The preliminary injunction hearing is
presently scheduled to take place on September 10, 1996.

On January 16, 1996, Avant! filed a counterclaim alleging antitrust
violations, racketeering, false advertising, defamation, trade libel, unfair
competition, unfair trade practices, negligent and intentional interference
with prospective economic advantage and intentional interference with
contractual relations.

The Santa Clara County District Attorney's office also is investigating the
allegations of misappropriation of trade secrets set forth in Cadence's
lawsuit, described above. On December 5, 1995, a search warrant was executed
at Avant!'s Sunnyvale, California, facility to determine whether there was
evidence of criminal conduct. No criminal charges have been filed against
Avant!, but no assurance can be given that such charges will not be filed in
the future. A criminal complaint, if filed, could result in a loss of
personnel and could have other material adverse effects. On each of December
15 and 19, 1995, class action filings were made against Avant! alleging
certain securities law violations, including omission and/or misrepresentation
of material facts. The alleged omissions and/or misrepresentations are largely
consistent with those outlined in the Cadence claim.

It is Avant!'s position that the plaintiffs' claims are without merit.
Avant! believes it has sufficient defenses to all the plaintiffs' claims and
intends to vigorously defend itself. In the opinion of management, based on
information it presently possesses, the conclusion of these claims will not
have a material adverse effect on Avant!'s consolidated financial position.
If, however, Avant!'s defenses are unsuccessful, Avant! may be enjoined from
selling certain place and route products and may be required to pay damages to
Cadence. In such event, Avant!'s business, operating results and financial
condition would be materially adversely affected. In addition, it is likely
that an adverse judgment against Avant! would result in a steep decline in the
market price of Avant! Common Stock. Although Meta has the right to terminate
the Plan of Reorganization prior to the Effective Time under certain
circumstances, it is possible that developments in the pending litigation
between Avant! and Cadence that would give Meta the right to terminate may
occur only after the Effective Time. In such an event, Meta shareholders would
bear the risk of any decline in the market price of the Avant! Common Stock
following an adverse outcome of the pending litigation between Avant! and
Cadence.

Meta has a long-standing technology relationship with Cadence pursuant to
which, among other things, Meta and Cadence cross-license certain aspects of
their respective technologies including Meta's MASTER Toolbox and HSPICE
products in order to develop certain interfaces between Cadence's products and
Meta's

19
<PAGE>

MASTER Toolbox and HSPICE products and verify output results in order to
assist in selling and supporting such products. Meta licenses Cadence's
maskwork layout software for use by Meta-Labs services for generating
maskworks for MetaTestchip. In light of Avant!'s pending litigation with
Cadence, it is possible that Cadence will sever its relationship with Meta
following the Merger. In such event, Meta may experience delays in generating
new MetaTestchips as a result of the need to transition to Avant!'s layout
software. Further, Meta currently integrates a portion of Cadence technology
with HSPICE to provide a data output format for Cadence's waveform viewing
products and uses certain Cadence products to provide Cadence product support
for MASTER Toolbox which may no longer be available at a reasonable price or
profit after the Merger. Additionally, Cadence sells Spectre circuit
simulation software which directly competes with Meta's HSPICE product.
Termination of Meta's relationship with Cadence could have a material adverse
effect upon the combined company's business, prospects and results of
operations. See "The Proposed Merger and Related Transactions (Related to
Proposals for Both Avant! and Meta)--Description of Merger and Plan of
Reorganization--Reasons for the Merger."

The preceding pending litigation and any future litigation against the
combined company or its employees, regardless of the outcome, may result in
substantial costs and expenses to the combined company and significant
diversion of attention by the combined company's technical and management
personnel. Any such litigation could accordingly have a material adverse
effect on the combined company's business, operating results or financial
condition.

UNCERTAINTY RELATING TO INTEGRATION OF OPERATIONS AND PRODUCT LINES;
MANAGEMENT OF GROWTH

Avant! recently entered into a definitive agreement to merge with Anagram
and expects to complete the Anagram Aquisition on or before September 30,
1996. However, the Anagram Closing is subject to a number of conditions,
including the issuance of a permit by the California Department of
Corporations for the issuance of securities in the Anagram Acquisition and
other standard closing conditions, and no assurance can be given that the
Anagram Acquisition will close by September 30, 1996, or at all. The
integration of Anagram's business and personnel presents difficult challenges
for Avant!'s management particularly in light of the increased time and/or
resources required to effect the combination with Meta. Further, each of
Avant! and Meta entered into the Plan of Reorganization with the expectation
that the Merger will result in synergies for the combined company. The
combined company, however, will be more complex and diverse than either Avant!
or Meta individually, and the combination and continued operation of their
distinct business operations will be difficult. While the management and
Boards of Directors of both Avant! and Meta believe that the contemporaneous
combination of Avant!, Anagram and Meta can be effected in a manner that will
realize the value of the combining companies, the management group of the
combined companies has limited experience in combinations of this complexity
or size. Accordingly, there can be no assurance that the process of effecting
these business combinations can be effectively managed to realize the
synergies anticipated to result therefrom.

Following the Anagram Acquisition and the Merger, in order to maintain and
increase profitability, the combined company will need to successfully
integrate and streamline overlapping functions. Avant!, Anagram and Meta each
have different systems and procedures in many operational areas that must be
rationalized and integrated. There can be no assurance that such integration
will be accomplished smoothly, expeditiously or successfully. The difficulties
of such integration may be increased by the necessity of coordinating
geographically separated divisions. The integration of certain operations
following the Anagram Acquisition and the Merger will require the dedication
of management resources that may temporarily distract attention from the day-
to-day business of the combined company. The business of the combined company
may also be disrupted by employee uncertainty and lack of focus during such
integration. Failure to effectively accomplish the integration of the
operations of Avant!, Anagram and Meta could have a material adverse effect on
the combined company's results of operations and financial condition.
Moreover, uncertainty in the marketplace or customer hesitation relating to
the Anagram Acquisition or the Merger could negatively affect the combined
company's results of operations.

Avant! and Meta entered into the Plan of Reorganization in order to achieve
potential mutual benefits from combining the expertise and product lines for
the physical design of high-density, high-performance ICs. Realization of
these potential benefits will require, among other things, integrating the
companies' respective

20
<PAGE>

product offerings and coordinating the combined company's sales and marketing
and research and development efforts. Failure to efficiently achieve such
integration of the two companies' product lines could have a material adverse
effect on the combined companies.

Each of Avant! and Meta has experienced periods of rapid growth and
expansion that has placed and will continue to place significant strains upon
their respective management systems and resources. In addition, certain of the
combined company's senior management personnel have worked together only for a
short period of time and must learn to work together effectively. The combined
company's ability to compete effectively and to manage future growth, if any,
will require the combined company to continue to implement and improve
operational, financial and management information systems on a timely basis
and to expand, train, motivate and manage its work force. There can be no
assurance that the combine company's personnel, systems, procedures and
control will be adequate to support the combined company's operations.

DEPENDENCE UPON KEY PERSONNEL

The combined company's future operating results depend in significant part
upon the continued service of its key management and technical personnel.
Relatively few of the combined company's employees are bound by employment or
non-competition agreements, and due to the intense competition for such
personnel as well as the uncertainty caused by the integration of Avant!'s,
Anagram's and Meta's businesses, it is possible that the combined company will
be unable to retain such key technical and managerial personnel. There are
only a limited number of qualified ICDA engineers, and competition for such
individuals is intense. If the combined company is unable to attract, hire and
retain qualified personnel in the future, the development of new products and
the management of an increasingly complex business would be impaired which
would materially adversely affect the combined company's business, operating
results or financial condition. Additionally, if a criminal complaint is filed
relating to the matters underlying the pending litigation between Avant! and
Cadence, a loss of Avant! personnel may result. See "--Litigation Risk" and
"Meta Business--Employees."

COMPETITION

The ICDA software market, in which Avant!, Anagram and Meta compete is
intensely competitive and subject to rapid change. Avant!, Anagram and Meta
currently face competition from major ICDA vendors, including Cadence, which
currently holds a dominant share of the market for IC physical design
software, Mentor Graphics Corporation ("Mentor"), Viewlogic Systems
Incorporated and EPIC Design Technology, Inc. ("EPIC"). As the combined
company continues to expand its product offerings to include other library
generation tools and other electronic design automation ("EDA") tools, it will
compete increasingly with these established EDA vendors. Certain of these
major vendors have a longer operating history, and each of these major vendors
has significantly greater financial, technical and marketing resources,
greater name recognition and a larger installed customer base than Avant!,
Anagram and Meta combined. Each of these competitors will likely be able to
respond more quickly to new or emerging technologies and changes in customer
requirements, and to devote greater resources to the development, promotion
and sale of their products than Avant!, Anagram and Meta combined. Moreover,
the industry in which Avant!, Anagram and Meta compete is undergoing a trend
toward consolidation that is expected to result in large, more financially
flexible competitors with a broad range of product offerings. In addition to
competition from EDA vendors, Avant!, Anagram and Meta also face competition
from internal design groups that develop their own customized simulation tools
for their own particular needs and therefore may be reluctant to purchase
products offered by the combined company or other independent vendors. There
can be no assurance that the combined company will be able to convert such
users to its products. There can be no assurance that the combined company
will be able to compete successfully against current and future competitors or
that competitive pressures faced by the combined company will not have a
material adverse effect on its business, operating results and financial
condition. If the combined company is unable to compete successfully against
current and future competitors, the combined company's business, operating
results and financial condition will be materially and adversely affected. See
"Meta Business--Competition."

21
<PAGE>

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS

The quarterly operating results of the combined company may vary
substantially from period-to-period depending on factors such as the outcome
of outstanding litigation, increased competition, the size, timing and
structure of significant licenses, the timing of revenue recognition under its
time-based license agreements, the timing of new or enhanced product
announcements, introductions, or delays in the introductions, of new or
enhanced versions of the combined company's products, changes in pricing
policies by the combined company or its competitors, market acceptance of new
and enhanced versions of the combined company's products, the cancellation of
time-based licenses or maintenance agreements, the unavailability of
technology of third parties, including that of Cadence and Mentor, which is
incorporated in certain of the products of the combined company, the mix of
direct and indirect sales, changes in operating expenses, changes in the
combined company's strategy, seasonal factors, personnel changes, foreign
currency exchange rates and general economic factors. Due to the foregoing
factors, and particularly the variability of the size, timing and structure of
significant licenses, quarterly revenue and operating results are difficult to
forecast. In particular, Avant! has adopted a flexible pricing strategy
pursuant to which Avant! offers both perpetual and time-based software
licenses to customers, depending on customer requirements and financial
constraints. Because each time-based license may have a different structure
and could be subject to cancellation, future revenue is unusually
unpredictable. In addition, Meta's quarterly operating results have in the
past fluctuated as a result of seasonality of customer buying patterns, with
revenues for the first quarter of a year often lower than those for the last
quarter of the preceding year. Avant!'s, Anagram's and Meta's expense levels
are based, in part, on expectations as to future revenue levels. Accordingly,
net income, if any, may be disproportionately affected by a reduction in
revenue because only a small portion of Avant!'s and Meta's expenses are
variable with revenue. If revenue levels are below expectations, operating
results are likely to be materially adversely affected. Such shortfalls in the
future in the combined company's revenue or operating results from levels
expected by public market analysts and investors could have an immediate and
significant adverse effect on the market price of Avant!'s Common Stock.
Additionally, the combined company may not learn of such shortfalls until late
in a fiscal quarter, which could result in an even more immediate and adverse
effect on the trading price of the Avant! Common Stock. In such event, the
market price of Avant!'s Common Stock would likely be materially adversely
affected. Due to the foregoing, Avant!, Anagram and Meta believe that period-
to-period comparisons of their results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance
shortfall. See "Selected Consolidated Financial Data."

POTENTIAL VOLATILITY OF STOCK PRICE

The market price of the shares of Avant! Common Stock is likely to be highly
volatile and may be significantly affected by many factors, including the
outcome of outstanding litigation, actual or anticipated fluctuations in the
combined companies operating results, announcements of technological
innovations, new products, new contractual relationships with strategic
partners by the combined company or its competitors, proposed acquisitions and
financial results that fail to meet analyst expectations of performance. In
addition, the U.S. equity markets have from time to time experienced
significant price and volume fluctuations that have particularly affected the
market prices for the common stocks of technology companies. These broad
market fluctuations may adversely affect the market price of Avant! Common
Stock in future periods, including prior to consummation of the Merger.
Because the Merger Exchange Ratio is unaffected by fluctuations in the market
price of the Avant! Common Stock or the Meta Common Stock, the extent to which
the consideration to be received by the shareholders of Meta in the Merger
represents a premium for the Meta Common Stock may be adversely affected by
market price fluctuations of Avant! Common Stock or Meta Common Stock. See
"Market Prices of Avant! Common Stock; Dividends."

COST OF INTEGRATION; TRANSACTION EXPENSES

Transaction costs relating to the negotiation of, preparation for and
consummation of the Merger and the anticipated combination of certain
operations of Avant! and Meta are expected to result in a one-time material
charge to the combined company's earnings. This one-time charge is in addition
to a similar charge estimated to

22
<PAGE>

be approximately $900,000 incurred in connection with the Anagram Acquisition.
Although it will not be feasible to determine the actual amount of this charge
until the operational and transition plans are completed, the management of
Avant! and Meta believe that the charge will be approximately $5.4 million
before taxes, although such amount may be increased by unanticipated
additional expenses incurred in connection with the Merger. This charge is
expected to include the estimated costs associated with financial advisory,
accounting and legal fees, printing expenses, filing fees and other merger-
related costs. While the exact timing of these expenses cannot be determined
at this time, the management of Avant! anticipates that this charge to
earnings along with the charge relating to the Anagram Acquisition, will be
recorded primarily in the quarter ended December 31, 1996, the quarter in
which the Merger is expected to be consummated. The effects of these costs
have not been reflected in the unaudited pro forma condensed combined
statements of operations. These estimates are preliminary and are therefore
subject to change. See "The Proposed Merger and Related Transactions (Related
to Proposals for Both Avant! and Meta)--Unaudited Pro Forma Condensed Combined
Financial Statements."

POTENTIAL DILUTIVE EFFECT TO STOCKHOLDERS

Although the companies believe that beneficial synergies will result from
the Merger, there can be no assurance that the combining of Avant!'s,
Anagram's and Meta's businesses, even if achieved in an efficient and
effective manner, will result in combined results of operations and financial
condition superior to what would have been achieved by each company
independently, or as to the period of time required to achieve such result.
The issuance of Avant! Common Stock in connection with the Merger is likely to
have a dilutive effect on Avant!'s earnings per share and there is no
assurance that stockholders of Avant! would not achieve greater returns on
investment were Avant! to remain an independent company. There also is no
assurance that shareholders of Meta would not achieve greater returns on
investment if Meta were to remain an independent company.

SHARES ELIGIBLE FOR PUBLIC SALE

Sales of substantial amounts of Avant! Common Stock in the public market
after the consummation of the Anagram Acquisition and the Merger could
adversely affect prevailing market prices. The shares of Avant! Common Stock
to be issued in the Merger will be eligible for immediate sale in the public
market, subject to certain limitations under the Securities Act applicable to
affiliates of Meta and certain agreements to be entered into by certain
affiliates of Meta which prohibit such persons from disposing of any Avant!
Common Stock during the period immediately following the Effective Time. See
"The Proposed Merger and Related Transactions (Related to Proposals for Both
Avant! and Meta)--Description of Merger and Plan of Reorganization--Resale of
Avant! Common Stock; Agreements with Affiliates."

PRODUCT CONCENTRATION

Each of Avant! and Meta expects that revenue from the licensing and support
of Aquarius, the Avant! place and route software product family, Hercules, the
Avant! design verification software, and ADM and HSPICE, the Anagram and Meta
circuit simulation and analysis products, respectively, will account for a
substantial percentage of combined company's revenues for the foreseeable
future. As a result, the combined company's future operating results are
significantly dependent upon continued market acceptance and purchases of
Aquarius, Hercules, ADM and HSPICE. A decline in demand for any of these
products as a result of competition, technological change or other factors
would have a material adverse effect on the business, operating results and
financial condition of the combined company. There can be no assurance that
Aquarius, Hercules, ADM or HSPICE will achieve continued market acceptance, or
that the combined company will be successful in marketing such products or any
new or enhanced products. Failure to develop or acquire additional products,
or to successfully market such products on a profitable basis, could have a
material adverse effect on the combined company's business, operating results
and financial condition. See "Meta Business."

RISKS ASSOCIATED WITH INTERNATIONAL LICENSING

International revenue accounted for approximately 34%, 33% and 35% of the
combined company's pro forma total revenue in 1994, 1995 and the first six
months of 1996, respectively. Avant!, Anagram and Meta

23
<PAGE>

expect that international license and service revenue will continue to account
for a significant portion of the combined company's total revenue. Avant!'s,
Anagram's and Meta's international revenue involves a number of risks,
including the impact of possible recessionary environments in economies
outside the United States, longer receivables collection periods and greater
difficulty in accounts receivable collection, adverse currency fluctuations,
difficulties in staffing and managing foreign operations, political and
economic instability, unexpected changes in regulatory requirements, reduced
protection for intellectual property rights in some countries and tariffs and
other trade barriers. Currency exchange fluctuations in countries in which the
combined company licenses its products could also materially adversely affect
the combined company's business and operating results by resulting in pricing
that is not competitive with products priced in local currencies. Furthermore,
there can be no assurance that in the future the combined company will be able
to continue to price its products and services internationally in U. S.
dollars because of changing sovereign restrictions on importation and
exportation of foreign currencies as well as other practical considerations.
In addition, the laws of certain countries do not protect the combined
company's products and intellectual property rights to the same extent as do
the laws of the United States. There can be no assurance that these factors
will not have a material adverse effect on the combined company's future
international sales and, consequently, on the combined company's business,
operating results and financial condition. There can be no assurance that the
combined company will be able to sustain or increase revenue derived from
international licensing and service or that the foregoing factors will not
have a material adverse effect on the combined company's future international
license and service revenue, and, consequently, on the combined company's
business, operating results and financial condition. See "Meta Management's
Discussion and Analysis of Financial Condition and Results of Operations."

DEPENDENCE UPON DISTRIBUTORS AND MANUFACTURER'S REPRESENTATIVES

Avant! and Meta each rely on distributors and manufacturer's representatives
("Third Party Sellers") for licensing and support of their respective products
in China, Japan, Korea, Singapore and Taiwan. A substantial portion of
Avant!'s international license and service revenue results from a limited
number of these Third Party Sellers, and a substantial portion of Meta's
international license and service revenue results from one of these Third
Party Sellers. During 1994, 1995 and the first six months of 1996, revenue
from two distributors and two manufacturer's representatives accounted for an
aggregate of approximately 13%, of Avant!'s total revenue, and during each of
1994, 1995 and the first six months of 1996, revenue from NTT Advanced
Technology Corp. ("NTT-AT"), Meta's distributor in Japan, accounted for an
aggregate of approximately 15%, 14% and 18%, respectively, of Meta's net
revenue. There can be no assurance that Avant!'s and Meta's current Third
Party Sellers will choose to or be able to market or service and support the
combined company's products effectively, that economic conditions or industry
demand will not adversely affect these or other Third Party Sellers or that
these Third Party Sellers will not devote greater resources to marketing and
supporting products of the combined company's competitors. In particular, Meta
has opened a sales office in Tokyo, Japan, which may affect its relationship
with NTT-AT and NTT-AT's performance as a distributor of the Company's
products. Additionally, because the combined company's products are used by
highly skilled professional engineers, a Third Party Seller must possess
sufficient technical, marketing and sales resources in order to be effective
and must devote these resources to a lengthy sales cycle, customer training
and product service and support. Only a limited number of Third Party Sellers
possess such resources. The loss of, or a significant reduction in revenue
from, one of Avant!'s or Meta's Third Party Sellers or any other Third Party
Sellers on which the combined company's revenues may, in the future, become
dependent, could have a material adverse effect on the combined company's
business, operating results or financial condition. See "Meta Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Meta Business--Sales and Marketing."

NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE

The ICDA industry is characterized by extremely rapid technological change,
frequent new product introductions and enhancements, evolving industry
standards and rapidly changing customer requirements. The combined company's
future results of operations will depend in part upon its ability to enhance
its current products and to develop and introduce new products on a timely and
cost-effective basis that will keep pace with

24
<PAGE>

technological developments and evolving industry standards and methodologies,
as well as address the increasingly sophisticated needs of the combined
company's customers. New technologies developed by the combined company or its
competitors could render existing products obsolete. The combined company's
success will depend upon its ability to enhance existing products and to
introduce new products on a timely and cost-effective basis that meet changing
customer requirements. There can be no assurance that the combined company
will be successful in developing new products or enhancing existing products
or that such new or enhanced products will receive market acceptance. On
occasion, Avant! and Meta have each experienced delays in the scheduled
introductions of new and enhanced products, and there can be no assurance that
they will be able to introduce products on a timely basis in the future. In
particular, Meta experienced delays in the introduction of MetaCircuit, due in
part to changing customer demands and the need to augment product features in
response to competitive product offerings. Delays in the scheduled
availability, for technological or other reasons, or a lack of market
acceptance of such products, or the combined company's failure to accurately
anticipate customer demand, would have an adverse effect on its business and
results of operations. See "Meta Business."

DEPENDENCE UPON SEMICONDUCTOR AND ELECTRONICS INDUSTRIES; GENERAL ECONOMIC AND
MARKET CONDITIONS

Avant!, Anagram and Meta are each dependent upon the semiconductor and, more
generally, the electronics industries. Each of these industries is
characterized by rapid technological change, short product life cycles,
fluctuations in manufacturing capacity and pricing and gross margin pressures.
Segments of these industries have from time to time experienced significant
economic downturns characterized by decreased product demand, production over-
capacity, price erosion, work slowdowns and layoffs. Over the past few years,
these industries have experienced an extended period of significant economic
growth, although during 1996 certain sectors of the semiconductor industry
have experienced slower growth than in 1995. There can be no assurance that
economic growth in these industries will continue, and if it does not, any
downturn could be especially severe. During such downturns, the number of new
IC design projects often decreases. Acquisitions of new licenses from the
combined company are largely dependent upon the commencement of new design
projects, and factors negatively affecting any of these industries could have
a material adverse effect on the combined company's business, operating
results or financial condition. The combined company's business, operating
results and financial condition may in the future reflect substantial
fluctuations from period to period as a consequence of patterns and general
economic conditions in either the semiconductor or electronics industry.

LIMITATIONS ON PROTECTION OF INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

Avant!, Anagram and Meta rely on a combination of patents, trade secret,
copyright and trademark laws, as well as contractual commitments, to protect
their proprietary rights in their software products. The companies generally
enter into confidentiality or license agreements with their employees,
distributors and customers, and limit access to and distribution of their
software, documentation and other proprietary information. Despite these
precautions, there can be no assurance that a third party will not copy or
otherwise obtain and use the combined company's products or technology without
authorization, or develop similar technology independently. In particular,
Meta has on occasion distributed its products pursuant to "shrink wrap"
licenses. There can be no assurance that such licenses are enforceable. In
addition, effective copyright and trade secret protection may be unavailable
or limited in certain foreign countries. The combined company expects that
software companies will increasingly be subject to infringement claims as the
number of products and competitors in the industry in which Avant!, Anagram
and Meta currently compete grows and the functionality of products in
different industry segments overlaps. In particular, Avant! is currently in
litigation with Cadence. Responding to such claims, regardless of merit, could
be time-consuming, result in costly litigation, cause product shipment delays
or require the combined company to enter into royalty or licensing agreements.
Such royalty or licensing agreements, if required, may not be available on
terms acceptable to the combined company or at all, which could have a
material adverse effect upon the combined company's business, operating
results and financial condition. There can be no assurance that infringement
claims will not be asserted against the combined company in the future or that
any such claims will not require the combined company to enter into royalty
arrangements or result in costly litigation, which could materially adversely
affect the combined company's business, operating results and financial
condition. See "--Litigation Risks" and "Meta Business--Proprietary Rights."

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RISK OF PRODUCT DEFECTS

Software products as complex as those offered by the combined company may
contain defects or failures when introduced or when new versions are released.
Avant!, Anagram and Meta have in the past discovered software defects in
certain of their products and may experience delays or lost revenue to correct
such defects in the future. There can be no assurance that, despite testing by
the combined company, errors will not be found in new products or releases
after commencement of commercial shipments, resulting in loss of market share
or failure to achieve market acceptance. Any such occurrence could have a
material adverse effect upon the combined company's business, operating
results and financial condition.

DEPENDENCE UPON RELATIONSHIP WITH SYNOPSYS

Avant! currently has a cooperative technical and marketing agreement with
Synopsys that expires by its terms in March 1997, and is automatically renewed
for one year, unless either party gives notice otherwise. The agreement
provides that Synopsys will share certain technical information with Avant!
concerning Synopsys' high level design automation products, which information
has assisted Avant! in the development and marketing of its products. Synopsys
has no obligation to continue to provide similar information in the future,
and if Synopsys were to stop sharing technical information with Avant!, to
favor competitors of Avant! or to develop software products that are
competitive with those of Avant!, Avant!'s business, operating results or
financial condition could be materially adversely affected. While Avant!
believes its relationship with Synopsys is good, there can be no assurance
that the Merger will not have an adverse effect on the existing relationship
with Synopsys.

RIGHTS OF HOLDERS OF META COMMON STOCK FOLLOWING THE MERGER

Following the Merger, holders of Meta Common Stock outstanding as of the
Effective Date will become holders of Avant! Common Stock. Certain material
differences exist between the rights of shareholders of Meta under California
law, Meta's Articles of Incorporation and Meta's Bylaws and the rights of
stockholders of Avant! under Delaware law, Avant!'s Certificate of
Incorporation and Avant!'s Bylaws. As a result of these material differences,
the right of holders of Avant! Common Stock may be generally more limited than
those of holders of Meta Common Stock. See "Comparison of the Rights of
Holders of Avant! Common Stock and Holders of Meta Common Stock."

CONCENTRATION OF STOCK OWNERSHIP; CHANGE OF CONTROL PROVISIONS

Based on the pro forma stock ownership of the combined company as of August
31, 1996 and upon completion of the Merger, the directors and principal
stockholders of the combined company and their affiliates will beneficially
own approximately % of the outstanding Avant! Common Stock. As a result,
these stockholders will be able to exercise significant influence over all
matters requiring stockholder approval, including the election of directors
and approval of significant corporate transactions. Such concentration of
ownership may have the effect of delaying or preventing a change in control of
Avant!. In addition, the combined company's Board of Directors will have the
authority to issue up to 5,000,000 shares of Preferred Stock, to determine the
powers, preferences and rights and the qualifications, limitations or
restrictions granted to or imposed upon any unissued series of Preferred Stock
and to fix the number of shares constituting any series and the designation of
such series, without any further vote or action by the combined company's
stockholders. The Preferred Stock could be issued with voting, liquidation,
dividend and other rights superior to the rights of the Common Stock. The
issuance of Preferred Stock under certain circumstances could have the effect
of delaying or preventing a change in control of the combined company.

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INTRODUCTION

This Joint Proxy Statement/Prospectus is furnished in connection with the
solicitation by Avant! and by Meta of proxies to be voted, respectively, at
the Avant! Special Meeting to be held on , 1996 and the Meta Special
Meeting also to be held on , 1996. This Joint Proxy Statement/Prospectus
is first being mailed to stockholders of Avant! and shareholders of Meta on or
about , 1996.

The purpose of the Avant! Special Meeting is to consider and vote upon the
Avant! Share Issuance Proposal. The purpose of the Meta Special Meeting is to
consider and vote upon the approval of the Meta Merger Proposal. At the
Effective Time, Merger Sub will be merged with and into Meta, the separate
existence of Merger Sub will cease, all of the rights, privileges, powers,
franchises, properties, assets, liabilities and obligations of Merger Sub will
be vested in Meta and Meta will become a wholly-owned subsidiary of Avant!.
See "The Proposed Merger and Related Transactions (Related to Proposals for
Both Avant! and Meta)."

THE BOARD OF DIRECTORS OF AVANT! HAS DETERMINED THAT THE PLAN OF
REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY ARE FAIR TO, AND IN
THE BEST INTERESTS OF, AVANT! AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE
STOCKHOLDERS OF AVANT! APPROVE THE AVANT! SHARE ISSUANCE PROPOSAL.

THE BOARD OF DIRECTORS OF META HAS DETERMINED THAT THE PLAN OF
REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED THEREBY ARE FAIR TO, AND IN
THE BEST INTERESTS OF, META AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE
SHAREHOLDERS OF META APPROVE THE META MERGER PROPOSAL.

This Joint Proxy Statement/Prospectus also constitutes the prospectus of
Avant! under the Securities Act for the offering of Avant! Common Stock in
connection with the Merger.

VOTING AND PROXIES

DATE, TIME AND PLACE OF AVANT! SPECIAL MEETING AND META SPECIAL MEETING

The Avant! Special Meeting will be held at , California, on ,
1996, at , local time. The Meta Special Meeting will be held at the
principal executive offices of Meta, 1300 White Oaks Road, Campbell,
California on , 1996, at , local time.

RECORD DATE AND OUTSTANDING SHARES

Stockholders of record of Avant! Common Stock at the close of business on
, 1996 (the "Avant! Record Date") are entitled to notice of and to vote at
the Avant! Special Meeting. On the Avant! Record Date, there were
approximately holders of record of Avant! Common Stock, and shares of
Avant! Common Stock were issued and outstanding. Each share of Avant! Common
Stock is entitled to one vote per share.

Shareholders of record of Meta Common Stock at the close of business on ,
1996 (the "Meta Record Date") are entitled to notice of and to vote at the
Meta Special Meeting. On the Meta Record Date, there were approximately
holders of record of Meta Common Stock, and shares of Meta Common Stock
were issued and outstanding. Each share of Meta Common Stock is entitled to
one vote per share.

All properly executed proxies given by holders of Avant! Common Stock or
Meta Common Stock that are not revoked will be voted at the Avant! Special
Meeting or the Meta Special Meeting, as the case may be, and at any
postponements or adjournments of either such meeting, in accordance with the
instructions contained therein. Proxies containing no instructions regarding
the proposal specified in the proxy will be voted, in the case of the Avant!
Special Meeting, in favor of the Avant! Share Issuance Proposal and, in the
case of the Meta Special Meeting, in favor of the Meta Merger Proposal. If any
other matters are properly brought before either the Avant! Special Meeting or
the Meta Special Meeting, all proxies will be voted in accordance with the
judgment of the the proxies. Either Special Meeting may be adjourned, and
additional proxies solicited, if the vote necessary to

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approve a proposal has not been obtained. Any adjournment of either Special
Meeting will require the affirmative vote of the holders of at least a
majority of the shares represented, whether in person or by proxy, at such
Special Meeting (regardless of whether those shares constitute a quorum).

An Avant! stockholder or a Meta shareholder who has executed and returned a
proxy may revoke such proxy at any time before it is voted at the Avant!
Special Meeting or the Meta Special Meeting, as the case may be, by executing
and returning a proxy bearing a later date, by filing written notice of such
revocation with the Secretary of Avant! or the Secretary of Meta, as
appropriate, which states that such proxy is revoked, or by attending the
Avant! Special Meeting or the Meta Special Meeting, as the case may be, and
voting in person.

AVANT! STOCKHOLDER VOTE REQUIRED

The approval of the Avant! Share Issuance Proposal requires the affirmative
vote of a majority of the shares of Avant! Common Stock represented in person
or by proxy at the Avant! Special Meeting. The holders of a majority of the
outstanding shares of Avant! Common Stock, present in person or by proxy, will
constitute a quorum for the transaction of business at the Avant! Special
Meeting or any adjournment thereof.

Votes cast by proxy or in person at the Avant! Special Meeting will be
tabulated by the election inspectors appointed for the meeting and will
determine whether or not a quorum is present. The election inspectors will
treat abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the stockholders for a
vote.

META SHAREHOLDER VOTE REQUIRED

Approval of the Meta Merger Proposal requires the affirmative vote of the
holders of a majority of the outstanding shares of Meta Common Stock. Shawn M.
Hailey, Meta's President and Chief Executive Officer, and Kim L. Hailey,
Meta's Vice President of Engineering, the holders of an aggregate of 7,481,201
shares of Meta Common Stock (approximately % of the outstanding Meta Common
Stock) have agreed to vote their shares in favor of the Meta Merger Proposal.
The holders of a majority of the outstanding shares of Meta Common Stock,
present in person or by proxy, will constitute a quorum for the transaction of
business at the Meta Special Meeting or any adjournment thereof.

Votes cast by proxy or in person at the Meta Special Meeting will be
tabulated by the election inspectors appointed for the meeting and will
determine whether or not a quorum is present. The election inspectors will
treat abstentions and broker non-votes as shares that are present and entitled
to vote for purposes of determining the presence of a quorum, and such
abstentions and broker non-votes will have the effect of a vote against the
Meta Merger Proposal.

SOLICITATION OF PROXIES; EXPENSES

Avant! and Meta will bear their respective costs of solicitation of proxies
from their respective stockholders and shareholders. Avant! will bear the cost
of printing and filing this Joint Proxy Statement/Prospectus and the
Registration Statement of which it is a part unless the Merger is not
completed for certain reasons, in which case such expenses will be divided
equally between Avant! and Meta. In addition to solicitation by mail, the
directors, officers and employees of Avant! and Meta and stockholders and
shareholders of Avant! and Meta, respectively, may solicit proxies from the
stockholders and shareholders of Avant! and Meta, respectively, by telephone,
telegram or letter or in person for no additional compensation. Brokers,
nominees, fiduciaries and other custodians have been requested by Avant! and
Meta, respectively, to forward proxy solicitation materials to the beneficial
owners of Avant! Common Stock and Meta Common Stock held of record by such
custodians. Such custodians will be reimbursed by Avant! and Meta for their
expenses.

In addition, although it is not currently anticipated, Avant! may retain a
proxy solicitation firm to aid in the solicitation of proxies from its
stockholders. If such a firm or firms are retained, they would be paid
customary fees (which, in each case, are not expected to exceed $10,000) and
reimbursement for out-of-pocket expenses.

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THE PROPOSED MERGER AND RELATED TRANSACTIONS
(RELATED TO PROPOSALS FOR BOTH AVANT! AND META)

DESCRIPTION OF MERGER AND PLAN OF REORGANIZATION

GENERAL

The Plan of Reorganization provides for the merger of a newly formed,
wholly-owned subsidiary of Avant! with and into Meta, with Meta to be the
surviving corporation of the Merger and thus to become a wholly-owned
subsidiary of Avant!. The discussion in this Joint Proxy Statement/Prospectus
of the Merger and the description of the principal terms of the Plan of
Reorganization are subject to and qualified in their entirety by reference to
the Plan of Reorganization.

MATERIAL CONTACTS AND BOARD DELIBERATIONS

On May 9, 1996, Gerald C. Hsu, the President and Chief Executive Officer of
Avant!, and Shawn M. Hailey, the President and Chief Executive Officer of
Meta, met to explore the possibility of a strategic transaction or business
combination, and the long-term strategic possibilities of such a transaction
or combination.

At a regularly scheduled meeting on May 23, 1996, the Meta Board of
Directors considered possible strategic transactions for Meta, including a
business combination with Avant!. No action on any transaction was taken at
that time, as the Meta Board determined to study the costs and benefits of
such transactions further.

On May 29, 1996, Messrs. Hsu and Hailey met to continue to explore the
possibility of a business combination. On May 30, 1996, Messrs. Hsu and Hailey
continued their meeting, together with their respective legal counsel.

At a special meeting on May 31, 1996, the Meta Board discussed a possible
business combination with Avant! in greater detail. At this meeting, Special
Counsel to Meta presented a preliminary overview of the litigation between
Cadence and Avant!. After discussion, the Meta Board directed Special Counsel
to review the litigation further and to report to the Meta Board regarding its
review.

At the Design Automation Conference in Las Vegas, Nevada, between June 3 and
7, 1996, Messrs. Hsu and Hailey met informally to discuss Meta's progress in
evaluating a possible business combination between Avant! and Meta.

At a special meeting on June 4, 1996, the Meta Board again discussed a
possible business combination with Avant!. After consideration of many
factors, including a report from Special Counsel regarding the pending
litigation between Cadence and Avant!, the Meta Board determined not to pursue
the transaction actively.

On July 12, 1996, representatives of Meta, WA&H and legal counsel met at
Meta's offices to review the status of certain issues relating to the
potential business combination.

On July 19, 1996, Y. Eric Cho, a member of the Avant! Board, and Mr. Hailey
met informally to discuss certain issues relating to the potential
transaction. During the course of these discussions the parties discussed the
material terms of the potential transaction, including timing and valuation.
The parties were unable to come to agreement on the material terms, and,
following these discussions, the parties determined not to proceed with the
potential transaction.

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On August 15, 1996, Avant! announced the signing of a binding letter of
intent relating to the Anagram Acquisition.

At a special meeting on August 19, 1996, the Meta Board again discussed a
possible business combination with Avant!, in light of changes in the
competitive landscape following the announcement of the Anagram Acquisition
and in light of other changes in circumstances. The Meta Board considered in
detail the potential benefits of the proposed transaction, including: (i) the
complementary nature of Avant!'s products, which have the potential to address
a growing customer preference for bundled products incorporating broad
functionality and to reduce Meta's dependence on any individual products or
product line; (ii) the expanded sales and marketing opportunities for Meta
products provided by Avant!'s customer base and sales and distribution
network, including an increased ability to penetrate the major semiconductor
manufacturer customer base; (iii) the significantly greater financial and
technological resources of the combined company and more complete IC design
product offering including physical design, verification and simulation
products; and (iv) the increased risk of competition in a consolidating market
if Meta were to remain an independent company. The Meta Board also considered
various risks associated with the proposed transaction, including: (a) the
possible effects of any adverse outcome in the pending litigation between
Cadence and Avant!; (b) the loss of control over the future operations of Meta
following the Merger; (c) the risk that the benefits sought to be achieved in
the Merger will not be achieved; (d) the risk that the operations of Meta and
Avant! will not be effectively integrated or that potential synergies expected
to result from the consolidation of the operations of the companies will not
occur; and (e) the risk that the Anagram Acquisition may not occur, and/or
that the operations of Avant! and Anagram will not be effectively integrated
or that potential synergies expected to result from the consolidation of the
operations of those companies will not occur. The Meta Board also considered
possible alternative transactions, including other business combinations.
A representative of WA&H participated in this meeting and commented on the
financial aspects of the proposed transactions. At this meeting, the Meta
Board formally retained WA&H to render an opinion as to the fairness, from a
financial point of view, of the consideration to be paid to the Meta
shareholders in the proposed transaction.

Also on August 19, 1996, a confidentiality agreement between Meta and Avant!
was executed, and legal, financial, sales, marketing and product development
documents began to be exchanged on an ongoing basis between Avant! and Meta in
response to due diligence requests.

Also on August 19, 1996, Messrs. Hsu and Hailey continued their discussions.
They were joined by representatives of WA&H and their respective legal counsel
and other Meta and Avant! personnel. At this meeting, Messrs. Hsu and Hailey
discussed a purchase price of $160,000,000 worth of Avant!'s Common Stock
valued at the August 19, 1996 closing price, in exchange for all outstanding
shares of Meta Common Stock and all Meta Stock Options and subscription rights
and committed to discuss this valuation with their respective Boards of
Directors. Following this meeting, attorneys with Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP ("Gunderson Dettmer"), outside counsel to
Avant!, began preparation of definitive documentation for the proposed
transaction.

From August 19, 1996 to August 22, 1996, management of Avant! and Meta,
together with representatives from Gunderson Dettmer, Venture Law Group, A
Professional Corporation ("VLG") and WA&H, completed a financial and
operational due diligence review, and continued discussions to review and
resolve outstanding legal and financial issues.

On August 21, 1996, the Avant! Board discussed the financial terms and
conditions of the proposed merger and approved the overall financial terms of
the transaction and continuation of negotiations with representatives of Meta.

At a special meeting on August 21, 1996, the Meta Board considered the
proposed terms of the transaction in greater detail, including the premium to
be paid in the transaction and recent performance of the Meta Common Stock and
the Avant! Common Stock.

On August 22, 1996, there was a telephonic meeting of the Avant! Board to
approve the Plan of Reorganization and the related transactions.
Representatives of Gunderson Dettmer informed the Avant! Board regarding the
final terms of the Plan of Reorganization. After considering the terms of the
proposed transaction,

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the Avant! Board of Directors determined that the Plan of Reorganization was
fair to Avant! stockholders and that the proposed Merger was in the best
interests of Avant! and its stockholders. The Avant! Board then unanimously
adopted the Plan of Reorganization and the Merger contemplated thereby.
Following approval by the Board, Avant! executed and delivered the Plan of
Reorganization to Meta.

On August 22, 1996, there was a regularly scheduled meeting of the Meta
Board. At this meeting, the final terms of the Plan of Reorganization were
reviewed for the Meta Board by a representative of VLG. WA&H informed the Meta
Board that, in its opinion and based upon the information then available, the
Merger Exchange Ratio contemplated by the Plan of Reorganization was at that
date fair from a financial point of view to the holders of Meta Common Stock,
and responded to various questions raised by members of the Meta Board
regarding such opinion. Special Counsel provided an update to the Meta Board
on the status of the pending litigation between Cadence and Avant!. After
considering the terms of the proposed transaction, the opinion of WA&H and the
report of Special Counsel, as well as other relevant matters, the Meta Board
determined that the Merger Exchange Ratio was fair to Meta's shareholders and
that the proposed Merger was in the best interests of Meta and its
shareholders. The Meta Board then unanimously adopted and approved the Plan of
Reorganization and the Merger contemplated thereby. Following approval by the
Meta Board, Meta executed and delivered the Plan of Reorganization to Avant!.

A joint press release announcing execution of the Plan of Reorganization and
the terms of the Merger was issued on the afternoon of August 22, 1996.

REASONS FOR THE MERGER

Avant!'s Reasons for the Merger. Avant!'s Board has identified several
potential benefits of the Merger that it believes will contribute to the
success of the combined company. These potential benefits include:

. The Merger will expand Avant!'s software product offerings into
simulation and library generation software products for use in IC
design.

. The Merger will permit Avant! to broaden and diversify its product
offerings with complementary software tools that it currently does not
offer, which may reduce the risk of dependence on individual products.

. Avant! believes that the management team of the combined company will
have greater depth and experience than that of either company standing
alone.

. A larger combined customer base and complementary distribution channels
will provide leverage for expanded sales and marketing opportunities for
the combined company.

In the course of its discussions and the formal meeting held August 22,
1996, the Avant! Board reviewed with Avant!'s management a number of factors
relevant to the Merger, including the strategic overview and prospects for
Avant!, its products and its finances. The Avant! Board also considered, among
other matters: (i) information concerning Avant!'s and Meta's respective
businesses, prospects, financial performance and condition, operations,
technology, management and competitive position; (ii) the financial condition,
results of operations and businesses of Avant! and Meta before and after
giving effect to the Merger; (iii) current financial market conditions and
historical market prices, volatility and trading information with respect to
Avant! Common Stock and Meta Common Stock; (iv) the consideration to be
received by Meta shareholders in the Merger and the relationship between the
market value of Avant! Common Stock to be issued in exchange for each share of
Meta Common Stock and Avant!'s per share reported earnings, earnings before
interest and taxes and certain other measures; (v) a comparison of selected
recent acquisition and merger transactions involving high-technology
companies; (vi) the

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belief that the terms of the Plan of Reorganization, including the parties'
respective representations, warranties and covenants, and the conditions to
their respective obligations, are reasonable; (vii) the ability of Avant! to
devote management time and energy to the integration and assimilation of
Meta's business and organization should the Merger be consummated; (viii) the
fact that the Merger is expected to be accounted for as a pooling of interests
and that no goodwill is expected to be created on the financial statements of
Avant! as a result thereof; (ix) the impact of the Merger upon Avant!'s
customers, including the potential loss of revenue that might result due to
uncertainty among customers caused by the Merger; and (x) reports from
management, financial, accounting and legal advisors as to the results of
their due diligence investigation of Meta. The Board of Directors of Avant!
also considered a number of potentially negative factors in its deliberations
concerning the Merger, including, but not limited to (i) the risk that the
benefits sought to be achieved in the Merger will not be so achieved and (ii)
the other risks described above under "Risk Factors."

In view of the wide variety of factors considered by the Avant! Board, the
Avant! Board did not find it practicable to quantify or otherwise assign
relative weights to the specific factors considered in approving the Plan of
Reorganization and Merger. However, after taking into account all of the
factors set forth above, the Avant! Board determined that the Plan of
Reorganization and the Merger were in the best interests of Avant! and its
stockholders and that Avant! should proceed with the Plan of Reorganization
and the Merger.

Meta's Reasons for the Merger. Meta's Board believes that the Merger will be
potentially beneficial in several respects. In reaching its determination to
recommend approval of the Merger and related transactions, the Meta Board
considered a number of factors, including, but not limited to, the following:

. Avant!'s customer base and sales and distribution network offer expanded
sales and marketing opportunities for the Meta products. Meta believes
that the broader product offering of the combined company may facilitate
adoption of Meta products by major semiconductor manufacturers, a
customer base that Meta has not fully penetrated to date.

In the course of its deliberations during meetings held on May 23, 1996, May
31, 1996, June 4, 1996, August 19, 1996, August 21, 1996 and August 22, 1996,
and in numerous telephone conferences, the Meta Board reviewed with Meta's
management a number of additional factors relevant to the Merger, including
the strategic overview and prospects for Meta, its products and its finances.
The Meta Board considered in particular recent delays experienced in the
market introduction of certain Meta products under development, the uncertain
market response to functionality incorporated in recently released products,
and the net outflow of personnel experienced in recent months, all of which
have the potential to materially and adversely impact Meta's business,
financial condition and results of operations. The Meta Board also considered,
among other matters: (i) information concerning Avant!'s and Meta's respective
businesses, prospects, financial performance and condition, operations,
technology, management and competitive position (in general and specifically
in light of the Anagram Acquisition); (ii) the businesses, financial condition
and results of operations of Avant! and Meta before and after giving effect to
the Merger; (iii) current financial market conditions and historical market
prices, volatility and trading information with respect to Avant! Common Stock
and Meta Common Stock; (iv) the consideration to be received by Meta
shareholders in the Merger, and the fact that the market value of Avant!
Common Stock to

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be issued in exchange for each share of Meta Common Stock represented a
premium of approximately 19% over the closing sales price of $10.75 per share
of Meta Common Stock on August 21, 1996, the last trading day prior to the
date of announcement of the Merger; (v) a comparison of selected recent
acquisition and merger transactions, and other transactions reflecting a
consolidation in the industry, including the Anagram Acquisition; (vi) the
belief that the terms of the Plan of Reorganization, including the parties'
respective representations, warranties and covenants, and the conditions to
their respective obligations to complete the Merger are reasonable; (vii) the
ability of Meta to terminate the Plan of Reorganization in the event of a
material adverse change in the business, financial condition, results of
operations or prospects of Avant! and the failure of Avant! to propose a
reasonably acceptable plan to mitigate the effect of such material adverse
change within 20 business days following written notice to Avant! of Meta's
intent to terminate; (viii) the fact that the Merger is expected to be
accounted for as a pooling of interests and that no goodwill is expected to be
created on the financial statements of Avant! as a result thereof and is
intended to be a tax-free reorganization for federal income tax purposes; (ix)
a financial presentation by WA&H, including the written opinion of WA&H
rendered at the August 22, 1996 meeting of the Meta Board that, as of such
date, the Merger Exchange Ratio was fair to Meta shareholders from a financial
point of view; (x) the impact of the Merger upon Meta's customers and
employees; and (xi) reports from management and financial advisors and legal
advisors as to the results of their due diligence investigation of Avant!,
including the report of Special Counsel regarding the pending litigation
between Avant! and Cadence.

The Meta Board also considered a number of potentially negative factors in
its deliberations concerning the Merger, including, but not limited to: (i)
the possible effects of any adverse outcome in the pending litigation between
Cadence and Avant!; (ii) the loss of control over the future operations of
Meta following the Merger; (iii) the risk that the benefits sought to be
achieved in the Merger will not be achieved; (iv) the risk that the operations
of Meta, Avant! and Anagram will not be effectively integrated or that
potential synergies expected to result from the consolidation of their
operations will not occur; and (v) the other risks described above under "Risk
Factors." The Meta Board discussed with management the prospects for
combinations with companies other than Avant! and whether the benefits
described above could be achieved through any such combination, as well as the
risks and benefits of a standalone strategy.

In view of the wide variety of factors considered, the Meta Board did not
find it practicable to quantify or otherwise assign relative weights to the
specific factors considered. After taking into account all of the factors set
forth above, however, the Meta Board determined that the Plan of
Reorganization and Merger were in the best interests of Meta and its
shareholders and that Meta should enter into the Plan of Reorganization and
complete the Merger.

OPINIONS OF FINANCIAL ADVISORS

Opinion of Financial Advisor to Avant!. Avant! retained Morgan Stanley to
render a financial opinion to the Avant! Board in connection with the Merger.
Morgan Stanley was selected by the Avant! Board to provide such services based
on Morgan Stanley's qualifications, expertise and reputation, as well as
Morgan Stanley's investment banking relationship and familiarity with Avant!.

Morgan Stanley rendered to the Avant! Board its written opinion dated as of
September 9, 1996 (the "Morgan Stanley Opinion") that, as of such date, based
upon and subject to the various considerations set forth in the opinion, the
consideration to be paid to the holders of Meta Common Stock pursuant to the
Plan of Reorganization was fair from a financial point of view to Avant!.

The full text of the Morgan Stanley Opinion, which sets forth, among other
things, assumptions made, procedures followed, matters considered and
limitations on the review undertaken, is attached as Appendix B to this Joint
Proxy Statement/Prospectus. Morgan Stanley's opinion is directed to the Avant!
Board and the fairness of the consideration to be paid to the holders of Meta
Common Stock from a financial point of view and does not constitute a
recommendation to any holder of Avant! or Meta Common Stock as to how to vote
at the Avant!

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Special Meeting or the Meta Special Meeting. The summary of the Morgan Stanley
Opinion set forth herein is qualified in its entirety by reference to the full
text of such opinion. The Avant! stockholders are urged to read the Morgan
Stanley Opinion in its entirety.

In rendering its opinion, Morgan Stanley, among other things: (i) reviewed
certain publicly available financial statements and other information of Meta
and Avant!; (ii) reviewed certain internal financial statements and other
financial and operating data concerning Meta and Avant! prepared by the
managements of Meta and Avant!, respectively; (iii) analyzed certain financial
projections prepared by the management of Meta; (iv) analyzed certain
financial projections prepared by the management of Avant!; (v) reviewed and
discussed with Avant!'s management Avant!'s estimate of the cost savings and
other synergies that may be achieved in the Merger; (vi) discussed the past
and current operations and financial condition and the prospects of Meta with
senior executives of Meta; (vii) discussed the past and current operations and
financial condition and the prospects of Avant! with senior executives of
Avant!; (viii) analyzed the pro forma impact of the Merger on Avant!'s
earnings per share and consolidated capitalization and financial ratios;
(ix) reviewed the reported prices and trading activity for the Avant! Common
Stock and the Meta Common Stock; (x) compared the financial performance of
Avant! and Meta and the prices and trading activity of the Avant! Common Stock
and the Meta Common Stock with that of certain other comparable publicly-
traded companies and their securities; (xi) reviewed the financial terms, to
the extent publicly available, of certain comparable acquisition transactions;
(xii) reviewed the Plan of Reorganization and certain related documents; and
(xiii) considered such other factors as Morgan Stanley deemed appropriate.

In rendering its opinion, Morgan Stanley assumed and relied upon, without
independent verification, the accuracy and completeness of the information
reviewed by it for purposes of rendering its opinion. With respect to the
financial projections, Morgan Stanley assumed that they were reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the future financial performance of Meta and Avant!. Morgan
Stanley also relied upon, without independent verification, the estimate of
Avant!'s management of the cost savings and other synergies that may be
achieved if the Merger is consummated. Morgan Stanley also relied upon,
without independent verification, Avant! management's assessment of the
validity of, and the risks associated with, Meta's products and technology.
Morgan Stanley did not make any independent valuation or appraisal of the
assets or liabilities of Avant! or Meta, nor was it furnished with any such
appraisals. Morgan Stanley assumed that the Merger will be accounted for as a
"pooling-of-interests" business combination in accordance with U.S. generally
accepted accounting principles and will be consummated in accordance with the
terms set forth in the Plan of Reorganization. The Morgan Stanley Opinion
stated that it is necessarily based on economic, market and other conditions
as in effect on, and the information made available to Morgan Stanley as of,
the date of such opinion.

The following is a brief summary of certain financial analyses performed by
Morgan Stanley in connection with the Morgan Stanley Opinion:

Comparative Stock Price Performance. As part of its analysis, Morgan Stanley
reviewed the recent stock market performance of Meta Common Stock and Avant!
Common Stock and compared such performance to that of a group of software
companies: Cadence, Synopsys, Mentor, CCT, Viewlogic and EPIC (the "Design
Software Comparables"). Morgan Stanley observed that over the period January
1, 1996 to September 6, 1996, Meta underperformed the Design Software
Comparables index by 24.6% and Avant! outperformed the Design Software
Comparables index by 61.2%.

Exchange Ratio Analysis. Morgan Stanley reviewed the ratios of the prices of
Meta Common Stock to Avant! Common Stock over various periods ending September
6, 1996 and computed the premium over these ratios represented by the Exchange
Ratio. The average of the ratios of closing stock prices of Meta Common Stock
and Avant! Common Stock for the various periods ending September 6, 1996 were
0.719 since November 8, 1995; 0.641 for the previous 90 days; 0.536 for the
previous 60 days; 0.413 for the previous 30 days; 0.417

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for the previous 10 days; and 0.424 for September 6, 1996. Morgan Stanley
observed that the Exchange Ratio represented a discount of 39.5%, 32.2% and
18.8% and a premium of 5.4%, 4.4% and 2.6%, respectively, over the
aforementioned ratios of the prices of Meta Common Stock and Avant! Common
Stock.

Peer Group Comparison. Morgan Stanley compared certain financial information
of Meta with the Design Software Comparables. Such financial information
included, among other things, market valuation, market value as a multiple of
earnings and market value as a multiple of earnings taken as a multiple of the
projected EPS growth rate. In particular, such analysis showed that as of
September 6, 1996, based on representative research analysts for Avant! and
Meta, Avant! and Meta traded at 42.8 and 23.6 times forecasted earnings for
the fiscal year 1996, respectively, and 31.2 and 19.0 times forecast earnings
for the fiscal year 1997, respectively, compared to a median of 29.7 times
calendar year 1996 earnings and 22.8 times calendar year 1997 earnings for the
Design Software Comparables. In addition, Morgan Stanley observed that Avant!
and Meta traded at market values to 1997 earnings multiples taken as a
multiple of the five year projected EPS growth of 0.73 and 0.54 times,
respectively, compared to a median of 0.67 for the Design Software
Comparables.

No company utilized as a comparison in the peer group analysis is identical
to Meta or Avant!. In evaluating the Design Software Comparables, Morgan
Stanley made judgments and assumptions with regard to industry performance,
general business, economic, market and financial conditions and other matters,
many of which are beyond the control of Meta or Avant!, such as the impact of
competition on Meta or Avant! and the industry generally, industry growth and
the absence of any adverse material change in the financial condition and
prospects of Meta or Avant! or the industry or the financial markets in
general.

Contribution Analysis. Morgan Stanley analyzed the pro forma contribution of
each of Meta and Avant! to the combined company if the Merger were to be
consummated. Such analysis was based on financial data for Meta and for Avant!
based on research and respective management estimates. Such analysis showed
that, on average for the years 1996 and 1997 (fiscal years ending December for
Avant! and Meta); Meta would contribute approximately 33.3%, 33.0%, 29.1% and
27.8% of the revenues, gross profit, operating profit and net income of the
combined company, respectively. Morgan Stanley observed that the
aforementioned contribution percentages implied exchange ratios of 0.864,
0.855, 0.728 and 0.703, respectively, as compared to the Exchange Ratio of
0.435.

Analysis of Selected Precedent Transactions. Morgan Stanley examined
selected precedent merger and acquisition transactions involving software
companies. Such analysis resulted in a median of 38.2 times projected net
income, a 39.5% premium over the stock price one month prior to announcement
of the transaction, and a 26.1% premium over the stock price one day prior to
announcement of the transaction.

No transaction utilized as a comparison in the comparable transaction
analysis is identical to the Merger. In evaluating the precedent transactions,
Morgan Stanley made judgments and assumptions with regard to industry
performance, general business, economic, market and financial conditions and
other matters, many of which are beyond the control of Meta and Avant!, such
as the impact of competition on Meta and Avant! and the industry generally,
industry growth and the absence of any adverse material change in the
financial condition and prospects of the Meta or Avant! or the industry or the
financial markets in general. Mathematical analysis (such as determining the
average or median) is not in itself a meaningful method of using comparable
transaction data.

Discounted Equity Value. Morgan Stanley performed an analysis of the present
value per share of Avant! and Meta's respective future trading prices based on
a range of earnings per share estimates for Avant! and Meta for calendar years
1998 and 1999, illustrative multiples of earnings per share ranging from 30.0
times to 35.0 times next calendar year's earnings per share for Avant! and
16.0 times to 20.0 times next calendar year's earnings per share for Meta, and
illustrative discount rates ranging from 15.0% to 25.0% based on Morgan
Stanley estimates of the theoretical return required by shareholders to hold
shares Avant! and Meta, respectively. Based on this analysis, Morgan Stanley
estimated a present value of the potential future trading price per share
ranging from $38.00 to $44.00 for the Avant! Common Stock and $12.50 to $16.00
for the Meta Common Stock. Additionally, Morgan Stanley compared the present
value per share of Avant! to the pro forma present value per

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<PAGE>

share assuming consummation of the Merger. This analysis showed values ranging
from $36.76 to $41.91 for Avant! on a stand-alone basis based on Avant!'s
current multiple of next calendar year's earnings per share of 31.2 times and
an illustrative discount rate of 25.0% and values ranging from $36.18 to
$46.56 for Avant! assuming consummation of the Merger based on a range of
multiples of next calendar year's earnings per share 27.5 times (the combined
company's current weighted average multiple of the next calendar year's
earnings per share) to 31.2 times (Avant!'s current multiple of next calendar
year's earnings per share) and an illustrative discount rate of 25.0%.

Pro Forma Analysis of the Merger. Morgan Stanley analyzed certain pro forma
effects of the Merger on the earnings and capitalization of the combined
company. These analyses were based on certain forecasts provided by both
Avant! and Meta management as well as research estimates regarding the
financial performance of Meta and Avant!, respectively. Based on such
analyses, Morgan Stanley observed that, based on the Exchange Ratio and
assuming that the Merger was treated as a pooling of interests for accounting
purposes, the Merger would result in an increase in Avant!'s earnings per
share in fiscal years 1996 and 1997.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. In
arriving at its opinion, Morgan Stanley considered the results of all of its
analysis as a whole and did not attribute any particular weight to any
particular analysis or factor considered by it. Furthermore, selecting any
portion of Morgan Stanley's analyses, without considering all analyses, would
create an incomplete view of the process underlying its opinion. In addition,
Morgan Stanley may have deemed various assumptions more or less probable than
other assumptions, so that the ranges of valuations resulting for any
particular analysis described above should not be taken to be Morgan Stanley's
view of the actual value of Meta or Avant!.

In performing its analyses, Morgan Stanley made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Meta or Avant!. The
analyses performed by Morgan Stanley are not necessarily indicative of actual
values, which may be significantly more or less favorable than suggested by
such analyses. Such analyses were prepared solely as a part of the Morgan
Stanley Opinion. The analyses do not purport to be appraisals or to reflect
the prices at which Meta or Avant! might actually be sold. Because such
estimates are inherently subject to uncertainty, none of Meta, Avant! or
Morgan Stanley or any other person assumes responsibility for their accuracy.

Avant! retained Morgan Stanley based upon its experience and expertise.
Morgan Stanley is an internationally recognized investment banking and
advisory firm. Morgan Stanley, as part of its investment banking business, is
regularly engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distribution of listed and unlisted
securities, private placements and valuations for corporate and other
purposes. Morgan Stanley makes a market in Avant! Common Stock and may
continue to provide investment banking services to Avant! in the future. In
the course of its market-making and other trading activities, Morgan Stanley
may, from time to time, have a long or short position in, and buy and sell,
securities of Avant! and Meta. Morgan Stanley and its and affiliates have
provided financial advisory and financing services to Avant! and have received
customary fees in connection with these services.

Avant! has agreed to pay Morgan Stanley a fee of $500,000 for the rendering
of the Morgan Stanley Opinion in connection with the transaction. Avant! also
has agreed to reimburse Morgan Stanley for its out-of-pocket expenses and to
indemnify Morgan Stanley and its affiliates, their respective directors,
officers, agents and employees and each person, if any, controlling Morgan
Stanley, or any of its affiliates against certain liabilities, including
liabilities under federal securities laws, and expenses related to Morgan
Stanley's engagement.

Opinion of Financial Advisor to Meta. WA&H was retained, pursuant to an
engagement letter dated August 19, 1996 (the "WA&H Engagement Letter"), to
furnish an opinion as to the fairness, from a financial

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point of view, to Meta and the Meta shareholders of the consideration to be
paid in the Merger. The amount of consideration to be paid to Meta
shareholders in the Merger was determined through negotiations between Meta
management and Avant! management and not by WA&H.

On August 22, 1996, WA&H rendered its opinion to the Meta Board of Directors
that, as of such date and based on the procedures followed, factors considered
and assumptions made by WA&H and certain other limitations, all as set forth
therein, the consideration proposed to be paid to the holders of Meta Common
Stock upon completion of the Merger was fair from a financial point of view. A
copy of the WA&H Opinion is attached as Appendix C to this Joint Proxy
Statement/Prospectus. Meta shareholders are urged to read the WA&H Opinion in
its entirety. The summary of the opinion set forth herein is qualified in its
entirety by reference to the full text of the WA&H Opinion.

The WA&H Opinion applies only to the fairness, from a financial point of
view, of the consideration to be paid to the Meta shareholders as provided by
the terms of the Plan of Reorganization and should not be understood to be a
recommendation by WA&H to vote in favor of any matter presented in this Joint
Proxy Statement/Prospectus. Meta shareholders should note that the opinion
expressed by WA&H was provided solely for the information of the Meta Board of
Directors in its evaluation of the Merger and was not prepared on behalf of,
and was not intended to confer rights or remedies upon, Avant!, Meta or any
shareholder of Meta or Avant!, or any persons other than the Meta Board of
Directors. The Meta Board did not impose any limitations on the scope of the
investigation of WA&H with respect to rendering its opinion.

WA&H assumed and relied upon the accuracy and completeness of the financial,
legal, tax, operating and other information provided by Meta and Avant! and
certain other publicly available information and did not independently verify
such information. Additionally, WA&H did not consider the possible effects of
any adverse outcome of the pending litigation between Avant! and Cadence, of
any other legal or contingency matters. Further, WA&H assumed that the Merger
will be accounted for as a pooling of interests. WA&H did not perform an
independent evaluation or appraisal of any of the respective assets or
liabilities of Meta or Avant!, nor was WA&H furnished with any such
evaluations or appraisals. The WA&H Opinion is based on the conditions as they
existed and the information available to WA&H on the date of the opinion.
Events occurring after the date of the WA&H Opinion may materially affect the
assumptions used in preparing the WA&H Opinion.

In connection with its review of the Merger, and in arriving at its opinion,
WA&H has: (i) reviewed and analyzed the financial terms of the Plan of
Reorganization; (ii) reviewed and analyzed certain publicly available
financial and other data with respect to Meta and Avant! and certain other
relevant and operating data relating to Meta and Avant! made available to WA&H
from published sources and from the internal records of Meta and Avant!; (iii)
conducted discussions with members of the senior management of Meta with
respect to the business and prospects of Meta; (iv) conducted discussions with
members of the senior management of Avant! with respect to the business and
prospects of Avant!; (v) analyzed the pro forma impact of the Merger on
Avant!'s results of operations; (vi) reviewed the reported prices and trading
activity for the Avant! Common Stock and the Meta Common Stock; (vii) compared
the financial performance of Avant! and Meta and the prices of the Avant!
Common Stock and the Meta Common Stock with that of certain other comparable
publicly traded companies and their securities; and (viii) reviewed the
financial terms, to the extent publicly available, of certain comparable
merger transactions.

Based on this information, WA&H conducted such other analyses and
examinations and considered such other financial, economic and market criteria
as it deemed necessary in arriving at its opinion. The following is a summary
of the financial analyses performed by WA&H in connection with the delivery of
the WA&H Opinion and made available to the Meta Board:

Comparable Company Analysis. WA&H used a comparable company analysis to
analyze Meta's operating performance relative to a group of publicly traded
companies that WA&H deemed for purposes of its analysis to be comparable to
Meta. In such analysis, WA&H compared the value to be achieved by the Meta
shareholders in the Merger, expressed as a multiple of certain operating data,
to the market trading values of the

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comparable companies expressed as a multiple of the same operating results.
WA&H compared multiples of selected financial data for Meta with those of the
following publicly traded companies in the EDA industry: Cadence, CCT, EPIC,
Mentor, OrCAD, Inc., Synopsys and Viewlogic (collectively referred to as the
"Comparable Companies"). Although such companies were considered comparable to
Meta for the purpose of this analysis based on certain characteristics of
their respective businesses, none of such companies possessed characteristics
identical to those of Meta. WA&H calculated the following valuation multiples
based on an implied closing price of $12.83 per share of Meta Common Stock
based on the Merger Exchange Ratio and the market price of Avant! Common Stock
on August 21, 1996 (the last trading date prior to the date of the
announcement of the Merger) and, as to the Comparable Companies, on market
prices and other information available as of the same date. Multiples of
future earnings were based on projected earnings as estimated publicly by
recognized securities analysts, including those in the WA&H research
department. The mean and median for price per share as a multiple of each of
the indicated statistics for Meta as compared to those of the Comparable
Companies were as follows: (i) projected calendar year 1996 earnings per
share, 21.6x for Meta, as compared to a mean of 28.2x and a median of 28.3x
for the Comparable Companies, (ii) projected calendar year 1997 earnings per
share, 17.6x for Meta, compared to a mean of 21.5x and a median of 22.7x for
the Comparable Companies. The mean and median for market capitalization as a
multiple of each of the indicated statistics for Meta as compared to those of
the Comparable Companies were as follows: (i) latest 12 months' reported
revenue, 4.7x for Meta, compared with a mean of 5.2x and a median of 4.9x for
the Comparable Companies, (ii) annualized last quarter reported revenue, 4.5x
for Meta as compared to a mean of 4.7x and a median of 4.4x for the Comparable
Companies. The mean and median ratios of stock price to projected calendar
earnings as a multiple of growth rate for Meta as compared to those of the
Comparable Companies were as follows: (i) projected calendar 1996 earnings,
72% for Meta as compared with a mean of 87% and a median of 86% for the
Comparable Companies, (ii) projected calendar 1997 earnings per share, 59% for
Meta compared with a mean of 67% and a median of 68% for the Comparable
Companies.

Comparable Transactions. WA&H compared multiples of selected financial data
and other financial data relating to the Merger with multiples paid in, and
other financial data from, seven selected mergers (the "Comparable
Transactions") since 1993 of publicity-traded companies in the software
industry with aggregate transaction values between $100 and $250 million. The
Comparable Transactions were selected primarily on the aggregate transaction
value of the business acquired and the target company's involvement in the
software industry. WA&H noted that none of the target companies involved in
these transactions had a business that was directly comparable to Meta. This
analysis produced multiples of transaction value to latest 12-month reported
revenues for the Comparable Transactions ranging from 1.3x to 6.5x, with a
mean and median of 3.4x and 3.2x, respectively, compared with 5.1x for Meta.
The multiple of transaction value to latest 12-month reported net income for
the Comparable Transactions ranged from 21.2x to 54.2x, for companies with net
income, with a mean and median of 36.5x and 31.7x, respectively, compared with
28.4x for Meta. WA&H also compared the premium of the equity value per share
over the target stock price one day prior to the announcement of the
transaction. The premium of the equity value per share over the stock price of
the target one day prior to the announcement of the transaction ranged from -
5% to 38%, with a mean and a median of 18% and 17%, respectively, compared
with 19% for Meta.

Discounted Cash Flow Analysis. WA&H estimated present values of Meta using a
discounted cash flow analysis using projections of future operations based in
part on information provided by Meta's management. WA&H calculated present
values of projected operating cash flows after net changes to working capital
over the period between August 21, 1996 and December 31, 2000 using a discount
rate of 18%. WA&H calculated an approximate terminal value for Meta as of
December 31, 2000 of 10x Meta's projected calendar year 2000 operating income.
WA&H determined this multiple by analyzing the relationship between Meta's
current operating income growth rate and its current market multiple of
operating income and applying this relationship to estimated future operating
income as of calendar year 2000. The terminal value was discounted to present
value using the same discount rate as the cash flows. WA&H calculated an
implied valuation of Meta by adding the present value of the cash flows and
the terminal value. The implied value of Meta based on this analysis was $141
million. WA&H determined that, at the time of the WA&H Opinion, the value of
the consideration to be

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received by the Meta stockholders in the merger of approximately $150 million
was greater than the present value of Meta's cash flows under the discounted
cash flow valuation discussed above.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. WA&H
believes that its analyses must be considered as a whole and that selecting
portions of its analyses and of the factors considered by it, without
considering all factors and analyses, could create an incomplete or misleading
view of the processes underlying its opinion. In arriving at its fairness
determination, WA&H considered the results of all such analyses. In view of
the wide variety of factors considered in connection with its evaluation of
the fairness of the Merger consideration, WA&H did not find it practicable to
assign relative weights to the factors considered in reaching its opinion. No
company or transaction used in the above analysis as a comparison is identical
to Meta or Avant! or the proposed Merger. The analyses were prepared solely
for purposes of WA&H providing its opinion as to the fairness of the Merger
consideration pursuant to the Plan of Reorganization to Meta and do not
purport to be appraisals or necessarily reflect the prices at which businesses
or securities actually may be sold. Analyses based upon forecasts of future
results are not necessarily indicative of actual future results, which may be
significantly more or less favorable than suggested by such analyses. As
described above, the WA&H Opinion and presentation to the Meta Board of
Directors was one of many factors taken into consideration by the Meta Board
of Directors in making its determination to approve the Plan of
Reorganization.

WA&H is a nationally recognized investment banking firm and is regularly
engaged in the valuation of businesses and securities in connection with
mergers and acquisitions, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements and valuations for
corporations. WA&H is familiar with Meta, having acted as a managing
underwriter of the initial public offering of Meta Common Stock in November
1995. Meta selected WA&H to render the fairness opinion based on WA&H's
familiarity with Meta, its knowledge of the EDA industry and its experience in
mergers and acquisitions and in securities valuation generally. WA&H is also
familiar with Avant!, having acted as a managing underwriter of the initial
public offering of Avant! Common Stock in June 1995 and Avant!'s financial
advisor in connection with its acquisition of Integrated Silicon Systems, Inc.
in November 1995.

In the ordinary course of business, WA&H acts as a market maker and broker
in the publicly traded securities of Meta and Avant! and receives customary
compensation in connection therewith, and also provides research coverage on
Meta and Avant!. In the ordinary course of business, WA&H actively trades in
the publicly traded securities of Meta and Avant! for its own account and for
the accounts of its customers and, accordingly, may at any time hold a long or
short position in such securities which positions, on occasion, may be
material in size relative to the volume of trading activity. On the close of
trading on August 21, 1996 (the day before the execution and announcement of
the Plan of Reorganization), WA&H held positions of 1,076 shares of Avant!
Common Stock and 75,304 shares of Meta Common Stock.

Pursuant to the WA&H Engagement Letter, Meta was required to pay WA&H a non-
refundable retainer fee of $250,000 upon the execution of the WA&H Engagement
Letter and an opinion fee of $750,000 upon the rendering of the WA&H Opinion.
Meta has also agreed to reimburse WA&H for its reasonable out-of-pocket
expenses and to indemnify WA&H against certain liabilities relating to or
arising out of services performed by WA&H in connection with the transactions.
The terms of the Wessels Engagement Letter, which are customary for
transactions of this nature, were negotiated at arm's length between Meta and
WA&H, and the Meta Board was aware of such fee arrangement at the time of its
approval of the Plan of Reorganization.

CONVERSION OF META SHARES

Upon the consummation of the Merger, each outstanding share of Meta Common
Stock will automatically be converted into a fraction of share of Avant!
Common Stock, the numerator of which is 5,079,365, and the denominator of
which is equal to the sum of the aggregate number of shares of Meta Common
Stock issued and outstanding as of the closing of the Merger, and the
aggregate number of shares of Meta Stock Options and subscription rights
outstanding as of the closing of the Merger. The Merger Exchange is estimated
to be 0.435-to-one, based upon Meta Common Stock and Meta Stock Options
outstanding at June 30, 1996. The issuance of

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<PAGE>

additional shares of Meta Common Stock, and options or rights to purchase Meta
Common Stock prior to the Effective Time would cause the Merger Exchange Ratio
to decrease. No fractional shares of Avant! Common Stock will be issued in the
Merger. Instead, each Meta shareholder who would otherwise be entitled to
receive a fraction of a share of Avant! Common Stock will receive an amount of
cash equal to the per share market value of Avant! Common Stock multiplied by
the fraction of a share of Avant! Common Stock to which the shareholder would
otherwise be entitled. Based upon the capitalization of Meta and Avant! on
September 30, 1996 (assuming no further exercises of outstanding Avant! stock
options but giving effect to the Anagram Acquisition), the shareholders of Meta
will own Avant! Common Stock representing approximately % of the Avant! Common
Stock outstanding immediately after consummation of the Merger.

ASSUMPTION OF META OPTIONS AND SUBSCRIPTION RIGHTS

At the Effective Time, the Meta Stock Plans and each outstanding option to
purchase shares of Meta Common Stock under the Meta Stock Plans, whether vested
or unvested, will be assumed by Avant!. Each such option so assumed by Avant!
will continue to have, and be subject to, the same terms and conditions set
forth in each of the Meta Stock Plans and the documents governing the
outstanding options immediately prior to the Effective Time, except that (i)
such option will be exercisable for that number of whole shares of Avant!
Common Stock equal to the product of the number of shares of Meta Common Stock
that were issuable upon exercise of such option immediately prior to the
Effective Time multiplied by the Merger Exchange Ratio and rounded down to the
nearest whole number of shares of Avant! Common Stock, and (ii) the per share
exercise price for the shares of Avant! Common Stock issuable upon exercise of
such assumed option will be equal to the quotient determined by dividing the
exercise price per share of Meta Common Stock at which such option was
exercisable immediately prior to the Effective Time by the Merger Exchange
Ratio, rounded up to the nearest whole cent. Consistent with the terms of the
Meta Stock Plans and the documents governing the outstanding options under
those plans and except as set forth in the Meta disclosure schedule to the Plan
of Reorganization, the Merger will not terminate or otherwise result in the
cash-out of any of the outstanding options under such plans or accelerate the
exercisability or vesting of such options or the shares of Avant! Common Stock
which will be subject to those options solely as a result of the consummation
of the Merger and Avant!'s assumption of the options in connection therewith.
Avant! will take all necessary steps to ensure that the options so assumed by
Avant! qualify following the Effective Time as incentive stock options as
defined in Section 422 of the Code to the extent such options qualified as
incentive stock options prior to the Effective Time. Within ten business days
after the Effective Time, Avant! will issue to each person who, immediately
prior to the Effective Time was a holder of an outstanding option under any of
the Meta Stock Plans, a document in form and substance reasonably satisfactory
to Meta evidencing the foregoing assumption of such option by Avant!. Avant!
will take all corporate and other action necessary to reserve a sufficient
number of shares of Avant! Common Stock for issuance upon the exercise of the
options assumed by Avant! and upon the exercise of Meta Purchase Rights
described below.

The Meta Employee Stock Purchase Plan (the "Meta ESPP") and each outstanding
subscription to purchase shares of Meta Common Stock thereunder (a "Meta
Purchase Right") will be assumed by Avant! at the Effective Time of the Merger.
The Meta Purchase Rights so assumed by Avant! will continue to be exercisable
upon the same terms and conditions applicable to those rights immediately prior
to the Effective Time in accordance with the terms of the Meta ESPP, except
that each such assumed Meta Purchase Right will be exercisable for that number
of whole shares of Avant! Common Stock equal to the product of the number of
shares of Meta Common Stock purchasable under the Meta Purchase Right
immediately prior to the Effective Time multiplied by the Merger Exchange Ratio
and rounded down to the nearest whole number of shares of Avant! Common Stock,
and the purchase price payable per share of Avant! Common Stock under the
assumed right will be equal to eighty-five percent (85%) of the lower of (i)
the fair market value per share of the Meta Common Stock on the date the Meta
Purchase Right was granted, divided by the Merger Exchange Ratio and rounded up
to the nearest whole cent, or (ii) the fair market value per share of Avant!
Common Stock on the date such right is exercised. Within ten business days
after the Effective Time, Avant! will issue to each person who, immediately
prior to the Effective Time, was a holder of an outstanding Meta Purchase
Right, a document in form and substance reasonably satisfactory to Meta
evidencing the foregoing assumption of such Meta Purchase Right by Avant!.

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From and after the assumption by Avant! of the Meta Stock Plans and the Meta
ESPP, and the outstanding options and subscriptions thereunder, and, with
regard to each such plan, until such time as none of the participants
thereunder is subject to Section 16(b) of the Exchange Act, Avant! will take
all steps necessary to ensure that any transaction under the Meta Stock Plans
or the Meta ESPP by any such participant will comply with Rule 16b-3 under the
Exchange Act (to the extent such plans shall have complied with Rule 16b-3
prior to the Effective Time).

As of August 31, 1996, there were outstanding, under the Meta Stock Plans,
options to purchase 1,492,090 shares of Meta Common Stock at exercise prices
ranging from $1.421 to $18.625, with a weighted average exercise price of
approximately $8.233 per share.

Avant! intends to file within ten days after the closing of the Merger a
Registration Statement on Form S-8 under the Securities Act covering the
shares of Avant! Common Stock issuable upon the exercise of Avant! Common
Stock Options and Purchase Rights created by the assumption by Avant! of the
Meta Stock Plans and the outstanding options thereunder and the Meta ESPP and
the outstanding subscriptions thereunder.

EXCHANGE OF CERTIFICATES

Following effectiveness of the Merger, a letter of transmittal with
instructions will be mailed to each Meta shareholder for use in exchanging
Meta Common Stock certificates for Avant! Common Stock certificates. Upon
surrender of a Meta Common Stock certificate for cancellation to the exchange
agent in connection with the Merger, Harris Trust Company of California,
Avant!'s present transfer agent, or to such other agent or agents as may be
appointed by Avant!, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, the holder
of such certificate will be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Avant! Common Stock
equal to a fraction of share of Avant! Common Stock, the numerator of which is
5,079,365, and the denominator of which is equal to the sum of the aggregate
number of shares of Meta Common Stock issued and outstanding as of the closing
of the Merger and the aggregate number of shares of Meta Stock Options and
subscription rights outstanding as of the closing of the Merger, multiplied by
the number of shares subject to the Meta Common Stock certificate being
exchanged. No fraction of a share of Avant! Common Stock will be issued, but
in lieu thereof each holder of shares of Meta Common Stock who would otherwise
be entitled to a fraction of a share of Avant! Common Stock (after aggregating
all fractional shares of Avant! Common Stock to be received by such holder)
will receive from Avant! an amount of cash (rounded to the nearest whole cent)
equal to the product of (i) such fraction, multiplied by (ii) the average last
sale price of a share of Avant! Common Stock for ten consecutive trading days
ending on the trading day immediately prior to the Effective Time as reported
on The Nasdaq National Market.

Following the Merger, each outstanding Meta Common Stock certificate will be
deemed for all corporate purposes, other than the payment of dividends, to
evidence the ownership of the number of full shares of Avant! Common Stock
into which such shares of Meta Common Stock shall have been so converted as a
result of the Merger and the right to receive an amount in cash in lieu of the
issuance of any fractional shares. No dividends or other distributions in
respect of Avant! Common Stock with a record date after the Effective Time of
the Merger will be paid to the holder of any unsurrendered Meta Common Stock
certificate with respect to the shares of Avant! Common Stock represented
thereby until the holder of record of such certificate surrenders such
certificate. Subject to applicable law, following surrender of any such
certificate, there will be paid to the record holder of the certificates
representing whole shares of Avant! Common Stock issued in exchange therefor,
without interest, at the time of such surrender, the amount of any such
dividends or other distributions with a record date after the Effective Time
of the Merger theretofore payable with respect to such shares of Avant! Common
Stock.

If any certificate for shares of Avant! Common Stock is to be issued in a
name other than that in which the Meta Common Stock certificate surrendered in
exchange therefor is registered, it will be a condition of the issuance
thereof that the Meta Common Stock certificate so surrendered be properly
endorsed and otherwise

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in proper form for transfer and that the person requesting such exchange will
have paid to Avant! or any agent designated by it any transfer or other taxes
required by reason of the issuance of a certificate for shares of Avant!
Common Stock in any name other than that of the registered holder of the Meta
Common Stock certificate surrendered, or established to the satisfaction of
Avant! or any agent designated by it that such tax has been paid or is not
payable.

HOLDERS OF META COMMON STOCK CERTIFICATES SHOULD NOT SUBMIT THEIR CERTIFICATES
FOR EXCHANGE UNTIL THEY HAVE RECEIVED THE LETTER OF TRANSMITTAL AND
INSTRUCTIONS REFERRED TO ABOVE.

OPERATIONS FOLLOWING THE MERGER; MANAGEMENT OF COMBINED COMPANY

Following the Merger, Meta will continue its operations as a wholly-owned
subsidiary of Avant!. If the Merger is approved, the Avant! Board of Directors
intends to increase the size of the Avant! Board from five to six directors
and to appoint Shawn M. Hailey, the President and Chief Executive Officer of
Meta, director of Avant! to fill the vacancy created by such action. The Board
of Directors of Avant! would then, in accordance with the Plan of
Reorganization, consist of Gerald C. Hsu, Y. Eric Cho, Robert C. Kagle, Tench
Coxe and Dr. Tatsuya Enomoto, all of whom are current members of the Board of
Directors of Avant!, and Mr. Hailey, with Mr. Hsu continuing to serve as
Chairman of the Board, President and Chief Executive Officer. In addition, if
the Merger is approved, the Avant! Board of Directors intends to appoint Kim
L. Hailey, the Vice President of Engineering of Meta, as the Chief Technology
Officer of Avant!.

REPRESENTATIONS AND WARRANTIES AND COVENANTS

The Plan of Reorganization contains various representations and warranties
of the parties, including representations by Avant!, Meta and Merger Sub as to
their organization and capitalization, their authority to enter into the Plan
of Reorganization and to complete the transactions contemplated thereby, the
existence of certain liabilities, the absence of certain material undisclosed
liabilities and changes in their businesses, the status of their respective
filings with the SEC, the status of their intellectual property rights, and
other matters relating to their respective operations. Such representations
and warranties will not survive consummation of the Merger.

Under the terms of the Plan of Reorganization, and for the period from the
date of the Plan of Reorganization and continuing until the earlier of the
termination of the Plan of Reorganization or the Effective Time, each of Meta
and Avant! has agreed (except to the extent expressly contemplated by the Plan
of Reorganization or the Disclosure Schedules or as consented to in writing by
the other), to carry on its and its subsidiaries' business in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted, to pay, and to cause its subsidiaries to pay, debts and taxes when
due subject (i) to good faith disputes over such debts or taxes and (ii) in
the case of taxes of Meta or any of its subsidiaries, to Avant!'s review of
material tax returns prior to filing, if applicable; to pay or perform other
obligations when due; to use all reasonable efforts, consistent with past
practice and policies, to preserve intact its and its subsidiaries' present
business organizations; to use commercially reasonable efforts consistent with
past practice to keep available the services of its and its subsidiaries'
present officers and key employees (provided, however, that the failure to
retain the services of its or its subsidiaries' present officers and key
employees (after taking such reasonable efforts) will not constitute a breach
of such agreement) and to use commercially reasonable efforts consistent with
past practice to preserve its and its subsidiaries' relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it or its subsidiaries, to the end that its and its
subsidiaries' goodwill and ongoing businesses will be unimpaired at the
Effective Time. Each of Avant! and Meta has agreed to promptly notify the
other of any event or occurrence not in the ordinary course of its or its
subsidiaries' business, and of any event which could have an effect that is
materially adverse to its or its subsidiaries' (taken as a whole) condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, prospects, operations or results of operations. In
addition, each of Meta and Avant! has agreed that it will not do, cause or
permit any of the following, or allow, cause or permit any of its subsidiaries
to do, cause or permit any of the following, without the prior written consent
of the other: (a) accelerate, amend

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or change the period of exercisability or vesting of options or other rights
granted under its stock option agreements or stock plans or authorize cash
payments in exchange for any options or other rights granted under any of such
agreements or plans, except as may be required by the terms of such agreements
or plans or any related agreements then in effect and except as disclosed in
the Disclosure Schedules; or issue or grant shares of its Common Stock or
options to acquire its Common Stock in a manner materially inconsistent with
historical practices; (b) take any action that, to the knowledge of Avant! or
Meta, would interfere with Avant!'s ability to account for the Merger as a
pooling of interests; or (c) take, or agree in writing or otherwise to take,
any of the actions described in (a) or (b) above, or any action which would
make any of its representations or warranties contained in the Plan of
Reorganization untrue or incorrect in any material respect or prevent it from
performing or cause it not to perform its covenants thereunder in any material
respect.

Moreover, under the terms of the Plan of Reorganization, Meta has agreed
that, during the period from the date of the Plan of Reorganization and
continuing until the earlier of the termination of the Plan of Reorganization
or the Effective Time, except as expressly contemplated by the Plan of
Reorganization or the Meta Disclosure Schedule, it will not do, cause or
permit any of the following, or allow, cause or permit any of its subsidiaries
to do, cause or permit any of the following, without the prior written consent
of Avant!, which consent will not be unreasonably withheld or delayed: (a)
enter into any material contract or commitment, or violate, amend or otherwise
modify or waive any of the material terms of any of its material contracts,
other than in the ordinary course of business consistent with past practice;
(b) transfer to any person or entity any rights to its intellectual property
other than in the ordinary course of business consistent with past practice;
(c) enter into or amend any agreements pursuant to which any other party is
granted exclusive marketing or other exclusive rights of any type or scope
with respect to any of its products or technology; (d) incur any indebtedness
for borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or guarantee any debt securities of others, other than in the
ordinary course of business and consistent with past practice, which in the
aggregate do not exceed $50,000; (e) enter into any operating lease in excess
of $150,000; (f) pay, discharge or satisfy in an amount in excess of $50,000
in any one case or $250,000 in the aggregate, any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise) arising other than in the ordinary course of business, other than
the payment, discharge or satisfaction of liabilities reflected or reserved
against in Meta's financial statements; (g) make any capital expenditures,
capital additions or capital improvements except in the ordinary course of
business and consistent with past practice; (h) materially reduce the amount
of any material insurance coverage provided by existing insurance policies;
(i) adopt or amend any employee benefit or stock purchase or option plan, or
hire any new director level or officer level employee without prior
consultation with Avant!, pay any special bonus or special remuneration to any
employee or director, or increase the salaries or wage rates of its employees,
except in the ordinary course of business and consistent with past practices
or as previously disclosed to Avant!; (j) grant any severance or termination
pay (i) to any director or officer or (ii) to any other employee except (A)
payments made pursuant to standard written agreements outstanding on the date
hereof or (B) grants which are made in the ordinary course of business in
accordance with its standard past practice; (k) cause or permit any amendments
to its Articles of Incorporation or Bylaws or similar organizational
documents, (l) issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, or purchase or propose the purchase of, any shares of its
capital stock or securities convertible into, or subscriptions (including
subscription rights under the Meta ESPP), rights, warrants or options to
acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities, other than the issuance
of shares of its Common Stock pursuant to the exercise of stock options,
warrants or other rights therefore outstanding as of the date of the Plan of
Reorganization; provided, however, that Meta may, in the ordinary course of
business consistent with past practice, grant options for the purchase of Meta
Common Stock under the Meta Stock Plans; (m) declare or pay any dividends on
or make any other distributions (whether in cash, stock or property) in
respect of any of its capital stock, or split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock,
or repurchase or otherwise acquire, directly or indirectly, any shares of its
capital stock except from former employees, directors and consultants in
accordance with agreements providing for the repurchase of shares in
connection with any termination of service to it or its subsidiaries; (n)
sell, lease, license or otherwise dispose of or encumber any of its properties
or assets which are material, individually or in the aggregate, to its

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and its parents's subsidiaries' business, taken as a whole, except in the
ordinary course of business consistent with past practice; (o) commence a
lawsuit other than (i) for the routine collections of bills, (ii) in such case
where it in good faith determines that failure to commence suit would result
in the material impairment of a valuable aspect of its business, provided that
it consults with the other party prior to the filing of such a suit, or (iii)
for a breach of the Plan of Reorganization; (p) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof,
or otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to its and its subsidiaries' business, taken
as a whole; (q) other than in the ordinary course of business, make or change
any material election in respect of taxes, except where such change or
election would not have a material adverse effect on such party and its
subsidiaries, taken as a whole, adopt or change any accounting method in
respect of taxes, file any material tax return or any amendment to a material
tax return, enter into any closing agreement, settle any claim or assessment
in respect of taxes or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of taxes or consent to
any extension or waiver of the limitation period applicable to any claim or
assessment in respect of taxes; (r) revalue in any material respect any of its
assets, including without limitation, writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary course of
business; or (s) take, or agree in writing or otherwise to take, any of the
actions described in (a) through (r) above, or any action which would make any
of its representations or warranties contained in the Plan of Reorganization
untrue or incorrect or prevent it from performing or cause it not to perform
its covenants thereunder.

OTHER OFFERS

Meta has further agreed that from and after the date of the Plan of
Reorganization until the earlier of the Effective Time or the termination of
the Plan of Reorganization in accordance with its terms, it and its
subsidiaries and the officers, directors, employees or other agents of Meta
and its subsidiaries will not, directly or indirectly, (i) take any action to
solicit, initiate or encourage any Takeover Proposal (defined below) or (ii)
engage in negotiations with, or disclose any nonpublic information relating to
Meta or any of it subsidiaries to, or afford access to the properties, books
or records of Meta or any of its subsidiaries to, any person that has advised
Meta that it may be considering making, or that has made, a Takeover Proposal;
provided, however, that nothing herein shall prohibit Meta's Board of
Directors from taking and disclosing to Meta's shareholders a position with
respect to a tender offer pursuant to Rules 14d-9 and 14e-2 promulgated under
the Exchange Act. Notwithstanding the immediately preceding sentence, if (i)
an unsolicited Takeover Proposal shall be received by the Board of Directors
of Meta, then, to the extent the Board of Directors of Meta believes in good
faith (after consultation with its financial advisor) that such Takeover
Proposal would, if consummated, result in a transaction more favorable to
Meta's shareholders from a financial point of view than the transaction
contemplated by the Plan of Reorganization (any such more favorable Takeover
Proposal being referred to as a "Superior Proposal") and (ii) the Board of
Directors of Meta determines in good faith after consultation with outside
legal counsel that it is necessary for the Board of Directors of Meta to
comply with its fiduciary duties to shareholders under applicable law, Meta
and its officers, directors, employees, investment bankers, financial
advisors, attorneys, accountants and other representatives retained by it may
engage in discussions or negotiations with a third party who has initiated
such Superior Proposal and make disclosures to the Meta shareholders to the
extent such actions are consistent with the fiduciary obligations of Meta's
Board of Directors, and such actions shall not be considered a breach of the
Plan of Reorganization or any other provision thereof. Meta will promptly
notify Avant! after receipt of any Takeover Proposal or any notice that any
person is considering making a Takeover Proposal or any request for nonpublic
information relating to Meta or any of its subsidiaries or for access to the
properties, books or records of Meta or any of its subsidiaries by any person
that has advised Meta that it may be considering making, or that has made, a
Takeover Proposal and will keep Avant! fully informed of the status and
details of any such Takeover Proposal notice or request. As used above,
"Takeover Proposal" means any offer or proposal for, or any indication of
interest in, a merger or other business combination involving Meta or any of
its subsidiaries or the acquisition of any significant equity interest in, or
a

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significant portion of the assets of, Meta or any of its subsidiaries, other
than the transactions contemplated by the Plan of Reorganization.

RESALE OF AVANT! COMMON STOCK; AGREEMENTS WITH AFFILIATES

The shares of Avant! Common Stock to be issued in the Merger have been
registered under the Securities Act and will be freely transferable, subject
to certain limitations on resale described in this Joint Proxy
Statement/Prospectus. As a condition to the obligations of the parties under
the Plan of Reorganization, Avant! shall have received agreements from each
person or entity who may be deemed an affiliate (as defined in the Securities
Act and the rules and regulations thereunder) of Meta pursuant to which such
persons will agree not to sell, transfer or otherwise dispose of shares of
Meta Common Stock or Avant! Common Stock until such time after the Effective
Time as Avant! has publicly released a report including the combined financial
results of Avant! and Meta for a period of at least 30 days of combined
operations of Avant! and Meta. Furthermore, pursuant to such agreements, the
affiliates of Meta will agree to refrain from the sale or transfer of any
Avant! Common Stock received in connection with the Merger, except in
accordance with the provisions of the Securities Act and the general rules and
regulations promulgated thereunder. Affiliates of Avant! will also be subject
to certain similar limitations on their ability to sell, transfer or otherwise
dispose of shares of Avant! Common Stock during the period preceding and
following the Merger.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the Board of Directors of Meta with
respect to the Merger, shareholders should be aware that certain officers and
directors of Meta have interests in connection with the Merger.

If the Merger is consummated, the Avant! Board of Directors intends to (i)
increase the size of the Avant! Board from five to six directors and appoint
Shawn M. Hailey, the President and Chief Executive Officer of Meta, to fill
the vacancy created by such action and (ii) to appoint Kim L. Hailey, the Vice
President of Engineering of Meta, as Chief Technical Officer of the combined
company. Also, options granted under the 1995 Directors' Stock Option Plan
vest in full and are immediately exercisable prior to the consummation of the
Merger.

In connection with agreements entered into at the commencement of their
employment, options to purchase an aggregate of 56,250 shares of Meta Common
Stock held by William Smith, Vice President, Finance, and Chief Financial
Officer of Meta, and Linda Gunther, Vice President, Human Resources of Meta,
will vest and become exercisable immediately prior to the consummation of the
Merger.

In addition, Meta will pay approximately $900,000 upon consummation of the
Merger to certain officers and key employees of Meta under Meta's Merger
Incentive Plan, as severance payments and retention incentive payments.

Joshua Pickus, a director of Meta, also is a director of VLG, legal counsel
to Meta. VLG will receive customary fees and expenses in connection with its
representation of Meta in the Merger.

Avant! has agreed that, after the Effective Time, Avant! and Meta will
indemnify each officer and director of Meta serving as such on the date of the
Plan of Reorganization as provided in the CGCL, Meta's Articles of
Incorporation and Bylaws, and existing indemnification agreements between Meta
and such officers and directors. Avant! has also agreed to use good faith
efforts to cause to be maintained for a period of not less than three years
after the closing of the Merger the directors' and officers' insurance
policies of Meta and to cause the directors and officers of Meta to be covered
thereunder for matters occurring prior to the closing of the Merger.

CONDITIONS TO THE MERGER

Each party's respective obligation to complete the Merger is subject to,
among other things, the approval of the Plan of Reorganization and the Merger
by the requisite votes of the stockholders of Avant! and the

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shareholders of Meta, the Commission having declared the Registration
Statement effective, and the satisfaction at or prior to the Effective Time of
the following additional conditions: (a) the absence of any temporary
restraining order, preliminary or permanent injunction or other legal action
or regulatory restraint or prohibition preventing the closing of the Merger;
the absence of any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
closing of the Merger illegal; the absence of any temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint limiting or
restricting Avant!'s conduct or operation of the business of Meta and its
subsidiaries following the Merger; and the absence of any proceeding brought
by an administrative agency or commission or other governmental entity,
domestic or foreign, seeking the foregoing; (b) all approvals, waivers,
authorizations and consents, if any, necessary for consummation of or in
connection with the Merger and the several transactions contemplated thereby,
including such approvals, waivers, authorizations and consents as may be
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, the Securities Act, the Exchange Act and under state Blue Sky laws
having been received; (c) Avant! and Meta having received substantially
identical written opinions of their respective counsel to the effect that,
based upon certain representations and assumptions and subject to certain
qualifications, the Merger will constitute a tax-free reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"); (d) the filing with The Nasdaq National Market of a Notification
Form for Listing of Additional Shares with respect to the shares of Avant!
Common Stock issuable in connection with the Merger; and (e) the appointment
of Shawn M. Hailey and Kim L. Hailey as a member of the Board of Directors and
Chief Technical Officer, respectively, of Avant!.

In addition, the obligations of Meta to complete the Merger and, subject to
the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by Meta: (a) the
representations and warranties of Avant! and Merger Sub in the Plan of
Reorganization shall be true and correct in all material respects (other than
representations and warranties regarding litigation connected with the Merger
or other proceedings connected with the Merger, which shall be governed solely
by the standard set forth in clause (a) of the preceding paragraph and except
for such representations and warranties that are qualified by their terms by a
reference to materiality which representations and warranties as so qualified
shall be true in all respects) on and as of the Effective Time as though such
representations and warranties were made on and as of such time; (except to
the extent such representations and warranties speak as of an earlier date);
(b) Avant! and Merger Sub shall have performed and complied in all material
respects with all covenants, obligations and conditions of the Plan of
Reorganization required to be performed and complied with by them as of the
Effective Time; (c) Meta shall have received an officers' certificate, dated
the Effective Date, executed on behalf of Avant! by the President and Chief
Financial Officer of Avant! to the effect that, as of the Effective Time, the
condition provided for in clause (a) of this paragraph has been satisfied; (d)
Meta shall have received a legal opinion dated the Effective Date as to
certain matters from Gunderson Dettmer, legal counsel to Avant! and Merger
Sub, in form and substance reasonably satisfactory to Meta; (e) there shall
not have occurred any material adverse change in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of Avant! and its
subsidiaries, taken as a whole and (f) Meta shall have been furnished with
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of Avant! or any of its subsidiaries or otherwise.

In addition, the obligations of Avant! and Merger Sub to complete the Merger
are subject to the satisfaction at or prior to the Effective Time of each of
the following conditions, any of which may be waived, in writing, by Avant!;
(a) the representations and warranties of Meta in the Plan of Reorganization
shall be true and correct in all material respects (other than the
representations and warranties regarding litigation connected with the Merger
or other proceedings connected with the Merger, which shall be governed solely
by the standard set forth in clause (a) of the first paragraph of this section
(--"Conditions to the Merger," and except for such representations and
warranties that are qualified by their terms by a reference to materiality,
which representations and warranties as so qualified shall be true in all
respects) on and as of the Effective Time as though such representations and
warranties were made on and as of such time; (b) Meta shall have performed

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and complied in all material respects with all covenants, obligations and
conditions of the Plan of Reorganization required to be performed and complied
with by it as of the Effective Time; (c) Avant! shall have received an
officers' certificate, dated the Effective Date, executed on behalf of Meta by
its President and Chief Financial Officer to the effect that, as of the
Effective Time, the condition provided for in clause (a) of this paragraph has
been satisfied; (d) Avant! shall have received a legal opinion, dated the
Effective Time, from VLG, legal counsel to Meta, in form and substance
reasonably satisfactory to Avant!; (e) Avant! shall have been furnished with
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of Meta or any of its subsidiaries or otherwise; (f) there
shall not have occurred any material adverse change in the condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, operations, results of operations or prospects of Meta
and its subsidiaries, taken as a whole; (g) Avant! shall have received a
letter from KPMG Peat Marwick LLP regarding treatment of the Merger as a
pooling of interests for accounting purposes if consummated in accordance with
the Plan of Reorganization; (h) Avant! shall have received from each of the
Affiliates of Meta an executed Affiliate Agreement; (i) Avant! shall have
received the written opinion of Morgan Stanley, or a written confirmation of
the Morgan Stanley Opinion, dated as of the date the Joint Proxy
Statement/Prospectus is first mailed to the stockholders of Avant!, to the
effect that the consideration to be received by Avant!'s stockholders in the
Merger is fair, from a financial point of view, to the stockholders of Avant!;
and (j) Dissenting Shares shall consist of no more than ten (10%) percent of
the then outstanding shares of Meta Common Stock.

SHAREHOLDERS AGREEMENT

Shawn M. Hailey and Kim L. Hailey, the President and Chief Executive
Officer, and Vice President of Engineering, respectively, of Meta,
beneficially own an aggregate of 7,481,201 shares of Meta Common Stock,
representing % of the votes entitled to be cast by holders of shares of Meta
Common Stock issued and outstanding as of the Meta Record Date. Both
individuals have entered into a Shareholders Agreement with Avant!, pursuant
to which each has agreed to vote the shares of Meta Common Stock held by him
in favor of the approval of the Plan of Reorganization and the Merger. The
vote of the shares of Meta Common Stock subject to the Shareholders Agreement
will be adequate to approve the Plan of Reorganization and the Merger.

CLOSING

As promptly as practicable after the satisfaction or waiver of the
conditions set forth in the Plan of Reorganization, Merger Sub and Meta will
file the Agreement of Merger with the Secretary of State of the State of
California. The Merger will become effective upon such filing. It is
anticipated that, assuming all conditions are met, the Merger will occur and a
closing will be held on , 1996.

TERMINATION

At any time prior to the Effective Date, whether before or after approval of
the matters presented in connection with the Merger by the shareholders of
Meta, the Plan or Reorganization may be terminated: (i) by mutual consent of
Avant! and Meta; (ii) by either Avant! or Meta, if the Effective Date shall
not have occurred on or before January 31, 1997 (provided that the right to
terminate the Plan of Reorganization for this reason shall not be available to
any party whose failure to fulfill any obligation under the Plan of
Reorganization has been a significant cause of, or resulted in, the failure of
the Effective Date to occur on or before such date); (iii) by either Avant! or
Meta, if the other party shall breach any of its representations, warranties
or obligations under the Plan or Reorganization, which breach would result in
a material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of the other party and its
subsidiaries, taken as a whole, and such breach shall not have been cured
within ten business days following receipt by such other party of written
notice of such breach; (iv) by either Avant! or Meta, if there shall have
occurred any material adverse change in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of the other party
and its subsidiaries, taken as a whole, and such other party shall not have
proposed a plan to mitigate the effect of such material adverse change which
is reasonably acceptable to such party, within 20

47
<PAGE>

business days after written notice from such party that it intends to
terminate the Plan or Reorganization; (v) by either Avant! or Meta, if the
Board of the other party withdraws or modifies, in an adverse manner, its
recommendation of the Plan of Reorganization or the Merger or shall have
resolved to do so; (vi) by either Avant! or Meta, if any permanent injunction
of a court or other competent authority preventing consummation of the Merger
shall have become final and nonappealable; or (vii) by either Avant! or Meta,
if the required approval of the shareholders of Meta or the stockholders of
Avant! is not obtained at the respective shareholder and stockholder meetings.

EXPENSES AND TERMINATION FEES

All costs and expenses incurred in connection with the Plan of
Reorganization and the transactions contemplated thereby (including, without
limitation, the fees and expenses of its advisers, accountants and legal
counsel) will be paid by the party incurring such expense, except that, in the
event the Merger is not closed for any reason or if the Plan of Reorganization
is terminated for any reason other than any of those reasons, as they apply to
permitted terminations by Meta, set forth in (iii), (iv) or (v) above in "--
Termination," expenses incurred in connection with printing the proxy
materials and the Registration Statement, registration and filing fees
incurred in connection with the Registration Statement, the proxy materials
and the listing of additional shares on The Nasdaq National Market and fees,
costs and expenses associated with compliance with applicable state securities
laws in connection with the Merger will be shared equally by Meta and Avant!.

In the event that (i) either Avant! or Meta terminates the Plan of
Reorganization following a failure of the shareholders of Meta to approve the
Plan of Reorganization and, prior to the time of the Meta Special Meeting,
there shall have been (A) a Trigger Event (defined below) with respect to Meta
or (B) a Takeover Proposal not rejected by Meta or withdrawn by the third
party, or (ii) Avant! terminates the Plan of Reorganization pursuant to any of
the reasons, as they apply to permitted terminations by Avant!, set forth in
clauses (iii), (iv) and (v) above in "--Termination," due in whole or in part
to any failure by Meta to use the requisite efforts required by the terms of
the Plan of Reorganization to perform and comply with all agreements and
conditions required by the Plan of Reorganization to be performed or complied
with by Meta prior to or on the Effective Date or any failure by Meta's
affiliates to take any actions required to be taken by the Plan of
Reorganization (and if Meta is not entitled to terminate the Plan of
Reorganization because of any of the reasons, as they apply to permitted
terminations by Meta, set forth in clauses (iii), (iv) and (v) above in "--
Termination"), then Meta shall promptly pay to Avant! a termination fee of
$4,800,000; provided, however, that with respect to (A) above, a Trigger Event
shall not be deemed to include the acquisition by any Person of securities
representing ten percent or more of Meta if such Person has acquired such
securities not with the purpose nor with the effect of changing or influencing
the control of Meta, nor in connection with or as a participant in any
transaction having such purpose or effect, including without limitation (i)
making any public announcement with respect to the voting of such shares at
any meeting to consider any merger, consolidation, sale of substantial assets
or other business combination or extraordinary transaction involving Meta,
(ii) making, or in any way participating in, any "solicitation" of "proxies"
(such as terms are defined or used in Regulation 14A under the Exchange Act)
to vote any voting securities of Meta (including, without limitation, any such
solicitation subject to Rule 14a-11 under the Exchange Act) or seeking to
advise or influence any Person with respect to the voting of any voting
securities of Meta, (iii) forming, joining or in any way participating in any
"group" within the meaning of Section 13(d)(3) of the Exchange Act with
respect to any voting securities of Meta or (iv) otherwise acting, alone or in
concert with others, to seek control of Meta or to seek to control or
influence the management of policies of Meta. As used in the Plan of
Reorganization, a "Trigger Event" will be deemed to have occurred if any
Person acquires securities representing ten percent or more, or commences a
tender or exchange offer following the successful consummation of which the
offeror and its affiliates would beneficially own securities representing 25%
or more, of the voting power of Meta.

If the Plan of Reorganization is terminated by Meta because of any of the
reasons, as they apply to permitted terminations by Meta, set forth in clauses
(iii), (iv) or (v) above in "--Termination," due in whole or in part to
Avant!'s failure to use the requisite efforts required by the Plan of
Reorganization or any failure by Avant!'s

48
<PAGE>

affiliates to take any actions required to be taken by the Plan of
Reorganization, and if Avant! is not entitled to terminate the Plan of
Reorganization because of any of the reasons, as they apply to permitted
terminations by Avant!, set forth in clauses (iii), (iv) and (v) above in "--
Termination," then Avant! must promptly pay to Meta a termination fee of
$4,800,000.

AMENDMENT

The Boards of Directors of Avant! and Meta may cause the Plan of
Reorganization to be amended at any time by execution of an instrument in
writing signed on behalf of each of Avant! and Meta, provided that an
amendment made subsequent to adoption of the Plan of Reorganization by the
shareholders of Meta or MergerSub, or the stockholders of Avant!, shall not
(i) alter or change the amount or kind of consideration to be received upon
conversion of the Meta Common Stock; (ii) alter or change any term of the
Articles of Incorporation of the combined company; or (iii) alter or change
any of the terms and conditions of the Plan of Reorganization if such
alteration or change would adversely affect the holders of Meta Common Stock
or Avant! Common Stock.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes the material federal income tax
considerations relevant to the Merger that are applicable to holders of Meta
Common Stock. This discussion is based on currently existing provisions of the
Code, existing Treasury Regulations thereunder and current administrative
rulings and court decisions, all of which are subject to change. Any such
change, which may or may not be retroactive, could alter the tax consequences
to Avant!, Meta or Meta's shareholders as described herein.

Meta shareholders should be aware that this discussion does not deal with
all federal income tax considerations that may be relevant to particular Meta
shareholders in light of their particular circumstances, such as shareholders
who are dealers in securities, who are subject to the alternative minimum tax
provisions of the Code, who are foreign persons or entities, who do not hold
their Meta Common Stock as capital assets, who acquired their shares in
connection with stock option or stock purchase plans or in other compensatory
transactions or who receive cash for their Meta Common Stock pursuant to the
exercise of their dissenters' rights under the CGCL. In addition, the
following discussion does not address the tax consequences of the Merger under
foreign, state or local tax laws, the tax consequences of transactions
effectuated prior or subsequent to, or concurrently with, the Merger (whether
or not any such transactions are undertaken in connection with the Merger),
including without limitation any transaction in which shares of Meta Common
Stock are acquired or shares of Avant! Common Stock are disposed of, or the
tax consequences of the assumption by Avant! of outstanding options and
subscriptions to acquire Meta Common Stock. ACCORDINGLY, META SHAREHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF
THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES TO THEM OF THE MERGER.

Consummation of the Merger is conditioned upon receipt by Avant! and Meta of
opinions (the "Tax Opinions") from Gunderson Dettmer and VLG, respectively,
that the Merger should constitute a "reorganization" within the meaning of
Section 368(a) of the Code (a "Reorganization"). Assuming the Merger is a
Reorganization, then, subject to the assumptions, limitations and
qualifications referred to herein and in the Tax Opinions, the Merger should
result in the following federal income tax consequences:

(i) No gain or loss should be recognized by holders of Meta Common Stock
solely upon their receipt in the Merger of Avant! Common Stock in exchange
therefor (except to the extent of cash received in lieu of a fractional
share of Avant! Common Stock).

(ii) The aggregate tax basis of the Avant! Common Stock received by Meta
shareholders in the Merger (including any fractional share of Avant! Common
Stock not actually received) should be the same as the aggregate tax basis
of the Meta Common Stock surrendered in exchange therefor.

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<PAGE>

(iii) The holding period of the Avant! Common Stock received by each Meta
shareholder in the Merger should include the period for which the Meta
Common Stock surrendered in exchange therefor was considered to be held,
provided that the Meta Common Stock so surrendered is held as a capital
asset at the time of the Merger.

(iv) Cash payments received by holders of Meta Common Stock in lieu of a
fractional share should be treated as if such fractional share of Avant!
Common Stock had been issued in the Merger and then redeemed by Avant!. A
Meta shareholder receiving such cash should recognize gain or loss, upon
such payment, measured by the difference (if any) between the amount of
cash received and the basis in such fractional share.

(v) Holders of Meta Common Stock who exercise dissenters' rights with
respect to their shares of Meta Common Stock and who receive payment for
the shares in cash should generally recognize gain or loss measured by the
difference between the amount of cash received and the shareholder's basis
in the shares surrendered, provided that the payment is neither essentially
equivalent to a dividend within the meaning of Section 302 of the Code nor
has the effect of a distribution of a dividend within the meaning of
Section 356(a)(2) of the Code (collectively, a "Dividend Equivalent
Transaction"). A sale of Meta Common Stock pursuant to an exercise of
dissenters' rights will generally not be a Dividend Equivalent Transaction
if, as a result of such exercise, the shareholder exercising dissenters'
rights owns no shares of Avant! Common Stock (either actually or
constructively within the meaning of Section 318 of the Code) immediately
after the Merger. If, however, a shareholder's sale for cash of Meta Common
Stock pursuant to an exercise of dissenters' rights is a Dividend
Equivalent Transaction, then such shareholder will generally recognize
income for federal income tax purposes in an amount equal to the entire
amount of cash so received.

Although Avant! and Meta will, as a condition to closing of the Merger,
receive Tax Opinions from their respective counsel that the Merger should
qualify as a Reorganization, a recipient of shares of Avant! Common Stock
could recognize gain to the extent that such shares were considered to be
received in exchange for services or property (other than solely Meta Common
Stock). All or a portion of such gain may be taxable as ordinary income. Gain
could also have to be recognized to the extent that a Meta shareholder was
treated as receiving (directly or indirectly) consideration other than Avant!
Common Stock in exchange for such shareholder's Meta Common Stock.

The parties will not request a ruling from the Internal Revenue Service (the
"IRS") in connection with the Merger. Meta shareholders should be aware that
the Tax Opinions do not bind the IRS and the IRS is therefore not precluded
from successfully asserting a contrary opinion. In addition, the Tax Opinions
are subject to certain assumptions, limitations and qualifications, including
but not limited to the truth and accuracy of certain representations made by
Avant!, Meta, Merger Sub, and certain shareholders of Meta, including
representations in certain certificates to be delivered to counsel by the
respective managements of Avant!, Meta and Merger Sub and by certain
shareholders of Meta. Of particular importance is the assumption that the
"continuity of interest" requirement for treatment of the Merger as a
Reorganization is satisfied.

To satisfy the continuity of interest requirement, Meta shareholders must
not, pursuant to a plan or intent existing at or prior to the Merger, dispose
of or transfer so much of either (i) their Meta Common Stock in anticipation
of the Merger or (ii) the Avant! Common Stock to be received in the Merger
(collectively, "Planned Dispositions"), such that Meta shareholders, as a
group, would no longer have a significant equity interest in the Meta business
being conducted after the Merger. Meta shareholders will generally be regarded
as having a significant equity interest as long as the number of shares of
Avant! Common Stock received in the Merger less the number of shares subject
to Planned Dispositions (if any) represents, in the aggregate, a substantial
portion of the entire consideration received by the Meta shareholders in the
Merger. Meta and Avant! have represented to respective counsel for Avant! and
Meta that they have no knowledge of any plan or intent on the part of Meta
shareholders to engage in a Planned Disposition of shares of Meta Common
Stock. In addition, Meta shareholders owning in excess of 50% of the Meta
shares have represented that they have no plan or intent to make a Planned

50
<PAGE>

Disposition of shares of Meta Common Stock. However, notwithstanding such
representations, no assurance can be made that the "continuity of interest"
requirement will be satisfied. If such requirement is not satisfied, the
Merger would not be treated as a Reorganization.

A successful IRS challenge to the Reorganization status of the Merger (as a
result of a failure of the "continuity of interest" requirement or otherwise)
would result in Meta shareholders recognizing taxable gain or loss with
respect to each share of Meta Common Stock surrendered equal to the difference
between the shareholder's basis in such share and the fair market value, as of
the Effective Time, of the Avant! Common Stock received in exchange therefor.
In such event, a shareholder's aggregate basis in the Avant! Common Stock so
received would equal its fair market value as of the Effective Time, and the
shareholder's holding period for such stock would begin the day after the
Merger.

ACCOUNTING TREATMENT

The Merger is intended to qualify as a pooling of interests for accounting
purposes. Accordingly, the affiliates of Meta have entered into agreements
imposing certain resale limitations on their stock. The affiliates of Avant!
will be subject to certain similar restrictions. See "--Resale of Avant!
Common Stock; Agreements with Affiliates." It is a condition to Avant!'s and
Meta's obligations to consummate the Merger that, among other things, both
parties receive a letter from KPMG Peat Marwick LLP, the independent
accountants for Avant! and Meta, to the effect that the Merger will be treated
as a pooling of interests for accounting purposes. Avant! and Meta have each
received a preliminary letter dated September 6, 1996 to this effect from KPMG
Peat Marwick LLP. Avant! and Meta each have indicated that it is their present
intention not to waive this condition.

The Anagram Acquisition also is intended to qualify as a pooling of
interests for accounting purposes.

DISSENTERS' RIGHTS

THE FOLLOWING SUMMARY OF META SHAREHOLDERS' DISSENTERS' RIGHTS UNDER
CALIFORNIA LAW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO CHAPTER 13 OF THE
CALIFORNIA GENERAL CORPORATION LAW, THE COMPLETE TEXT OF WHICH IS ATTACHED
HERETO AS APPENDIX D.

FAILURE TO STRICTLY FOLLOW THE PROCEDURES SET FORTH IN CHAPTER 13 OF THE
CALIFORNIA GENERAL CORPORATION LAW MAY RESULT IN THE LOSS, TERMINATION OR
WAIVER OF DISSENTERS' RIGHTS. A META SHAREHOLDER WHO FAILS TO SIGN AND RETURN
A PROXY CARD DISAPPROVING THE PLAN OF REORGANIZATION OR TO ATTEND THE META
SPECIAL MEETING AND VOTE HIS OR HER SHARES AGAINST THE MERGER WILL NOT HAVE A
RIGHT TO EXERCISE DISSENTERS' RIGHTS. A META SHAREHOLDER WHO DESIRES TO
EXERCISE HIS OR HER DISSENTERS' RIGHTS ALSO MUST SUBMIT A WRITTEN DEMAND FOR
PAYMENT TO META ON OR BEFORE THE DATE OF THE META SPECIAL MEETING. IN
ADDITION, NO META SHAREHOLDER, UNDER ANY CIRCUMSTANCES, WILL HAVE A RIGHT TO
DISSENT FROM THE PLAN OF REORGANIZATION UNLESS THE HOLDERS OF AT LEAST FIVE
PERCENT OF THE OUTSTANDING SHARES OF META COMMON STOCK PERFECT THEIR RIGHT TO
DISSENT AND EXERCISE THEIR DISSENTERS' RIGHTS IN ACCORDANCE WITH CHAPTER 13 OF
THE CALIFORNIA GENERAL CORPORATION LAW.

NO STATUTORY DISSENTERS' RIGHTS ARE AVAILABLE TO AVANT! STOCKHOLDERS IN
CONNECTION WITH THE MERGER.

On or prior to the Meta Special Meeting, each Meta shareholder who elects to
exercise his or her dissenters' rights must make a written demand upon Meta
for the purchase of his or her Meta shares. The Meta shareholder's demand must
state the number and class of shares held of record by such Meta shareholder
which such Meta

51
<PAGE>

shareholder demands that Meta purchase, as well as a statement by such Meta
shareholder as to what such Meta shareholder claims the fair market value of
such shares was as of the day prior to the date of the announcement of the
Merger (August 21, 1996). The statement of fair market value constitutes an
offer by such Meta shareholder to sell the shares at such price. Voting
against the Merger, abstaining from voting, or failing to vote on the Merger
will not constitute such written demand within the meaning of the CGCL. Any
notice should be addressed to Meta-Software, Inc., 1300 White Oaks Road,
Campbell, California 95008, Attention: Secretary.

A Meta shareholder wishing to exercise his or her right to dissent from the
Merger and to demand payment for the value of his or her shares of Meta Common
Stock must vote against the Merger. A failure to vote, a vote in favor of the
Merger, by proxy or in person, or a direction to abstain will constitute a
waiver of such dissenters' rights.

Unless Meta shareholders holding at least five percent of the outstanding
shares of Meta Common Stock in the aggregate perfect their right to dissent
and exercise their dissenters' rights in accordance with Chapter 13 of CGCL,
no Meta shareholder will have a right to dissent from the Plan of
Reorganization.

If the Merger is approved at the Meta Special Meeting and dissenters' rights
are perfected with respect to at least five percent of the outstanding Meta
Common Stock, Meta will mail by registered or certified mail, return receipt
requested, a written notice of the approval of the Merger by the Meta
shareholders (the "Meta Notice") to all shareholders who have perfected their
dissenters' rights no later than ten days after the Meta Special Meeting,
accompanied by Sections 1300-1304 of the CGCL. The Meta Notice also shall
state the price determined by Meta to be the fair market value of shares of
Meta Common Stock with respect to which dissenters' rights are perfected under
Chapter 13 of the CGCL ("Meta Dissenting Shares") and a brief description of
the procedure to be followed by a shareholder who elects to dissent.

Within the 30-day period following the mailing of the Meta Notice, each
dissenting Meta shareholder must submit to Meta for endorsement certificates
for any of such shareholder's Meta Dissenting Shares. If Meta and the Meta
shareholder agree upon the price of the Meta Dissenting Shares, the dissenting
Meta shareholder is entitled to the agreed price with interest at the legal
rate on judgment from the date of such agreement. Payment must be made within
30 days of the later of the date of the agreement between the Meta shareholder
and Meta or the date the contractual conditions to closing of the transactions
contemplated by the Plan of Reorganization are satisfied.

A shareholder who perfects his or her dissenters' rights in accordance with
Chapter 13 of the CGCL retains all other rights of a shareholder until the
fair market value of his or her shares is agreed upon or determined. A
dissenting Meta shareholder may not withdraw a demand for payment without the
consent of Meta.

If Meta and the Meta shareholder cannot agree as to the fair market value or
as to the fact that such shareholder's shares are Meta Dissenting Shares, such
Meta shareholder may file within six months of the date of mailing of the Meta
Notice a complaint with the California Superior Court for the proper county
demanding judicial determination of such matters. Meta will then be required
to make any payments in accordance with such judicial determination. If the
complaint is not filed within the specified six months, the shareholder's
rights as a dissenter are lost.

Meta Dissenting Shares lose their status as such if (i) Meta abandons the
Merger; (ii) the shares are transferred prior to submission for endorsement or
are surrendered for conversion into shares of another class in accordance with
the Articles of Incorporation; (iii) the Meta shareholder and Meta do not
agree as to the fair market value of such shares and a complaint is not filed
within six months of the date the Meta Notice was mailed; or (iv) the
dissenting Meta shareholder withdraws, with the consent of Meta, his or her
demand for purchase of shares.

If demands for payment are received from the holders of more than ten
percent of the outstanding shares of Meta Common Stock, then neither Avant!
nor Merger Sub will be obligated to close the Merger.

52
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed financial data including the
notes thereto are qualified in their entirety by reference to, and should be
read in conjunction with, the historical consolidated financial statements of
Avant! incorporated herein by reference and the consolidated financial
statements of Meta and of Anagram included elsewhere in this Joint Proxy
Statement/Prospectus. The historical financial statement data as of June 30,
1996 and for the six-month periods ended June 30, 1995 and 1996 are unaudited,
and have been prepared on the same basis as the historical financial
information derived from the audited financial statements, and in the opinion
of management, contain all adjustments, consisting of normal recurring
accruals, necessary for the fair presentation of the results of operations for
such periods. The unaudited pro forma condensed combined balance sheet data
combine Avant!, Meta and Anagram balance sheets as of June 30, 1996, giving
effect to the Merger and the Anagram Acquisition as if they had occurred on
June 30, 1996. The unaudited pro forma condensed combined statements of income
combine Avant!, Meta, and Anagram results of operations for the six months
ended June 30, 1995 and 1996 and the three years ended December 31, 1995,
giving effect to the Merger and the Anagram Acquisition as if they had
occurred at January 1, 1993. The pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial condition that would have occurred had the Merger and the
Anagram Acquisition been consummated at the beginning of the periods
presented, nor is it necessarily indicative of future operating results or
financial condition.

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA PRO FORMA PRO FORMA
AVANT! ANAGRAM ADJUSTMENTS COMBINED META ADJUSTMENTS COMBINED
------- ------- ----------- --------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $ 9,303 $2,336 $ $ 11,639 $ 3,891 $ $ 15,530
Short-term
investments........... 67,230 -- 67,230 20,497 87,727
Accounts receivable,
net................... 4,799 1,873 6,672 5,590 12,262
Deferred income taxes.. 2,625 -- 2,625 1,103 3,728
Other.................. 6,074 844 6,918 3,488 10,406
------- ------ ---- -------- ------- ------ --------
Total current assets... 90,031 5,053 95,084 34,569 129,653
Equipment, furniture and
fixtures, net.......... 5,571 209 5,780 2,351 8,131
Capitalized software,
net.................... 102 18 120 -- 120
Other................... -- 14 14 193 207
Deferred income taxes... -- -- -- 1,200 1,200
------- ------ ---- -------- ------- ------ --------
Total assets........... $95,704 $5,294 $ $100,998 $38,313 $ $139,311
======= ====== ==== ======== ======= ====== ========
LIABILITIES AND STOCK-
HOLDERS' EQUITY
Current liabilities:
Current portion of
capital lease
obligations........... $ 103 $ -- $ $ 103 $ -- $ $ 103
Accounts payable....... 903 44 947 258 1,205
Accrued compensation... 2,147 345 2,492 -- 2,492
Accrued merger
transaction costs..... -- -- 895(4) 895 -- 5,415(4) 6,310
Accrued income taxes... 527 878 1,405 -- 1,405
Other accrued
liabilities........... 2,829 93 2,922 2,648 5,570
Current portion
technology acquisition
payable............... -- -- -- 586 586
Deferred revenue....... 7,910 597 8,507 4,110 12,617
------- ------ ---- -------- ------- ------ --------
Total current
liabilities........... 14,419 1,957 895 17,271 7,602 5,415 30,288
Capital lease
obligations, less
current portion........ 14 -- 14 -- 14
Deferred rent........... 91 -- 91 -- 91
Deferred income taxes... 172 -- 172 191 363
Long-term portion
technology acquisition
payable................ -- -- -- 903 903
------- ------ ---- -------- ------- ------ --------
Total liabilities...... 14,696 1,957 895 17,548 8,696 5,415 31,659
Stockholders' equity:
Capital stock.......... 16 2,303 2,319 -- 2,319
Additional paid-in
capital............... 70,217 -- 70,217 25,832 96,049
Deferred stock
compensation.......... (436) (1,836) (2,272) -- (2,272)
Net unrealized gain
(loss) on short-term
investments........... (142) -- (142) (22) (164)
Retained earnings...... 11,353 2,870 (895) 13,328 3,807 (5,415) 11,720
------- ------ ---- -------- ------- ------ --------
Total stockholders'
equity................ 81,008 3,337 (895) 83,450 29,617 (5,415) 107,652
------- ------ ---- -------- ------- ------ --------
Total liabilities and
stockholders' equity.. $95,704 $5,294 $ $100,998 $38,313 $ $139,311
======= ====== ==== ======== ======= ====== ========
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

53
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO PRO
FORMA FORMA
AVANT! ANAGRAM COMBINED META COMBINED
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Revenue:
Software.......................... $ 7,648 $ -- $ 7,648 $10,523 $18,171
Services and other................ 1,060 -- 1,060 3,254 4,314
------- ----- ------- ------- -------
Total revenue..................... 8,708 -- 8,708 13,777 22,485
------- ----- ------- ------- -------
Costs and expenses:
Costs of software................. 236 -- 236 1,125 1,361
Costs of services and other....... 614 -- 614 1,290 1,904
Selling and marketing............. 3,302 -- 3,302 4,661 7,963
Research and development.......... 3,309 -- 3,309 3,179 6,488
General and administrative........ 1,606 23 1,629 1,357 2,986
------- ----- ------- ------- -------
Total operating expenses.......... 9,067 23 9,090 11,612 20,702
------- ----- ------- ------- -------
Income (loss) from operations..... (359) (23) (382) 2,165 1,783
Interest income.................... 200 -- 200 -- 200
Interest expense................... (95) -- (95) 44 (51)
------- ----- ------- ------- -------
Income (loss) before income
taxes............................ (254) (23) (277) 2,209 1,932
Provision (benefit) for income
taxes(5).......................... (1,596) -- (1,596) 795 (801)
------- ----- ------- ------- -------
Net income (loss)................. $ 1,342 $ (23) $ 1,319 $ 1,414 $ 2,733
======= ===== ======= ======= =======
Net income (loss) per share........ $ .12 $(.02) $ .11 $ .16 $ .17
======= ===== ======= ======= =======
Weighted average shares
outstanding....................... 11,506 993 12,499 8,834 15,885
======= ===== ======= ======= =======
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

54
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO
FORMA PRO FORMA
AVANT! ANAGRAM COMBINED META COMBINED
------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Software.......................... $16,431 $ 241 $16,672 $13,818 $30,490
Services and other................ 2,527 -- 2,527 5,834 8,361
------- ------ ------- ------- -------
Total revenue..................... 18,958 241 19,199 19,652 38,851
------- ------ ------- ------- -------
Costs and expenses:
Costs of software................. 340 1 341 683 1,024
Costs of services and other....... 1,352 -- 1,352 1,588 2,940
Acquisition of technology......... -- -- -- 1,600 1,600
Selling and marketing............. 7,615 40 7,655 6,560 14,215
Research and development.......... 4,837 126 4,963 4,044 9,007
General and administrative........ 2,070 53 2,123 1,946 4,069
------- ------ ------- ------- -------
Total operating expenses.......... 16,214 220 16,434 16,421 32,855
------- ------ ------- ------- -------
Income from operations............ 2,744 21 2,765 3,231 5,996
Interest income.................... 878 -- 878 -- 878
Interest expense................... (146) (2) (148) 104 (44)
------- ------ ------- ------- -------
Income before income taxes........ 3,476 19 3,495 3,335 6,830
Provision for income taxes(5)...... 1,216 -- 1,216 1,201 2,417
------- ------ ------- ------- -------
Net income........................ $ 2,260 $ 19 $ 2,279 $ 2,134 $ 4,413
======= ====== ======= ======= =======
Net income per share............... $ .16 $ .02 $ .15 $ .22 $ .24
======= ====== ======= ======= =======
Weighted average shares
outstanding....................... 13,734 1,108 14,767 9,792 18,592
======= ====== ======= ======= =======
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

55
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO
FORMA PRO FORMA
AVANT! ANAGRAM COMBINED META COMBINED
------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Software.......................... $32,286 $3,346 $35,632 $17,456 $53,088
Services and other................ 5,718 161 5,879 7,825 13,704
------- ------ ------- ------- -------
Total revenue..................... 38,004 3,507 41,511 25,281 66,792
------- ------ ------- ------- -------
Costs and expenses:
Costs of software................. 430 -- 430 875 1,305
Costs of services and other....... 2,988 -- 2,988 1,857 4,845
Acquisition of technology......... -- -- -- 2,693 2,693
Selling and marketing............. 12,945 777 13,722 8,184 21,906
Research and development.......... 7,732 566 8,298 5,940 14,238
General and administrative........ 3,406 209 3,615 2,686 6,301
Merger expense.................... $ 3,590 -- 3,590 -- 3,590
------- ------ ------- ------- -------
Total operating expenses.......... 31,091 1,552 32,643 22,235 54,878
------- ------ ------- ------- -------
Income from operations............ 6,913 1,955 8,868 3,046 11,914
Interest income.................... 2,449 14 2,463 355 2,818
Interest expense................... (56) -- (56) -- (56)
------- ------ ------- ------- -------
Income before income taxes........ 9,306 1,969 11,275 3,401 14,676
Provision for income taxes(5)...... 4,241 799 5,040 1,224 6,264
------- ------ ------- ------- -------
Net income ....................... $ 5,065 $1,170 $ 6,235 $ 2,177 $ 8,412
======= ====== ======= ======= =======
Net income per share............... $ .31 $ .32 $ .34 $ .22 $ .38
======= ====== ======= ======= =======
Weighted average shares
outstanding....................... 16,128 3,607 18,552 9,866 22,368
======= ====== ======= ======= =======
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

56
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO
FORMA PRO FORMA
AVANT! ANAGRAM COMBINED META COMBINED
------- ------- -------- ------ ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Software........................... $14,187 $ 715 $14,902 $7,413 $22,315
Services and other................. 2,141 31 2,172 3,448 5,620
------- ------ ------- ------ -------
Total revenue..................... 16,328 746 17,074 10,861 27,935
------- ------ ------- ------ -------
Costs and expenses:
Costs of software.................. 226 6 232 434 666
Costs of services and other........ 1,190 -- 1,190 906 2,096
Selling and marketing.............. 5,841 148 5,989 3,708 9,697
Research and development........... 3,307 71 3,378 2,798 6,176
General and administrative......... 1,443 69 1,512 1,041 2,553
------- ------ ------- ------ -------
Total operating expenses.......... 12,007 294 12,301 8,887 21,188
------- ------ ------- ------ -------
Income from operations............ 4,321 452 4,773 1,974 6,747
Interest income..................... 799 2 801 109 910
Interest expense.................... (27) -- (27) -- (27)
------- ------ ------- ------ -------
Income before income taxes........ 5,093 454 5,547 2,083 7,630
Provision for income taxes(5)....... 1,665 182 1,847 750 2,597
------- ------ ------- ------ -------
Net income........................ $ 3,428 $ 272 $ 3,700 $1,333 $ 5,033
======= ====== ======= ====== =======
Net income per share................ $ .23 $ .08 .21 $ .14 $ .24
======= ====== ======= ====== =======
Weighted average shares
outstanding........................ 15,126 3,378 17,550 9,792 21,210
======= ====== ======= ====== =======
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

57
<PAGE>

AVANT!, META AND ANAGRAM

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO
FORMA PRO FORMA
AVANT! ANAGRAM COMBINED META COMBINED
------- ------- -------- ------ ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Software........................... $21,468 $4,040 $25,508 $9,970 $35,478
Services and other................. 5,701 334 6,035 4,919 10,954
------- ------ ------- ------ -------
Total revenue..................... 27,169 4,374 31,543 14,889 46,432
------- ------ ------- ------ -------
Costs and expenses:
Costs of software.................. 430 13 443 590 1,033
Costs of services and other........ 2,373 62 2,435 1,113 3,548
Selling and marketing.............. 7,185 1,159 8,344 5,110 13,454
Research and development........... 5,622 263 5,885 2,887 8,772
General and administrative......... 4,610 329 4,939 1,395 6,334
------- ------ ------- ------ -------
Total operating expenses.......... 20,220 1,826 22,046 11,095 33,141
------- ------ ------- ------ -------
Income from operations............ 6,949 2,548 9,497 3,794 13,291
Interest income..................... 1,651 34 1,685 366 2,051
Interest expense.................... (7) -- (7) -- (7)
------- ------ ------- ------ -------
Income before income taxes........ 8,593 2,582 11,175 4,160 15,335
Provision for income taxes(5)....... 3,000 878 3,878 1,478 5,356
------- ------ ------- ------ -------
Net income........................ $ 5,593 $1,704 $ 7,297 $2,682 $ 9,979
======= ====== ======= ====== =======
Net income per share................ $ .32 $ .42 $ .36 $ .25 $ .41
======= ====== ======= ====== =======
Weighted average shares
outstanding........................ 17,430 4,067 20,085 10,622 24,247
======= ====== ======= ====== =======
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

58
<PAGE>

AVANT!, META, AND ANAGRAM

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

The Avant!, Meta and Anagram statements of income for the three years ended
December 31, 1995 and for each of the six months ended June 30, 1995 and 1996
have been combined. The balance sheets for Avant!, Meta and Anagram have been
combined as of June 30, 1996. The unaudited pro forma condensed combined
financial statements, including the notes thereto, should be read in
conjunction with the historical consolidated financial statements of Avant!
incorporated herein by reference and of Anagram and of Meta included herein.

No adjustments have been made to conform the accounting policies of the
combining companies. The nature and extent of such adjustments, if any, will
be based upon further study and analysis and are not expected to be
significant.

(2) UNAUDITED PRO FORMA COMBINED NET INCOME PER SHARE

The unaudited pro forma condensed combined statements of income for Avant!,
Meta and Anagram have been prepared as if the Merger and the Anagram
Acquisition were completed at the beginning of the earliest period presented.
The unaudited pro forma combined net income per share is based on the combined
weighted average number of common and common equivalent shares of Avant! and
Meta Common Stock and Anagram stock for each period, based upon an exchange
ratio of 0.435 shares of Avant! Common Stock for each share of Meta common
stock and 0.540 shares of Avant! Common Stock for each share of Anagram
capital stock.

(3) PRO FORMA UNAUDITED COMBINED SHARES OUTSTANDING

These unaudited pro forma condensed combined financial statements reflect
the issuance of 5,079,365 shares of Avant! Common Stock in exchange for all
the fully-diluted shares of Meta Common Stock (11,679,226 at June 30, 1996) in
connection with the Merger resulting in an exchange ratio of 0.435 shares of
Avant! Common Stock for each fully-diluted share of Meta common stock and the
issuance of 2,413,793 shares of Avant! common stock in exchange for all the
fully-diluted shares of Anagram capital stock (4,467,000 at June 30, 1996) in
connection with the Anagram Acquisition resulting in an exchange ratio of
0.540 shares of Avant! Common Stock for each fully-diluted share of Anagram
capital stock.

The following table details the pro forma share issuances (as of June 30,
1996) in connection with the Merger and the Anagram Acquisition:

<TABLE>
<CAPTION>
AVANT!
SHARES ESTIMATED COMMON SHARES
OUTSTANDING EXCHANGE OUTSTANDING
(IN THOUSANDS) RATIO (IN THOUSANDS) %
-------------- --------- --------------- ------
<S> <C> <C> <C> <C>
Avant! shares outstanding
as of June 30, 1996...... 16,147 70.6%
Meta shares outstanding as
of June 30, 1996......... 10,164 0.435 4,421 19.3%
Anagram shares outstanding
as of June 30, 1996...... 4,291 0.540 2,317 10.1%
------ ------
Number of shares of
Avant! Common Stock
outstanding after
completion of the
Merger and the Anagram
Acquisition ........... 22,885 100.00%
====== ======
</TABLE>
The actual exchange ratios will be determined at the effective time of the
Merger and the Anagram Acquisition based on the number of fully-diluted shares
of Meta Common Stock and Anagram capital stock then outstanding.

59
<PAGE>

(4) TRANSACTION COSTS AND MERGER RELATED EXPENSES

Avant!, Meta and Anagram estimate they will incur direct transaction costs
and merger-related integration expenses of approximately $6.3 million
associated with the Merger and the Anagram Acquisition, consisting of
transaction fees for investment bankers, attorneys, accountants, financial
printing and shareholder meetings of approximately $3.2 million and
termination costs and certain other related costs of approximately $3.1
million. As of June 30, 1996, no transaction related costs had been incurred.
These nonrecurring transaction costs will be charged to operations primarily
during the quarters in which each of the Merger and the Anagram Acquisition
close.

The unaudited pro forma condensed combined balance sheet gives effect to
estimated direct transaction costs and merger related integration expenses as
if such costs and expenses had been incurred as of June 30, 1996. These costs
and expenses are assumed to be nondeductible for income tax purposes. These
costs and expenses are not reflected in the unaudited pro forma condensed
combined statement of income.

(5) PROVISION FOR INCOME TAXES

The provision for income taxes for Meta is on a pro forma basis for 1993,
1994, and 1995, reflecting a tax expense that would have been reported if Meta
had been a C Corporation during those periods.

60
<PAGE>

AVANT!

BUSINESS

INTRODUCTION

Avant! develops, markets and supports integrated circuit design automation
software for the physical design, layout, verification and analysis of high-
density, high-performance ICs. Avant!'s objective is to establish a
significant market position as a supplier of physical design software for the
ICDA market. To achieve this objective, Avant! has adopted its mission, which
is to provide innovative technology, products, and business models that enable
customers to solve the toughest problems in deep submicron integrated circuit
design, improve their productivity and achieve a high return on their
investment. To effect its mission Avant! has adopted the strategies of
maintaining focus on technological innovation and creating strategic
relationships with customers.

RECENT DEVELOPMENTS

On August 2, 1996 Avant! announced Version 2.0 of its deep submicron product
families which include the Aquarius family of place and route tools; the
Planet family of floorplanning tools; the Star family of simulation, timing,
analysis and RC extraction tools; the Solar family of synthesis-oriented
layout refinement tools; and the Hercules family of physical verification
tools. The Aquarius family consists of Aquarius-BV, which supersedes ArcCell-
BV, Aquarius-XO, which supersedes ArcCell-XO, and Aquarius-GA, which
supersedes ArcGate. The Hercules product family supersedes Avant!'s VeriCheck
product family. The Star family is a new product that analyzes the performance
of deep submicron ICs, including the most complex, high-performance
microprocessors. The Star product family is a full-chip extraction, delay
analysis and data reduction tool for IC designers to use during physical
design. Star is tightly integrated with Avant!'s hierarchical layout and
verification tools, Aquarius and Hercules, to provide efficient, accurate and
predictable IC performance. Anagram's ADM circuit simulation and analysis tool
is currently being integrated into the Star product family. The Solar family
is a new product that optimizes the performance and area of ICs to meet new
deep submicron "golden file" needs. Solar is tightly integrated with Avant!'s
Aquarius family of place and route tools.

On August 18, 1996, Avant! entered into a definitive agreement to acquire
Anagram, a developer of simulation and analysis ICDA software for high-
performance deep submicron ICs. Pursuant to the terms of the agreement, a
wholly-owned subsidiary of Avant! will be merged with and into Anagram,
whereby Anagram will become a wholly-owned subsidiary of Avant!. In addition,
at the Anagram Closing (i) all of the fully-diluted shares of Anagram capital
stock (other than Dissenting Shares) will be exchanged for approximately
2,414,000 shares of Avant! Common Stock, with (ii) each option to purchase
shares of Anagram capital stock outstanding immediately prior to the Anagram
Closing being assumed by Avant!. All Anagram stock options will be converted
into options to purchase shares of Avant! Common Stock. The Anagram
Acquisition is expected to be treated as a pooling of interests. The Anagram
Closing is conditioned upon the issuance of a permit by the California
Department of Corporations for the issuance of securities in the Anagram
Acquisition, and other standard closing conditions. Prior to the Anagram
Closing, each of Avant! and Anagram has consented, among other things, to
carry on their respective businesses in the usual, regular and ordinary
course. The Anagram Closing is expected to be consummated on or before
September 30, 1996; however, no assurance can be given that the Anagram
Acquisition will be consummated by such time, if at all. In the event that the
Anagram Closing is delayed, the integration of Anagram's and Avant!'s
business, operations and employees could be interrupted and the costs related
thereto would likely increase. In addition, to the extent the Anagram Closing
fails to be consummated, the business, and thus the operating results, of the
combined company could be materially adversely affected. See "Risk Factors--
Uncertainty Relating to Integration of Operations and Product Lines;
Management of Growth"and "--Cost of Integration; Transaction Expenses."

61
<PAGE>

Anagram, which was founded in March 1993, develops, markets, and supports
ICDA software for the simulation and analysis of high-performance deep
submicron ICs. Anagram's objective is to establish a significant market
position as a supplier of easy-to-use, high-capacity circuit simulation and
high-accuracy timing analysis software. Anagram's flagship product, ADM, is a
high-capacity circuit simulator for deep submicron processor, graphics,
memory, communications, and mixed-signal IC designs. ADM is designed to be
compatible with the most commonly used ICDA tools and to be easily integrated
in the customer's existing design environment and methodology. Anagram's
products help increase IC performance and reliability and increase designer
productivity by enabling designers to characterize large blocks; accurately
simulate mixed-signal, dynamic logic and memory circuits where performance,
signal integrity and power analyses are essential; and to reuse high-
performance intellectual property without changing the design process.

Anagram markets its products to major customer accounts through its direct
sales force in the U.S. and distributors and manufacturer's representatives in
Asia and Japan. End users of Anagram's products consist primarily of leading
electronics companies, such as AMD, Hyundai, LG Semicon, Motorola,
Matsushita/Panasonic, Mitsubishi, National, NEC, S3, SGS-Thomson, Samsung, Sun
Microsystems and Toshiba.

INDUSTRY BACKGROUND

Applications employing ICs have grown dramatically, expanding from
traditional uses in computer systems to a large number of diverse applications
including telecommunications, multimedia, automotive, industrial automation
and consumer electronics. Moreover, complex electronic products are being
introduced at rapidly increasing rates, and increasing worldwide competition
is continuing to shorten product life cycles. These developments have driven
continued improvements in IC manufacturing process technologies and design
methodologies, enabling the design and fabrication of highly complex ICs. For
example, in the 1970s, a typical IC consisted of a few thousand transistors
implemented in five-micron technology (one micron is one millionth of a
meter). Today, designers and manufacturers are creating ICs consisting of more
than a million transistors implemented in submicron and deep submicron
technologies. These improvements have resulted in smaller, faster, more
complex ICs being produced more rapidly and at a lower cost per function.

Electronic design automation software has been an important catalyst for
many of the significant technological advances that have occurred in the
semiconductor industry. IC design has evolved from a manual, time-consuming,
error-prone and costly process to an automated process, resulting in dramatic
productivity increases. The traditional IC design process consists of the
following steps: architectural design, or the outline of the chip's overall
architecture; functional design, the specification of the desired IC
functionality using hardware description languages ("HDLs") and simulation
tools; logic design, the logical implementation of the functional design; and
physical design, the placement and interconnection of physical components and
verification that the physical layout meets logical specifications and
manufacturing constraints. Depending upon the complexity of the IC, the
traditional IC design process can result in multiple iterations between the
logic design and physical design stages, as logical and physical constraints
are combined and incorporated into the design.

Automation of the IC design process began in the early 1970s with computer-
aided design ("CAD") software tools that automated the process of laying out
mask patterns for IC fabrication. In the early 1980s, computer-aided
engineering ("CAE") tools, such as automated place and route software, were
developed to automate the physical design process. Recently, most of the
advances in EDA software technology have been focused on the functional and
logic design stages, such as logic synthesis, HDLs and high-level design
automation ("HLDA") methodologies. Although these advancements have brought
greater efficiency and productivity to the IC design process, many EDA tools,
particularly physical design tools, have not kept pace with advances in
semiconductor process technology and, in particular, deep submicron process
technology.

Deep submicron process technology enables the manufacture of high
performance (over 100 MHz) and highly complex (several million transistors)
ICs in a very small silicon die at decreased manufacturing costs.

62
<PAGE>

This process technology enables the manufacture of ICs with feature sizes
approaching 0.25 micron. But such performance, complexity and size introduce
significant challenges to the traditional IC design process.

In deep submicron designs, the total amount of wire ("interconnect") needed
to connect the millions of transistors in these designs is dramatically
increased and the width of the wire is reduced, thereby increasing the time it
takes for a signal to travel from transistor to transistor ("interconnect
delay"). However, because the transistors in a deep submicron design are much
smaller and faster than previous generations, the time it takes for an
electronic signal to travel through a transistor ("gate delay") is greatly
reduced. Therefore, in contrast to designs implemented in technologies greater
than 0.5 micron where gate delay determines the speed of the IC, interconnect
delay--not gate delay--becomes the dominant factor in deep submicron IC
performance and physical design.

The increased importance of interconnect delay, which is not accurately
modeled by logic design tools, makes physical design a critical step in the
design of deep submicron ICs. IC design methodology and software design tools
for deep submicron IC design must consider the physical effects of
interconnect delay during logic design.

Traditional physical design software is based on technology developed seven
to twelve years ago, before deep submicron process technology was developed.
Most of these older tools use gate delay as the critical design factor. In
addition, these products are primarily single-purpose ("point") tools that do
not easily share design data with each other or with other best-of-class point
tool solutions, and typically do not adequately address the other unique
challenges presented by deep submicron designs. As a result, their use in deep
submicron design typically results in lengthy design cycles and designs that
do not meet timing constraints and die size requirements. In some instances,
due to deep submicron design complexity, the older tools are simply unable to
generate the physical layout of the product under design.

Because of the inadequacy of traditional physical design tools for deep
submicron ICs, an innovative solution is required that uses new models and
algorithms and a new methodology that enables designers to consider all design
constraints at both the logical and physical design stages.

TECHNOLOGY AND ARCHITECTURE

As processing technology makes the transition from submicron to deep
submicron, the gap widens between the capabilities of IC process technology
and traditional IC physical design tools. In the continued drive to narrow
this design gap, challenges of increasing design complexity, overall market
pressure for a shorter design cycle, and faster IC performance must be
addressed by IC physical design tools. The design methodology, assumptions and
modeling methods used in traditional IC physical design tools often break down
in deep submicron. Deep submicron process technology requires that the logic
design and physical design tools share information ("vertical integration") in
order to address the critical issues of increased design complexity, shortened
design cycle, faster IC performance and improved productivity through faster
design convergence. Avant! works closely with Synopsys, the industry market
share leader in synthesis technology, to make Avant!'s physical design tools
compatible with Synopsys' logic synthesis tools to enable a more comprehensive
solution for deep submicron IC design.

The drive toward deep submicron has accelerated the use of system-on-chip
designs as well as embedded designs, which combine standard-cell application-
specific standard product ("ASSP") design styles with gate array application-
specific IC ("ASIC") design styles. The structure of Avant!'s architecture
enables designers to combine different design styles into a single design
environment ("horizontal integration").

Avant!'s product architecture is designed to solve the problems presented by
deep submicron IC design. The architecture is comprised of an efficient
unified hierarchical physical design database, a set of proprietary
technologies shared by the physical design products, an interactive physical
design floorplanner, an interactive unified layout editor and a common
graphical user interface.

63
<PAGE>

Unified hierarchical physical design database. The foundation of Avant!'s
architecture is the unified hierarchical physical design database. This
database is compact and finely tuned to efficiently manage deep submicron IC
design data. All of Avant!'s products utilize this unified database for
information exchange and storage.

Shared proprietary technologies. Avant! has developed a set of proprietary
technologies for deep submicron IC physical design. See "Risk Factors--
Litigation Risk" and "--Limitations on Protection of Intellectual Property and
Proprietary Rights." Avant!'s products utilize one or more of the following
internally developed proprietary technologies and innovative software
algorithms.

. Progressive lookahead placement and routing. Unlike traditional IC
physical design in which the placement and routing steps are separate
and disjoint, Avant! has developed a unique progressive lookahead
placement and routing method. In this method, each step interacts with
the next, thereby forming a tight coupling between the placement and
routing engines for improved physical design results.

. All-path timing-driven design. Avant! has developed an innovative "Slack
Graph" algorithm, available as an option, that efficiently manages
design timing constraints on 100% of the paths in a design during the
automated layout design process without significant degradation in run
time performance. This algorithm achieves faster convergence of design
timing, especially for high performance, high density, deep submicron
ICs. Avant! has received a patent relating to this algorithm.

. Clock management. Avant! has developed an innovative delay-balanced
clustering algorithm, available as an option, that supports multi-level
clock tree synthesis, buffer cell insertion and all-path, all-cell
sizing optimization for improved design timing performance.

. Automated data preparation. Avant! has developed a proprietary algorithm
for automatically preparing the customer's IC physical design library to
be used with Avant!'s products. This algorithm analyzes the intrinsic
design characteristics of the library and its contents, and extracts
additional information from the library for the physical layout tools to
produce more aggressive design results. The close interaction between
the customer's IC design library and the physical design tool reduces
design time and produces designs with smaller die size. Avant! has
received a patent relating to this algorithm.

. Parasitic extraction and timing delay calculation. Avant! has developed
a method for capturing ("extracting") the lumped or distributed values
of interconnect resistance and capacitance ("parasitics") and for
calculating the timing delays caused by these parasitics. Avant!
supports parallel line capacitance to accurately model deep submicron
design timing behavior.

In addition to these technologies, Avant! also provides layout verification
for design rule checking ("DRC"), layout vs. schematic ("LVS") checking and
design timing verification.

Interactive physical design floorplanner. Avant! provides an interactive
physical design floorplanner that includes design timing estimation and
planning, physical design area planning, partitioning, design management and,
when used with Avant!'s Synopsys option, interfacing with logic synthesis
tools.

Interactive unified layout editor. Avant! also provides an interactive
unified layout editor for modifying the design layout during the physical
design process. The layout editor is easy to use thereby enhancing designer
productivity.

Unified graphical user interface. Avant!'s IC physical design products share
a common graphical user interface. Avant! supports the industry standard X-
Windows and Motif user interfaces to provide clear forms and user-friendly
prompts and messages.

64
<PAGE>

PRODUCTS

Avant! products are based on its proprietary architecture and technology,
which provide a breadth of automated IC physical design capabilities. Avant!'s
product architecture is designed to solve the problems inherent in submicron
(less than 1.0-micron feature size) and deep submicron (less than 0.5 micron
feature size) IC design and to offer improved time to market, reduced
development and manufacturing costs, and enhanced IC performance when compared
to previous generations of ICDA software.

Avant! products are designed to be compatible with the most commonly used
ICDA tools and to be easily integrated into the customer's existing design
environments and methodologies through industry standard interfaces. Avant!'s
products are written in C, run on Unix workstations such as those from Sun
Microsystems, Inc. and Hewlett-Packard Company, and support industry standards
such as Motif, XWindows, GDSII Stream format, EDIF, SDF, SPICE and Verilog.

Avant!'s Aquarius family of cell-based place and route products includes
Aquarius-BV, for standard-cell IC designs with up to three layers of metal,
and Aquarius-XO, for more complex standard-cell and mixed-block IC designs
with up to six layers of metal. Aquarius-BV and -XO reduce die size and
shorten the design cycle by combining the advantages of over-the-cell channel
routing and channel compaction with the flexibility of area-based maze
routing.

Avant!'s Aquarius-GA product is an advanced e-layer metal place and route
system for gate-array ICs. ArcGate increases gate utilization and minimizes
design congestion by using proprietary congestion-driven placement and routing
algorithms. Aquarius-GA includes many of the same features as Aquarius-BV and
- -XO to improve circuit performance. Aquarius-GA supports embedded designs
through its horizontal integration with Aquarius-BV and -XO.

Avant!'s Hercules family of design verification software is the industry's
most advanced suite of IC physical verification products. The Hercules family
of tools is divided into two groups: geometric and electrical verification
products and the newly introduced extraction products. Hercules' first module
for design rule checking ("DRC") was introduced in January 1992 and is the
first hierarchical system offered for complex submicron design. Hercules now
includes a comprehensive suite of hierarchical products addressing geometric
and electrical verification, layout versus schematic comparisons and parasitic
extraction for resistance and capacitance ("RC") analysis. Hercules extraction
products consist of a full-chip hierarchical capacitance extractor and a
critical net resistance and capacitance extractor.

The LTL layout editor was the first product developed by Avant!, and had
been its cornerstone product before the introduction of Hercules in 1992. The
LTL family of layout products executes under UNIX or MS-DOS operating systems
and runs on popular platforms including DEC, HP, IBM and Sun workstations and
on 386/486-based PCs. See "Risk Factors--Uncertainty Relating to Integration
of Operations and Product Lines; Management of Growth" and "--Product
Concentration."

CUSTOMERS

Avant! focuses its sales and marketing efforts on creating strategic
relationships with technology leaders in IC design and with early adopters of
the most advanced EDA tools. By creating strong relationships with industry
leaders, Avant! receives critical technical feedback that enables it to
develop and implement proprietary design technologies and methodologies. In
addition, strategic relationships with these companies can create influential
references for other prospective customers.

The market for Avant!'s physical layout, verification and analysis products
encompasses a wide range of industries, including semiconductor, computer,
consumer electronics, multimedia and telecommunications IC companies
worldwide. End-users of Avant!'s products range from small companies to a
number of the world's largest manufacturing organizations. Approximately 1,000
of Avant!'s physical layout and verification systems are currently installed
worldwide at approximately 200 companies as of December 31, 1995.

65
<PAGE>

In 1995, Intel accounted for 12% of Avant!'s revenue. IBM accounted for 13%
and 12% of Avant!'s revenue in 1994 and 1993, respectively. Motorola accounted
for 29% of Avant!'s revenue in 1993. Avant! does not believe that seasonality
is a significant factor in sales.

SALES AND MARKETING

Avant! markets its products in North America and Europe primarily through
its direct sales and support force. Avant! employs highly skilled engineers
and technically proficient sales persons capable of serving the sophisticated
needs of its prospective customers' engineering and management staffs. Avant!
has domestic sales and support offices in or near Austin, Texas; Boston,
Massachusetts; Chicago, Illinois; Dallas, Texas; Los Angeles, California;
Research Triangle Park, North Carolina; and Sunnyvale, California; sales and
support offices in London, England, and Tokyo, Japan; and support offices in
Munich, Germany and Seoul, South Korea. In addition to its direct sales and
marketing efforts, Avant! participates in industry trade shows and organizes
seminars to promote the adoption of its products and methodologies.

In Asia, Avant! markets its products primarily through a limited number of
Third Party Sellers that license and service Avant! products in this market.
Avant! also supports these distributors and representatives and their
customers with technical, sales and management personnel. See "Risk Factors--
Risks Associated with International Licensing" and "--Dependence Upon
Distributors and Manufacturer's Representatives."

Since Avant!'s products are used by highly skilled professional engineers,
in order to be effective a Third Party Seller must possess sufficient
technical, marketing and sales resources and must devote these resources to a
lengthy sales cycle, customer training and product service and support. Only a
limited number of Third Party Sellers possess such resources. In addition,
Avant!'s Third Party Sellers generally offer products of several different
companies, including, in some cases, products that are competitive with
Avant!'s products. There can be no assurance that Avant!'s current Third Party
Sellers will choose to or be able to market or service and support Avant!'s
products effectively, that economic conditions or industry demand will not
adversely affect these or other Third Party Sellers, that any Third Party
Seller will continue to market and support Avant!'s products or that these
Third Party Sellers will not devote greater resources to marketing and
supporting products of other companies. The loss of, or a significant
reduction in revenue from, one of Avant!'s Third Party Sellers could have a
material adverse effect on Avant!'s business, operating results or financial
condition.

66
<PAGE>

AVANT! MANAGEMENT

The executive officers and directors of Avant! are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------------------------------------------------------------------------
<S> <C> <C>
Gerald C. Hsu 49 President, Chief Executive Officer and Chairman of the Board of Directors
Y. Eric Cho 48 Senior Vice President of Corporate Operations, Secretary and Director
John P. Huyett 42 Vice President of Financial & Administrative Services, and Chief Financial
Officer and Treasurer
Tench Coxe 37 Director
Robert C. Kagle 40 Director
Tatsuya Enomoto 55 Director
</TABLE>

Mr. Hsu joined Avant! in March 1994 as President, Chief Executive Officer
and a director, and has been Chairman of the Avant! Board of Directors since
November 1995. From July 1991 to March 1994, Mr. Hsu was employed by Cadence,
where his last position was President and General Manager of the IC Design
Group. From June 1988 to July 1991, Mr. Hsu was employed by Sun Microsystems,
Inc., an engineering workstation company, where his last position was Director
of Strategic Business Development. Mr. Hsu holds an S.M. in Ocean Engineering
from the Massachusetts Institute of Technology, an M.S. in Mechanics and
Hydraulics from the University of Iowa and a B.S. in Applied Mathematics from
the National Chung-Hsing University.

Dr. Cho co-founded Avant! in February 1991 and has been a director of Avant!
since such date. From January 1996 to the present, Dr. Cho has served as the
Senior Vice President of Corporate Operations. From October 1993 until January
1996, he served as the Vice President of Asian Operations. From the inception
of Avant! until October 1993, Dr. Cho served as Vice President of Sales and
Marketing. From September 1986 to February 1991, Dr. Cho was employed by
Cadence where his last position was a Marketing Director of the IC Division.
Dr. Cho holds an M.B.A. from New York University, an M.S. and a Ph.D. in
Electrical Engineering and Computer Science from the University of California,
Berkeley and a B.S. in Electrical Engineering from the National Chiao-Tung
University, Taiwan.

Mr. Huyett has served as Vice President of Financial & Administrative
Services, Chief Financial Officer and Treasurer since he joined Avant! in
connection with the merger of Integrated Silicon Solutions, Inc. ("ISS") with
and into Avant! in November 1995. From July 1993 to November 1995, Mr. Huyett
served as Vice President of Finance and Chief Financial Officer of ISS. Mr.
Huyett also served as Treasurer and Secretary of ISS from October 1994 to
November 1995. Prior to July 1993, Mr. Huyett was a partner with KPMG Peat
Marwick LLP, independent auditors to Avant!

Mr. Coxe has been a director of Avant! since February 1992. Mr. Coxe is a
general partner of the general partner of Sutter Hill Ventures, a venture
capital investment firm, and has been associated with Sutter Hill Ventures
since 1987. Mr. Coxe holds a B.A. in Economics from Dartmouth College and an
M.B.A. from the Harvard Business School.

Mr. Kagle has been a director of Avant! since February 1992. Mr. Kagle has
been a general partner of Benchmark Capital, a venture capital investment
firm, since 1995, and has been a general partner of TVI Management, the
general partner of Technology Venture Investors, a venture capital investment
firm, since 1986. Mr. Kagle also is a director of Viasoft, Inc., a software
company. Mr. Kagle holds a B.S. in Electrical Engineering from the General
Motors Institute and an M.B.A. from the Stanford Graduate School of Business.

Dr. Enomoto has been the President of Mitsubishi Electric Semiconductor
Software Corporation, a semiconductor engineering company and a subsidiary of
Mitsubishi Electric Corporation ("MELCO"), since June 1993. From 1962 to June
1993, Dr. Enomoto was employed by MELCO where his last position was General
Manager of the ASIC Design Engineering Center. Dr. Enomoto holds a Ph.D. in
Engineering from the University of Tokyo.

67
<PAGE>

MARKET PRICES OF AVANT! COMMON STOCK; DIVIDENDS

Avant! Common Stock is traded in the over-the-counter market on The Nasdaq
National Market under the symbol "AVNT." The following table sets forth for
the periods indicated the high and low sale prices as reported by Nasdaq.

<TABLE>
<CAPTION>
QUARTER ENDED HIGH LOW
------------- ------ ------
<S> <C> <C>
1995:
June 30, 1995 (beginning June 7, 1995)......................... $34.00 $26.50
September 30, 1995............................................. $51.00 $33.25
December 31, 1995.............................................. $46.00 $34.25
1996:
March 31, 1996................................................. $26.25 $14.00
June 30, 1996.................................................. $27.75 $16.25
September 30, 1996 (through , 1996)....................... $34.50 $20.50
</TABLE>

On August 21, 1996, the last full trading day before the date of the
announcement of the execution of the Plan of Reorganization by Avant! and
Meta, the closing sale price of Avant! Common Stock as reported by The Nasdaq
National Market was $29.50 per share. On , 1996, the last trading day for
which quotations were available at the time of printing this Joint Proxy
Statement/Prospectus, the closing sale price of Avant! Common Stock as
reported by The Nasdaq National Market was $ per share. As of , 1996,
there were holders of record of Avant! Common Stock.

No cash dividends have been paid on the Avant! Common Stock since Avant!'s
initial public offering. Avant! does not anticipate paying cash dividends in
the foreseeable future.

68
<PAGE>

META

SELECTED FINANCIAL DATA

The statement of income data presented below for the years ended December
31, 1993, 1994 and 1995 and the balance sheet data as of December 31, 1993,
1994 and 1995 are derived from the financial statements of Meta that have been
audited by KPMG Peat Marwick LLP, independent certified public accountants.
The statement of income data presented below for the six-month periods ended
June 30, 1995 and 1996 are derived from Meta's unaudited financial statements
included elsewhere in this Joint Proxy Statement/Prospectus. The unaudited
financial statements have been prepared by Meta on a basis consistent with
Meta's audited financial statements and include all adjustments, consisting
only of normal recurring adjustments, which management believes necessary for
a fair presentation of the information. Operating results for the six-month
period ended June 30, 1996 are not necessarily indicative of results to be
expected for the year ending December 31, 1996 or any future period. The data
set forth below should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
financial statements and notes thereto included elsewhere in the this Joint
Proxy Statement/Prospectus.

The unaudited pro forma net income and per share data presented below
include a provision for income taxes of approximately 36% as if Meta had been
a C Corporation. The shares used in computing pro forma net income per share
include 881,818 additional shares representing the shares that would need to
be sold at an assumed initial public offering price of $11.00 per share to pay
a final S Corporation distribution of approximately $9.7 million. See Notes 5
and 6 of Meta Notes to Financial Statements.

<TABLE>
<CAPTION>
SIX-MONTH
YEARS ENDED PERIODS ENDED
DECEMBER 31, JUNE 30,
----------------------- --------------
1993 1994 1995 1995 1996
------- ------- ------- ------- ------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net revenue:
Product license..................... $10,523 $13,818 $17,456 $ 7,413 $9,970
Maintenance and service............. 3,254 5,834 7,825 3,448 4,919
------- ------- ------- ------- ------
Net revenue......................... 13,777 19,652 25,281 10,861 14,889
Cost of revenue:
Product license..................... 1,125 683 875 434 590
Maintenance and service............. 1,290 1,588 1,857 906 1,113
------- ------- ------- ------- ------
Total cost of revenue............. 2,415 2,271 2,732 1,340 1,703
------- ------- ------- ------- ------
Gross margin...................... 11,362 17,381 22,549 9,521 13,186
Operating expenses:
Research and development............ 3,179 4,044 5,940 2,798 2,887
Sales and marketing................. 4,661 6,560 8,184 3,708 5,110
General and administrative.......... 1,357 1,946 2,686 1,041 1,395
Acquisition of technology........... -- 1,600 2,693 -- --
------- ------- ------- ------- ------
Total operating expenses.......... 9,197 14,150 19,503 7,547 9,392
------- ------- ------- ------- ------
Operating income...................... 2,165 3,231 3,046 1,974 3,794
Other income, net..................... 44 104 355 109 366
------- ------- ------- ------- ------
Income before income taxes............ 2,209 3,335 3,401 2,083 4,160
Income taxes.......................... 147 575 (950) 186 1,478
------- ------- ------- ------- ------
Net income............................ $ 2,062 $ 2,760 $ 4,351 $ 1,897 2,682
======= ======= ======= ======= ======
Income per share...................... $ 0.25
======
Number of shares used in per share
calculation 10,622
======
</TABLE>

76
<PAGE>

<TABLE>
<CAPTION>
PRO FORMA
----------------------------------------------
SIX-MONTH
YEARS ENDED PERIODS ENDED
DECEMBER 31, JUNE 30,
---------------------------- -----------------
1993 1994 1995 1995 1996
-------- --------- --------- --------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Pro forma net income and per
share data (unaudited):
Income before income taxes, as
reported..................... $ 2,209 $ 3,335 $ 3,401 $ 2,083
Pro forma income taxes........ 795 1,201 1,224 750
-------- --------- --------- ---------
Pro forma net income.......... $ 1,414 $ 2,134 $ 2,177 $ 1,333
======== ========= ========= =========
Pro forma net income per
share(1)..................... $ 0.16 $ 0.22 $ 0.22 $ 0.14
======== ========= ========= =========
Shares used in computation of
pro forma net income per
share(1)..................... 8,834 9,792 9,866 9,792
======== ========= ========= =========
<CAPTION>
HISTORICAL
----------------------------------------------
DECEMBER 31, JUNE 30,
---------------------------- -----------------
1993 1994 1995 1995 1996
-------- --------- --------- --------- -------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents...... $ 3,664 $ 3,811 $ 25,720 $ 5,580 $ 3,891
Working capital(2)............. 3,098 3,854 21,942 4,580 26,967
Total assets................... 8,788 10,776 35,095 12,900 38,313
Total shareholders' equity..... 4,883 5,317 23,325 6,388 29,617
</TABLE>
- --------
(1) See Note 1 of Notes to Financial Statements.
(2) Working capital is computed as current assets less current liabilities.

77
<PAGE>

META MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

Meta develops, markets and supports simulation and library generation
software products for use in IC design. Since inception, Meta's growth has
been driven primarily by growth in licenses of its proprietary circuit
simulator, HSPICE. In 1993, Meta began a program of diversification by adding
its Meta-Labs service and its MetaTestchip product, which are designed to
address the market for testchip fabrication and model library generation. In
1994, Meta further expanded within its field of EDA expertise by acquiring in-
process library generation and automated cell characterization technology now
embodied in its MASTER Toolbox product. Meta also introduced a fast timing
simulator, MetaCircuit, in mid-1996. In addition, Meta has generated and
continues to generate revenue from maintenance, product upgrades, training and
consulting activities. Products and services are sold primarily to
semiconductor manufacturers through a direct sales force and a network of
sales representatives and distributors.

Meta's revenues have in the past been derived principally from HSPICE. More
than 75% of Meta's net revenue in 1993, 1994, 1995 and the first six months of
1996 was generated by HSPICE-related licenses and maintenance. In addition,
because Meta intends to offer additional products as part of a family of
products based on HSPICE, a decline in the demand for HSPICE could have a
material adverse effect on sales of Meta's other products. As a result, a
decline in the demand for HSPICE could have a material adverse effect on
Meta's business, operating results and financial condition. Therefore, Meta
must enhance its current products and develop or acquire new products to keep
pace with technological developments and emerging industry standards and to
address the increasingly sophisticated needs of its customers. There can be no
assurance that Meta will not experience difficulties that could delay or
prevent the successful development, introduction and marketing of these
products, or that its new products and product enhancements will adequately
meet the requirements of the marketplace and achieve market acceptance.

Operating results in 1994 were negatively affected by the $1.6 million
expense of the MASTER Toolbox in-process technology purchased in the second
quarter. In 1995, Meta acquired timing simulator algorithms as in-process
technology, which had a negative effect upon operating results in the amount
of $2.7 million. In addition, in 1993, 1994, and 1995, Meta recorded
compensation expenses of $39,000, $380,000, and $484,000, respectively,
related to its 1992 Stock Option/Appreciation Plan (the "1992 Plan"). These
compensation expenses reflect the rights of the holders of options under the
1992 Plan to receive cash in lieu of stock upon exercise prior to Meta's
initial public offering. Compensation expense has been recorded based on the
vested rights of the optionholders to receive cash in lieu of stock through
the date such rights were terminated. At December 31, 1995, all such rights
had been terminated.

78
<PAGE>

RESULTS OF OPERATIONS

The following tables set forth, for the periods indicated, the percentages
of net revenues represented by each line item reflected in Meta's statements
of income.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------- ----------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
AS A PERCENTAGE OF NET REVENUE:
Net revenue:
Product license................. 76.4% 70.3% 69.0% 68.3% 67.0%
Maintenance and service......... 23.6 29.7 31.0 31.7 33.0
------- ------- ------- ------- -------
Net revenue..................... 100.0 100.0 100.0 100.0 100.0
Cost of revenue:
Product license................. 8.2 3.5 3.5 4.0 4.0
Maintenance and service......... 9.4 8.1 7.3 8.3 7.5
------- ------- ------- ------- -------
Total cost of revenue......... 17.6 11.6 10.8 12.3 11.5
Gross margin.................. 82.4 88.4 89.2 87.7 88.5
Operating expenses:
Research and development........ 23.1 20.6 23.5 25.8 19.4
Sales and marketing............. 33.8 33.4 32.4 34.1 24.3
General and administrative...... 9.8 9.9 10.6 9.6 9.4
Acquisition of technology....... -- 8.1 10.7 -- --
------- ------- ------- ------- -------
Total operating expenses...... 66.7 72.0 77.2 69.5 63.1
Operating income.................. 15.7 16.4 12.0 18.2 25.4
Other income, net................. 0.3 0.5 1.4 1.0 2.5
------- ------- ------- ------- -------
Income before income taxes........ 16.0 16.9 13.4 19.2 27.9
Income taxes...................... 1.1 2.9 (3.8) 1.7 9.9
------- ------- ------- ------- -------
Net income........................ 14.9% 14.0% 17.2% 17.5% 18.0%
======= ======= ======= ======= =======
</TABLE>

Net Revenue

Meta's net revenue consists of product license revenue and maintenance and
service revenue. Product license revenue consists of license fees for Meta's
software products and is recognized upon shipment of product and permanent
authorization codes and satisfaction of all significant customer obligations.
Products typically are sold on a perpetual license basis. Maintenance and
service revenue consists of fees associated with providing software
maintenance, customer support, training, laboratory services and consulting.
Maintenance revenue for ongoing customer support and product updates is
recognized ratably over the contract term, which is generally twelve months.
Maintenance fees are paid in advance and are not refundable. Revenue related
to other services, including Meta-Labs, training and consulting, are generally
recognized upon completion of the service performed.

Net revenue increased 43% from $13.8 million in 1993 to $19.7 million in
1994. Net revenue increased 29% from $19.7 million in 1994 to $25.3 million in
1995. Net revenue for the six months ended June 30, 1996 increased by $4.0
million, or 37%, to $14.9 million from $10.9 million for the first six months
of 1995. The increases in net revenue for all periods were due to increased
HSPICE product license revenue, an increase in installed base and an increase
in demand for lab services. As a percentage of Meta's net revenue, product
license revenue declined from 76% in 1993 to 70% in 1994 to 69% in 1995 and to
67% for the first six months of 1996. Conversely, maintenance and service
revenue, principally from maintenance and customer support, has increased as a
percentage of net revenue from approximately 24% in 1993 to approximately 30%
in 1994 to 31% in 1995

79
<PAGE>

and to 33% in the first six months of 1996. These increases in maintenance and
service revenue as a percentage of net revenue reflect the growing installed
base of customers, as well as growth in other service revenue, including
revenue related to Meta-Labs, training and consulting.

Product license revenue increased 31% from $10.5 million in 1993 to $13.8
million in 1994. Product license revenue increased 27% from $13.8 million in
1994 to $17.5 million in 1995. For the six months ended June 30, 1996, product
license revenues increased $2.6 million, or 34%, over the first six months of
1995. The increase in product license revenue from 1993 to 1994 is primarily
related to growth in the number of HSPICE licenses sold. HSPICE-related
license and maintenance revenue constituted more than 75% of Meta's net
revenue in each of 1993, 1994, 1995 and the first six months of 1996. The
increase in product license revenue from 1994 to 1995 is attributable to
increased HSPICE license revenue and, to a lesser extent, increased sales of
MASTER Toolbox licenses. The increase in product license revenue from the
first six months of 1995 to the first six months of 1996 is due primarily to
increased HSPICE license revenue.

Maintenance and service revenue increased 79% from $3.3 million in 1993 to
$5.8 million in 1994. Maintenance and service revenue increased 34% from $5.8
million in 1994 to $7.8 million in 1995. Maintenance and service revenues for
the six months ended June 30, 1996 increased $1.5 million, or 43%, over the
first six months of 1995. The growth in maintenance and service revenue
reflects the continued growth of the installed base of customers who have
purchased Meta's software products, as well as the growth in other lab
services and other service revenue.

International revenue, including both product license revenue and
maintenance and service revenue, was 37% of Meta's net revenue in 1993, 40% in
1994, 40% in 1995 and 47% for the six months ended June 30, 1996,
respectively. Meta expects that international revenue will continue to account
for a material percentage of Meta's net revenue in the future. Furthermore,
Meta intends to continue to expand its operations outside of the United
States, in part by the expansion of the direct sales office in Japan, and to
enter additional international markets, which will require significant
management attention and financial resources. International sales are subject
to inherent risks, including unexpected changes in regulatory requirements,
tariffs and taxes, difficulties in staffing and managing foreign operations,
longer payment cycles, greater difficulty in accounts receivable collection
and political and economic instability. Moreover, gains and losses on the
conversion to U.S. dollars of receivables and payables arising from
international operations may contribute to fluctuations in Meta's results of
operations. While the effect of foreign currency fluctuations on Meta's
results has not been material to date, there can be no assurance that this
will continue to be the case in the future. In addition, Meta relies on
distributors and manufacturers' representatives for licensing and support of a
substantial portion of Meta's Asian business. Meta's distributor in Japan,
NTT-AT, accounted for 14% of Meta's net revenue in 1993, 15% in 1994, 14% in
1995 and 18% for the six months ended June 30, 1996, respectively. Meta's
distribution agreement with NTT-AT expired in May 1996, and, subsequent to
such time, Meta and NTT-AT have been conducting business in good faith on
substantially the same terms as set forth in the terminated distributor
agreement. There can be no assurance that NTT-AT will continue to serve as
Meta's distributor.

Cost of Product License Revenue

The cost of product license revenue represents the costs associated with the
licensing of Meta's products, such as the costs of reproduction and delivery
of software, license authorization codes and user documentation. The cost of
product license revenue decreased 39% from $1.1 million in 1993 to $683,000 in
1994. Cost of product license revenue increased 28% from $683,000 in 1994 to
$875,000 in 1995. Cost of product license revenue for the six months ended
June 30, 1996 was $590,000, which represented a 36% increase over the same
period in 1995. Cost of product license revenue decreased from 11% of product
license revenue in 1993 to 5% of product license revenue in both 1994 and 1995
and 6% for the six months ended June 30, 1996. The decrease in cost of product
license revenue, both in amount and as a percentage of product license
revenue, from 1993 to 1994 reflects increased focus on efficiency achieved
through a change in executive management and streamlining of product delivery
mechanisms. The increase in cost of product license revenue from 1994 to 1995
reflects the costs of printing product manuals and an increase in personnel
and customer service costs. The increase in cost

80
<PAGE>

of product license revenue from the first six months of 1995 to the first six
months of 1996 was primarily a result of the increase in product revenue.
However, cost of product license revenue as a percentage of product license
revenue remained relatively constant at approximately 5% during the 1994 and
1995 periods and at approximately 6% for the first six months of 1995 and the
first six months of 1996.

Cost of Maintenance and Service Revenue

The cost of maintenance and service revenue includes the costs of providing
software maintenance to customers (such as hotline telephone support, revision
releases of the software and updated user documentation) and the costs of
providing Meta-Labs services, training, and consulting. Cost of maintenance and
service revenue increased 23% from $1.3 million in 1993 to $1.6 million in
1994. Cost of maintenance and service revenue increased 17% from $1.6 million
in 1994 to $1.9 million in 1995. Cost of maintenance and service revenue for
the six months ended June 30, 1996 was $1.1 million, which represented a 23%
increase over the first six months of 1995. The increase in costs from 1993 to
1994, from 1994 to 1995 and from the first six months of 1995 to the first six
months of 1996 were due primarily to an increase in personnel in the
maintenance and other service areas. As a percentage of maintenance and service
revenue, cost of maintenance and service revenue decreased from 40% in 1993 to
27% in 1994, due principally to an increase in revenue in the Meta-Labs
services from 1993 to 1994 while costs remained relatively fixed during that
period. Additionally, the software maintenance group was reorganized, and its
focus on efficiency was increased through streamlining of service delivery
mechanisms. Cost of maintenance and service revenue as a percentage of
maintenance and service revenue declined from 27% in 1994 to 24% in 1995, due
to a greater number of software revision releases (which are provided to
current maintenance customers under their annual maintenance contracts) in 1994
as compared to 1995 and an increase in maintenance and other service revenue.
Cost of maintenance and service revenue as a percentage of maintenance service
revenue declined from 26% in the first six months of 1995 to 23% in the first
six months of 1996, primarily due to the ability to service a larger installed
base without increasing headcount proportionally.

Research and Development

Research and development expenses include the costs of creating new products
and development of enhancements to existing products. Software development
costs have been expensed as incurred, as software development has been
completed concurrently with the establishment of technological feasibility.
Meta has invested significant financial resources in its product research and
development efforts, and plans to continue to do so in the future. Research and
development expenses increased 27% from $3.2 million in 1993 to $4.0 million in
1994. The increase in research and development expenses from 1993 to 1994 was
due to increased personnel costs, including costs associated with increased
headcount and compensation expenses related to Meta's 1992 Plan discussed
above. Research and development expenses increased 47% from $4.0 million in
1994 to $5.9 million in 1995. Research and development expenses were $2.9
million for the six months ended June 30, 1996, a 3% increase over the same
period in 1995. The increases in research and development costs from 1994 to
1995 and from the first six months of 1995 to the first six months of 1996 were
primarily caused by an increase in personnel costs, including costs associated
with increased headcount, in support of an organizational focus on new and
advanced technology and expanded product development efforts. Research and
development expenses remained relatively constant as a percentage of net
revenues, ranging from 19% to 24%, in 1993, 1994, 1995 and the first six months
of 1996.

Sales and Marketing

Sales and marketing expenses include the costs associated with the sales
channels (such as personnel, commissions, remote office costs and travel),
promotional events (such as trade show and technical conference attendance),
and advertising and public relations programs. Sales and marketing expenses
increased 41% from $4.7 million in 1993 to $6.6 million in 1994. Sales and
marketing expenses increased 25% from $6.6 million in 1994 to $8.2 million in
1995. Sales and marketing expenses were $5.1 million for the six months ended
June 30, 1996, which represented a 38% increase over the same period in 1995.
The increase in sales and marketing

81
<PAGE>

expenses from 1993 to 1994, and from 1994 to 1995 are due in part to the
compensation expenses related to Meta's 1992 Plan discussed above. In addition,
the increases in all periods are due to increases in headcount, increases in
commissions associated with increased revenues, and the opening of remote sales
offices in Switzerland in 1994, and in Germany and Japan in 1995, and continued
expansion of the Swiss and Japanese offices in 1996. Sales and marketing
expenses remained relatively constant as a percentage of net revenue, ranging
from approximately 32% to 34% in 1993, 1994, 1995 and the first six months of
1996.

General and Administrative

General and administrative expenses include the costs associated with Meta's
executive office, human resources and finance functions. General and
administrative expenses increased 43% from $1.4 million in 1993 to $1.9 million
in 1994. General and administrative expenses increased 38% from $1.9 million in
1994 to $2.7 million in 1995. General and administrative expenses were $1.4
million for the six months ended June 30, 1996, which represented a 34%
increase over the same period in 1995. The increases in all periods were due to
an increase in personnel in the areas of finance and human resources, as Meta
added administrative infrastructure and expanded its recruiting efforts. In
addition, operating expenses in 1995 were impacted by compensation expenses
related to Meta's 1992 Plan and a higher provision for bad debts. As a
percentage of net revenue, general and administrative expenses remained
relatively constant, ranging from approximately 9% to 11% in 1993, 1994, 1995
and the first six months of 1996.

Acquisition of Technology

In April 1994, Meta purchased and expensed in-process library generation and
automated cell characterization technology now embodied in its MASTER Toolbox
product. As the acquired technology had not reached technological feasibility,
it was expensed upon acquisition. In November 1995, Meta purchased a set of
timing simulator algorithms which had not reached technological feasibility and
the cost associated with the technology was expensed upon acquisition.

Other Income, Net

Other income, net, consists of interest income, losses on the disposal of
property and equipment, and foreign currency gains and losses. Interest income
principally consists of the earnings on available cash balances, which have
generally been invested in short-term money market investments substantially
free from Federal and state income taxes.

For the six months ended June 30, 1996, other income, net grew to $366,000
from $109,000 for the same period in 1995, or by 236%. This other income growth
resulted from investment income attributable to the higher cash balances
associated with the proceeds received from Meta's initial public offering of
Common Stock in November 1995.

82
<PAGE>

QUARTERLY RESULTS

The following table sets forth certain unaudited quarterly financial data for
each of the eight three-month periods through the three-month period ending
June 30, 1996. In the opinion of Meta's management, this unaudited information
has been prepared on the same basis as the audited financial statements
contained herein and includes all adjustments (consisting only of normal
recurring adjustments) that management believes are necessary to present fairly
the information set forth therein. The operating results for any quarter are
not necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
--------------------------------------------------------------------
1994 1995 1996
---------------- --------------------------------- ----------------
SEPT. 30 DEC. 31 MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 JUNE 30
-------- ------- -------- ------- -------- ------- -------- -------
(UNAUDITED, IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue:
Product license....... $3,825 $4,375 $2,903 $4,510 $4,680 $5,363 $5,044 $4,926
Maintenance and
service.............. 1,577 1,829 1,578 1,870 2,141 2,236 2,249 2,670
------ ------ ------ ------ ------ ------ ------ ------
Net revenue......... 5,402 6,204 4,481 6,380 6,821 7,599 7,293 7,596
Cost of revenue:
Product license....... 177 198 179 255 207 234 350 239
Maintenance and
service.............. 431 436 444 462 438 513 571 542
------ ------ ------ ------ ------ ------ ------ ------
Total cost of
revenue............ 608 634 623 717 645 747 921 781
------ ------ ------ ------ ------ ------ ------ ------
Gross margin........ 4,794 5,570 3,858 5,663 6,176 6,852 6,372 6,815
Operating expenses:
Research and
development.......... 1,141 1,028 1,268 1,530 1,605 1,537 1,525 1,362
Sales and marketing... 1,800 1,976 1,394 2,314 2,084 2,392 2,477 2,633
General and
administrative....... 460 560 473 568 938 707 622 773
Acquisition of
technology........... -- -- -- -- -- 2,693 -- --
------ ------ ------ ------ ------ ------ ------ ------
Total operating
expenses........... 3,401 3,564 3,135 4,412 4,627 7,329 4,624 4,768
------ ------ ------ ------ ------ ------ ------ ------
Operating income
(loss)................. 1,393 2,006 723 1,251 1,549 (477) 1,748 2,047
Other income, net....... 9 48 55 54 89 157 145 220
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes........... 1,402 2,054 778 1,305 1,638 (320) 1,893 2,267
Income taxes (benefit).. 227 204 91 95 276 (1,412) 661 817
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)....... $1,175 $1,850 $1,210 $ 687 $1,362 $1,092 $1,232 $1,450
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

83
<PAGE>

<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
-------------------------------------------------------------------
1994 1995 1996
---------------- --------------------------------- ----------------
SEPT. 30 DEC. 31 MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 JUNE 30
-------- ------- -------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As a Percentage of Net
Revenue:
Net revenue:
Product license....... 70.8% 70.5% 64.8% 70.7% 68.6% 70.6% 69.2% 64.8%
Maintenance and
service.............. 29.2 29.5 35.2 29.3 31.4 29.4 30.8 35.2
----- ----- ----- ----- ----- ----- ----- -----
Net revenue......... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Cost of revenue:
Product license....... 3.3 3.2 4.0 4.0 3.0 3.1 4.8 3.2
Maintenance and
service.............. 8.0 7.0 9.9 7.2 6.5 6.7 7.8 7.1
----- ----- ----- ----- ----- ----- ----- -----
Total cost of
revenue............ 11.3 10.2 13.9 11.2 9.5 9.8 12.6 10.3
----- ----- ----- ----- ----- ----- ----- -----
Gross margin........ 88.7 89.8 86.1 88.8 90.5 90.2 87.4 89.7
Operating expenses:
Research and
development.......... 21.1 16.6 28.3 24.0 23.5 20.2 20.9 17.9
Sales and marketing... 33.3 31.8 31.1 36.3 30.6 31.5 34.0 34.7
General and
administrative....... 8.5 9.0 10.6 8.9 13.7 9.3 8.5 10.2
Acquisition of
technology........... -- -- -- -- -- 35.4 -- --
----- ----- ----- ----- ----- ----- ----- -----
Total operating
expenses........... 62.9 57.4 70.0 69.2 67.8 96.4 63.4 62.8
----- ----- ----- ----- ----- ----- ----- -----
Operating income
(loss)................. 25.8 32.3 16.1 19.6 22.7 (6.2) 24.0 26.9
Other income, net....... 0.1 0.8 1.2 0.8 1.3 2.0 2.0 2.9
----- ----- ----- ----- ----- ----- ----- -----
Income (loss) before
income taxes........... 25.9 33.1 17.3 20.4 24.0 (4.2) 26.0 29.8
Income taxes (benefit).. 4.2 3.3 2.0 1.5 4.0 (18.6) 9.1 10.8
----- ----- ----- ----- ----- ----- ----- -----
Net income (loss)....... 21.7% 29.8% 15.3% 18.9% 20.0% 14.4% 16.9% 19.0%
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>

Meta's quarterly operating results have in the past and may in the future
vary significantly depending on factors such as increased competition, the
timing of new product announcements and changes in pricing policies by Meta or
its competitors, lengthy sales cycles, market acceptance or delays in the
introduction of new or enhanced versions of Meta's products, the timing of
significant orders, seasonal factors, the mix of direct and indirect sales and
general economic conditions. In particular, in connection with Meta's
acquisition of rights to certain technology under development in October 1995,
Meta recognized expense of approximately $2.7 million in the fourth quarter of
1995. In addition, Meta's quarterly operating results have in the past
fluctuated as a result of seasonality of customer buying patterns, with
revenues for the first quarter of a year often lower than those for the last
quarter of the preceding year. A substantial portion of Meta's revenue in each
quarter results from orders booked in that quarter. Meta's expense levels are
based, in part, on its expectations as to future revenue. If revenue levels are
below expectations, operating results are likely to be adversely affected. Net
income may be disproportionately affected by a reduction in revenue because
only a small portion of Meta's expenses varies with its revenue. Meta has
recently experienced rapid growth and expansion. There can be no assurance that
Meta will be able to grow in future periods or that it will be able to sustain
its historical rate of revenue growth or, even if revenue grows, that its
operations will remain profitable. Due to the foregoing factors, Meta believes
that period-to-period comparisons of its results of operations are not
necessarily meaningful and should not be relied upon as indications of future
performance. Additionally, a significant portion of Meta's revenue in a quarter
typically is received in the last few weeks of that quarter. As a result, Meta
may not learn of, or be able to confirm, revenue shortfalls until late in the
quarter or earnings shortfalls from expected levels or other failures to meet
market expectations for results of operations which could have an immediate and
significant adverse effect on the trading price of Meta Common Stock in any
given period.

84
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

From inception in 1980 through its initial public offering of Common Stock
in November 1995, Meta financed its activities through internally generated
cash flow. In November 1995, Meta completed its initial public offering of
2,300,000 shares of Common Stock. The cash proceeds from the initial public
offering, net of expenses, were approximately $24.7 million. At December 31,
1995, Meta had $25.7 million in cash and cash equivalents. Cash and cash
equivalents decreased to $3.9 million at June 30, 1996 primarily from net
purchases of $20.5 million in short term investments and the final
distribution of $1.8 million to Subchapter S Corporation shareholders. In
total, cash and cash equivalents and short term investments decreased by $1.3
million from December 31, 1995 to $24.4 million at June 30, 1996. Net cash
used in operations for the first six months of 1996 was $686,000. Cash used in
investing activities, other than that invested in short term investments, was
related to the purchase of leasehold improvements, fixed assets, primarily
computers, software and office furnishings. Cash used in financing activities
related to the final $1.8 million distribution to shareholders was partially
offset by the proceeds from the exercise of stock options by employees.

Meta had a line of credit secured by eligible accounts receivable which
expired on June 30, 1996 and will not be renewed. There were no borrowings
against the line of credit during its effective period.

It is Meta's opinion that existing cash and the cash generated by operations
will satisfy Meta's working capital requirements through at least 1996.

85
<PAGE>

MARKET PRICE OF META'S COMMON STOCK; DIVIDENDS

Meta's Common Stock is traded on The Nasdaq National Market under the symbol
"MESW."

The following table sets forth the high and low closing sale prices per
share for the periods indicated, as reported by The Nasdaq National Market.
The quotations shown represent inter-dealer prices without adjustment for
retail markups, markdowns, or commissions, and may not necessarily reflect
actual transactions.

<TABLE>
<CAPTION>
PRICE RANGE
COMMON STOCK
-------------
QUARTER ENDED HIGH LOW
------------- ------ ------
<S> <C> <C>
1995:
December 31, 1995 (beginning November 7, 1995).............. $20.00 $15.00
1996:
March 31, 1996.............................................. 19.50 13.25
June 30, 1996............................................... 18.88 15.38
September 30, 1996 (through September 6, 1996).............. 17.25 10.75
</TABLE>

On August 21, 1996, the last full trading day before public announcement of
the execution of the Plan of Reorganization by Avant! and Meta, the closing
sale price of Meta Common Stock as reported by The Nasdaq National Market was
$12.75 per share. On , 1996, the last trading day for which quotations were
available at the time of printing this Joint Proxy Statement/Prospectus, the
closing sale price of Meta Common Stock as reported by The Nasdaq National
Market was $ per share.

As of , 1996, there were approximately holders of record of Meta's
Common Stock.

Meta has not paid any dividends on its Common Stock other than dividends for
S Corporation shareholders to pay their share of income taxes on S Corporation
earnings and the final distribution of S Corporation earnings to S Corporation
shareholders in connection with the Company's conversion from S Corporation to
C Corporation status at the time of its initial public offering. Meta
currently intends to retain any future earnings for use in its business.

86
<PAGE>

MANAGEMENT OF META

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding each executive
officer or director of Meta who will serve as an executive officer or director
of Avant! following the Merger:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH META
---- --- ------------------
<S> <C> <C>
Shawn M. Hailey.................. 46 Chairman of the Board of Directors,
President and Chief Executive Officer
Kim L. Hailey.................... 46 Director and Executive Vice President
and Vice President of Engineering
</TABLE>

Following the Merger, the Avant! Board of Directors intends that Shawn M.
Hailey will serve as a director of Avant!, and Kim L. Hailey will serve as
Chief Technical Officer of Avant!.

Shawn M. Hailey, a co-founder of Meta, has served as President, Chief
Executive Officer and Chairman of the Board of Directors of Meta since its
inception in 1978. Prior to 1978, Mr. Hailey held engineering and management
positions involving circuit design at Advanced Micro Devices, Inc., where he
established the MOS Microprocessor Department and the EPROM group.

Kim L. Hailey, a co-founder of Meta, has served as Vice President of
Engineering since May 1996. Prior to that, Mr. Hailey served as Vice President
of Next Technology since December 1994, as Executive Vice President of Meta
since July 1991, and as a director of Meta since July 1988. Mr. Hailey
previously served as Vice President and Secretary of Meta. Prior to co-
founding Meta, Mr. Hailey held various circuit and systems engineering design
positions with General Instrument Corp. and Xerox Corporation.

COMPENSATION OF DIRECTORS

Directors who are employees of Meta receive no compensation for their
services as directors. Directors who are not employees of Meta receive a
retainer of $10,000 per year, $1,000 per Board meeting attended, and $500 per
committee meeting attended, plus payment of out-of-pocket expenses relating to
their service as Board members. In addition, under Meta's 1995 Directors'
Stock Option Plan, non-employee directors receive an initial grant of an
option to purchase 7,500 shares of Meta's Common Stock upon their election to
the Board, and an additional grant of an option to purchase 7,500 shares upon
their election at each annual meeting of shareholders, if they have served on
the Board for at least six months prior to such annual meeting. Upon
consummation of the Merger, the vesting of an aggregate of 15,000 shares
underlying options held by non-employee directors of Meta will accelerate.

87
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation
paid by Meta for services rendered by Shawn M. Hailey and Kim L. Hailey to
Meta during the periods indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------- ----------------
SECURITIES
UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#) COMPENSATION ($)
- ------------------------- ---- ---------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Shawn M. Hailey.......... 1995 $180,000 $98,010 -- 1,648(1)
President and Chief
Executive Officer 1994 $180,000 $72,000 -- 4,682(2)
Kim L. Hailey............ 1995 $180,000 $85,536 -- 1,648(1)
Executive Vice President 1994 $180,000 $52,250 -- 4,682(2)
and Vice President of
Engineering
</TABLE>
- --------
(1) Consists of matching contributions of $1,000 under Meta's 401(k) Profit
Sharing Plan (the "401(k) Plan"), and $648 paid in premiums for Life and
Accidental Death, Disability and Dismemberment Insurance ("Life and AD&D
Insurance").
(2) Consists of $4,392 in matching contributions under the 401(k) Plan and
$290 paid in premiums for Life and AD&D Insurance.

88
<PAGE>

CERTAIN TRANSACTIONS

From October 1, 1988 through October 31, 1995, Meta operated as an S
Corporation for tax purposes. As such, during such period corporate income was
taxable directly to Meta's shareholders, rather than to Meta (other than
California S Corporation franchise tax and certain foreign taxes, which were
imposed on Meta's net income). For the years ended December 31, 1993 and 1994,
Meta made distributions to the shareholders of $1.6 million and $2.9 million,
respectively. With respect to the period ended December 31, 1995, Meta
declared a final distribution to shareholders of approximately $10.3 million,
representing undistributed tax basis earnings through the initial public
offering date (October 31, 1995).

In connection with Meta's initial public offering, Shawn M. Hailey and Kim
L. Hailey entered into an S Corporation Termination, Tax Allocation and
Indemnification Agreement providing that Meta will be indemnified by such
shareholders, jointly and severally, with respect to certain federal or state
corporate income taxes (plus interest and penalties) attributable to the
failure of Meta to qualify as an S Corporation for any period or in any
jurisdiction for which S Corporation status was claimed through the date of
termination of S Corporation status. In the case of tax liability arising out
of any defect in the proper and timely execution, preparation and/or filing of
Meta's election to be treated as an S Corporation, there is no limit on the
amount or time of the indemnification obligation of the shareholders under the
S Corporation Termination, Tax Allocation and Indemnification Agreement. In
the case of tax liability arising out of a failure of Meta to qualify as an
S Corporation for any other reason, the aggregate indemnification obligation
of the shareholders under the S Corporation Termination, Tax Allocation and
Indemnification Agreement is limited to $7,000,000 if the tax liability is
asserted within four years after the later of the due date or the date of
filing of Meta's tax return for its final S Corporation year, $4,666,667 if
the tax liability is asserted within the next one-year period, $2,333,333 if
the tax liability is asserted within the next one-year period, and nothing
thereafter. The shareholders may, at their option, satisfy any indemnification
obligation in cash or shares of Meta Common Stock valued for this purpose at
70% of the average closing price of Meta Common Stock for the 60-day period
prior to the due date of the indemnification payment.

Meta currently leases its facilities at 1300 White Oaks Road, Campbell,
California pursuant to a leasing agreement with Santolina Associates, a
partnership consisting of Shawn M. Hailey and Jan Crawford (spouses) and Kim
L. Hailey. Under the terms of the lease, Meta pays a monthly lease payment of
$47,000 for 40,000 square feet of manufacturing and office space. The lease
was entered into in December 1990 and expires in August 1999. Meta believes
that the terms of this lease are no less favorable than would be received from
a third party in an arm's length transaction. Avant! considers this facility
to be a duplicate facility and expects to terminate this lease upon
consummation of the Merger.

89
<PAGE>

STOCK OWNERSHIP OF META MANAGEMENT AND PRINCIPAL META SHAREHOLDERS

The following table sets forth information that has been provided to Meta
with respect to beneficial ownership of shares of Meta Common Stock as of July
31, 1996 for (i) each person who is known by Meta to own beneficially more
than five percent of the outstanding shares of Common Stock, (ii) each
executive officer of Meta named in the Summary Compensation Table set forth
above, (iii) each director of Meta and (iv) all directors and executive
officers of Meta as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
-------------------------------
NAME NUMBER PERCENT
---- ---------------- --------------
<S> <C> <C>
Shawn M. Hailey............................ 4,493,000 44.1%
c/o Meta-Software, Inc.
1300 White Oaks Road
Campbell, CA 95008
Kim L. Hailey.............................. 2,988,201 29.3%
c/o Meta-Software, Inc.
1300 White Oaks Road
Campbell, CA 95008
William C. Smith(2)........................ 38,725 *
John H. Wright(3).......................... 38,725 *
Vic Kulkarni(4)............................ 32,926 *
Linda Gunther(5)........................... 11,880 *
Alan Feinberg.............................. -- --
Joshua Pickus(6)........................... -- --
A.E. Ross(7)............................... -- --
All directors and executive officers as a
group (9 persons)(8)...................... 7,596,778 74.3%
</TABLE>
- --------
* Less than 1%.
(1) Except pursuant to applicable community property laws, Meta believes the
persons named in the table have sole voting and investment power with
respect to all shares.
(2) Includes 3,333 shares issuable pursuant to options exercisable within 60
days of July 31, 1996.
(3) Includes 8,166 shares issuable pursuant to options exercisable within 60
days of July 31, 1996.
(4) Includes 7,291 shares issuable pursuant to options exercisable within 60
days of July 31, 1996.
(5) Includes 11,458 shares issuable pursuant to options exercisable within 60
days of July 31, 1996.
(6) Does not include shares issuable upon the exercise of stock options the
vesting of which accelerates upon completion of the Merger.
(7) Includes shares issuable pursuant to options exercisable within 60 days of
July 31, 1996. Does not include shares issuable upon the exercise of stock
options the vesting of which accelerates upon completion of the Merger.
(8) See footnotes (1) through (7).

90
<PAGE>

DESCRIPTION OF AVANT! CAPITAL STOCK

The authorized capital stock of Avant! consists of 50,000,000 shares of
Avant! Common Stock, and 5,000,000 shares of Preferred Stock ("Preferred
Stock"), $.0001 par value. As of September 30, 1996, there were [ ] shares
of Common Stock issued held by [ ] holders of record and no shares of
Preferred Stock issued and outstanding.

COMMON STOCK

Holders of shares of Avant! Common Stock are entitled to one vote per share
on all matters to be voted on by stockholders. Subject to the preferences that
may be applicable to any outstanding Preferred Stock, holders of Avant! Common
Stock are entitled to receive ratably such dividends, if any, as may be
declared by the Avant! Board in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution, or winding up of Avant!,
holders of Avant! Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
outstanding Preferred Stock. Holders of Avant! Common Stock have no preemptive
rights and have no rights to convert their Avant! Common Stock into any other
securities. The outstanding shares of Avant! Common Stock are, and the Avant!
Common Stock to be outstanding upon completion of the offering will be,
validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Avant! Board has the authority to cause Avant! to issue up to 5,000,000
shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series or the designation of such
series, without any further vote or action by the stockholders. The issuance
of Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of Avant! without further action by the stockholders and
could adversely affect the rights and powers, including voting rights, of the
holders of Avant! Common Stock. In certain circumstances, this could have the
effect of decreasing the market price of the Avant! Common Stock. Avant! has
no present plans to issue any shares of Preferred Stock.

ANTITAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW

Certificate of Incorporation and Bylaws. Avant!'s Certificate of
Incorporation ("Avant!'s Certificate") provides that all stockholder action
must be effected at a duly called meeting and not by a consent in writing. In
addition, Avant!'s Amended and Restated Bylaws ("Avant!'s Bylaws") do not
permit stockholders of Avant! to call a special meeting of stockholders. These
provisions of Avant!'s Certificate and Avant!'s Bylaws could discourage
potential acquisition proposals and could delay or prevent a change in control
of Avant!. Such provisions are intended to enhance the likelihood of
continuity and stability in the composition of the Avant! Board and in the
policies formulated by the Avant! Board and to discourage certain types of
transactions that may involve an actual or threatened change of control of
Avant!. In addition, these provisions are designed to reduce the vulnerability
of Avant! to an unsolicited acquisition proposal and are intended to
discourage certain tactics that may be used in proxy fights. However, such
provisions could have the effect of discouraging others from making tender
offers for Avant!'s shares and, as a consequence, they also may inhibit
fluctuations in the market price of Avant!'s shares which could result from
actual or rumored takeover attempts. Such provisions also may have the effect
of preventing changes in the management of Avant!.

Delaware Takeover Statute. Avant! is subject to Section 203 of the DGCL
("Section 203") which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such
stockholder became an interested stockholder, unless: (i) prior to such date,
the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder; (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the

91
<PAGE>

interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding those shares owned
(x) by persons who are directors and also officers and (y) by employee stock
plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer; or (iii) on or subsequent to such date, the business
combination is approved by the board of directors and authorized at an annual
or special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder.

Section 203 defines "business combination" to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii)
any sale, transfer, pledge or other disposition involving the interested
stockholder of ten percent or more of the assets of the corporation; (iii)
subject to certain exceptions, any transaction which results in the issuance
or transfer by the corporation of any stock of the corporation to the
interested stockholder; (iv) any transaction involving the corporation which
has the effect of increasing the proportionate share of the stock of any class
or series of the corporation beneficially owned by the interested stockholder;
or (v) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation. In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by such entity or person.

REGISTRATION RIGHTS

The holders of approximately 2,950,000 shares of Avant! Common Stock (the
"Registrable Securities") are entitled to certain rights with respect to the
registration of such shares under the Securities Act. Under the terms of the
agreement between Avant! and the holders of such registrable securities, if
Avant! proposes to register any of its securities under the Securities Act,
either for its own account or for the account of other security holders
exercising registration rights, such holders are entitled to notice of such
registration and are entitled to include shares of such Avant! Common Stock
therein. Additionally, holders of approximately 1,475,000 shares of the
Registrable Securities are also entitled to certain demand registration rights
pursuant to which they may require Avant! to file a registration statement
under the Securities Act at its expense with respect to their shares of Avant!
Common Stock, and Avant! is required to use its best efforts to effect such
registration. Further, the holders of such demand rights may require Avant! to
file additional registration statements on Form S-3 registering the resale of
such shares. All of these registration rights are subject to certain
conditions and limitations, among them the right of the underwriters of an
offering to limit the number of shares included in such registration and the
right of Avant! not to effect a requested registration within six months
following an offering of Avant!'s securities.

TRANSFER AGENT AND REGISTRAR

Harris Trust Company of California at (213) 239-0671 serves as the transfer
agent and registrar for Avant! Common Stock.

92
<PAGE>

COMPARISON OF RIGHTS OF HOLDERS OF AVANT!
COMMON STOCK AND HOLDERS OF META COMMON STOCK

As a result of the Merger, holders of Meta Common Stock will be exchanging
their shares of a California corporation which is governed by the CGCL and
Meta's Amended and Restated Articles of Incorporation ("Meta's Articles") and
Amended and Restated Bylaws ("Meta's Bylaws"), for shares of the common stock
of Avant!, a Delaware corporation, which is governed by the DGCL, Avant!'s
Certificate and Avant!'s Bylaws. While the rights and privileges of
stockholders of a Delaware corporation such as Avant! are, in many instances,
comparable to those of shareholders of a California corporation such as Meta,
there are certain differences. The following is a summary of the material
differences between the rights of holders of Meta Common Stock and the rights
of holders of Avant! Common Stock at the date hereof. These differences arise
from differences between the DGCL and the CGCL and between Avant!'s
Certificate and Avant!'s Bylaws on the one hand and Meta's Articles and Meta's
Bylaws on the other.

Mergers and Consolidations.

The DGCL requires the approval of the Avant! Board of Directors and the
holders of a majority of the outstanding shares of Avant! Common Stock
entitled to vote thereon for mergers or consolidations, and for sales, leases
or exchanges of substantially all of Avant!'s property and assets. The DGCL
would permit Avant! to merge with another corporation without obtaining the
approval of Avant!'s stockholders if: (i) Avant! is the surviving corporation
of the merger; (ii) the merger agreement does not amend Avant!'s Certificate;
(iii) each share of Avant! Common Stock outstanding immediately prior to the
effective date of the merger is to be an identical outstanding or treasury
share of Avant! Common Stock after the merger; and (iv) any authorized but
unissued shares or treasury shares of Avant! Common Stock to be issued or
delivered under the plan of merger plus those initially issuable upon
conversion of any other securities or obligations to be issued or delivered
under such plan do not exceed 20% of the shares of Avant! Common Stock
outstanding immediately prior to the effective date of the merger.

The CGCL requires that the principal terms of a merger be approved by the
affirmative vote of a majority of the outstanding shares of each class
entitled to vote thereon, except that, unless required by its articles of
incorporation, no authorizing shareholder vote is required of a corporation
surviving a merger if the shareholders of such corporation shall own,
immediately after the merger, more than five-sixths of the voting power of the
surviving corporation or its parent. Meta's Articles do not require a greater
percentage vote. The CGCL further requires the affirmative vote of a majority
of the outstanding shares entitled to vote thereon if (a) the surviving
corporation's articles of incorporation will be amended and would otherwise
require shareholder approval or (b) shareholders of such corporation will
receive shares of the surviving corporation having different rights,
preferences, privileges or restrictions (including shares in a foreign
corporation) than the shares surrendered. Shareholder approval is not required
under the CGCL for mergers or consolidations in which a parent corporation
merges or consolidates with a subsidiary of which it owns at least 90% of the
outstanding shares of each class of stock.

Anti-Takeover Provisions.

Avant! is subject to the provisions of Section 203 of the DGCL ("Section
203") which prohibits a "business combination" (defined in Section 203 as
generally including mergers, sales and leases of assets, issuances of
securities, and similar transactions) by Avant! or a subsidiary with an
"interested stockholder" (defined in Section 203 as generally the beneficial
owner of 15% or more of Avant! Common Stock) within three years after the
person or entity becomes an interested stockholder, unless (i) prior to the
person or entity becoming an interested stockholder, the business combination
or the transaction pursuant to which such person or entity became an
interested stockholder shall have been approved by Avant!'s Board of
Directors, (ii) upon consummation of the transaction in which he became an
interested stockholder, the interested stockholder holds at least 85% of the
Avant! Common Stock (excluding shares held by persons who are both officers
and directors and shares held by certain employee benefit plans), or (iii) the
business combination is approved by Avant!'s

93
<PAGE>

Board of Directors and by the holders of at least two-thirds of the
outstanding Avant! Common Stock, excluding shares owned by the interested
stockholder.

The DGCL requires a vote of the corporation's board of directors followed by
the affirmative vote of a majority of the outstanding stock of each class
entitled to vote for any amendment to the certificate of incorporation, unless
a greater level of approval is required by the certificate of incorporation.
Avant!'s Certificate requires the approval of 80% of the total number of
shares entitled to vote for the amendment of provisions relating to (i) the
rights of the board of directors and the stockholders to amend Avant!'s
Bylaws, (ii) the removal of members of the board of directors, (iii) the
inability of the stockholders to take any action by written consent and (iv)
the vote required to amend Avant!'s Certificate. If an amendment would alter
the powers, preferences or special rights of a particular class or series of
stock so as to affect them adversely, the class or series shall be given the
power to vote as a class notwithstanding the absence of any specifically
enumerated power in the certificate of incorporation. The DGCL also states
that the power to adopt, amend or repeal the bylaws of a corporation shall be
in the stockholders entitled to vote, provided that the corporation in its
certificate of incorporation may confer such power on the board of directors
in addition to the stockholders. Avant!'s Certificate expressly authorizes the
board of directors to adopt, amend or repeal Avant!'s Bylaws. Avant!'s
Certificate requires the approval of 80% of the total number of shares
entitled to vote for the amendment of certain provisions of Avant!'s Bylaws
relating to (i) the calling of special meetings of stockholders, (ii) the
advance notice requirement for nominations of persons for election to the
board of directors by stockholders and (iii) the advance notice requirement
for business brought before the annual meeting of stockholders by a
stockholder.

Unless otherwise specified in a California corporation's articles of
incorporation, an amendment to the articles of incorporation requires the
approval of the corporation's board of directors and the affirmative vote of a
majority of the outstanding shares entitled to vote thereon, either before or
after the board approval. Meta's Articles do not require a greater level of
approval for an amendment thereto. Under the CGCL, the holders of the
outstanding shares of a class are entitled to vote as a class if a proposed
amendment to the articles of incorporation would (a) increase or decrease the
aggregate number of authorized shares of such class; (b) effect an exchange,
reclassification or cancellation of all or part of the shares of such class,
other than a stock split; (c) effect an exchange, or create a right of
exchange, of all or part of the shares of another class into the shares of
such class; (d) change the rights, preferences, privileges or restrictions of
the shares of such class; (e) create a new class of shares having rights,
preferences or privileges prior to the shares of such class, or increase the
rights, preferences or privileges or the number of authorized shares having
rights, preference or privileges prior to the shares of such class; (f) in the
case of preferred shares, divide the shares of any class into series having
different rights, preferences, privileges or restrictions or authorize the
board of directors to do so; or (g) cancel or otherwise affect dividends on
the shares of such class which have accrued but have not been paid. Under the
CGCL, a corporation's bylaws may be adopted, amended or repealed either by the
board of directors or the shareholders of the corporation. Meta's Bylaws
provide that Meta's Bylaws may be adopted, amended or repealed either by the
vote of the holders of a majority of the outstanding shares entitled to vote
or by the board of directors; provided, however, that the Meta Board of
Directors may not amend Meta's Bylaws in order to change the authorized number
of directors (except to alter the authorized number of directors within the
existing range of a minimum of five and a maximum of nine directors).

The CGCL provides that, except where the fairness of the terms and
conditions of the transaction has been approved by the California Commissioner
of Corporations and except in a "short-form" merger (the merger of a parent
corporation with a subsidiary in which the parent owns at least 90% of the
outstanding shares of each class of the subsidiary's stock), if the surviving
corporation or its parent corporation owns, directly or indirectly, shares of
the target corporation representing more than 50% of the voting power of the
target corporation prior to the merger, the nonredeemable common stock of a
target corporation may be converted only into nonredeemable common stock of
the surviving corporation or its parent corporation, unless all of the
shareholders of the class consent. The effect of this provision is to prohibit
a cash-out merger of minority

94
<PAGE>

shareholders, except where the majority shareholders already own 90% or more
of the voting power of the target corporation and could, therefore, effect a
short-form merger to accomplish such a cash-out of minority shareholders.

Appraisal Rights. The rights of appraisal of dissenting shareholders of Meta
are governed by the CGCL. Pursuant thereto, any shareholder has the right to
dissent from any merger or consolidation, except that no such appraisal rights
are available for the shares of any class or series if (a) approval of the
Merger by the shareholders is not required under Section 1201 of the CGCL, or
(b) such shares are then redeemable by the corporation at a price not greater
than the cash to be received in exchange for such shares. See "Dissenters'
Rights."

Under the DGCL, stockholders are entitled to certain limited rights of
appraisal. No appraisal rights shall be available, however, for the holders of
any shares of a stock of a constituent Delaware corporation to a merger if
that corporation survives the merger and the merger did not require for its
approval the vote of the stockholders of such constituent Delaware
corporation. Moreover, under the DGCL, no appraisal rights are available to
stockholders of a Delaware constituent corporation to a merger for any shares
of stock which, at the record date for the vote on such merger, were either
(a) listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. (i.e., The Nasdaq National Market) or
(b) held of record by more than 2,000 stockholders. Appraisal rights are
available to Delaware stockholders in any event if such stockholders are
required by the terms of an agreement of merger or consolidation to accept for
such stock of the constituent corporation anything except (w) shares of stock
of the corporation surviving or resulting from such merger or consolidation;
(x) shares of stock of any other corporation which, at the effective date of
the merger or consolidation, will be either listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc. (for
example, The Nasdaq National Market) or held of record by more than 2,000
stockholders; (y) cash in lieu of fractional shares of the corporation
described in clauses (a) and (b) above; or (z) any combination of the shares
of stock and cash in lieu of fractional shares described in clauses (w), (x)
and (y) above.

Special Meetings. Under the CGCL, special meetings of shareholders may be
called by a corporation's board of directors, the chairman of the board of
directors, the president, the holders of shares entitled to cast not less than
ten percent of the votes at such meeting or such additional persons as may be
provided in the corporation's articles or bylaws. Meta's bylaws do not provide
for any such additional persons to call special meetings of shareholders.

Under the DGCL, special meetings of stockholders may be called by a
corporation's board of directors or such person or persons as may be
authorized by such corporation's certificate of incorporation or bylaws.
Avant!'s Bylaws provide that special meetings of stockholders may be called by
the president and shall be called by the president or secretary at the written
request of a majority of the Avant! Board of Directors. Avant!'s Bylaws
further provide that only such business shall be conducted at a special
meeting of stockholders as shall have been specified in the notice of such
meeting.

Actions Without a Meeting. Under the DGCL and the CGCL, unless otherwise
provided in the certificate or articles of incorporation, any action required
to be taken or which may be taken at an annual or special meeting of
stockholders or shareholders may be taken without a meeting if a consent in
writing is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize such action at a
meeting at which all shares entitled to vote were present and voted. Avant!'s
Certificate provides that any action by the stockholders must be taken at an
annual special meeting of stockholders and may not be taken by written
consent. Meta's Articles provide that action by written consent of
stockholders is permitted, except that directors may not be elected by written
consent except by unanimous written consent of all shares entitled to vote for
the election of directors.

Proxy Requirements. Under the CGCL, proxies are valid for an eleven-month
period unless a different period is expressly provided for in the appointment
form. Under the DGCL, proxies are valid for up to three

95
<PAGE>

years unless otherwise specified therein. In addition, the CGCL specifies
that, if the appointment form conspicuously states that it is irrevocable,
proxies from pledgees, purchasers of the shares, creditors, contract
employees, and persons designated in a shareholder agreement, and other
proxies coupled with an interest, are, under certain circumstances
irrevocable. Under the DGCL, a proxy is irrevocable if it specifically states
that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support that power.

Derivative Actions. The CGCL provides that a shareholder bringing a
derivative action on behalf of the corporation need not have been a
shareholder at the time of the transaction in question, provided that certain
tests are met. The CGCL also provides that the corporation or the defendant in
a derivative suit may make a motion to the court for an order requiring the
plaintiff shareholder to furnish a security bond.

Derivative actions may be brought in Delaware by a stockholder on behalf of,
and for the benefit of, the corporation. The DGCL provides that a stockholder
must represent in the complaint that he or she was a stockholder of the
corporation at the time of the transaction of which he or she complains. A
stockholder may not sue derivatively unless he first makes demand on the
corporation that it bring suit and such demand has been refused, unless it is
shown that such demand would have been futile. The DGCL does not have a
bonding requirement similar to that of the CGCL.

Dividends. The CGCL provides that a corporation may, unless otherwise
restricted by its articles of incorporation, make distributions (including
cash dividends) to its shareholders (a) if the amount of the retained earnings
of the corporation immediately prior to such distribution equals or exceeds
the amount of such distribution, (b) if, after giving effect to such
distribution, the sum of the assets of the corporation (exclusive of goodwill,
capitalized research and development expenses and deferred charges) would be
at least equal to 125% of its liabilities (not including deferred taxes,
deferred income and other deferred credits) or (c) such corporation's total
current assets would be at least equal to its current liabilities or, if the
average of the earnings of the corporation before taxes on income and before
interest expense for the two preceding fiscal years was less than the average
of the interest expense of the corporation for those fiscal years, at least
equal to 125% of its current liabilities. Meta's Bylaws provide that the Meta
Board of Directors may pay distributions and dividends as permitted by law and
by Meta's Articles. A Delaware corporation may pay dividends not only out of
surplus (the excess of net assets over capital) but also out of net profits
for the current or preceding fiscal year if it has no surplus, subject to any
restrictions contained in the certificate of incorporation. Avant!'s
Certificate contains no restrictions on dividend payments.

Indemnification. The DGCL provides that a corporation may indemnify its
present and former directors, officers, employees and agents against all
reasonable expenses (including attorneys' fees) and, against all judgments,
fines and amounts paid in settlement in actions brought against them (except
in actions by or in the right of the corporation) if such person acted in good
faith, and in a manner which he or she reasonably believed to be in, or not
opposed to, the best interests of the stockholders and, in the case of a
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The corporation shall indemnify such person to the extent that he or
she is successful on the merits or otherwise in the defense of any claim,
issue or matter associated with an action. Avant!'s Certificate provides for
indemnification of directors or officers to the fullest extent authorized by
the DGCL.

Under the CGCL, (i) a corporation has the power to indemnify present and
former directors, officers, employees and agents against expenses, judgments,
fines and settlements (other than in connection with actions by or in the
right of the corporation) if that person acted in good faith and in a manner
the person reasonably believed to be in the best interests of the corporation
and, in the case of a criminal proceeding, had no reasonable cause to believe
the conduct of the person was unlawful, and (ii) a corporation has the power
to indemnify, with certain exceptions, any person who is a party to any action
by or in the right of the corporation, against expenses actually and
reasonably incurred by that person in connection with the defense or
settlement of the action if the person acted in good faith and in a manner the
person believed to be in the best interests of the corporation and its
shareholders.

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<PAGE>

The indemnification authorized by the CGCL is not exclusive, and a
corporation may grant its directors, officers, employees or other agents
certain additional rights to indemnification. Meta's Articles and the Meta's
Bylaws provide for the indemnification of its agents (as defined under the
CGCL) to the fullest extent permissible under the CGCL, which may be in excess
of the indemnification expressly permitted by Section 317 of the CGCL, subject
to the limits set forth in Section 204 of the CGCL with respect to actions for
breach of duty to the corporation and its shareholders.

The DGCL and the CGCL allow for the advance payment on an indemnitee's
expenses prior to the final disposition of an action, provided that the
indemnitee undertakes to repay any such amount advanced if it is later
determined that the Indemnitee is not entitled to indemnification with regard
to the action for which the expenses were advanced.

Fiduciary Duties of Directors. Directors of corporations incorporated or
organized under the DGCL and the CGCL have fiduciary obligations to the
corporation and its shareholders. Pursuant to these fiduciary obligations, the
directors must act in accordance with the so-called duties of "care" and
"loyalty." Under the DGCL, the duty of care requires that the directors act in
an informed and deliberative manner and to inform themselves, prior to making
a business decision, of all material information reasonably available to them.
The duty of loyalty may be summarized as the duty to act in good faith, not
out of self-interest and in a manner that the directors reasonably believe to
be in the best interest of the corporation. Under the CGCL, the duty of
loyalty requires directors to perform their duties in good faith in a manner
that the directors reasonably believe to be in the best interest of the
corporation and its stockholders. The duty of care requires that the directors
act with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would exercise under similar circumstances.

Limitation of Liability. The DGCL and the CGCL each provide that the charter
documents of the corporation may include provisions which limit or eliminate
the liability of directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided such liability
does not arise from certain proscribed conduct, including, in the case of the
DGCL, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, breach of the duty of loyalty, the
payment of unlawful dividends or expenditure of funds for unlawful stock
purchases or redemptions or transactions from which such director derived an
improper personal benefit, or, in the case of the CGCL, intentional misconduct
or knowing and culpable violation of law, acts or omissions that a director
believes to be contrary to the best interest of the corporation or its
shareholders or that involve the absence of good faith on the part of the
director, the receipt of an improper personal benefit, acts or omissions that
show reckless disregard for the director's duty to the corporation or its
shareholders, where the director in the ordinary course of performing a
director's duties should be aware of a risk of serious injury to the
corporation or its shareholders, acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the
director's duty to the corporation and its shareholders, interested
transactions between the corporation and a director in which a director has a
material financial interest and liability for improper distributions, loans or
guarantees. Avant!'s Certificate contains a provision limiting the liability
of its directors to the fullest extent permitted by the DGCL. Meta's Articles
contain a provision limiting the liability of its directors to the fullest
extent provided by the CGCL.

Cumulative Voting for Directors. Under the CGCL, unless, subject to certain
statutory restrictions, prohibited in the corporation's articles of
incorporation, if any shareholder has given notice of his or her intention to
cumulate votes for the election of directors, any other shareholder of the
corporation is also entitled to cumulate his or her votes at such election.
Meta's Articles do not prohibit cumulative voting. Cumulative voting must be
expressly provided for in the certificate of incorporation of a Delaware
corporation. Avant!'s Certificate of Incorporation does not provide for
cumulative voting.

Filling Vacancies on the Board of Directors. Under the DGCL, unless the
bylaws or certificate of incorporation provides otherwise, the board of
directors may fill vacancies, including vacancies created by an increase in
the number of directors. If the directors remaining in office constitute less
than a quorum of the board, the vacancy may be filled by the affirmative vote
of a majority of all the directors then in office, or by the sole

97
<PAGE>

remaining director. Avant! Bylaws mirror this statutory provision. The CGCL
grants similar authority to the directors, subject to a provision to the
contrary in the articles of incorporation; provided, however, that unless
otherwise provided by the bylaws or articles of incorporation, only the
shareholders may fill vacancies created by the removal of directors.

Removal of Directors. Under the CGCL, any director or the entire board of
directors may be removed, with or without cause, with the approval of a
majority of the outstanding shares entitled to vote; however, no individual
director may be removed (unless the entire board is removed) if the number of
votes cast against such removal would be sufficient to elect the director
under cumulative voting. Stockholders of a Delaware corporation holding a
majority of the outstanding shares entitled to vote for directors may remove a
director with or without cause, except in certain cases involving classified
boards or where cumulative voting is permitted. The Avant! bylaws provide for
such removal with or without cause.

Inspection of Books and Records. Under the CGCL, any shareholder of record
who is the holder of at least five percent of all of the outstanding shares of
stock of a corporation is entitled to examine and copy a corporation's
shareholder ledger. The CGCL also provides that any shareholder of record may
inspect the accounting books and records of the corporation for a purpose
reasonably related to such holder's interests as a shareholder. Under the
DGCL, any stockholder has the right to inspect and make copies of the
stockholder ledger and other books and records of the corporation upon written
demand.

Other. The foregoing is an attempt to summarize the more important
differences in the corporation laws of the two states and does not purport to
be a complete listing of differences in the rights and remedies of holders of
shares of CGCL, as opposed to Delaware corporations. Such differences can be
determined in full by reference to the CGCL and to the DGCL. In addition, the
laws of California and Delaware provide that some of the statutory provisions
as they affect various rights of holders of shares may be modified by
provisions in the articles of incorporation, charter or bylaws of the
corporation.

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<PAGE>

LEGAL MATTERS

Certain legal matters in connection with the Avant! Common Stock to be
issued in connection with the Merger will be passed upon for Avant! by
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, Palo Alto,
California. Venture Law Group, a Professional Corporation, Menlo Park,
California, is acting as counsel for Meta in connection with certain legal
matters relating to the Merger.

EXPERTS

The consolidated balance sheets of Avant! Corporation and subsidiaries as of
December 31, 1994 and 1995 and the consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995 have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, and are incorporated herein by
reference in reliance upon the report of KPMG Peat Marwick LLP, and upon the
authority of such firm as experts in accounting and auditing.

The financial statements of Meta-Software, Inc. as of December 31, 1994 and
1995 and for each of the years in the three-year period ended December 31,
1995, have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, and are included herein in reliance upon the report of KPMG Peat
Marwick LLP, and upon the authority of such firm as experts in accounting and
auditing.

The financial statements of Anagram as of December 31, 1995 and the related
statements of income, shareholders' equity, and cash flows for the year then
ended have been audited by Roberts Accountancy Corporation, independent
certified public accountants, and are included herein in reliance upon the
report of Roberts Accountancy Corporation, given upon the authority of such
firm as experts in accounting and auditing.

The firm KPMG Peat Marwick LLP served as independent certified public
accountants for Avant! for the year ended December 31, 1995 and served as
independent certified public accountants for Meta for the year ended December
31, 1995. Representatives of KPMG Peat Marwick LLP will be present at the
Avant! Special Meeting and Meta Special Meeting, respectively, and will have
the opportunity at such meetings to make a statement if such representatives
desire to do so. In addition, such representatives will be available to
respond to appropriate questions raised at the meetings.

99
<PAGE>

ANAGRAM, INCORPORATED

FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT

DECEMBER 31, 1994 (UNAUDITED) AND 1995

CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report............................................... F-2
Financial Statements:
Balance Sheets........................................................... F-3
Statements of Earnings................................................... F-4
Statements of Stockholders' Equity....................................... F-5
Statements of Cash Flows................................................. F-6
Notes to Financial Statements............................................ F-7
Supplementary Schedules:
Engineering and Support Expenses......................................... F-14
Selling Expenses......................................................... F-15
General and Administrative Expenses...................................... F-16
</TABLE>
F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Anagram, Incorporated
Sunnyvale, California

We have audited the accompanying balance sheet of Anagram, Incorporated, a
California corporation, as of December 31, 1995 and the related statements or
earnings, stockholders' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anagram, Incorporated as
of December 31, 1995 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules on pages F-
14-F-16 are presented for the purposes of additional analysis and are not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

ROBERTS ACCOUNTANCY CORPORATION

San Jose, California
March 14, 1996
F-2
<PAGE>

ANAGRAM, INCORPORATED
BALANCE SHEETS
DECEMBER 31, 1994 AND 1995 AND JUNE 30, 1996
<TABLE>
<CAPTION>
JUNE 30,
1994 1995 1996
----------- ---------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash -- Note B........................ $ 17,923 $1,057,972 $2,336,027
Accounts receivable -- Note A-4....... 223,093 1,355,677 1,872,979
Prepaid expenses...................... 5,215 4,803 844,401
Refundable taxes...................... 1,541 -- --
Deferred taxes -- Notes A-7 and C..... -- 8,275 --
-------- ---------- ----------
Total current assets................ 247,772 2,426,727 5,053,407
Equipment, at Cost:
Computer equipment and software....... 32,009 81,497 161,205
License management software........... 14,000 22,000 24,000
Furniture and equipment............... 8,094 47,381 88,729
-------- ---------- ----------
54,103 150,878 273,934
Less accumulated depreciation -- Note
A-5.................................. 8,705 25,028 46,702
-------- ---------- ----------
45,398 125,850 227,232
-------- ---------- ----------
Other Assets, at Cost:
Deposits.............................. 1,649 5,491 12,036
Organization costs, net of
amortization of $1,993, $3,080,
and $3,623,respectively--Note A-6.... 3,442 2,355 1,812
-------- ---------- ----------
5,091 7,846 13,848
-------- ---------- ----------
$298,261 $2,560,423 $5,294,487
======== ========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable...................... $ 44,060 $ 30,721 $ 43,848
Accrued liabilities................... 59,619 311,356 415,817
Deferred revenue...................... 28,195 516,473 619,194
Income taxes payable -- Note C........ -- 190,500 877,559
-------- ---------- ----------
Total current liabilities........... 131,874 1,049,050 1,956,418
Deferred income taxes -- Notes A-6 and
C...................................... -- 16,177 --
Convertible notes payable............... 100,000 -- --
Lease commitments -- Note D............. -- -- --
Stockholders' Equity:
Preferred stock, 5,000,000 shares
authorized; 230,000 shares issued and
outstanding--Note E.................. -- 230,000 230,000
Common stock, 10,000,000 shares
authorized; issued and outstanding
1,020,000, 1,620,000 and 1,915,500
shares, respectively................. 70,000 99,000 2,074,375
Deferred stock compensation........... -- -- (1,836,000)
Retained earnings (deficit)........... (3,613) 1,166,196 2,869,694
-------- ---------- ----------
66,387 1,495,196 3,338,069
-------- ---------- ----------
$298,261 $2,560,423 $5,294,487
======== ========== ==========
</TABLE>

The accompanying notes are an integral part of this statement.

F-3
<PAGE>

ANAGRAM, INCORPORATED

STATEMENTS OF EARNINGS

YEARS ENDED DECEMBER 31, 1994 AND 1995 AND SIX MONTHS ENDED JUNE 30, 1995 AND
1996

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------- -------------------
1994 1995 1995 1996
----------- ---------- -------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Software.................... $219,625 $3,346,580 $714,972 $4,040,021
Maintenance contracts....... 21,925 160,594 31,005 335,084
-------- ---------- -------- ----------
Total revenue............. 241,550 3,507,174 745,977 4,375,105
-------- ---------- -------- ----------
Costs and expenses:
Engineering and support..... 127,019 565,556 76,291 338,808
Selling..................... 39,822 776,568 147,924 1,158,435
General and administrative.. 53,495 209,448 69,230 330,355
-------- ---------- -------- ----------
Total costs and expenses.. 220,336 1,551,572 293,445 1,827,598
-------- ---------- -------- ----------
Operating income.......... 21,214 1,955,602 452,532 2,547,507
-------- ---------- -------- ----------
Other income and (expenses):
Interest income............. -- 19,231 2,426 33,550
Other income................ -- 116 -- --
Loss on disposition of fixed
assets..................... -- (4,754) -- --
Interest expense............ (2,249) (1,184) -- --
-------- ---------- -------- ----------
(2,249) 13,409 2,426 33,550
-------- ---------- -------- ----------
Income before taxes....... 18,965 1,969,011 454,958 2,581,057
Provision for income taxes--
Notes A-7 and C.............. -- 799,202 181,983 877,559
-------- ---------- -------- ----------
Net earnings.............. $ 18,965 $1,169,809 $272,975 $1,703,498
======== ========== ======== ==========
</TABLE>

The accompanying notes are an integral part of this statement.
F-4
<PAGE>

ANAGRAM, INCORPORATED

STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1994 AND 1995 AND SIX MONTHS ENDED JUNE 30, 1996

<TABLE>
<CAPTION>
DEFERRED RETAINED
PREFERRED COMMON STOCK EARNINGS
STOCK STOCK COMPENSATION (DEFICIT) TOTAL
--------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
Balances at December 31,
1993 (unaudited)....... $ -- 50,000 -- (22,578) 27,422
Exercise of common stock
options at $1.00 per
share (unaudited)...... -- 20,000 -- -- 20,000
Net earnings for the
year ended December 31,
1994 (unaudited)....... -- -- -- 18,965 18,965
-------- --------- ---------- --------- ---------
Balances at December 31,
1994 (unaudited)....... -- 70,000 -- (3,613) 66,387
Exercise of preferred
stock options at $1.00
per share.............. 230,000 -- -- -- 230,000
Exercise of common stock
options at $.05 per
share.................. -- 29,000 -- -- 29,000
Net earnings for the
year ended December 31,
1995................... -- -- -- 1,169,809 1,169,809
-------- --------- ---------- --------- ---------
Balances at December 31,
1995................... 230,000 99,000 -- 1,166,196 1,495,196
Exercise of common stock
options (unaudited).... -- 26,375 -- -- 26,375
Issuance of common stock
at below fair value
(unaudited)............ -- 1,949,000 (1,836,000) -- 113,000
Net earnings for the six
months, ended June 30,
1996................... -- -- -- 1,703,498 1,703,498
-------- --------- ---------- --------- ---------
$230,000 2,074,375 (1,836,000) 2,869,694 3,338,069
======== ========= ========== ========= =========
</TABLE>

The accompanying notes are an integral part of this statement.

F-5
<PAGE>

ANAGRAM, INCORPORATED

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1994 AND 1995 AND SIX MONTHS ENDED JUNE 30, 1995 AND
1996

INCREASE (DECREASE) IN CASH

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
----------------------- -------------------
1994 1995 1995 1996
----------- ----------- -------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash Flows From Operating
Activities:
Net earnings..................... $ 18,965 1,169,809 272,975 1,703,498
-------- ----------- -------- ---------
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Stock compensation expense... -- -- -- 113,000
Depreciation and
amortization................ 7,455 18,983 -- 22,217
Loss on disposition of
equipment................... -- 4,754 -- --
(Increase) decrease in
assets:
Accounts receivable........ (223,093) (1,132,584) (218,306) (517,302)
Refund of employment
taxes..................... (1,541) 1,541 -- --
Prepaid expenses........... (5,215) 412 (118,868) (839,598)
Deferred tax asset......... -- (8,275) -- 8,275
Increase (decrease) in
liabilities:
Accounts payable........... 34,024 (13,339) (6,998) 13,127
Accrued liabilities........ 59,619 251,737 6,258 104,461
Deferred revenue........... 28,195 488,278 207,100 102,721
Income taxes............... -- 190,500 181,983 687,059
Deferred tax liability..... -- 16,177 -- (16,177)
-------- ----------- -------- ---------
Total Adjustments........ (100,556) (181,816) 51,169 (322,217)
-------- ----------- -------- ---------
Net Cash (Used) Provided
by Operating
Activities.............. (81,591) 987,993 324,144 1,381,281
-------- ----------- -------- ---------
Cash Flows From Investing
Activities:
Decrease in shareholder loan... 6,000 -- -- --
Acquisition of equipment....... (35,197) (103,102) (25,356) (123,056)
Additional deposits............ (1,649) (3,842) -- (6,545)
-------- ----------- -------- ---------
Net Cash Used by
Investing Activities.... (30,846) (106,944) (25,356) (129,601)
-------- ----------- -------- ---------
Cash Flows From Financing Activi-
ties:
Proceeds from issuance of
convertible note.............. 100,000 -- -- --
Proceeds from sales of
preferred stock............... -- 130,000 125,000 --
Proceeds from sales of common
stock......................... 20,000 29,000 29,000 26,375
-------- ----------- -------- ---------
Net Cash Provided by
Financing Activities.... 120,000 159,000 154,000 26,375
-------- ----------- -------- ---------
Increase in Cash................. 7,563 1,040,049 452,788 1,278,055
Cash at beginning of period...... 10,360 17,923 17,923 1,057,972
-------- ----------- -------- ---------
Cash at end of period............ $ 17,923 1,057,972 470,711 2,336,027
======== =========== ======== =========
Supplemental disclosures of cash
flow information:
Cash paid during the period
for:
Interest..................... $ 3,433
Income taxes................. $ 600,000
Non-cash Financing Activity:
Conversion of long-term debt
(note payable) to Class A
preferred stock............. $ 100,000 $100,000
</TABLE>

The accompanying notes are an integral part of this statement.

F-6
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS

NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed by the Company are described as
follows:

1. ORGANIZATION AND NATURE OF OPERATIONS

Anagram, Incorporated is a privately funded California corporation
headquartered in Sunnyvale, California. The company was incorporated as an S-
Corporation on February 23, 1993 under the laws of the State of Washington.
The company decided to move to California and dissolved the Washington S-
Corporation. The new corporation was incorporated on November 14, 1994 as ADS
Software, Incorporated and on August 23, 1995 amended the corporation's name
to its original name, Anagram, Incorporated. The Company's primary business
activity is the design, development, and the sale of advanced software
products, and providing software management services for commercial
applications. The Company's main markets include North America and the Far
East.

2. USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

3. BASIS OF ACCOUNTING

The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting
principles.

4. BAD DEBTS

Bad debts are accounted for by the allowance method. There were no bad debts
for the year ended December 31, 1995 and no allowance is necessary.

F-7
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5. DEPRECIATION

Depreciation is provided for in amounts sufficient to relate the cost of
equipment to operations over their estimated useful life using the straight-
line method.

<TABLE>
<CAPTION>
DECEMBER 31, 1995
ACCUMULATED
CLASS LIFE DEPRECIATION
----- --------- -----------------
<S> <C> <C>
Furniture & equipment......................... 5-7 years $ 1,933
Computer equipment & software................. 3-5 years 15,927
License management software................... 3 years 7,168
-------
$25,028
=======
</TABLE>

Depreciation expense for the year ended December 31, 1995 was $17,896.

6. AMORTIZATION OF ORGANIZATION COSTS

Organization costs are being amortized five years (60 months) using the
straight-line method. Amortization of organization costs for the year ended
December 31, 1995 were $1,087.

7. INCOME TAXES

Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount
expected to be realized. Income tax expense is the tax payable or refundable
for the period plus or minus the change during the period in deferred tax
assets and liabilities.

NOTE B: CASH AND CASH EQUIVALENTS

The Company at times has cash in excess of $100,000 on deposit in individual
banks. The Federal Deposit Insurance Corporation (FDIC) insures only the first
$100,000 of funds at member banks. The Company has the following insured and
uninsured funds as of December 31, 1995:

<TABLE>
<CAPTION>
BANK BALANCE INSURED UNINSURED
------------ ------- ---------
<S> <C> <C> <C>
Bank of America............................... $776,104 100,000 676,104
</TABLE>

The Company also has funds deposited in a Charles Schwab-Schwab One Account.
The amount is included as a cash equivalent. These Funds are insured by the
Securities Investor Protection Corporation (SIPC) up to $500,000 in accounts
held in a separate capacity and an additional $40.5 million for any securities
held. The balance at Schwab on December 31, 1995 was $403,108.

F-8
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE C: INCOME TAXES

The types of temporary differences that give rise to deferred taxes are
unallowed vacation pay accruals and depreciation.

Income tax for the year ended December 31, 1995:

<TABLE>
<S> <C>
Current..................................................... $791,300
Deferred.................................................... 7,902
--------
$799,202
========
The company's total deferred tax assets, valuation allowance,
and deferred tax liabilities as of December 31, 1995 are as
follows:
Total deferred tax assets................................... $ 8,275
Less valuation allowance.................................... --
--------
8,275
Total deferred tax liabilities.............................. (16,177)
--------
Net deferred tax liability................................ $ (7,902)
========
Those amounts have been presented in the Company's financial
statements as follows:
Deferred income tax asset--current.......................... $ 8,275
Deferred income tax liability--noncurrent................... (16,177)
--------
Net deferred tax liability................................ $ (7,902)
========
</TABLE>

NOTE D: LEASE COMMITMENT

1. The Company leases office facilities in Sunnyvale, California under the
terms of an operating lease. The original lease was to expire April 14, 1996,
but was extended to July 15, 1996. Future minimum lease payments are $10,719.
The company is in the process of searching for a new location before the lease
expires.

2. The Company also leases office space in Newport Beach, California under
the terms of an operating lease. The lease expires November 8, 1996. Future
minimum lease payments are $13,200.

F-9
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE E: SERIES A PREFERRED STOCK

The Company is authorized to issue 5,000,000 shares of preferred stock, of
which 600,000 shares are designated Series A. These shares are entitled
certain rights, preferences, privileges and restrictions which are fully
described in the articles of incorporation as amended on December 30, 1994.

1. DIVIDEND PROVISIONS

Preferred stock holders are entitled to receive a dividend of $.06 per share
per annum prior to any dividends paid to common stockholders. If greater than
$.06 per share (determined on an as-converted basis for the preferred shares)
the dividend will be an amount equal to that paid on the common shares. The
dividends are not cumulative.

2. LIQUIDATION PREFERENCE

In the event of any liquidation, dissolution or winding up of the Company,
the preferred stockholders are entitled to be paid out before common
stockholders as follows. A payment is to be made to preferred stockholders of
$1.00 per share (or on a prorata basis if insufficient assets are available).
Next a payment of up to $.01 per share is to be made to the common
stockholders. Finally, any remaining assets are to be distributed to all
holders of preferred and common stock in proportion to the number of shares of
common stock that would be outstanding if all of the preferred stock were
converted to common stock at the then effective conversion price.

3. CONVERSION

Preferred stock shall be convertible at the option of the holder, at any
time after its issuance. The number of shares of common stock into which each
share of preferred stock may be converted is to be $1.00 divided by the
conversion price. The conversion price has been set at $1.00, but may be
adjusted (up or down) for stock splits or other subdivisions, distributions to
common stockholders of securities other than common stock, or a corporate
reorganization or reclassification.

4. VOTING RIGHTS

The holder of each share of preferred stock shall have the right to one vote
for each share of common stock into which each share of preferred stock could
then be converted. Preferred stockholders shall have the same rights and
powers as the holders of common stock.

F-10
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
NOTE F: STOCK OPTIONS AND RESTRICTED STOCK

1. The Company has the following outstanding stock options:

<TABLE>
<CAPTION>
1995
1994 STOCK UNRESTRICTED
OPTION STOCK
1993 PLAN AGREEMENT OPTIONS
--------- ---------- ------------
<S> <C> <C> <C>
Total shares in plan....................... 70,000 60,000 30,000
Granted.................................... 48,000 60,000 30,000
Exercised.................................. -- 20,000 --
Exercise price............................. $0.05 $1.00 $0.05
Effective/grant date....................... 07/08/93 01/10/94 04/01/96
Termination date........................... 07/08/03 01/10/99 05/01/96
Vested at (cumulative):
December 31, 1994........................ 11,000 60,000
December 31, 1995........................ 22,000 30,000
December 31, 1996........................ 33,000
December 31, 1997........................ 40,500
December 31 1998......................... 48,000
</TABLE>

2. The Company has the following outstanding restricted stock included in
common stock:

<TABLE>
<CAPTION>
ISSUED IN ISSUED IN
WASHINGTON CALIFORNIA TOTAL
CORPORATION CORPORATION ISSUED
----------- ----------- -------
<S> <C> <C> <C>
Total shares................................. 300,000 580,000 880,000
Exercise price............................... $0.05 $0.05
Date issued.................................. 08/26/93 04/05/95
Vested/Unrestricted at (cumulative):
December 31, 1995.......................... 60,000 174,167 234,167
December 31, 1996.......................... 120,000 284,167 404,167
December 31, 1997.......................... 180,000 394,167 574,167
December 31, 1998.......................... 240,000 504,167 744,167
December 31, 1999.......................... 300,000 580,000 880,000
</TABLE>

The Company has the right to repurchase, at $.05 per share, all unvested
shares of any employee at such time as the employment relationship
terminates.

F-11
<PAGE>

ANAGRAM, INCORPORATED

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE F:STOCK OPTIONS AND RESTRICTED STOCK-CONTINUED

3. The company has the following outstanding restricted stock options granted
to certain employees or consultants with vesting commencement on their hire
date:

<TABLE>
<CAPTION>
4 YEAR 3 YEAR
VESTING VESTING TOTAL
-------- -------- -------
<S> <C> <C> <C>
Granted............................................... 121,500 120,000 241,500
Exercise price........................................ $ 0.05 $ 0.05
Grant date............................................ 04/01/96 04/01/96
Termination date...................................... 05/01/96 05/01/96
Vested/Unrestricted at (cumulative):
December 31, 1995................................... -- -- --
December 31, 1996................................... 40,750 56,654 97,404
December 31, 1997................................... 71,154 96,662 167,816
December 31, 1998................................... 101,558 120,000 221,558
December 31, 1999................................... 121,500 120,000 241,500
</TABLE>

The Company has the right to repurchase, at $.05 per share, all unvested
shares of any employee at such time as the employment relationship terminates.

F-12
<PAGE>

SUPPLEMENTARY SCHEDULES

F-13
<PAGE>

ANAGRAM, INCORPORATED

SCHEDULE OF ENGINEERING AND SUPPORT EXPENSES

YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
1994 1995
----------- --------
(UNAUDITED)
<S> <C> <C>
Cost of software.................................... $ 600 $ 14,435
-------- --------
Engineering:
Salaries.......................................... 101,280 406,897
Payroll taxes..................................... 13,779 20,678
Contract labor.................................... -- 100,920
Health insurance.................................. 11,360 20,164
Workers' compensation............................. -- 2,462
-------- --------
Total Engineering............................... 126,419 551,121
-------- --------
Total Engineering & Support Expenses............ $127,019 $565,556
======== ========
</TABLE>

The accompanying notes are an integral part of this statement.

F-14
<PAGE>

ANAGRAM, INCORPORATED

SCHEDULE OF SELLING EXPENSES

YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
1994 1995
----------- --------
(UNAUDITED)
<S> <C> <C>
Selling:
Commissions....................................... $ -- $542,912
Salaries and wages................................ -- 56,698
Payroll taxes..................................... -- 8,296
Travel & lodging.................................. 6,883 30,858
Meals & entertainment............................. 491 3,864
Telephone......................................... 5,942 5,839
Supplies.......................................... -- 1,908
Postage........................................... -- 1,508
Rent.............................................. -- 1,759
Recruiting........................................ -- 4,292
Other expenses.................................... 1,709 210
------- --------
15,025 658,144
------- --------
Marketing:
Communication..................................... 24,797 28,385
Customer database................................. -- 2,000
Travel............................................ -- 2,494
Meals & entertainment............................. -- 753
Contract labor.................................... -- 24,818
------- --------
24,797 58,450
------- --------
Conventions, seminars and promotional materials..... -- 59,974
------- --------
Total Selling Expenses.......................... $39,822 $776,568
======= ========
</TABLE>

The accompanying notes are an integral part of this statement.

F-15
<PAGE>

ANAGRAM, INCORPORATED

SCHEDULES OF GENERAL AND ADMINISTRATIVE EXPENSES

YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
1994 1995
----------- --------
(UNAUDITED)
<S> <C> <C>
Salaries & wages........................................ $ -- $ 41,905
Relocation.............................................. -- 5,507
Payroll taxes........................................... -- 3,848
Contract labor.......................................... -- 28,143
Health insurance........................................ -- 2,076
Life insurance.......................................... -- 492
Legal................................................... 8,400 15,691
Accounting.............................................. -- 7,433
Recruiting.............................................. -- 3,600
Rent.................................................... 14,249 20,183
Telephone............................................... -- 23,538
Insurance............................................... 3,312 696
Travel & lodging........................................ -- 8,179
Intern lodging.......................................... -- 4,445
Meals & entertainment................................... -- 1,210
Supplies................................................ 10,066 10,775
Printing................................................ -- 2,186
Subscription & dues..................................... -- 973
Postage & freight....................................... -- 4,034
Maintenance & repairs................................... -- 5,202
Staff relations......................................... -- 5,319
Workers' compensation insurance......................... -- 254
Miscellaneous........................................... 13 839
Bank charges............................................ -- 310
Depreciation............................................ 5,590 11,508
Taxes & licenses........................................ 10,000 15
Amortization............................................ 1,865 1,087
------- --------
Total General & Administrative Expenses............... $53,495 $209,448
======= ========
</TABLE>

The accompanying notes are an integral part of this statement.

F-16
<PAGE>

META-SOFTWARE, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report............................................ F-18
Balance Sheets.......................................................... F-19
Statements of Income.................................................... F-20
Statements of Shareholders' Equity ..................................... F-21
Statements of Cash Flows................................................ F-22
Notes to Financial Statements........................................... F-23
</TABLE>

F-17
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Meta-Software, Inc.

We have audited the accompanying balance sheets of Meta-Software, Inc. (the
Company) as of December 31, 1994 and 1995, and the related statements of
income, shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Meta-Software, Inc. as of
December 31, 1994 and 1995, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1995
in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

San Jose, California
January 26, 1996

F-18
<PAGE>

META-SOFTWARE, INC.

BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
--------------- -----------
1994 1995 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 3,811 $25,720 $ 3,891
Short-term investments........................... -- -- 20,497
Accounts receivable, net......................... 5,067 4,981 5,590
Deferred income taxes............................ -- 1,103 1,103
Prepaid income taxes............................. -- -- 2,934
Prepaid expenses and other assets................ 283 328 554
------- ------- -------
Total current assets........................... 9,161 32,132 34,569
Property and equipment, net...................... 12,573 1,679 2,351
Deferred income taxes............................ -- 1,200 1,200
Other assets..................................... 42 84 193
------- ------- -------
$10,776 $35,095 $38,313
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................. $ 171 $ 152 $ 258
Accrued liabilities.............................. 1,967 3,764 2,648
Current portion technology acquisition payable... -- 876 586
Deferred revenue................................. 3,168 3,598 4,110
Shareholder distributions payable................ 1 1,800 --
------- ------- -------
Total current liabilities...................... 5,307 10,190 7,602
Other non-current liabilities...................... 152 156 191
Long-term portion technology acquisition payable... -- 1,424 903
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 50,000 shares
authorized;
7,500, 9,800 and 10,164 shares issued and
outstanding, respectively....................... 10 22,200 25,832
Unrealized gain (loss) on investments............ -- -- (22)
Retained earnings................................ 5,307 1,125 3,807
------- ------- -------
5,317 23,325 29,617
------- ------- -------
$10,776 $35,095 $38,313
======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-19
<PAGE>

META-SOFTWARE, INC.

STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------- --------------
1993 1994 1995 1995 1996
-------- -------- -------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue:
Product license................... $ 10,523 $ 13,818 $ 17,456 $7,413 $ 9,970
Maintenance and service........... 3,254 5,834 7,825 3,448 4,919
-------- -------- -------- ------ -------
Net revenue..................... 13,777 19,652 25,281 10,861 14,889
Cost of revenue:
Product license................... 1,125 683 875 434 590
Maintenance and service........... 1,290 1,588 1,857 906 1,113
-------- -------- -------- ------ -------
Total cost of revenue........... 2,415 2,271 2,732 1,340 1,703
-------- -------- -------- ------ -------
Gross margin.................... 11,362 17,381 22,549 9,521 13,186
Operating expenses:
Research and development.......... 3,179 4,044 5,940 2,798 2,887
Sales and marketing............... 4,61 6,560 8,184 3,708 5,110
General and administrative........ 1,357 1,946 2,686 1,041 1,395
Acquisition of technology......... -- 1,600 2,693 -- --
-------- -------- -------- ------ -------
Total operating expenses........ 9,197 14,150 19,503 7,547 9,392
Operating income.................... 2,165 3,231 3,046 1,974 3,794
Other income, net................... 44 104 355 109 366
-------- -------- -------- ------ -------
Income before income taxes.......... 2,209 3,335 3,401 2,083 4,160
Income before tax expense
(benefit).......................... 147 575 (950) 186 1,478
-------- -------- -------- ------ -------
Net income.......................... $ 2,062 $ 2,760 $ 4,351 $1,897 $ 2,682
======== ======== ======== ====== =======
Net income per share................ $ 0.25
=======
Shares used in computation of
net income per share........... 10,622
=======
Pro forma net income and per share
data (unaudited):
Income before taxes, as reported.. $ 2,209 $ 3,335 $ 3,401 $2,083
Pro forma income taxes............ 795 1,201 1,224 750
-------- -------- -------- ------
Pro forma net income.............. $ 1,414 $ 2,134 $ 2,177 $1,333
======== ======== ======== ======
Pro forma net income per share.... $ 0.16 $ 0.22 $ 0.22 $ 0.14
======== ======== ======== ======
Shares used in computation of pro
forma net income per share....... 8,834 9,792 9,866 9,792
======== ======== ======== ======
</TABLE>

See accompanying notes to financial statements.

F-20
<PAGE>

META-SOFTWARE, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK UNREALIZED TOTAL
-------------- GAIN (LOSS) ON RETAINED SHAREHOLDERS'
SHARES AMOUNT INVESTMENTS EARNINGS EQUITY
------ ------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balances, December 31,
1992.................... 7,500 $ 10 $ -- $ 4,961 $ 4,971
Distributions to
shareholders............ -- -- -- (2,150) (2,150)
Net income............... -- -- -- 2,062 2,062
------ ------- ----- ------- --------
Balances, December 31,
1993.................... 7,500 $ 10 $ -- $ 4,873 $ 4,883
Distributions to
shareholders............ -- -- -- (2,326) (2,326)
Net income............... -- -- -- 2,760 2,760
------ ------- ----- ------- --------
Balances, December 31,
1994.................... 7,500 $ 10 $ -- $ 5,307 $ 5,317
Distributions to
shareholders............ -- (2,593) -- (8,533) (11,126)
Issuance of common stock
in public offering, net
of expenses............. 2,300 24,668 -- -- 24,668
Contributed capital
related to stock
compensation expense.... -- 112 -- -- 112
Stock options exercised.. -- 3 -- -- 3
Net income............... -- -- -- 4,351 4,351
------ ------- ----- ------- --------
Balances, December 31,
1995.................... 9,800 $22,200 $ -- $ 1,125 $ 23,325
Unrealized gain (loss) on
investments
(unaudited)............. -- -- (22) -- (22)
Contributed capital on
exercise of vested stock
appreciation rights
(unaudited)............. -- 538 -- -- 538
Income tax benefit from
exercise of
non-qualified stock
options (unaudited)..... -- 2,200 -- -- 2,200
Exercise of stock options
(unaudited)............. 364 816 -- -- 816
Accrued shareholder
distributions adjustment
(unaudited)............. -- 46 -- -- 46
Contributed capital
related to stock
compensation expense
(unaudited)............. -- 32 -- -- 32
Net income (unaudited)... -- -- -- 2,682 2,682
------ ------- ----- ------- --------
Balances, June 30, 1996
(unaudited)............. 10,164 $25,832 $ (22) $ 3,807 $ 29,617
====== ======= ===== ======= ========
</TABLE>

See accompanying notes to financial statements.

F-21
<PAGE>

META-SOFTWARE, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------- --------------------------
1993 1994 1995 1995 1996
-------- -------- -------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income........... $ 2,062 $ 2,760 $ 4,351 1,897 $ 2,682
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization....... 614 729 775 367 386
Stock compensation
expense............ -- -- -- -- 32
Compensation expense
(benefit)
attributable to
stock appreciation
rights............. 39 380 484 435 (43)
Loss on disposal of
property and
equipment.......... 20 16 15 -- --
Provision for
doubtful accounts.. 12 14 297 38 16
Deferred taxes...... -- -- (2,303) -- --
Deferred rent....... -- 75 38 -- 78
Changes in operating
assets and
liabilities:
Accounts
receivable........ (106) (2,170) (211) (282) (625)
Shareholder
advances.......... (300) 300 -- -- --
Prepaid expenses
and other assets.. (96) (159) (87) 81 (335)
Prepaid income tax-
es................ -- -- -- -- (734)
Accounts payable... (215) 12 (19) 44 106
Accrued
liabilities....... 340 464 1,313 30 (535)
Technology
acquisition
payable........... -- -- 2,300 -- (811)
Deferred revenue... 991 1,193 396 545 469
-------- -------- -------- ----------- -------------
Net cash provided
by operating
activities...... 3,361 3,614 7,349 3,155 686
Cash flows used in
investing activities:
Purchase of property
and equipment...... (863) (571) (896) (559) (1,058)
Purchase of short-
term investments... -- -- -- -- (35,895)
Proceeds from sale
of short-term
investments........ -- -- -- -- 15,376
-------- -------- -------- ----------- -------------
Net cash used in
investing
activities...... (896) (571) (863) (559) (21,577)
Cash flows used in
financing activities:
Distributions to
shareholders....... (1,579) (2,896) (9,327) (827) (1,754)
Issuance of common
stock.............. -- -- 24,668 -- --
Stock compensation
expense............ -- -- 112 -- --
Proceeds from stock
option exercised... -- -- 3 -- 816
-------- -------- -------- ----------- -------------
Net cash provided
by (used in)
financing
activities...... (1,579) (2,896) 15,456 (827) (938)
Net increase (decrease)
in cash and cash
equivalents........... 919 147 21,909 1,769 (21,829)
Cash and cash
equivalents at
beginning of period... 2,745 3,664 3,811 3,811 25,720
-------- -------- -------- ----------- -------------
Cash and cash
equivalents at end of
period................ $ 3,664 $ 3,811 $ 25,720 $5,580 $ 3,891
======== ======== ======== =========== =============
Supplemental
disclosures of cash
flow information:
Cash paid during the
period:
Income taxes........ $ 204 $ 525 $ 730 $ 227 $ 2,545
======== ======== ======== =========== =============
Noncash financing
activities:
Dividends declared
but not paid....... $ 571 $ 1 $ 1,800 $ -- $ --
======== ======== ======== =========== =============
Contributed capital
on exercise of
vested stock appre-
ciation rights...... $ -- $ -- $ -- $ -- $ 538
======== ======== ======== =========== =============
Income tax benefit
from exercise of non
qualified stock op-
tions............... $ -- $ -- $ -- $ -- $ 2,200
======== ======== ======== =========== =============
</TABLE>

See accompanying notes to financial statements.

F-22
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Meta-Software, Inc. (the Company) develops, markets, and supports simulation
and library generation software products for use in integrated circuit design.

Principles of Presentation and Preparation

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments with
original maturities of 90 days or less. The carrying amount approximates fair
value due to the short-term nature of these instruments. Cash and cash
equivalents include money market funds and various deposit accounts.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is provided using the straight-line method over the
estimated useful lives of the respective assets, which are generally three to
five years. Leasehold improvements are amortized over the shorter of the
useful life of the asset or the related lease term.

Software Development Costs

Development costs incurred in the research and development of new software
products and enhancements to existing software products are expensed as
incurred until technological feasibility has been established. To date, the
Company's software development has been completed concurrent with the
establishment of technological feasibility, and accordingly, no costs have
been capitalized.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash, cash equivalents
and trade receivables. Cash equivalents consist primarily of money market
instruments carried at cost, which approximates fair market value. Management
believes the credit risk associated with such instruments is minimal. The
Company sells its products to customers who are primarily designers and
manufacturers of integrated circuits. Management believes that risk of credit
loss is significantly reduced due to the diversity of its customers and their
dispersion across many geographic areas.

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of American
Institute of Certified Public Accountants Statement of Position No. 91-1,
Software Revenue Recognition.

Product license revenue is recognized when a customer's firm purchase order
has been received, the software and authorization code have been shipped, and
there are no significant remaining obligations to the customer. When the
Company receives payment prior to shipment or fulfillment of a significant
obligation to the

F-23
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)
customer, such payments are recorded as deferred revenue and recognized as
revenue upon shipment or fulfillment of such significant obligation.

Maintenance revenue consists of fees for providing software updates, user
documentation updates, and technical support for software products.
Maintenance revenue is deferred and is recognized on a straight-line basis
over the term of the agreement, generally one year. Design and test services
revenue is recognized upon delivery of the final design or completion of
testing, as applicable.

The Company maintains an allowance for potential credit losses and for any
anticipated returns on products sold to distributors and direct customers.

Pro Forma Net Income Per Share

Pro forma net income per share is computed using pro forma net income which
reflects the tax expense that would have been reported if the Company had been
a C corporation and is based on the weighted average number of shares of
common stock outstanding and common equivalent shares from stock options
outstanding (using the treasury stock method). In accordance with certain
Securities and Exchange Commission Staff Accounting Bulletins, such
computations include all common and common equivalent shares issued within 12
months of the offering date as if they were outstanding for all prior periods
presented using the treasury stock method and the anticipated initial public
offering (IPO) price. In addition, the calculation includes shares deemed to
be outstanding, which represent the number of shares sufficient to fund the
final S corporation distribution.

Income Taxes

The Company accounts for income taxes using the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of changes in tax rates is recognized in
income in the period that includes the enactment date.

The Company previously elected to be treated as an S corporation for federal
and state income tax reporting purposes. Federal and state taxes on the income
of an S corporation are generally payable by the individual shareholders
rather than the corporation. Accordingly, only the California S corporation
franchise tax and certain foreign taxes were provided through the termination
of the S corporation.

The Company's S corporation status was terminated on October 31, 1995, prior
to the completion of the IPO of its common stock. The accompanying statements
of income for the years ended December 31, 1995 and 1994 reflect provisions
for income taxes on an unaudited pro forma basis, using the asset and
liability method, as if the Company had been a C corporation, fully subject to
federal and state income taxes.

Stock-Based Compensation

The Company has various stock-based compensation plans, as discussed in Note
5. The Company has accounted for the effect of its stock-based compensation
plans under Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees. The Company will adopt Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation in 1996 and
plans to use the pro forma approach allowed under this standard.

F-24
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

Foreign Currency Translation

The functional currency of the Company's foreign operations is the U.S.
dollar. All monetary assets and liabilities are translated at the current rate
at the end of the period; nonmonetary assets and liabilities are translated at
historical rates; and expenses are translated at average exchange rates in
effect during the period. Translation and transaction gains and losses, which
are included in the statements of income, have not been material in any of the
periods presented.

Interim Financial Statements

The accompanying unaudited financial statements as of June 30, 1996 and for
the six-month periods ended June 30, 1995 and 1996 have been prepared on
substantially the same basis as the audited financial statements, and include
all adjustments, consisting only of normal recurring adjustments, which
management believes are necessary for a fair presentation of the financial
information set forth herein.

Reclassifications

Certain amounts in the 1993 and 1994 financial statements have been
reclassified to conform to the 1995 presentation.

(2) BALANCE SHEET COMPONENTS

Cash and Cash Equivalents

A summary of cash and cash equivalents follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1994 1995
------ -------
<S> <C> <C>
Cash.......................................................... $1,366 $ 3,094
Money market funds............................................ 2,445 22,626
------ -------
$3,811 $25,720
====== =======
</TABLE>

Accounts Receivable

A summary of accounts receivable follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1994 1995
------ ------
<S> <C> <C>
Trade receivables............................................. $5,374 $5,558
Less allowance for doubtful accounts.......................... 307 577
------ ------
$5,067 $4,981
====== ======
</TABLE>

Property and Equipment

A summary of property and equipment follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1994 1995
------ ------
<S> <C> <C>
Computer equipment............................................ $1,992 $2,824
Office and other equipment.................................... 586 624
Leasehold improvements........................................ 912 917
------ ------
3,490 4,365
Less accumulated depreciation and amortization................ 1,917 2,686
------ ------
$1,573 $1,679
====== ======
</TABLE>

F-25
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

Depreciation and amortization expense was approximately $614,000, $729,000,
and $775,000 for the years ended December 31, 1993, 1994 and 1995,
respectively.

Accrued Liabilities

A summary of accrued liabilities follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1994 1995
------ ------
<S> <C> <C>
Accrued employee compensation................................. $ 542 $1,109
Accrued commissions........................................... 579 426
Accrued sales tax............................................. 160 59
Accrued income tax............................................ 89 712
Accrued stock appreciation rights............................. 419 903
Other liabilities............................................. 178 555
------ ------
$1,967 $3,764
====== ======
</TABLE>

(3) LINE OF CREDIT

The Company has a line of credit expiring in June 1996 that allows
borrowings of up to $3,500,000 of eligible accounts receivable at the 30-day
commercial paper rate plus 2.65%.

(4) COMMITMENTS AND CONTINGENCIES

Leases

The Company leases certain facilities and equipment under noncancelable
operating leases. Future minimum lease commitments under noncancelable
operating leases are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------
<S> <C>
1996.............................................................. $ 600
1997.............................................................. 630
1998.............................................................. 662
1999.............................................................. 459
------
Total minimum lease payments...................................... $2,351
======
</TABLE>

The Company leases its primary operating facility from a related party under
a noncancelable operating lease agreement expiring in 1999. Rent expense
incurred under this lease agreement was approximately $448,000, $622,000, and
$613,000 for the years ended December 31, 1993, 1994 and 1995, respectively.

Rent expense under other operating leases, primarily for sales offices under
month-to-month leases, was approximately $0, $30,000, and $82,000 for the
years ended December 31, 1993, 1994 and 1995, respectively.

Contingencies

The Company has been involved in various legal matters which have arisen in
the normal course of business. It is the judgment of management, after
consultation with counsel, that any liability which may result from the
disposition of such legal matters will not have a material adverse effect on
the financial condition of the Company.

F-26
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

(5) SHAREHOLDERS' EQUITY

Shareholder Distributions

As an S corporation, the Company made distributions to its shareholders to
provide them with funds to pay income taxes on corporate earnings. Prior to
the completion of the IPO and the termination of the S corporation, the
Company declared a distribution payable to existing shareholders of the
Company. This distribution represented undistributed tax basis earnings of the
Company through termination of the S corporation.

Stock Split

On September 15, 1995 the Board of Directors approved an increase in the
number of authorized shares of common stock to 50,000,000, and a three for two
stock split on outstanding shares and options. Accordingly, all share and per
share amounts have been adjusted to reflect the stock split.

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of undesignated
preferred stock in one or more series and to determine dividend rights,
preferences, dividend rates, conversion rights, voting rights, terms of
redemption, redemption prices, liquidation preferences, number of shares and
designation of any such series without any further vote or action of the
shareholders.

1992 Stock Option/Appreciation Plan

Under the Company's 1992 Stock Option/Appreciation Plan (the 1992 Plan),
1,950,000 shares of common stock were reserved for the issuance of stock
options, for grant at not less than 90% of the fair market value at the date
of grant. Fair market value, in the absence of trading on a national or
regional stock exchange, was established by the Board of Directors based on an
independent valuation of the Company. Options generally vest over a period of
1 to 4 years from the date of grant, expire 10 years from the date of grant
and terminate, to the extent not exercised, 1 month after termination of
employment.

The 1992 Plan provided for the exercise of stock appreciation rights with
respect to outstanding options in the absence of trading of the Company's
stock on a national or regional stock exchange. Upon the exercise of stock
appreciation rights, the employee surrendered the related unexercised option
and received a cash payment equal to the excess of the fair market value of
the underlying shares at the time of exercise over the aggregate exercise
price of the related option. Compensation expense was recognized for the
appreciation in value from the date of grant.

F-27
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

A summary of stock option activity under the 1992 Plan follows (in the
table, stock appreciation rights are treated as underlying options):

<TABLE>
<CAPTION>
SHARES
AVAILABLE FOR OPTIONS
FUTURE GRANT OUTSTANDING EXERCISE PRICE
------------- ----------- --------------
<S> <C> <C> <C>
Balances as of December 31, 1992...... 833,333 -- --
Granted............................. (594,458) 594,458 $1.42
Canceled............................ 94,958 (94,958) $1.42
-------- ---------
Balances as of December 31, 1993...... 333,833 499,500 $1.42
Additional shares reserved.......... 516,667 -- --
Granted............................. (691,875) 691,875 $1.54
Canceled............................ 150,000 (150,000) $1.42 - $1.54
-------- ---------
Balances as of December 31, 1994...... 308,625 1,041,375 $1.42 - $1.54
Additional shares reserved.......... 600,000 -- --
Granted............................. (787,000) 787,000 $2.33 - $10.14
Canceled............................ 325,875 (325,875) $1.42 - $6.41
Exercised........................... -- (375) $1.54
-------- ---------
Balances as of December 31, 1995...... 447,500 1,502,125
======== =========
</TABLE>

As of December 31, 1995, 340,593 options were exercisable at $1.42 to $5.28.

During the months of June, July, and August 1995, the Company entered into
agreements with substantially all individual option holders under the 1992
Plan terminating the stock appreciation right feature of the individual
awards. Compensation expense, based on fair market value of the stock as
determined by the Board of Directors, was recorded based on the vested stock
appreciation rights of the individual shareholders through the date such
rights were terminated. Upon effectiveness of the IPO, all stock appreciation
rights terminated, and no further compensation expense was recorded.

1995 Equity Incentive Plan

In July 1995, the Company adopted the 1995 Equity Incentive Plan (the Equity
Incentive Plan) and reserved 900,000 shares for issuance thereunder. The
Equity Incentive Plan provides for the grant of incentive stock options to
employees of the Company and for the grant of nonstatutory stock options to
employees and consultants of the Company. The Board of Directors administers
the Equity Incentive Plan and has the discretion to grant stock options.
Exercise prices may not be less than 100% and 85% of the fair market value at
the date of grant for incentive options and nonstatutory options,
respectively. Options granted under the Equity Incentive Plan generally vest
over 4 years and expire after 10 years. The Company has granted 9,500 options
under the Equity Incentive Plan at prices ranging between $16.25 to $17.63 as
of December 31, 1995.

1995 Directors' Stock Option Plan

In July 1995, the Company adopted the 1995 Directors' Stock Option Plan (the
Directors' Plan) and reserved 90,000 shares for issuance thereunder. The
Directors' Plan provides for the automatic grant of nonstatutory stock options
to nonemployee directors of the Company at the fair market value of the common
stock on the date of grant. The term of options granted under the Directors'
Plan may not exceed 10 years or the end of the director's status as a
director. The Company has not granted any options under the Directors' Plan as
of December 31, 1995.

F-28
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)
1995 Employee Stock Purchase Plan

In July 1995, the Company adopted the 1995 Employee Stock Purchase Plan (the
Purchase Plan) and reserved 225,000 shares for issuance thereunder. The
Purchase Plan became effective upon the completion of the Company's IPO. The
Purchase Plan permits eligible employees to purchase common stock, through
payroll deductions of up to 5% of the employee's compensation, at a price
equal to 85% of the fair market value of the common stock at either the
beginning of each offering period or the end of the offering period, whichever
is lower.

(6) INCOME TAXES

The components of income tax expense (benefit), as presented in the
accompanying statements of income, comprise federal taxes, state taxes, and
certain foreign taxes. The pro forma provision for income taxes reflects the
income tax expense that would have been reported if the Company had been a C
corporation for the year ended December 31, 1994 and the entire year ended
December 31, 1995. The components of income taxes for the year ended December
31, 1995 and unaudited pro forma income taxes for the years ended December 31,
1994 and 1995 are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
Income taxes:
Current:
Federal.................................................... $ 544
State...................................................... 230
Foreign.................................................... 579
------
Total current............................................ 1,353
------
Deferred:
Federal.................................................... (1,788)
State...................................................... (515)
------
Total deferred........................................... (2,303)
------
Total income tax benefit................................. $ (950)
======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1994 1995
------ ------
<S> <C> <C>
Unaudited Pro Forma Income taxes:
Current:
Federal.................................................... $ 784 $1,788
State...................................................... 304 633
Foreign.................................................... 497 579
------ ------
Total current............................................ 1,585 3,000
Deferred:
Federal.................................................... (312) (1,349)
State...................................................... (72) (427)
------ ------
Total deferred........................................... (384) (1,776)
------ ------
Total pro forma income taxes............................. $1,201 $1,224
====== ======
</TABLE>

F-29
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

The following reconciles the expected corporate federal income tax expense
(computed by multiplying the Company's income before income taxes by 34%) to
the Company's income tax expense (benefit) for the year ended December 31,
1995 and the unaudited pro forma income tax expense for the years ended
December 31, 1994 and 1995 (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C>
Expected income tax expanse................................. $1,156
State income taxes, net of federal tax effect............... (188)
S-election benefit.......................................... (575)
Foreign taxes............................................... 423
Establishment of deferred assets in conjunction with the
change from S to C status.................................. (1,725)
Other, net.................................................. (41)
------
Actual income tax benefit................................. $ (950)
======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1994 1995
------ ------
<S> <C> <C>
Expected pro forma income tax expense...................... $1,134 $1,156
State income taxes, net of federal tax effect.............. 153 136
Research and development tax credits....................... (144) (105)
Other, net................................................. 58 37
------ ------
Pro forma income taxes................................... $1,201 $1,224
====== ======
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities as of December 31, 1995,
are presented below (in thousands):

<TABLE>
<S> <C>
Deferred tax assets:
Reserves not recognized for tax purposes.......................... $ 250
Accrued expenses, not currently deductible........................ 774
Deferred revenue recognized for tax purposes...................... 46
Property and equipment, principally due to differences in
depreciation..................................................... 1,200
Other deferred tax assets......................................... 33
------
Total gross deferred tax assets................................. 2,303
------
Valuation allowance................................................. --
------
Net deferred tax assets......................................... $2,303
======
</TABLE>

Management believes that it is more likely than not, based upon historical
operating results, that the Company will generate sufficient future taxable
income to realize the net deferred tax assets.

(7) MAJOR CUSTOMERS AND INTERNATIONAL SALES

One customer accounted for approximately 14%, 15%, and 14% of total revenue
for the years ended December 31, 1993, 1994 and 1995, respectively. As of
December 31, 1993, 1994 and 1995, no customer comprised in excess of 10% of
total accounts receivable.

F-30
<PAGE>

META-SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995 AND JUNE 30, 1996
(INFORMATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS UNAUDITED)

International revenue, principally to customers in Asia, accounted for
approximately 37% 40%, and 40% of net revenue for the years ended December 31,
1993, 1994 and 1995, respectively.

(8) ACQUISITIONS OF TECHNOLOGY

In each of April 1994 and October 1995, the Company acquired rights to
certain software technology under development. As the acquired software had
not reached technological feasibility, it was expensed upon acquisition.

Under the October 1995 agreement, the Company made a cash payment of
$400,000 and will make payments of approximately $500,000, $400,000, $670,000,
$475,000, $350,000 and $200,000 in January 1996, March 1996, March 1997, March
1998, March 1999 and March 2000, respectively. The net present value of these
payments is included in technology acquisition payable in the accompanying
balance sheet.

(9) EMPLOYEE RETIREMENT PLAN

The Company maintains a 401(k) retirement plan for employees meeting certain
criteria. The plan is administered by a third party, and the Company matches
25% of employee contributions up to a maximum annual matching contribution of
$1,000 per employee. The Company may make additional contributions to the plan
at the discretion of the Board of Directors.

F-31
<PAGE>

APPENDIX A

AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

AVANT! CORPORATION,

NATASHA MERGER CORPORATION

AND

META-SOFTWARE, INC.

AUGUST 22, 1996
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I THE MERGER........................................................... 2
1.1 The Merger.......................................................... 2
1.2 Closing, Effective Time............................................. 2
1.3 Effect of the Merger................................................ 2
1.4 Articles of Incorporation; Bylaws................................... 2
1.5 Directors and Officers.............................................. 2
1.6 Effect on Capital Stock............................................. 3
1.7 Dissenters' Rights.................................................. 4
1.8 Surrender of Certificates........................................... 4
1.9 No Further Ownership Rights in Meta Common Stock.................... 6
1.10 Lost, Stolen or Destroyed Certificates.............................. 6
1.11 Tax and Accounting Consequences..................................... 6
1.12 Taking of Necessary Action; Further Action.......................... 6

ARTICLE II REPRESENTATIONS AND WARRANTIES OF META.............................. 6
2.1 Organization, Standing and Power.................................... 7
2.2 Capital Structure................................................... 7
2.3 Authority........................................................... 9
2.4 SEC Documents, Financial Statements................................. 9
2.5 Absence of Certain Changes.......................................... 10
2.6 Absence of Undisclosed Liabilities.................................. 11
2.7 Permits and Licenses................................................ 11
2.8 Properties and Contracts............................................ 11
2.9 Litigation.......................................................... 12
2.10 Intellectual Property............................................... 12
2.11 Environmental Matters............................................... 14
2.12 Taxes............................................................... 14
2.13 Employee Benefit Plans.............................................. 15
2.14 Certain Agreements Affected by the Merger........................... 17
2.15 Brokers' and Finders' Fees.......................................... 17
2.16 Opinion of Meta Financial Advisor................................... 17
2.17 Registration Statement; Proxy Statement/Prospectus.................. 17
2.18 Representations Complete............................................ 18

ARTICLE III REPRESENTATIONS AND WARRANTIES OF AVANT! AND MERGER SUB............ 18
3.1 Organization, Standing and Power.................................... 18
3.2 Capital Structure................................................... 19
3.3 Authority........................................................... 20
</TABLE>

i
<PAGE>

<TABLE>
<S> <C>
3.4 SEC Documents; Financial Statements................................. 20
3.5 Absence of Certain Changes.......................................... 21
3.6 Absence of Undisclosed Liabilities.................................. 22
3.7 Permits and Licenses................................................ 22
3.8 Properties and Contracts............................................ 22
3.9 Litigation.......................................................... 23
3.10 Intellectual Property............................................... 23
3.11 Environmental Matters............................................... 25
3.12 Taxes............................................................... 25
3.13 Employee Benefit Plans.............................................. 25
3.14 Certain Agreements Affected by the Merger........................... 27
3.15 Brokers' and Finders' Fees.......................................... 28
3.16 Registration Statement; Proxy Statement/Prospectus.................. 28
3.17 Representations Complete............................................ 28

ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME................................. 28
4.1 Conduct of Business of Avant! and Meta.............................. 28
4.2 Conduct of Business of Meta......................................... 29
4.3 Notices............................................................. 32
4.4 Other Offers........................................................ 32

ARTICLE V ADDITIONAL AGREEMENTS................................................ 33
5.1 Proxy Statement/Prospectus; Registration Statement.................. 33
5.2 Meeting of Shareholders............................................. 33
5.3 Access to Information............................................... 34
5.4 Confidentiality..................................................... 34
5.5 Public Disclosure................................................... 34
5.6 Consents; Cooperation............................................... 35
5.7 Pooling Accounting.................................................. 36
5.8 Affiliate Agreements................................................ 36
5.9 Legal Requirements.................................................. 36
5.10 Blue Sky Laws....................................................... 37
5.11 Employee Benefit Plans.............................................. 37
5.12 Letter of Avant!'s and Meta's Accountants........................... 39
5.13 Form S-8............................................................ 39
5.14 Indemnification..................................................... 39
5.15 Listing of Additional Shares........................................ 40
5.16 Pooling Letters..................................................... 40
5.17 Best Efforts and Further Assurances................................. 41
5.18 Notification of Certain Matters..................................... 41
5.19 Shareholders Agreement.............................................. 41
5.20 HSR Act Filings..................................................... 41
5.21 Operations of Avant! Post Merger.................................... 42
</TABLE>

ii
<PAGE>

<TABLE>
<S> <C>
ARTICLE VI CONDITIONS TO THE MERGER............................................ 42
6.1 Conditions to Obligations of Each Party to Effect the Merger........ 42
6.2 Additional Conditions to Obligations of Meta........................ 43
6.3 Additional Conditions to the Obligations of Avant! and Merger Sub... 44

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.................................. 45
7.1 Termination......................................................... 45
7.2 Effect of Termination............................................... 46
7.3 Expenses and Termination Fees....................................... 47
7.4 Amendment........................................................... 48
7.5 Extension; Waiver................................................... 48

ARTICLE VIII GENERAL PROVISIONS................................................ 48
8.1 Survival............................................................ 48
8.2 Notices............................................................. 48
8.3 Interpretation...................................................... 49
8.4 Counterparts........................................................ 50
8.5 Entire Agreement; Nonassignability; Parties in Interest............. 50
8.6 Severability........................................................ 50
8.7 Remedies Cumulative................................................. 50
8.8 Governing Law....................................................... 50
8.9 Rules of Construction............................................... 50
</TABLE>
EXHIBITS

Exhibit A Affiliates Agreement
Exhibit B Shareholders Agreement

SCHEDULES

Meta Disclosure Schedule
Avant! Disclosure Schedule

Schedule 2.10 Intellectual Property
Schedule 2.13 Employee Benefit Plans
Schedule 3.10 Intellectual Property
Schedule 3.13 Employee Benefit Plans
Schedule 5.8 Affiliates
Schedule 5.12(a) Option List
Schedule 5.12(b) ESPP List

iii
<PAGE>

AGREEMENT AND PLAN OF REORGANIZATION

This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of August 22, 1996, by and among Avant! Corporation, a Delaware
corporation ("Avant!"), Natasha Merger Corporation, a California corporation
("Merger Sub") and wholly owned subsidiary of Avant!, and Meta-Software, Inc., a
California corporation ("Meta").

RECITALS

A. The Boards of Directors of Meta, Avant! and Merger Sub believe it is
in the best interests of their respective corporations and the stockholders of
their respective corporations that Meta and Merger Sub combine into a single
company through the statutory merger of Merger Sub with and into Meta (the
"Merger") and, in furtherance thereof, have approved the Merger.

B. In the Merger, among other things, the outstanding shares of Meta
Common Stock, no par value ("Meta Common Stock"), shall be converted into shares
of Avant! Common Stock, $.0001 par value ("Avant! Common Stock"), at the rate
set forth herein.

C. Meta, Avant! and Merger Sub desire to make certain representations and
warranties and other agreements in connection with the Merger.

D. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and to cause the Merger to qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code.

E. The parties intend for the Merger to be accounted for as a pooling of
interests pursuant to APB Opinion No. 16, Staff Accounting Series Releases 130,
135 and 146 and Staff Accounting Bulletin Topic Two.

F. Concurrent with the execution of this Agreement and as an inducement
to Avant! and Merger Sub to enter into this Agreement, Shawn M. Hailey and Kim
L. Hailey (the "Shareholders"), who are officers and directors of Meta, have on
the date hereof entered into an agreement to vote the shares of Meta's Common
Stock owned by such persons to approve the Merger.

NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, and for other good and valuable consideration, the parties agree
as follows:
<PAGE>

ARTICLE I

THE MERGER
----------

1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
----------
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the California General Corporation Law ("California
Law"), Merger Sub shall be merged with and into Meta, the separate corporate
existence of Merger Sub shall cease and Meta shall continue as the surviving
corporation. Meta as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "Surviving Corporation."

1.2 Closing; Effective Time. The closing of the transactions contemplated
-----------------------
hereby (the "Closing") shall take place as soon as practicable after the
satisfaction or waiver of each of the conditions set forth in Article VI hereof
or at such other time as the parties hereto agree (the date on which the Closing
shall occur, the "Closing Date" or the "Effective Date"). The Closing shall take
place at the offices of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, 600 Hansen Way, Palo Alto, California, or at such other location
as the parties hereto agree. In connection with the Closing, the parties hereto
shall cause the Merger to be consummated by filing an Agreement of Merger, in
form reasonably satisfactory to Avant! and Meta (the "Agreement of Merger"),
with the Secretary of State of the State of California, in accordance with the
relevant provisions of California Law (the time of such filing being the
"Effective Time").

1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
--------------------
shall be as provided in this Agreement, the Articles of Merger and the
applicable provisions of California Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of Meta and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Meta and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.4 Articles of Incorporation; Bylaws.
---------------------------------

(a) At the Effective Time, the Articles of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation until thereafter amended;
provided, however, that Article I of the Articles of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is Meta."

(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.

1.5 Directors and Officers. At the Effective Time, the directors of
----------------------
Merger Sub shall be the initial directors of the Surviving Corporation and the
officers of Merger Sub shall be the initial officers of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified.

2
<PAGE>

1.6 Effect on Capital Stock. By virtue of the Merger and without any
-----------------------
action on the part of Merger Sub, Avant!, Meta or the holders of any of the
following securities:

(a) Conversion of Meta Common Stock. At the Effective Time, each
-------------------------------
share of Meta Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Meta Common Stock to be canceled
pursuant to Section 1.6(b) and any Dissenting Shares (as defined in Section 1.7
below)) will be canceled and extinguished and be converted automatically into
the right to receive a fraction of a share of Avant! Common Stock (the "Exchange
Ratio"), the numerator of which is equal to (i) 5,079,365, and the denominator
of which is equal to (ii) the sum of the aggregate number of shares of Meta
Common Stock issued and outstanding as of the Effective Time, and the aggregate
number of shares of Meta Common Stock issuable upon exercise of all outstanding
options and warrants outstanding as of the Effective Time.

(b) Cancellation of Meta Common Stock Owned by Avant! or Meta. At
---------------------------------------------------------
the Effective Time, all shares of Meta Common Stock that are owned by Meta and
each share of Meta Common Stock owned by Avant! or any direct or indirect wholly
owned subsidiary of Avant! or of Meta immediately prior to the Effective Time
shall be canceled and extinguished without any conversion thereof.

(c) Meta Stock Plans. At the Effective Time, the Meta 1995 Equity
----------------
Incentive Plan, Meta 1995 Directors' Stock Option Plan, and the Meta 1992 Stock
Option/Appreciation Plan, and all options to purchase Meta Common Stock then
outstanding under such plans shall be assumed by Avant! in accordance with
Section 5.12. The Meta 1995 Equity Incentive Plan, Meta 1995 Directors' Stock
Option Plan, and the Meta 1992 Stock Option/Appreciation Plan are sometimes
collectively referred to herein as the "Meta Stock Plans."

(d) Meta 1995 Employee Stock Purchase Plan. At the Effective Time,
--------------------------------------
the Meta 1995 Employee Stock Purchase Plan (the "Meta ESPP") and all of the
existing rights and obligations of Meta pursuant to the outstanding subscription
rights thereunder shall be assumed by Avant! in accordance with Section 5.11.

(e) Capital Stock of Merger Sub. At the Effective Time, each share
---------------------------
of Common Stock, no par value, of Merger Sub ("Merger Sub Common Stock"), issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
Common Stock, no par value, of the Surviving Corporation. Each stock certificate
of Merger Sub evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the Surviving Corporation.

(f) Adjustments to Exchange Ratio. The Exchange Ratio shall be
-----------------------------
adjusted to (including any dividend or distribution of securities convertible
into Avant! Common Stock or Meta Common Stock), reorganization, recapitalization
or other like change with respect to Avant! Common Stock or Meta Common Stock
occurring after the date hereof and prior to the Effective Time.

3
<PAGE>

(g) Fractional Shares. No fraction of a share of Avant! Common
-----------------
Stock will be issued, but in lieu thereof each holder of shares of Meta Common
Stock who would otherwise be entitled to a fraction of a share of Avant! Common
Stock (after aggregating all fractional shares of Avant! Common Stock to be
received by such holder) shall receive from Avant! an amount of cash (rounded to
the nearest whole cent) equal to the product of (i) such fraction, multiplied by
(ii) the average last sale price of a share of Avant! Common Stock for the ten
most recent days that Avant! Common Stock has traded ending on the trading day
immediately prior to the Effective Time, as reported on The Nasdaq National
Market.

1.7 Dissenters' Rights. If, as of the Effective Time, holders of Meta
------------------
Common Stock have complied with all requirements for perfecting and not
forfeited dissenters' rights ("Dissenting Shares") in connection with the Merger
under California Law, such Dissenting Shares shall not be converted into Avant!
Common Stock but instead shall be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to the California Law. Meta shall give Avant! prompt notice of
any demand received by Meta to require Meta to pay the value of any Dissenting
Shares of Meta Common Stock, and Avant! shall have the right to participate in
all negotiations and proceedings with respect to such demand. Meta agrees that,
except with the prior written consent of Avant!, it will not make any payment
with respect to, or settle or offer to settle, any such purchase demand. Each
holder of Dissenting Shares (a "Dissenting Shareholder") who, pursuant to the
provisions of California Law, becomes entitled to payment of the value of shares
of Meta Common Stock shall receive payment therefor (but only after the value
therefor shall have been agreed upon or finally determined pursuant to such
provisions). In the event of a legal obligation, after the Effective Time, to
deliver shares of Avant! Common Stock to any holder of shares of Meta Common
Stock who shall have failed to make an effective payment demand or shall have
lost his or her status as a Dissenting Shareholder, Avant! shall issue and
deliver, upon surrender by such Dissenting Shareholder of his or her certificate
or certificates representing shares of Meta Common Stock, the shares of Avant!
Common Stock to which such Dissenting Shareholder is then entitled under Section
1.6(a) and cash in lieu of fractional shares pursuant to Section 1.6(g).

1.8 Surrender of Certificates.
-------------------------

(a) Exchange Agent. Harris Trust Company of California shall act as
--------------
exchange agent (the "Exchange Agent") in the Merger.

(b) Avant! to Provide Common Stock and Cash. As soon as practicable
---------------------------------------
after the Effective Time, but no later than two (2) business days thereafter,
Avant! shall make available to the Exchange Agent for exchange in accordance
with this Article I, through such reasonable procedures as Avant! may adopt, (i)
the shares of Avant! Common Stock issuable pursuant to Section 1.6(a) in
exchange for shares of Meta Common Stock outstanding immediately prior to the
Effective Time and (ii) cash in an amount sufficient to permit payment of cash
in lieu of fractional shares pursuant to Section 1.6(g).

4
<PAGE>

(c) Exchange Procedures. As soon as practicable after the Effective
-------------------
Time, but no later than ten (10) business days thereafter, the Surviving
Corporation shall cause to be mailed to each holder of record of a certificate
or certificates (the "Certificates") which immediately prior to the Effective
Time represented outstanding shares of Meta Common Stock, whose shares were
converted into the right to receive shares of Avant! Common Stock (and cash in
lieu of fractional shares) pursuant to Section 1.6, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon receipt of the Certificates by the
Exchange Agent, and shall be in such form and have such other provisions as
Avant! may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Avant! Common Stock (and cash in lieu of fractional shares). Upon surrender
of a Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Avant!, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holder of record of such Certificate shall be entitled
to receive in exchange therefor a certificate representing the number of whole
shares of Avant! Common Stock and payment in lieu of fractional shares which
such holder of record has the right to receive pursuant to Section 1.6, and the
Certificate so surrendered shall forthwith be canceled. Until so surrendered,
each outstanding Certificate that, prior to the Effective Time, represented
shares of Meta Common Stock will be deemed from and after the Effective Time,
for all corporate purposes, other than as provided in subsection (d) below, to
evidence only the ownership of the number of full shares of Avant! Common Stock
into which such shares of Meta Common Stock shall have been so converted and the
right to receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with Section 1.6.

(d) Distributions With Respect to Unexchanged Shares. No dividends
------------------------------------------------
or other distributions with respect to Avant! Common Stock with a record date
after the Effective Time will be paid to the holder of record of any
unsurrendered Certificate with respect to the shares of Avant! Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law, following surrender of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Avant! Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of any
such dividends or other distributions with a record date after the Effective
Time theretofore payable (but for the provisions of this Section 1.8(d)) with
respect to such shares of Avant! Common Stock.

(e) Transfers of Ownership. If any certificate for shares of Avant!
----------------------
Common Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it will be a condition of the
issuance thereof that the Certificate so surrendered will be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
exchange will have paid to Avant! or any agent designated by it any transfer or
other taxes required by reason of the issuance of a certificate for shares of
Avant! Common Stock in any name other than that of the registered holder of the
Certificate surrendered, or established to the satisfaction of Avant! or any
agent designated by it that such tax has been paid or is not payable.

5
<PAGE>

(f) No Liability. Notwithstanding anything to the contrary in this
------------
Section 1.8, none of the Exchange Agent, the Surviving Corporation or any party
hereto shall be liable to any person for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar law.

1.9 No Further Ownership Rights in Meta Common Stock. All shares of
------------------------------------------------
Avant! Common Stock issued upon the surrender for exchange of shares of Meta
Common Stock in accordance with the terms hereof (including any cash paid in
lieu of fractional shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Meta Common Stock, and
following the Effective Time there shall be no further registration of transfers
on the records of the Surviving Corporation of shares of Meta Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.

1.10 Lost, Stolen or Destroyed Certificates. In the event any
--------------------------------------
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such shares of Avant!
Common Stock (and cash in lieu of fractional shares) as may be required pursuant
to Section 1.6; provided, however, that Avant! may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Avant!, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.

1.11 Tax and Accounting Consequences. It is intended by the parties
-------------------------------
hereto that the Merger shall (i) constitute a reorganization within the meaning
of Section 368 of the Code and (ii) qualify for accounting treatment as a
pooling of interests. No party shall take any action, to such party's knowledge,
which would cause the Merger to fail to qualify as a reorganization within the
meaning of Section 368 of the Code or to qualify for accounting treatment as a
pooling of interest.

1.12 Taking of Necessary Action; Further Action. If, at any time after
------------------------------------------
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Meta and Merger Sub, the officers and directors of Meta and
Merger Sub are fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action, so long
as such action is not inconsistent with this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF META
--------------------------------------

In this Agreement, any reference to any event, change, condition or effect
being "material" with respect to any entity or group of entities means any
material event, change,

6
<PAGE>

condition or effect related to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
prospects, operations or results of operations of such entity or group of
entities. In this Agreement, any reference to a "Material Adverse Effect" with
respect to any entity or group of entities means any event, change or effect
that is materially adverse to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
prospects, operations or results of operations of such entity and its
subsidiaries, taken as a whole.

In this Agreement, any reference to a party's "knowledge" means such
party's actual knowledge after due and diligent inquiry of officers, directors
and other employees of such party and its subsidiaries reasonably believed to
have knowledge of such matters.

Except as disclosed in a document of even date herewith and delivered by
Meta to Avant! prior to the execution and delivery of this Agreement and
referring to the representations and warranties in this Agreement (the "Meta
Disclosure Schedule"), Meta represents and warrants to Avant! and Merger Sub as
follows:

2.1 Organization, Standing and Power. Each of Meta and its subsidiaries
--------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each of Meta and its subsidiaries has
the corporate power to own its properties and to carry on its business as now
being conducted and as proposed to be conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified and in good standing would have a Material Adverse Effect on Meta.
Meta has delivered a true and correct copy of the Articles of Incorporation
(referred to herein as Meta's "Articles of Incorporation") and Bylaws or other
charter documents, as applicable, of Meta and each of its subsidiaries, each as
amended to date, to Avant!. Neither Meta nor any of its subsidiaries is in
violation of any of the provisions of its Articles of Incorporation or Bylaws or
equivalent organizational documents. Meta is the owner of all outstanding shares
of capital stock of each of its subsidiaries and all such shares are duly
authorized, validly issued, fully paid and nonassessable. All of the outstanding
shares of capital stock of each such subsidiary are owned by Meta free and clear
of all liens, charges, claims or encumbrances or rights of others. There are no
outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable
or convertible securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other securities of any such
subsidiary, or otherwise obligating Meta or any such subsidiary to issue,
transfer, sell, purchase, redeem or otherwise acquire any such securities.
Except as disclosed in the Meta SEC Documents (as defined in Section 2.4), Meta
does not directly or indirectly own any equity or similar interest in, or any
interest convertible or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity.

2.2 Capital Structure. The authorized capital stock of Meta consists of
-----------------
50,000,000 shares of Common Stock, no par value, and 5,000,000 shares of
Preferred Stock, no par value, of which there were issued and outstanding as of
the close of business on July 31, 1996, 10,188,095 shares of Meta Common Stock
and no shares of Preferred Stock. There are no other outstanding shares of
capital stock or voting securities of Meta and no outstanding

7
<PAGE>

commitments to issue any shares of capital stock or voting securities of Meta
after July 31, 1996 other than pursuant to (i) the exercise of options
outstanding as of such date under the Meta Stock Plans or (ii) the exercise of
subscription rights outstanding as of such date under the Meta ESPP. All
outstanding shares of Meta Common Stock are duly authorized, validly issued,
fully paid and non-assessable and are free of any liens or encumbrances, other
than any liens or encumbrances created by or imposed upon the holders thereof,
and are not subject to preemptive rights or rights of first refusal created by
statute, the Articles of Incorporation or Bylaws of Meta or any agreement to
which Meta is a party or by which it is bound. As of the close of business on
July 31, 1996, Meta had reserved (i) 900,000 shares of Meta Common Stock for
issuance to employees pursuant to the Meta 1995 Equity Incentive Plan, of which
no shares have been issued pursuant to option exercises and 562,058 shares are
subject to outstanding, unexercised options, (ii) 225,000 shares of Meta Common
Stock for issuance to employees pursuant to the Meta ESPP, of which 24,810
shares have been issued and approximately 2,072 shares are subject to
outstanding subscriptions, (iii) 1,950,000 shares of Meta Common Stock for
issuance to employees, consultants and nonemployee directors pursuant to the
Meta 1992 Stock Option/Appreciation Plan, of which 429,561 shares have been
issued pursuant to option exercises, and 890,376 shares are subject to
outstanding, unexercised options, and (iv) 90,000 shares of Meta Common Stock
for issuance to certain nonemployee directors pursuant to the Meta 1995
Directors' Stock Option Plan, of which no shares have been issued pursuant to
option exercises and 15,000 shares are subject to outstanding, unexercised
options. Since July 31, 1996, Meta has not (i) issued or granted additional
options under any of the Meta Stock Plans or (ii) accepted any additional Common
Stock subscriptions or otherwise granted any additional purchase rights under
the Meta ESPP. Except for the rights created pursuant to this Agreement and as
disclosed in this Section 2.2, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Meta is a party or
by which it is bound obligating Meta to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of capital stock of Meta or obligating Meta to grant, extend, accelerate
the vesting of, change the price of, or otherwise amend or enter into any such
option, warrant, call, right, commitment or agreement. There are no contracts,
commitments or agreements relating to voting, registration, purchase or sale of
Meta's capital stock (i) between or among Meta and any of its shareholders or
(ii) to Meta's knowledge, between or among any of Meta's shareholders. The terms
of the Meta Stock Plans permit the assumption or substitution of options to
purchase Avant! Common Stock as provided in this Agreement, without the consent
or approval of the holders of such securities, the Meta shareholders, or
otherwise and without any acceleration of the exercise schedule or vesting
provisions in effect for those options. Neither the Board of Directors nor the
Administration Committee under any of the Meta Stock Plans has taken any action
to cause the acceleration of any benefits under any of such Meta Stock Plans in
connection with the Merger. No other outstanding options, whether under the Meta
Stock Plans or otherwise, will be accelerated by action of the Board of the
Directors or the Administration Committee in connection with the Merger. The
current subscription window period (as contemplated by the Meta ESPP) commenced
under the Meta ESPP on July 1, 1996, and except for the subscriptions to acquire
approximately 2,072 shares of Meta Common Stock under the Meta ESPP, there are
no other subscriptions or purchase rights or options outstanding under the Meta
ESPP. True and complete copies of all agreements and instruments relating to or
issued under the Meta Stock Plans and the Meta ESPP have been made available to
Avant! and such

8
<PAGE>

agreements and instruments have not been amended, modified or supplemented, and
there are no agreements to amend, modify or supplement such agreements or
instruments in any case from the form made available to Avant!.

2.3 Authority. Meta has all requisite corporate power and authority to
---------
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Meta, subject only to the approval of the Merger
by Meta's shareholders as contemplated by Section 6.1(a). This Agreement has
been duly executed and delivered by Meta and constitutes the valid and binding
obligation of Meta enforceable against Meta in accordance with its terms. The
Board of Directors of Meta has unanimously approved this Agreement and the
transactions contemplated hereby. The execution and delivery of this Agreement
by Meta does not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or default under (with
or without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
material benefit under (i) any provision of the Articles of Incorporation or
Bylaws of Meta or any of its subsidiaries, or (ii) any material mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Meta or any of its subsidiaries or any of their
properties or assets, except where such conflict, violation, default,
termination, cancellation or acceleration with respect to the foregoing
provisions of (ii) would not have a Material Adverse Effect on Meta. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality ("Governmental Entity") is required by or with
respect to Meta or any of its subsidiaries in connection with the execution and
delivery of this Agreement, or the consummation of the transactions contemplated
hereby and thereby, except for (i) the filing of the Agreement of Merger as
provided in Section 1.2; (ii) the filing with the Securities and Exchange
Commission (the "SEC") and the National Association of Securities Dealers, Inc.
(the "NASD") of the Proxy Statement (as defined in Section 2.17) relating to the
Meta Shareholders' Meeting (as defined in Section 2.17), (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the securities laws
of any foreign country; (iv) filings required to be made by each of Meta and
Avant! under the HSR Act (as defined in Section 5.20 below); and (v) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on Meta and would not
prevent, or materially alter or delay any of the transactions contemplated by
this Agreement.

2.4 SEC Documents; Financial Statements. Meta has furnished to Avant! a
-----------------------------------
true and complete copy of each statement, report, registration statement
(together with the prospectus in the form filed pursuant to Rule 424(b) of the
Securities Act of 1933, as amended (the "Securities Act"), if any), definitive
proxy statement and other filings filed with the SEC by Meta on or after
November 7, 1995, and, prior to the Effective Time, Meta will have furnished
Avant! with true and complete copies of any additional documents filed with the
SEC by Meta prior to the Effective Time (collectively, the "Meta SEC
Documents"). In addition, Meta has

9
<PAGE>

made available to Avant! all exhibits to the Meta SEC Documents filed prior to
the date hereof, and will promptly make available to Avant! all exhibits to any
additional Meta SEC Documents filed prior to the Effective Time. All documents
required to be filed as exhibits to the Meta SEC Documents have been so filed,
and all material contracts so filed as exhibits are in full force and effect,
except those which have expired or have been terminated in accordance with their
terms, and neither Meta nor any of its subsidiaries is in material default
thereunder. As of their respective filing dates, the Meta SEC Documents complied
in all material respects with the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Securities Act, and none of the
Meta SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected, modified or superseded by a
subsequently filed Meta SEC Document. The financial statements of Meta,
including the notes thereto, included in the Meta SEC Documents (the "Meta
Financial Statements") were complete and correct in all material respects as of
their respective dates, complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates, and have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto or, in the case of
unaudited statements included in Quarterly Reports on Form 10-QSB, as permitted
by Form 10-QSB of the SEC). The Meta Financial Statements fairly present in all
material respects the consolidated financial condition and operating results of
Meta and its subsidiaries at the dates and during the periods indicated therein
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments). There has been no change in Meta accounting policies except as
described in the notes to the Meta Financial Statements.

2.5 Absence of Certain Changes. Except as set forth in the Meta SEC
--------------------------
Documents, since June 30, 1996 (the "Meta Balance Sheet Date"), Meta has
conducted its business in the ordinary course consistent with past practice and
there has not occurred: (i) any change, event or condition (whether or not
covered by insurance) that has resulted in a Material Adverse Effect on Meta;
(ii) any acquisition, sale or transfer of any material asset of Meta or any of
its subsidiaries other than in the ordinary course of business and consistent
with past practice; (iii) any change in accounting methods or practices
(including any change in depreciation or amortization policies or rates) by Meta
or any revaluation by Meta of any of its or any of its subsidiaries' assets;
(iv) any declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of Meta, or any direct or indirect
redemption, purchase or other acquisition by Meta of any of its shares of
capital stock; (v) any material contract entered into by Meta or any of its
subsidiaries, other than in the ordinary course of business and as provided to
Avant!, or any material amendment or termination of, or default under, any
material contract to which Meta or any of its subsidiaries is a party or by
which it is bound; (vi) any action by Meta or, to Meta's knowledge, any
affiliate of Meta which might reasonably be expected to preclude the ability of
Avant! to account for the business combination to be effected by the Merger as a
"pooling of interests" under generally accepted accounting principles; (vii) any
increase in the compensation payable or to become payable by Meta to any of its
officers, directors, consultants or employees (except for salary or rate
increases granted to such

10
<PAGE>

persons in the ordinary course of business and consistent with prior practice);
(viii) any (A) grant of any severance or termination pay to any director,
officer or employee of Meta or any of its subsidiaries, (B) entering into of any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director, officer or employee of Meta
or any such subsidiary, (C) any increase in benefits payable under any existing
severance or termination pay policies or employment agreements, or (D) any
increase in compensation, bonus or other benefits payable to directors, officers
or employees of Meta or any such subsidiary, in each case other than in the
ordinary course of business consistent with past practice; or (ix) any
negotiation or agreement by Meta or any of its subsidiaries to do any of the
things described in the preceding clauses (i) through (viii) (other than
negotiations with Avant! and its representatives regarding the transactions
contemplated by this Agreement).

2.6 Absence of Undisclosed Liabilities. Meta has no material obligations
----------------------------------
or liabilities of any nature (matured or unmatured, fixed or contingent) other
than (i) those set forth or adequately provided for in the Balance Sheet
included in Meta's Quarterly Report on Form 10-QSB for the period ended June 30,
1996 (the "Meta Balance Sheet"); (ii) those incurred in the ordinary course of
business and not required to be set forth in the Meta Balance Sheet under
generally accepted accounting principles; (iii) those incurred in the ordinary
course of business since the Meta Balance Sheet Date and consistent with past
practice; and (iv) those incurred in connection with the execution and delivery
of this Agreement and the transactions contemplated hereby.

2.7 Permits and Licenses. Meta is now the holder of all licenses,
--------------------
franchises, ordinances, authorizations, permits, and certificates, domestic or
foreign (collectively, the "Meta Licenses"), necessary to enable it to continue
to conduct its business in all material respects, as presently conducted, except
where the failure to have such Meta Licenses, individually or in the aggregate,
would not have a Material Adverse Effect on Meta. All of the Meta Licenses are
in full force and effect. To the knowledge of Meta, no Federal, state, or local
government or agency having jurisdiction will revoke, cancel, rescind, refuse to
renew in the ordinary course, or modify any of the Meta Licenses, which
revocation, cancellation, rescission, refusal or modification would have a
Material Adverse Effect on Meta. There is not now pending, or, to the knowledge
of Meta, threatened any investigation before any such Federal, state, or local
governments or agencies which, either individually or in the aggregate, would
have a Material Adverse Effect on Meta. Meta has conducted its business so as to
comply with all applicable laws, regulations, ordinances, and codes, domestic
and foreign, including, without limitation, laws, regulations, ordinances, and
codes relating to the protection of the environment, the failure to comply with
which would have a Material Adverse Effect on Meta.

2.8 Properties and Contracts.
------------------------

(a) Meta owns, or is licensed to use, or leases, all property and
assets, real and personal, tangible and intangible, used in or necessary for the
conduct of its business as currently conducted, except in those cases where the
failure so to own, license or lease would not have a Material Adverse Effect on
Meta and except as this subsection (a) may relate to Meta Intellectual Property
which is addressed exclusively by Section 2.10 below.

11
<PAGE>

(b) To the knowledge of Meta, (i) all of the material contracts of
Meta are presently valid and existing and in full force and effect, and (ii)
there is no violation or default or claim of violation or default by any party
thereto and no condition or event has occurred which with notice or lapse of
time or both would constitute a violation or default thereunder, except for any
such failure or any such violation, default, or claim, which would not have a
Material Adverse Effect on Meta.

2.9 Litigation. There is no private or governmental action, suit,
----------
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the knowledge of Meta, threatened
against Meta or any of its subsidiaries or any of their respective properties or
any of their respective officers or directors (in their capacities as such)
that, if adversely determined, individually or in the aggregate, would have a
Material Adverse Effect on Meta or that arise out of or in any way relate to
this Agreement, the Merger or any of the transactions contemplated hereby. From
the date of this Agreement until the Effective Time, Meta shall promptly advise
Avant! of any such action, suit, proceeding, claim, arbitration or investigation
that is commenced, or, to the knowledge of Meta, threatened against Meta or any
of its subsidiaries. There is no judgment, decree or order against Meta or any
of its subsidiaries, or, to the knowledge of Meta, any of their respective
directors or officers (in their capacities as such), that could prevent, enjoin,
alter or materially delay any of the transactions contemplated by this Agreement
or that would have a Material Adverse Effect on Meta.

2.10 Intellectual Property.
---------------------

(a) Meta and its subsidiaries own, or otherwise possess legally
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights, and any applications therefor, maskworks, net lists, schematics,
technology, know-how, trade secrets, inventory, ideas, algorithms, processes,
computer software programs or applications (in source code and/or object code
form), and tangible or intangible proprietary information or material ("Meta
Intellectual Property") that are used or proposed to be used in the business of
Meta and its subsidiaries as currently conducted (including with respect to
products currently under development that are expected to be material to Meta's
business), except to the extent that the failure to have such rights has not had
and would not have a Material Adverse Effect on Meta.

(b) Schedule 2.10 lists (i) all patents and patent applications and
-------------
all material registered and unregistered trademarks, trade names and service
marks, registered copyrights, and maskworks that are included in the Meta
Intellectual Property, including the jurisdictions in which each such Meta
Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (ii) all
licenses, sublicenses and other agreements as to which Meta is a party and
pursuant to which any person is authorized to use any Meta Intellectual Property
other than end user licenses entered into with customers of Meta in the ordinary
course of business and licenses that the loss of which would not have a Material
Adverse Effect on Meta, and (iii) all licenses, sublicenses and other agreements
as to which Meta is a party and pursuant to which Meta is authorized to use any
third party patents, trademarks or copyrights, including software ("Meta Third
Party Intellectual Property Rights") which are incorporated in, are, or form a
part of any Meta product that is

12
<PAGE>

material to its business or any Meta product under development that is expected
to be material to its business, other than end user licenses of commercially
available products of third parties entered into in the ordinary course of
business.

(c) To the knowledge of Meta, there is no material unauthorized use,
disclosure, infringement or misappropriation of any Meta Intellectual Property
rights of Meta or any of its subsidiaries, any trade secret material to Meta or
any of its subsidiaries, or any Meta Intellectual Property right of any third
party to the extent licensed by or through Meta or any of its subsidiaries, by
any third party, including any employee or former employee of Meta or any of its
subsidiaries. Neither Meta nor any of its subsidiaries has entered into any
agreement to indemnify any other person against any charge of infringement by
any Meta Intellectual Property, other than indemnification provisions contained
in end user licenses entered into with customers of Meta arising in the ordinary
course of business.

(d) Neither Meta nor any of its subsidiaries is, nor will they be
as a result of the execution and delivery of this Agreement or the performance
of their respective obligations under this Agreement, in breach of any license,
sublicense or other agreement relating to the Meta Intellectual Property or Meta
Third Party Intellectual Property Rights, which breach would have a Material
Adverse Effect on Meta.

(e) To Meta's knowledge, all patents, registered trademarks,
service marks and copyrights held by Meta or any of its subsidiaries are valid
and subsisting. Meta (i) has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right of
any third party; (ii) has no knowledge that the manufacturing, marketing,
licensing or sale of its products infringes any patent, trademark, service mark,
copyright, trade secret or other proprietary right of any third party, which
such infringement would have a Material Adverse Effect on Meta; and (iii) has
not brought any action, suit or proceeding for infringement of Meta Intellectual
Property or breach of any license or agreement involving Meta Intellectual
Property against any third party.

(f) Meta has secured from all consultants and employees who
contributed to the creation or development of Meta Intellectual Property valid
written assignments of the rights to such contributions that Meta does not
already own by operation of law, the absence of which would have a Material
Adverse Effect on Meta.

(g) Meta has taken all commercially reasonable steps to protect and
preserve the confidentiality of all Meta Intellectual Property not otherwise
protected by patents, patent applications or copyright ("Meta Confidential
Information"). All use, disclosure or appropriation of Meta Confidential
Information owned by Meta by or to a third party has been pursuant to the terms
of a written agreement between Meta and such third party. All use, disclosure or
appropriation of Meta Confidential Information not owned by Meta has been
pursuant to the terms of a written agreement between Meta and the owner of such
Meta Confidential Information, or is otherwise lawful.

13
<PAGE>

2.11 Environmental Matters. To the knowledge of Meta, each of Meta and
---------------------
its subsidiaries is and at all times has been in compliance with all foreign,
federal, state and local laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous or toxic materials
or waste, except to the extent noncompliance with such laws has not had and
would not have a Material Adverse Effect on Meta.

2.12 Taxes. Meta and each of its subsidiaries, and any consolidated,
-----
combined or unitary group for Tax purposes of which Meta or any of its
subsidiaries is or has been a member have timely filed all Tax Returns required
to be filed by them and have paid all Taxes shown thereon to be due. The Meta
Financial Statements (i) fully accrue all actual and contingent liabilities for
Taxes with respect to all periods through June 30, 1996 and, to the knowledge of
Meta, Meta and each of its subsidiaries have not and will not incur any Tax
liability in excess of the amount reflected on the Meta Financial Statements
with respect to such periods, and (ii) properly accrue in accordance with
generally accepted accounting principles all liabilities for Taxes payable after
June 30, 1996 with respect to all transactions and events occurring on or prior
to such date. No material Tax liability since June 30, 1996 has been incurred by
Meta or its subsidiaries other than in the ordinary course of business and
adequate provision has been made in the Meta Financial Statements for all Taxes
since that date in accordance with generally accepted accounting principles on
at least a quarterly basis. Meta and each of its subsidiaries have withheld and
paid or will timely pay to the applicable financial institution or Tax Authority
all amounts required to be withheld. No notice of deficiency or similar document
of any Tax Authority has been received by either Meta or any of its
subsidiaries, and there are no liabilities for Taxes with respect to the issues
that have been raised (and are currently pending) by any Tax Authority that
would, if determined adversely to Meta and its subsidiaries, materially and
adversely affect the liability of Meta and its subsidiaries for Taxes. There is
(i) no material claim for Taxes that is a lien against the property of Meta or
any of its subsidiaries other than liens for Taxes not yet due and payable, (ii)
no notification received by Meta of any audit of any Tax Return of Meta or any
of its subsidiaries being conducted pending or threatened by a Tax Authority,
and (iii) no extension or waiver of the statute of limitations on the assessment
of any Taxes granted by Meta or any of its subsidiaries and currently in effect.
Neither Meta nor any of its subsidiaries is a party to any tax sharing or tax
allocation agreement nor does Meta or any of its subsidiaries owe any amount
under any such agreement. For purposes of this Agreement, the following terms
have the following meanings: "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") means (i) any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other
tax governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any Governmental Entity (a "Tax Authority") responsible for the
imposition of any such tax (domestic or foreign), (ii) any liability for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any Taxable
period and (iii) any liability for the payment of any amounts of the type
described in (i) or (ii) as a result of any express or implied obligation to
indemnify any other person. As used herein, "Tax Return" shall mean any return,
statement, report or form including, without limitation, estimated Tax returns

14
<PAGE>

and reports, withholding Tax returns and reports and information reports and
returns required to be filed with respect to Taxes.

2.13 Employee Benefit Plans.
----------------------

(a) Schedule 2.13 lists, with respect to Meta, any subsidiary of
-------------
Meta and any trade or business (whether or not incorporated) which is treated as
a single employer with Meta (an "ERISA Affiliate") within the meaning of Section
414(b), (c), (m) or (o) of the Code, (i) all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), (ii) each loan to a non-officer employee in excess of
$10,000, loans to officers and directors and any stock option, stock purchase,
phantom stock, stock appreciation right, supplemental retirement, severance,
sabbatical, medical, dental, vision care, disability, employee relocation,
cafeteria benefit (Code section 125) or dependent care (Code Section 129), life
insurance or accident insurance plans, programs or arrangements, (iii) all
bonus, pension, profit sharing, savings, deferred compensation or incentive
plans, programs or arrangements, (iv) other fringe or employee benefit plans,
programs or arrangements that apply to senior management of Meta and that do not
generally apply to all employees, and (v) any current or former employment or
executive compensation or severance agreements, written or otherwise, as to
which unsatisfied obligations of Meta of greater than $10,000 remain for the
benefit of, or relating to, any present or former employee, consultant or
director of Meta (together, the "Meta Employee Plans").

(b) Meta has furnished to Avant! a copy of each of the Meta
Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets, summary plan descriptions and other
authorizing documents, and, to the extent still in its possession, any material
employee communications relating thereto) and has, with respect to each Meta
Employee Plan which is subject to ERISA reporting requirements, provided copies
of the Form 5500 reports filed for the last three plan years. Any Meta Employee
Plan intended to be qualified under Section 401(a) of the Code has either
obtained from the Internal Revenue Service a favorable determination letter as
to its qualified status under the Code, including all amendments to the Code
effected by the Tax Reform Act of 1986 and subsequent legislation, or has
applied to the Internal Revenue Service for such a determination letter prior to
the expiration of the requisite period under applicable Treasury Regulations or
Internal Revenue Service pronouncements in which to apply for such determination
letter and to make any amendments necessary to obtain a favorable determination,
or has been established under a standardized prototype plan for which an
Internal Revenue Service opinion letter has been obtained by the plan sponsor
and is valid as to the adopting employer. Meta has also furnished Avant! with
the most recent Internal Revenue Service determination or opinion letter issued
with respect to each such Meta Employee Plan, and nothing has occurred since the
issuance of each such letter which could reasonably be expected to cause the
loss of the tax-qualified status of any Meta Employee Plan subject to Code
Section 401(a).

(c) (i) None of the Meta Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there has
been no "prohibited transaction," as such term is defined in Section 406 of
ERISA and Section 4975 of the Code,

15
<PAGE>

with respect to any Meta Employee Plan, which could reasonably be expected to
have, in the aggregate, a Material Adverse Effect on Meta; (iii) each Meta
Employee Plan has been administered in accordance with its terms and in
compliance with the requirements prescribed by any and all statutes, rules and
regulations (including ERISA and the Code), except as would not have, in the
aggregate, a Material Adverse Effect on Meta, and Meta and each subsidiary or
ERISA Affiliate have performed all material obligations required to be performed
by them under, are not in any material respect in default under or violation of,
and have no knowledge of any material default or violation by any other party
to, any of the Meta Employee Plans; (iv) neither Meta nor any subsidiary or
ERISA Affiliate is subject to any liability or penalty under Sections 4976
through 4980 of the Code or Title I of ERISA with respect to any of the Meta
Employee Plans which liability or penalty would have a Material Adverse Effect
on Meta; (v) all material contributions required to be made by Meta or any
subsidiary or ERISA Affiliate to any Meta Employee Plan have been made on or
before their due dates and a reasonable amount has been accrued for
contributions to each Meta Employee Plan for the current plan years; (vi) with
respect to each Meta Employee Plan, no "reportable event" within the meaning of
Section 4043 of ERISA (excluding any such event for which the thirty (30) day
notice requirement has been waived under the regulations to Section 4043 of
ERISA) nor any event described in Section 4062, 4063 or 4041 of ERISA has
occurred; and (vii) no Meta Employee Plan is covered by, and neither Meta nor
any subsidiary or ERISA Affiliate has incurred or expects to incur any liability
under Title IV of ERISA or Section 412 of the Code. With respect to each Meta
Employee Plan subject to ERISA as either an employee pension plan within the
meaning of Section 3(2) of ERISA or an employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, Meta has prepared in good faith and timely
filed all requisite governmental reports (which were true and correct as of the
date filed) and has properly and timely filed and distributed or posted all
notices and reports to employees required to be filed, distributed or posted
with respect to each such Meta Employee Plan. No suit, administrative
proceeding, action or other litigation has been brought, or to the knowledge of
Meta is threatened, against or with respect to any such Meta Employee Plan,
including any audit or inquiry by the IRS or United States Department of Labor.
Neither Meta nor any Meta subsidiary or other ERISA Affiliate is a party to, or
has made any contribution to or otherwise incurred any obligation under, any
"multiemployer plan" as defined in Section 3(37) of ERISA.

(d) With respect to each Meta Employee Plan, Meta and each of its
United States subsidiaries have complied with (i) the applicable health care
continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), and the proposed regulations thereunder,
and (ii) the applicable requirements of the Family Leave Act of 1993 and the
regulations thereunder, except to the extent that such failure to comply would
not, in the aggregate, have a Material Adverse Effect on Meta.

(e) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or other service
provider of Meta, any Meta subsidiary or any other ERISA Affiliate to severance
benefits or any other payment (including, without limitation, unemployment
compensation, golden parachute or bonus), except as expressly provided in this
Agreement, or (ii) accelerate the time of payment or vesting of any

16
<PAGE>

such benefits, or increase the amount of compensation due any such employee or
service provider.

(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by Meta, any Meta subsidiary or other
ERISA Affiliate relating to, or change in participation or coverage under, any
Meta Employee Plan which would materially increase the expense of maintaining
such Plan above the level of expense incurred with respect to that Plan for the
most recent fiscal year included in Meta's financial statements.

2.14 Certain Agreements Affected by the Merger. Neither the execution and
-----------------------------------------
delivery of this Agreement nor the consummation of the transaction contemplated
hereby will (i) result in any material payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or employee of Meta or any of its subsidiaries,
(ii) materially increase any benefits otherwise payable by Meta or (iii) result
in the acceleration of the time of payment or vesting of any such benefits.

2.15 Brokers' and Finders' Fees. Meta has not incurred, nor will it incur,
--------------------------
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or investment bankers' fees or any similar charges in connection
with this Agreement or any transaction contemplated hereby, other than fees and
expenses payable to Wessels, Arnold & Henderson, L.L.C.

2.16 Opinion of Meta Financial Advisor. Meta has received the opinion of
---------------------------------
Wessels, Arnold & Henderson, L.L.C., to the effect that, as of the date hereof,
the consideration to be received by Meta's shareholders in the Merger is fair,
from a financial point of view, to the shareholders of Meta.

2.17 Registration Statement; Proxy Statement/Prospectus. The written
--------------------------------------------------
information supplied by Meta expressly for the purpose of inclusion in the
registration statement on Form S-4 (or such other or successor form as shall be
appropriate) pursuant to which the issuance of the shares of Avant! Common Stock
to be issued in the Merger will be registered with the SEC (the "Registration
Statement") shall not at the time the Registration Statement (including any
amendments or supplements thereto) is declared effective by the SEC contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading. The written information
supplied by Meta expressly for the purpose of inclusion in the combined proxy
statement/prospectus to be sent to the shareholders of Meta in connection with
the meetings of Meta's shareholders (the "Meta Shareholders Meeting") and
Avant!' stockholders (the "Avant! Stockholders Meeting") to be held in
connection with the Merger (such proxy statement/prospectus as amended or
supplemented is referred to herein as the "Proxy Statement") shall not, on the
date the Proxy Statement is first mailed to Meta's shareholders, at the time of
the Meta Shareholders Meeting and at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they are made, not misleading. If at any time prior to the Effective Time
any event or information should be discovered by Meta which should be set forth
in an

17
<PAGE>

amendment to the Registration Statement or a supplement to the Proxy Statement,
Meta shall promptly inform Avant! and Merger Sub. Notwithstanding the foregoing,
Meta makes no representation, warranty or covenant with respect to any
information supplied by Avant! or Merger Sub that is contained in any of the
foregoing documents.

2.18 Representations Complete. None of the representations or warranties
------------------------
made by Meta herein or in any Schedule or Exhibit hereto, including the Meta
Disclosure Schedule, or certificate furnished by Meta pursuant to this
Agreement, or the Meta SEC Documents or any written statement furnished to
Avant! by Meta pursuant hereto or in connection with the transactions
contemplated hereby, when all such documents are read together in their
entirety, contains or will contain at the Effective Time any untrue statement of
a material fact, or omits or will omit at the Effective Time to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading;
provided, however, that it is understood that the financial projections
delivered by Meta represent only Meta's best estimate under the circumstances of
what it reasonably believes (although it is not aware of any fact or information
that would lead it to believe that such projections are misleading in any
material respect) and are based upon assumptions that Meta believes were
reasonable as of the time such projections were made. Meta does not make any
other representation or warranty regarding such projections or Meta's possible
or anticipated operating performance other than as set forth in this Section
2.18.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF AVANT! AND MERGER SUB
-------------------------------------------------------

Except as disclosed in a document of even date herewith and delivered by
Avant! to Meta prior to the execution and delivery of this Agreement and
referring to the representations and warranties in this Agreement (the "Avant!
Disclosure Schedule"), Avant! and Merger Sub jointly and severally represent and
warrant to Meta as follows:

3.1 Organization, Standing and Power. Each of Avant! and Merger Sub is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization. Each of Avant! and Merger Sub has the
corporate power to own its properties and to carry on its business as now being
conducted and as proposed to be conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the failure to be so
qualified and in good standing would have a Material Adverse Effect on Avant!.
Avant! has delivered a true and correct copy of the Certificate of Incorporation
and Bylaws or other charter documents, as applicable, of Avant! and each of its
subsidiaries, each as amended to date, to Meta. Neither Avant! nor Merger Sub
is in violation of any of the provisions of its Certificate or Articles of
Incorporation or Bylaws or equivalent organizational documents. Avant! is the
owner of all outstanding shares of capital stock of Merger Sub and all such
shares are duly authorized, validly issued, fully paid and nonassessable. All
of the outstanding shares of capital stock of Merger Sub are owned by Avant!
free and clear of all liens, charges, claims or encumbrances or rights of
others. There are no outstanding subscriptions, options, warrants, puts, calls,
rights, exchangeable or convertible securities or other commitments or
agreements of

18
<PAGE>

any character relating to the issued or unissued capital stock or other
securities of any such subsidiary, or otherwise obligating Meta or any such
subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any
such securities. Except as disclosed in the Avant! SEC Documents (as defined in
Section 3.4), Avant! does not directly or indirectly own any equity or similar
interest in, or any interest convertible or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.

3.2 Capital Structure. The authorized capital stock of Avant! consists of
-----------------
50,000,000 shares of Common Stock, $.0001 par value, and 5,000,000 shares of
Preferred Stock, $.0001 par value, of which there were issued and outstanding as
of the close of business on August 9, 1996, 16,255,597 shares of Avant! Common
Stock and no shares of Preferred Stock. There are no other outstanding shares of
capital stock or voting securities of Avant! and no outstanding commitments to
issue any shares of capital stock or voting securities of Avant! after August 9,
1996, other than shares of Avant! Common Stock issued after August 9, 1996 upon
the exercise of options outstanding as of such date under the Avant! 1995 Stock
Option/Stock Issuance Plan (the "Avant! Stock Option Plan") and the Integrated
Silicon Systems stock option plans (the "ISS Option Plans"). The authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, no par
value, all of which are issued and outstanding and are held by Avant!. All
outstanding shares of Avant! and Merger Sub have been duly authorized, validly
issued, fully paid and are nonassessable and free of any liens or encumbrances
other than any liens or encumbrances created by or imposed upon the holders
thereof and are not subject to preemptive rights or rights of first refusal
created by statute, the Certificate of Incorporation or Bylaws of Avant! or any
agreements to which Avant! is a party or by which it is bound. As of July 31,
1996, Avant! had reserved 3,065,575 shares of Avant! Common Stock for issuance
to employees, directors and independent contractors pursuant to the Avant! Stock
Option Plan, of which approximately 535,000 shares have been issued pursuant to
option exercises, and approximately 1,191,000 shares are subject to outstanding,
unexercised options, and Avant! had reserved approximately 1,337,000 shares of
Avant! Common Stock for issuance to employees, directors and independent
contractors pursuant to the ISS Option Plans, all of which are subject to
outstanding, unexercised options. Other than this Agreement, there are no other
options, warrants, calls, rights, commitments or agreements of any character to
which Avant! or Merger Sub is a party or by which either of them is bound
obligating Avant! or Merger Sub to issue, deliver, sell, repurchase or redeem,
or cause to be issued, delivered, sold, repurchased or redeemed, any shares of
the capital stock of Avant! or Merger Sub or obligating Avant! or Merger Sub to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement. The shares of Avant! Common Stock to be issued pursuant to the Merger
will be duly authorized, validly issued, fully paid, and non-assessable and free
of any liens or encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof. There are no contracts, commitments or
agreements relating to voting, registration, purchase or sale of Avant!'s
capital stock (i) between or among Avant! and any of its stockholders or (ii) to
the best of Avant!'s knowledge, between or among any of Avant!'s stockholders.

19
<PAGE>

3.3 Authority. Each of Avant! and Merger Sub has all requisite corporate
---------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of each of Avant! and
Merger Sub, subject only to the approval of the issuance of shares of Avant!
Common Stock in the Merger by the stockholders of Avant!. This Agreement has
been duly executed and delivered by each of Avant! and Merger Sub and
constitutes the valid and binding obligations of each of Avant! and Merger Sub,
enforceable against each in accordance with its terms. The Boards of Directors
of Avant! and Merger Sub has unanimously approved this Agreement and the
transactions contemplated hereby. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under (i) any provision of the Certificate of Incorporation or Bylaws of Avant!
or any of its subsidiaries, or (ii) any material mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Avant! or any of its subsidiaries or their properties or assets,
except where such conflict, violation, default, termination, cancellation or
acceleration with respect to the foregoing provisions of (ii) would not have a
Material Adverse Effect on Avant!. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity, is
required by or with respect to Avant! or any of its subsidiaries in connection
with the execution and delivery of this Agreement by Avant! and Merger Sub or
the consummation by each of Avant! and Merger Sub of the transactions
contemplated hereby, except for (i) the filing of the Agreement of Merger as
provided in Section 1.2, (ii) the filing with the SEC and NASD of the
Registration Statement, (iii) the filing of a Form 8-K with the SEC and NASD
within 15 days after the Closing Date, (iv) any filings as may be required under
applicable state securities laws and the securities laws of any foreign country,
(v) the filing with the Nasdaq National Market of a Notification Form for
Listing of Additional Shares, in each case with respect to the shares of Avant!
Common Stock issuable upon conversion of the Meta Common Stock in the Merger and
upon exercise of the options, subscriptions or other awards, as the case may be,
under the Meta Stock Plans and the Meta ESPP to be assumed by Avant!, (vi)
filings required to be made by each of Avant! and Meta under the HSR Act (as
defined in Section 5.21 below); (vii) the filing of a registration statement on
Form S-8 covering the Avant! Common Stock issuable pursuant to (i) outstanding
options under the Meta Stock Plans; and (viii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not have a Material Adverse Effect on Avant! and would not prevent
or materially alter or delay any of the transactions contemplated by this
Agreement.

3.4 SEC Documents; Financial Statements. Avant! has furnished to Meta a
-----------------------------------
true and complete copy of each statement, report, registration statement (with
the prospectus in the form filed pursuant to Rule 424(b) of the Securities Act),
definitive proxy statement, and other filings filed with the SEC by Avant! since
June 6, 1995, and, prior to the Effective Time, Avant! will have furnished Meta
with true and complete copies of any additional documents filed with the SEC by
Avant! prior to the Effective Time (collectively, the "Avant! SEC Documents").

20
<PAGE>

In addition, Avant! has made available to Meta all exhibits to the Avant! SEC
Documents filed prior to the date hereof, and will promptly make available to
Meta all exhibits to any additional Avant! SEC Documents filed prior to the
Effective Time. All documents required to be filed as exhibits to the Meta SEC
Documents have been so filed, and all material contracts so filed as exhibits
are in full force and effect, except those which have expired or have been
terminated in accordance with their terms, and neither Avant! nor any of its
subsidiaries is in material default thereunder. As of their respective filing
dates, the Avant! SEC Documents complied in all material respects with the
requirements of the Exchange Act and the Securities Act, and none of the Avant!
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected by a subsequently filed
Avant! SEC Document. The financial statements of Avant!, including the notes
thereto, included in the Avant! SEC Documents (the "Avant! Financial
Statements") were complete and correct in all material respects as of their
respective dates, complied as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto as of their respective dates, and have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent throughout the periods indicated and consistent with each other
(except as may be indicated in the notes thereto or, in the case of unaudited
statements included in Quarterly Reports on Form 10-Q, as permitted by Form 10-Q
of the SEC). The Avant! Financial Statements fairly present in all material
respects the consolidated financial condition and operating results of Avant!
and its subsidiaries at the dates and during the periods indicated therein
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments). There has been no change in Avant! accounting policies except as
described in the notes to the Avant! Financial Statements.

3.5 Absence of Certain Changes. Except as set forth in the Avant! SEC
--------------------------
Documents, since June 30, 1996 (the "Avant! Balance Sheet Date"), Avant! has
conducted its business in the ordinary course consistent with past practice and
there has not occurred: (i) any change, event or condition (whether or not
covered by insurance) that has resulted in a Material Adverse Effect on Avant!;
(ii) any acquisition, sale or transfer of any material asset of Avant! or any of
its subsidiaries other than in the ordinary course of business and consistent
with past practice; (iii) any change in accounting methods or practices
(including any change in depreciation or amortization policies or rates) by
Avant! or any revaluation by Avant! of any of its assets; (iv) any declaration,
setting aside, or payment of a dividend or other distribution with respect to
the shares of Avant!, or any direct or indirect redemption, purchase or other
acquisition by Avant! of any of its shares of capital stock; (v) any material
contract entered into by Avant!, other than in the ordinary course of business
and as provided to Meta, or any material amendment or termination of, or default
under, any material contract to which Avant! is a party or by which it is bound;
(vi) any action by Avant! or, to Avant!'s knowledge, any affiliate of Avant!
which might reasonably be expected to preclude the ability of Avant! to account
for the business combination to be effected by the Merger as a "pooling of
interests" under generally accepted accounting principles; (vii) any increase in
the compensation payable or to become payable by Avant! to any of its officers,
directors, consultants or employees (except for salary or rate increases granted
to such persons in the ordinary course of business and consistent with prior

21
<PAGE>

practice); (viii) any (A) grant of any severance or termination pay to any
director, officer or employee of Avant! or any of its subsidiaries, (B) entering
into of any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or employee
of Avant! or any such subsidiary, (C) any increase in benefits payable under any
existing severance or termination pay policies or employment agreements, or (D)
any increase in compensation, bonus or other benefits payable to directors,
officers or employees of Avant! or any such subsidiary, in each case other than
in the ordinary course of business consistent with past practice; or (ix) any
negotiation or agreement by Avant! or any of its subsidiaries to do any of the
things described in the preceding clauses (i) through (viii) (other than
negotiations with Meta and its representatives regarding the transactions
contemplated by this Agreement).

3.6 Absence of Undisclosed Liabilities. Avant! has no material
----------------------------------
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in Avant!'s Quarterly Report on Form 10-Q for the period
ended June 30, 1996 (the "Avant! Balance Sheet"); (ii) those incurred in the
ordinary course of business and not required to be set forth in the Avant!
Balance Sheet under generally accepted accounting principles; (iii) those
incurred in the ordinary course of business since the Avant! Balance Sheet Date
and consistent with past practice; and (iv) those incurred in connection with
the execution and delivery of this Agreement and the transactions contemplated
hereby.

3.7 Permits and Licenses. Avant! is now the holder of all licenses,
--------------------
franchises, ordinances, authorizations, permits, and certificates, domestic or
foreign (collectively, the "Avant! Licenses"), necessary to enable it to
continue to conduct its business in all material respects as presently
conducted, except where the failure to have such Avant! Licenses, individually
or in the aggregate, would not have a Material Adverse Effect on Avant!. All of
Avant! Licenses are in full force and effect. To the knowledge of Avant!, no
Federal, state, or local government or agency having jurisdiction will revoke,
cancel, rescind, refuse to renew in the ordinary course, or modify any of Avant!
Licenses, which revocation, cancellation, rescission, refusal or modification
would have a Material Adverse Effect on Avant!. There is not now pending, or,
to the knowledge of Avant!, threatened any investigation before any such
Federal, state, or local governments or agencies which, either individually or
in the aggregate, would have a Material Adverse Effect on Avant!. Avant! has
conducted its business so as to comply with all applicable laws, regulations,
ordinances, and codes, domestic and foreign, including, without limitation,
laws, regulations, ordinances, and codes relating to the protection of the
environment, the failure to comply with which would have a Material Adverse
Effect on Avant!.

3.8 Properties and Contracts.
------------------------

(a) Avant! owns, or is licensed to use, or leases, all property and
assets, real and personal, tangible and intangible, used in or necessary for the
conduct of its business as currently conducted, except in those cases where the
failure so to own, license or
22
<PAGE>

lease would not have a Material Adverse Effect on Avant! and except as this
subsection (a) may relate to Avant! Intellectual Property which is addressed
exclusively by Section 3.10 below.

(b) To the knowledge of Avant!, (i) all of the material contracts
of Avant! are presently valid and existing and in full force and effect, and
(ii) there is no violation or default or claim of violation or default by any
party thereto and no condition or event has occurred which with notice or lapse
of time or both would constitute a violation or default thereunder, except for
any such failure or any such violation, default, or claim, which would not have
a Material Adverse Effect on Avant!.

3.9 Litigation. There is no private or governmental action, suit,
----------
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the knowledge of Avant!, threatened
against Avant! or any of its subsidiaries or any of their respective properties
or any of their respective officers or directors (in their capacities as such)
that, if adversely determined, individually or in the aggregate, would have a
Material Adverse Effect on Avant! or that arise out of or in any way relate to
this Agreement, the Merger or any of the transactions contemplated hereby. From
the date of this Agreement until the Effective Time, Avant! shall promptly
advise Meta of any such action, suit, proceeding, claim, arbitration or
investigation that is commenced, or, to the knowledge of Avant!, threatened
against Avant! or any of its subsidiaries. There is no judgment, decree or order
against Avant! or any of its subsidiaries or, to the knowledge of Avant!, any of
their respective directors or officers (in their capacities as such) that could
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement or that would have a Material Adverse Effect on Avant!.

3.10 Intellectual Property.
---------------------

(a) Avant! and its subsidiaries own, or otherwise possess legally
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights, and any applications therefor, maskworks, net lists, schematics,
technology, know-how, trade secrets, inventory, ideas, algorithms, processes,
computer software programs or applications (in source code and/or object code
form), and tangible or intangible proprietary information or material ("Avant!
Intellectual Property") that are used or proposed to be used in the business of
Avant! and its subsidiaries as currently conducted (including with respect to
products currently under development), except to the extent that the failure to
have such rights has not had and would not have a Material Adverse Effect on
Avant!.

(b) Schedule 3.10 lists (i) all patents and patent applications and
-------------
all registered and unregistered trademarks, trade names and service marks,
registered copyrights, and maskworks that are included in the Avant!
Intellectual Property, including the jurisdictions in which each such Avant!
Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (ii) all
licenses, sublicenses and other agreements as to which Avant! is a party and
pursuant to which any person is authorized to use any Avant! Intellectual
Property other than end user licenses entered into with customers of Avant! in
the ordinary course of business, and (iii) all licenses, sublicenses and other
agreements

23
<PAGE>

as to which Avant! is a party and pursuant to which Avant! is authorized to use
any third party patents, trademarks or copyrights, including software ("Avant!
Third Party Intellectual Property Rights") which are incorporated in, are, or
form a part of any Avant! product that is material to its business, other than
end user licenses of commercially available products of third parties entered
into in the ordinary course of business.

(c) To the knowledge of Avant!, there is no material unauthorized
use, disclosure, infringement or misappropriation of any Avant! Intellectual
Property rights of Avant! or any of its subsidiaries, any trade secret material
to Avant! or any of its subsidiaries, or any Avant! Intellectual Property right
of any third party to the extent licensed by or through Avant! or any of its
subsidiaries, by any third party, including any employee or former employee of
Avant! or any of its subsidiaries. Neither Avant! nor any of its subsidiaries
has entered into any agreement to indemnify any other person against any charge
of infringement of any Avant! Intellectual Property, other than indemnification
provisions contained in end user licenses entered into with customers of Avant!
arising in the ordinary course of business.

(d) Neither Avant! nor any of its subsidiaries is, nor will they be
as a result of the execution and delivery of this Agreement or the performance
of their respective obligations under this Agreement, in breach of any license,
sublicense or other agreement relating to the Avant! Intellectual Property or
Avant! Third Party Intellectual Property Rights, which breach would have a
Material Adverse Effect on Avant!.

(e) To Avant!'s knowledge, all patents, registered trademarks,
service marks and copyrights held by Avant! or any of its subsidiaries are valid
and subsisting. Avant! (i) has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right of
any third party; (ii) has no knowledge that the manufacturing, marketing,
licensing or sale of its products infringes any patent, trademark, service mark,
copyright, trade secret or other proprietary right of any third party, which
such infringement would have a Material Adverse Effect on Avant!; and (iii) has
not brought any action, suit or proceeding for infringement of Avant!
Intellectual Property or breach of any license or agreement involving Avant!
Intellectual Property against any third party.

(f) Avant! has secured from all consultants and employees who
contributed to the creation or development of Avant! Intellectual Property valid
written assignments of the rights to such contributions that Avant! does not
already own by operation of law, the absence of which would have a Material
Adverse Effect on Avant!.

(g) Avant! has taken all commercially reasonable steps to protect
and preserve the confidentiality of all Avant! Intellectual Property not
otherwise protected by patents, patent applications or copyright ("Avant!
Confidential Information"). All use, disclosure or appropriation of Avant!
Confidential Information owned by Avant! by or to a third party has been
pursuant to the terms of a written agreement between Avant! and such third
party. All use, disclosure or appropriation of Avant! Confidential Information
not owned by Avant! has been

24
<PAGE>

pursuant to the terms of a written agreement between Avant! and the owner of
such Avant! Confidential Information, or is otherwise lawful.

3.11 Environmental Matters. To the knowledge of Avant!, each of Avant!
---------------------
and its subsidiaries is and at all times has been in compliance with all
foreign, Federal, state and local laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic materials or waste, except to the extent noncompliance with such laws has
not had and would not have a Material Adverse Effect on Avant!.

3.12 Taxes. Avant! and each of its subsidiaries, and any consolidated,
-----
combined or unitary group for Tax purposes of which Avant! or any of its
subsidiaries is or has been a member have timely filed all Tax Returns required
to be filed by them and have paid all Taxes shown thereon to be due. The Avant!
Financial Statements (i) fully accrue all actual and contingent liabilities for
Taxes with respect to all periods through June 30, 1996 and, to the knowledge of
Avant!, Avant! and each of its subsidiaries have not and will not incur any Tax
liability in excess of the amount reflected on the Avant! Financial Statements
with respect to such periods, and (ii) properly accrue in accordance with
generally accepted accounting principles all liabilities for Taxes payable after
June 30, 1996 with respect to all transactions and events occurring on or prior
to such date. No material Tax liability since June 30, 1996 has been incurred by
Avant! or its subsidiaries other than in the ordinary course of business and
adequate provision has been made in the Avant! Financial Statements for all
Taxes since that date in accordance with generally accepted accounting
principles on at least a quarterly basis. Avant! and each of its subsidiaries
have withheld and paid or will timely pay to the applicable financial
institution or Tax Authority all amounts required to be withheld. No notice of
deficiency or similar document of any Tax Authority has been received by either
Avant! or any of its subsidiaries, and there are no liabilities for Taxes with
respect to the issues that have been raised (and are currently pending) by any
Tax Authority that would, if determined adversely to Avant! and its
subsidiaries, materially and adversely affect the liability of Avant! and its
subsidiaries for Taxes. There is (i) no material claim for Taxes that is a lien
against the property of Avant! or any of its subsidiaries other than liens for
Taxes not yet due and payable, (ii) no notification received by Avant! of any
audit of any Tax Return of Avant! or any of its subsidiaries being conducted
pending or threatened by a Tax Authority, (iii) no extension or waiver of the
statute of limitations on the assessment of any Taxes granted by Avant! or any
of its subsidiaries and currently in effect. Neither Avant! nor any of its
subsidiaries is a party to any tax sharing or tax allocation agreement nor does
Avant! or any of its subsidiaries owe any amount under any such agreement.

3.13 Employee Benefit Plans.
----------------------

(a) Schedule 3.13 lists, with respect to Avant!, any subsidiary of
-------------
Avant! and any ERISA Affiliate, (i) all employee benefit plans (as defined in
Section 3(3) of ERISA), (ii) each loan to a non-officer employee in excess of
$10,000, loans to officers and directors and any stock option, stock purchase,
phantom stock, stock appreciation right, supplemental retirement, severance,
sabbatical, medical, dental, vision care, disability, employee relocation,
cafeteria benefit (Code section 125) or dependent care (Code Section 129), life
insurance or accident insurance plans, programs or arrangements, (iii) all
bonus, pension, profit

25
<PAGE>

sharing, savings, deferred compensation or incentive plans, programs or
arrangements, (iv) other fringe or employee benefit plans, programs or
arrangements that apply to senior management of Avant! and that do not generally
apply to all employees, and (v) any current or former employment or executive
compensation or severance agreements, written or otherwise, as to which
unsatisfied obligations of Avant! of greater than $10,000 remain for the benefit
of, or relating to, any present or former employee, consultant or director of
Avant! (together, the "Avant! Employee Plans").

(b) Avant! has furnished to Meta a copy of each of the Avant!
Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets, summary plan descriptions and other
authorizing documents, and, to the extent still in its possession, any material
employee communications relating thereto) and has, with respect to each Avant!
Employee Plan which is subject to ERISA reporting requirements, provided copies
of the Form 5500 reports filed for the last three plan years. Any Avant!
Employee Plan intended to be qualified under Section 401(a) of the Code has
either obtained from the Internal Revenue Service a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied to the Internal Revenue Service for such a determination letter
prior to the expiration of the requisite period under applicable Treasury
Regulations or Internal Revenue Service pronouncements in which to apply for
such determination letter and to make any amendments necessary to obtain a
favorable determination, or has been established under a standardized prototype
plan for which an Internal Revenue Service opinion letter has been obtained by
the plan sponsor and is valid as to the adopting employer. Avant! has also
furnished Avant! with the most recent Internal Revenue Service determination or
opinion letter issued with respect to each such Avant! Employee Plan, and
nothing has occurred since the issuance of each such letter which could
reasonably be expected to cause the loss of the tax-qualified status of any
Avant! Employee Plan subject to Code Section 401(a).

(c) (i) None of the Avant! Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there has
been no "prohibited transaction," as such term is defined in Section 406 of
ERISA and Section 4975 of the Code, with respect to any Avant! Employee Plan,
which could reasonably be expected to have, in the aggregate, a Material Adverse
Effect on Avant!; (iii) each Avant! Employee Plan has been administered in
accordance with its terms and in compliance with the requirements prescribed by
any and all statutes, rules and regulations (including ERISA and the Code),
except as would not have, in the aggregate, a Material Adverse Effect on Avant!,
and Avant! and each subsidiary or ERISA Affiliate have performed all material
obligations required to be performed by them under, are not in any material
respect in default under or violation of, and have no knowledge of any material
default or violation by any other party to, any of the Avant! Employee Plans;
(iv) neither Avant! nor any subsidiary or ERISA Affiliate is subject to any
liability or penalty under Sections 4976 through 4980 of the Code or Title I of
ERISA with respect to any of the Avant! Employee Plans; (v) all material
contributions required to be made by Avant! or any subsidiary or ERISA Affiliate
to any Avant! Employee Plan have been made on or before their due dates and a
reasonable amount has been accrued for contributions to each Avant! Employee
Plan for the

26
<PAGE>

current plan years; (vi) with respect to each Avant! Employee Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the thirty (30) day notice requirement has been waived
under the regulations to Section 4043 of ERISA) nor any event described in
Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) no Avant! Employee
Plan is covered by, and neither Avant! nor any subsidiary or ERISA Affiliate has
incurred or expects to incur any liability under Title IV of ERISA or Section
412 of the Code. With respect to each Avant! Employee Plan subject to ERISA as
either an employee pension plan within the meaning of Section 3(2) of ERISA or
an employee welfare benefit plan within the meaning of Section 3(1) of ERISA,
Avant! has prepared in good faith and timely filed all requisite governmental
reports (which were true and correct as of the date filed) and has properly and
timely filed and distributed or posted all notices and reports to employees
required to be filed, distributed or posted with respect to each such Avant!
Employee Plan. No suit, administrative proceeding, action or other litigation
has been brought, or to the knowledge of Avant! is threatened, against or with
respect to any such Avant! Employee Plan, including any audit or inquiry by the
IRS or United States Department of Labor. Neither Avant! nor any Avant!
subsidiary or other ERISA Affiliate is a party to, or has made any contribution
to or otherwise incurred any obligation under, any "multiemployer plan" as
defined in Section 3(37) of ERISA.

(d) With respect to each Avant! Employee Plan, Avant! and each of
its United States subsidiaries have complied with (i) the applicable health care
continuation and notice provisions of COBRA and the proposed regulations
thereunder, and (ii) the applicable requirements of the Family Leave Act of 1993
and the regulations thereunder, except to the extent that such failure to comply
would not, in the aggregate, have a Material Adverse Effect on Avant!.

(e) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or other service
provider of Avant!, any Avant! subsidiary or any other ERISA Affiliate to
severance benefits or any other payment (including, without limitation,
unemployment compensation, golden parachute or bonus), except as expressly
provided in this Agreement, or (ii) accelerate the time of payment or vesting of
any such benefits, or increase the amount of compensation due any such employee
or service provider.

(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by Avant!, any Avant! subsidiary or other
ERISA Affiliate relating to, or change in participation or coverage under, any
Avant! Employee Plan which would materially increase the expense of maintaining
such Plan above the level of expense incurred with respect to that Plan for the
most recent fiscal year included in Avant!'s financial statements.

3.14 Certain Agreements Affected by the Merger. Neither the execution and
-----------------------------------------
delivery of this Agreement nor the consummation of the transaction contemplated
hereby will (i) result in any material payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or employee

27
<PAGE>

of Avant! or any of its subsidiaries, (ii) materially increase any benefits
otherwise payable by Avant! or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.

3.15 Brokers' and Finders' Fees. Avant! has not incurred, nor will it
--------------------------
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby, other
than fees and expenses payable to Avant!'s financial advisor.

3.16 Registration Statement; Proxy Statement/Prospectus. The written
--------------------------------------------------
information supplied by Avant! and Merger Sub expressly for the purpose of
inclusion in the Registration Statement shall not, at the time the Registration
Statement (including any amendments or supplements thereto) is declared
effective by the SEC, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
written information supplied by Avant! expressly for the purpose of inclusion in
the Proxy Statement shall not, on the date the Proxy Statement is first mailed
to Avant!'s stockholders, at the time of the Avant! Stockholders Meeting and at
the Effective Time, contain any statement which, at such time, is false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Avant!
Stockholders Meeting which has become false or misleading. If at any time prior
to the Effective Time any event or information should be discovered by Avant! or
Merger Sub which should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, Avant! or Merger Sub will
promptly inform Meta. Notwithstanding the foregoing, Avant! and Merger Sub make
no representation, warranty or covenant with respect to any information supplied
by Meta which is contained in any of the foregoing documents.

3.17 Representations Complete. None of the representations or warranties
------------------------
made by Avant! or Merger Sub herein or in any Schedule or Exhibit hereto,
including the Avant! Disclosure Schedule, or certificate furnished by Avant! or
Merger Sub pursuant to this Agreement, or the Avant! SEC Documents or any
written statement furnished to Meta by Avant! pursuant hereto or in connection
with the transactions contemplated hereby, when all such documents are read
together in their entirety, contains or will contain at the Effective Time any
untrue statement of a material fact, or omits or will omit at the Effective Time
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.

ARTICLE IV

CONDUCT PRIOR TO THE EFFECTIVE TIME
-----------------------------------

4.1 Conduct of Business of Avant! and Meta. During the period from the
--------------------------------------
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the

28
<PAGE>

Effective Time, each of Avant! and Meta agrees (except to the extent expressly
contemplated by this Agreement or the Disclosure Schedules or as consented to in
writing by the other) to carry on its and its subsidiaries' business in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted; to pay and to cause its subsidiaries to pay debts and
taxes when due subject (i) to good faith disputes over such debts or taxes and
(ii) in the case of taxes of Meta or any of its subsidiaries, to Avant!'s review
of material Tax Returns prior to filing, if applicable; to pay or perform other
obligations when due; to use all reasonable efforts consistent with past
practice and policies to preserve intact its and its subsidiaries' present
business organizations; to use commercially reasonable efforts consistent with
past practice to keep available the services of its and its subsidiaries'
present officers and key employees (provided, however, that the failure to
retain the services of its or its subsidiaries' present officers and key
employees (after taking such reasonable efforts) shall not constitute a breach
of this Section 4.1); and to use commercially reasonable efforts consistent with
past practice to preserve its and its subsidiaries' relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it or its subsidiaries, to the end that its and its
subsidiaries' goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Each of Avant! and Meta agrees to promptly notify the other of
any event or occurrence not in the ordinary course of its or its subsidiaries'
business, and of any event which could have a Material Adverse Effect. Without
limiting the foregoing, except as expressly contemplated by this Agreement,
neither Avant! nor Meta shall do, cause or permit any of the following, or
allow, cause or permit any of its subsidiaries to do, cause or permit any of the
following, without the prior written consent of the other:

(a) Stock Option Plans, Etc. Accelerate, amend or change the
-----------------------
period of exercisability or vesting of options or other rights granted under its
stock option agreements or stock plans or authorize cash payments in exchange
for any options or other rights granted under any of such agreements or plans,
except as may be required by the terms of such agreements or plans or any
related agreements then in effect and except as disclosed in the Disclosure
Schedules; or issue or grant shares of its Common Stock or options to acquire
its Common Stock in a manner materially inconsistent with historical practices;

(b) Pooling. To the knowledge of Avant! or Meta, take any action,
-------
which would interfere with Avant!'s ability to account for the Merger as a
pooling of interests;

(c) Other. Take, or agree in writing or otherwise to take, any of
-----
the actions described in Sections 4.1(a) or (b) above, or any action which would
make any of its representations or warranties contained in this Agreement untrue
or incorrect in any material respect or prevent it from performing or cause it
not to perform its covenants hereunder in any material respect.

4.2 Conduct of Business of Meta. During the period from the date of this
---------------------------
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, except as expressly contemplated by this Agreement or the
Meta Disclosure Schedule, Meta shall not do, cause or permit any of the
following, or allow, cause or permit any of its

29
<PAGE>

subsidiaries to do, cause or permit any of the following, without the prior
written consent of Avant!, which shall not be unreasonably withheld or delayed:

(a) Material Contracts. Enter into any material contract or
------------------
commitment, or violate, amend or otherwise modify or waive any of the material
terms of any of its material contracts, other than in the ordinary course of
business consistent with past practice;

(b) Intellectual Property. Transfer to any person or entity any
---------------------
rights to its Intellectual Property other than in the ordinary course of
business consistent with past practice;

(c) Exclusive Rights. Enter into or amend any agreements pursuant
----------------
to which any other party is granted exclusive marketing or other exclusive
rights of any type or scope with respect to any of its products or technology;

(d) Indebtedness. Incur any indebtedness for borrowed money or
------------
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, other than in the ordinary course of
business and consistent with past practice, which in the aggregate do not exceed
$50,000;

(e) Leases. Enter into any operating lease in excess of an
------
aggregate of $150,000;

(f) Payment of Obligations. Pay, discharge or satisfy in an
----------------------
amount in excess of $50,000 in any one case or $250,000 in the aggregate, any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than in the ordinary course of business,
other than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the Meta Financial Statements;

(g) Capital Expenditures. Make any capital expenditures, capital
--------------------
additions or capital improvements except in the ordinary course of business and
consistent with past practice;

(h) Insurance. Materially reduce the amount of any material
---------
insurance coverage provided by existing insurance policies;

(i) Employee Benefit Plans; New Hires; Pay Increases. Adopt or
------------------------------------------------
amend any employee benefit or stock purchase or option plan, or hire any new
director level or officer level employee without prior consultation with Avant!,
pay any special bonus or special remuneration to any employee or director, or
increase the salaries or wage rates of its employees, except in the ordinary
course of business and consistent with past practices or as previously disclosed
to Avant!;

(j) Severance Arrangements. Grant any severance or termination pay
----------------------
(i) to any director or officer or (ii) to any other employee except (A) payments
made pursuant to

30
<PAGE>

standard written agreements outstanding on the date hereof or (B) grants which
are made in the ordinary course of business in accordance with its standard past
practice;

(k) Charter Documents. Cause or permit any amendments to its
-----------------
Articles of Incorporation or Bylaws or other similar organizational document;

(l) Issuance of Securities. Issue, deliver or sell or authorize
----------------------
or propose the issuance, delivery or sale of, or purchase or propose the
purchase of, any shares of its capital stock or securities convertible into, or
subscriptions (including subscription rights under the Meta ESPP), rights,
warrants or options to acquire, or other agreements or commitments of any
character obligating it to issue any such shares or other convertible
securities, other than the issuance of shares of its Common Stock pursuant to
the exercise of stock options, warrants or other rights therefor outstanding as
of the date of this Agreement; provided, however, that Meta may, in the ordinary
course of business consistent with past practice, grant options for the purchase
of common stock under the Meta Stock Option Plans.

(m) Dividends; Changes in Capital Stock. Declare or pay any
-----------------------------------
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or its subsidiaries;

(n) Dispositions. Sell, lease, license or otherwise dispose of or
------------
encumber any of its properties or assets which are material, individually or in
the aggregate, to its and its parent's/subsidiaries' business, taken as a whole,
except in the ordinary course of business consistent with past practice;

(o) Lawsuits. Commence a lawsuit other than (i) for the routine
--------
collection of bills, (ii) in such cases where it in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of its business, provided that it consults with the other party prior to
the filing of such a suit, or (iii) for a breach of this Agreement;

(p) Acquisitions. Acquire or agree to acquire by merging or
------------
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to its and its parent's/subsidiaries' business, taken as a whole;

(q) Taxes. Other than in the ordinary course of business, make or
-----
change any material election in respect of Taxes, except where such change or
election would not have a Material Adverse Effect on such party and its
subsidiaries, taken as a whole, adopt or change any accounting method in respect
of Taxes, file any material Tax Return or any

31
<PAGE>

amendment to a material Tax Return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes, or consent to any extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes;

(r) Revaluation. Revalue in any material respect any of its
-----------
assets, including without limitation writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary course of
business; or

(s) Other. Take or agree in writing or otherwise to take, any of
-----
the actions described in Sections 4.2(a) through (r) above, or any action which
would make any of its representations or warranties contained in this Agreement
untrue or incorrect or prevent it from performing or cause it not to perform its
covenants hereunder.

4.3 Notices. Meta, with the assistance and advice of Avant!, shall give
-------
all notices and other information required to be given to the employees of Meta,
any collective bargaining unit representing any group of employees of Meta, and
any applicable government authority under the WARN Act, the National Labor
Relations Act, the Code, COBRA, and other applicable law in connection with the
transactions provided for in this Agreement.

4.4 Other Offers. Meta and its subsidiaries and the officers, directors,
------------
employees or other agents of Meta and its subsidiaries will not, directly or
indirectly, (i) take any action to solicit, initiate or encourage any Takeover
Proposal (defined below) or (ii) engage in negotiations with, or disclose any
nonpublic information relating to Meta or any of it subsidiaries to, or afford
access to the properties, books or records of Meta or any of its subsidiaries
to, any person that has advised Meta that it may be considering making, or that
has made, a Takeover Proposal; provided, however, that nothing herein shall
prohibit Meta's Board of Directors from taking and disclosing to Meta's
shareholders a position with respect to a tender offer pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act. Notwithstanding the immediately
preceding sentence, if (i) an unsolicited Takeover Proposal shall be received by
the Board of Directors of Meta, then, to the extent the Board of Directors of
Meta believes in good faith (after consultation with its financial advisor) that
such Takeover Proposal would, if consummated, result in a transaction more
favorable to Meta's shareholders from a financial point of view than the
transaction contemplated by this Agreement (any such more favorable Takeover
Proposal being referred to in this Agreement as a "Superior Proposal") and (ii)
the Board of Directors of Meta determines in good faith after consultation with
outside legal counsel that it is so necessary for the Board of Directors of Meta
to comply with its fiduciary duties to shareholders under applicable law, Meta
and its officers, directors, employees, investment bankers, financial advisors,
attorneys, accountants and other representatives retained by it may engage in
discussions or negotiations with a third party who has initiated such Superior
Proposal and make disclosures to the Meta shareholders to the extent such
actions are consistent with the fiduciary obligations of Meta's Board of
Directors, and such actions shall not be considered a breach of this Section 4.4
or any other provisions of this Agreement. Meta will promptly notify Avant!
after receipt of any Takeover Proposal or any notice that any person is
considering making a Takeover Proposal or any request for nonpublic information
relating to Meta or any of its subsidiaries or for access to the properties,
books or records of Meta or any of its subsidiaries by

32
<PAGE>

any person that has advised Meta that it may be considering making, or that has
made, a Takeover Proposal and will keep Avant! fully informed of the status and
details of any such Takeover Proposal notice or request. For purposes of this
Agreement, "Takeover Proposal" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving Meta
or any of its subsidiaries or the acquisition of any significant equity interest
in, or a significant portion of the assets of, Meta or any of its subsidiaries,
other than the transactions contemplated by this Agreement.

ARTICLE V

ADDITIONAL AGREEMENTS
---------------------

5.1 Proxy Statement/Prospectus; Registration Statement. As promptly as
--------------------------------------------------
practicable after the execution of this Agreement, Meta and Avant! shall prepare
and file with the SEC preliminary proxy materials relating to the approval of
the Merger and the transactions contemplated hereby by the stockholders of Meta
and Avant! and, as promptly as practicable following receipt of SEC comments
thereon, Avant! shall file with the SEC a Registration Statement on Form S-4 (or
such other or successor form as shall be appropriate), which complies in form
with applicable SEC requirements and shall use all reasonable efforts to cause
the Registration Statement to become effective as soon thereafter as
practicable; provided, however, that Avant! shall have no obligation to agree to
account for the Merger as a "purchase" in order to cause the Registration
Statement to become effective. Subject to the provisions of Section 4.4, the
Proxy Statement shall include the recommendation of the Board of Directors of
Meta in favor of the Merger; provided that such recommendation may not be
included or may be withdrawn if previously included if Meta's Board of Directors
believes in good faith that a Superior Proposal has been made and, upon advice
of its outside legal counsel, shall determine that to include such
recommendation or not withdraw such recommendation if previously included would
constitute a breach of the Board of Directors' fiduciary duty under applicable
law. The Proxy Statement shall include the recommendation of the Board of
Directors of Avant! in favor of the issuance of the shares of Avant! Common
Stock in connection with the Merger.

5.2 Meeting of Shareholders.
-----------------------

(a) Meta shall promptly after the date hereof take all action
necessary in accordance with California Law and its Articles of Incorporation
and Bylaws to convene the Meta Shareholders Meeting on or prior to November 30,
1996 or as soon thereafter as is practicable and in any event on the date within
40 days of the date on which the Registration Statement shall be declared
effective by the SEC, unless otherwise mutually agreed by the parties hereto.
Meta shall consult with Avant! and use all reasonable efforts to hold the Meta
Shareholders Meeting and shall not postpone or adjourn (other than for the
absence of a quorum) the Meta Shareholders Meeting without the consent of
Avant!. Meta shall use its best efforts to solicit from shareholders of Meta
proxies in favor of the Merger and shall take all other action necessary or
advisable to secure the vote or consent of shareholders required to effect the
Merger.

33
<PAGE>

(b) Avant! shall promptly after the date hereof take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Avant! Stockholders Meeting on or prior to November
30, 1996 or as soon thereafter as is practicable and in any event on the date
within 40 days of the date on which the Registration Statement shall be declared
effective by the SEC, unless otherwise mutually agreed by the parties hereto.
Avant! shall consult with Meta and use all reasonable efforts to hold the Avant!
Stockholders Meeting on the same day as the Meta Shareholders Meeting and shall
not postpone or adjourn (other than for the absence of a quorum) the Avant!
Stockholders meeting without the consent of Meta. Avant! shall use its best
efforts to solicit from stockholders of Avant! proxies in favor of the Merger
and shall take all other action necessary or advisable to secure the vote or
consent of stockholders to effect the Merger.

5.3 Access to Information.
---------------------

(a) Meta shall afford Avant! and its accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (i) all of Meta's and its subsidiaries'
properties, books, contracts, commitments and records, and (ii) all other
information concerning the business, properties and personnel of Meta and its
subsidiaries as Avant! may reasonably request. Meta agrees to provide to Avant!
and its accountants, counsel and other representatives copies of internal
financial statements promptly upon request. Avant! shall afford Meta and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to (i) all of
Avant!'s and its subsidiaries' properties, books, contracts, commitments and
records, and (ii) all other information concerning the business, properties and
personnel of Avant! and its subsidiaries as Meta may reasonably request. Avant!
agrees to provide to Meta and its accountants, counsel and other representatives
copies of internal financial statements promptly upon request.

(b) Subject to compliance with applicable law governing the exchange
of information, from the date hereof until the Effective Time, each of Avant!
and Meta shall confer on a regular and frequent basis with one or more
representatives of the other party to report material operational matters and
the general status of ongoing operations.

(c) No information or knowledge obtained in any investigation
pursuant to this Section 5.3 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the parties to consummate the Merger.

5.4 Confidentiality. The parties acknowledge that Avant! and Meta have
---------------
previously executed a non-disclosure agreement dated August 20, 1996 (the
"Confidentiality Agreement"), which Confidentiality Agreement shall continue in
full force and effect in accordance with its terms.

5.5 Public Disclosure. Unless otherwise permitted by this Agreement,
-----------------
Avant! and Meta shall consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or non-
confidential) disclosure (whether or not in response to an inquiry) regarding
the terms of this Agreement and the transactions contemplated

34
<PAGE>

hereby, and neither shall issue any such press release or make any such
statement or disclosure without the prior approval of the other (which approval
shall not be unreasonably withheld), except as may be required by law or by
obligations pursuant to any listing agreement with any national securities
exchange or with the NASD.

5.6 Consents; Cooperation.
---------------------

(a) Each of Avant! and Meta shall promptly apply for or otherwise
seek, and use its best efforts to obtain, all consents and approvals required to
be obtained by it for the consummation of the Merger, and shall use its best
efforts to obtain all necessary consents, waivers and approvals under any of its
material contracts in connection with the Merger for the assignment thereof or
otherwise. Subject to compliance with applicable law governing the exchange of
information, the parties hereto will consult and cooperate with one another, and
consider in good faith the views of one another, in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to any federal or state antitrust or fair
trade law.

(b) Each of Avant! and Meta shall use all reasonable efforts to
resolve such objections, if any, as may be asserted by any Governmental Entity
with respect to the transactions contemplated by this Agreement under the
Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade
Commission Act, as amended, and any other Federal, state or foreign statutes,
rules, regulations, orders or decrees that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade (collectively, "Antitrust Laws"). In connection therewith, if any
administrative or judicial action or proceeding is instituted (or threatened to
be instituted) challenging any transaction contemplated by this Agreement as
violative of any Antitrust Law, each of Avant! and Meta shall cooperate and use
all reasonable efforts vigorously to contest and resist any such action or
proceeding and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or permanent
(each an "Order"), that is in effect and that prohibits, prevents, or restricts
consummation of the Merger or any such other transactions, unless by mutual
agreement Avant! and Meta decide that litigation is not in their respective best
interests. Notwithstanding the provisions of the immediately preceding sentence,
it is expressly understood and agreed that Avant! shall have no obligation to
litigate or contest any administrative or judicial action or proceeding or any
Order beyond January 31, 1997.

(c) Notwithstanding anything to the contrary in subsection (a) or
(b) above, (i) neither Avant! nor any of it subsidiaries shall be required to
divest any of their respective businesses, product lines or assets, or to take
or agree to take any other action or agree to any limitation that would have a
Material Adverse Effect on Avant! or of Avant! combined with the Surviving
Corporation after the Effective Time or (ii) neither Meta nor its subsidiaries
shall be required to divest any of their respective businesses, product lines or
assets, or to take or agree to take any other action or agree to any limitation
that would have a Material Adverse Effect on Meta.

35
<PAGE>

5.7 Pooling Accounting. Avant! and Meta shall each use its best efforts
------------------
to cause the business combination to be effected by the Merger to be accounted
for as a pooling of interests and to take such action as may be reasonably
necessary to permit such treatment. Each of Avant! and Meta shall use its best
efforts to cause its "Affiliates" (as defined in Section 5.8) not to take any
action that would adversely affect the ability of Avant! to account for the
business combination to be effected by the Merger as a pooling of interest.

5.8 Affiliate Agreements.
--------------------

(a) Schedule 5.8 sets forth those persons who may be deemed
------------
"Affiliates" of Meta within the meaning of paragraphs (c) and (d) of Rule 145
promulgated under the Securities Act ("Rule 145"). Meta shall provide Avant!
such information and documents as Avant! shall reasonably request for purposes
of reviewing such list. Meta shall use its best efforts to deliver or cause to
be delivered to Avant!, as soon as practicable following the execution of this
Agreement (and in each case prior to the Effective Time) from each of the
Affiliates of Meta, an executed Affiliate Agreement in substantially the form
attached hereto as Exhibit A. Avant! and Merger Sub shall be entitled to place
---------
appropriate legends on the certificates evidencing any Avant! Common Stock to be
received by such Affiliates of Meta pursuant to the terms of this Agreement, and
to issue appropriate stop transfer instructions to the transfer agent for Avant!
Common Stock, consistent with the terms of such Affiliates Agreements.

(b) Avant! shall, at least 30 days prior to the Effective Date,
cause to be delivered to each person Avant! believes to be an "Affiliate" of
Avant! a notice informing such persons of the restrictions on the transfer of
Avant! Common Stock resulting from the Merger being accounted for as a pooling
of interests in accordance with generally accepted accounting principles and all
published rules, regulations and policies of the SEC and shall take reasonable
steps to prevent the disposition of the shares of Avant! Common Stock owned by
Avant! Affiliates in violation of such restrictions.

(c) Avant! shall use all reasonable efforts to publish no later than
90 days after the end of the first month following the Effective Date in which
there are at least 30 days of post-Merger combined operations (other than the
month in which the Effective Date occurs), combined sales and net income figures
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.

5.9 Legal Requirements. Each of Avant!, Merger Sub and Meta will, and
------------------
will cause their respective subsidiaries to, take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
them with respect to the consummation of the transactions contemplated by this
Agreement and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon such
other party in connection with the consummation of the transactions contemplated
by this Agreement and will take all reasonable actions necessary to obtain (and
will cooperate with the other parties hereto in obtaining) any consent,
approval, order or authorization of, or any

36
<PAGE>

registration, declaration or filing with, any Governmental Entity or other
person, required to be obtained or made in connection with the taking of any
action contemplated by this Agreement.

5.10 Blue Sky Laws. Avant! shall take such steps as may be necessary to
-------------
comply with the securities and blue sky laws of all jurisdictions which are
applicable to the issuance of the Avant! Common Stock in connection with the
Merger. Meta shall use commercially reasonable efforts to assist Avant! as may
be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable in connection with the issuance of Avant!
Common Stock in connection with the Merger.

5.11 Employee Benefit Plans.
----------------------

(a) At the Effective Time, the Meta Stock Plans and each
outstanding option to purchase shares of Meta Common Stock under the Meta Stock
Plans, whether vested or unvested, will be assumed by Avant!. Schedule 5.11(a)
----------------
hereto sets forth a true and complete list as of the date hereof of all holders
of outstanding options under the Meta Stock Plans, including the number of
shares of Meta capital stock subject to each such option, the exercise or
vesting schedule, the exercise price per share and the term of each such option.
On the Closing Date, Meta shall deliver to Avant! an updated Schedule 5.11(a)
----------------
hereto current as of such date. Each such option so assumed by Avant! under this
Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in each of the Meta Stock Plans immediately prior to the
Effective Time, except that (i) such option will be exercisable for that number
of whole shares of Avant! Common Stock equal to the product of the number of
shares of Meta Common Stock that were issuable upon exercise of such option
immediately prior to the Effective Time multiplied by the Exchange Ratio and
rounded down to the nearest whole number of shares of Avant! Common Stock, and
(ii) the per share exercise price for the shares of Avant! Common Stock issuable
upon exercise of such assumed option will be equal to the quotient determined by
dividing the exercise price per share of Meta Common Stock at which such option
was exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent. Consistent with the terms of the Meta
Stock Plans and the documents governing the outstanding options under those
plans and except as set forth in the Meta Disclosure Schedule, the Merger will
not terminate or otherwise result in the cash-out of any of the outstanding
options under such plans or accelerate the exercisability or vesting of such
options or the shares of Avant! Common Stock which will be subject to those
options solely as a result of the consummation of the Merger and Avant!'s
assumption of the options in connection therewith. Avant! shall take all
necessary steps to ensure that the options so assumed by Avant! qualify
following the Effective Time as incentive stock options as defined in Section
422 of the Code to the extent such options qualified as incentive stock options
prior to the Effective Time. Within 10 business days after the Effective Time,
Avant! will issue to each person who, immediately prior to the Effective Time
was a holder of an outstanding option under any of the Meta Stock Plans, a
document in form and substance reasonably satisfactory to Meta evidencing the
foregoing assumption of such option by Avant!. Avant! will take all corporate
and other action necessary to reserve a sufficient number of shares of Avant!
Common Stock for issuance upon the exercise of the options assumed by Avant!
pursuant to this subsection (a) and upon the exercise of Meta Purchase Rights
pursuant to subsection (b) below.

37
<PAGE>

(b) The Meta ESPP and each outstanding subscription to purchase
shares of Meta Common Stock thereunder (a "Meta Purchase Right") shall be
assumed by Avant! at the Effective Time of the Merger. Schedule 5.11(b) hereto
----------------
sets forth a true and complete list as of the date hereof of all holders of
outstanding Meta Purchase Rights, including the remaining number of shares of
Meta Common Stock purchasable under each such right, the outstanding balance in
each Meta ESPP participant's subscription account thereunder, the fair market
value per share of Meta Common Stock on the date the Meta Purchase Right was
granted, and the expiration date of such right. On the Closing Date, Meta shall
deliver to Avant! an updated Schedule 5.11(b) hereto current as of such date.
----------------
The Meta Purchase Rights so assumed by Avant! shall continue to be exercisable
upon the same terms and conditions applicable to those rights immediately prior
to the Effective Time in accordance with the terms of the Meta ESPP, except that
each such assumed Meta Purchase Right will be exercisable for that number of
whole shares of Avant! Common Stock equal to the product of the number of shares
of Meta Common Stock purchasable under the Meta Purchase Right immediately prior
to the Effective Time multiplied by the Exchange Ratio and rounded down to the
nearest whole number of shares of Avant! Common Stock, and the purchase price
payable per share of Avant! Common Stock under the assumed right will be equal
to eighty-five percent (85%) of the lower of (i) the fair market value per share
of the Meta Common Stock on the date the Meta Purchase Right was granted,
divided by the Exchange Ratio and rounded up to the nearest whole cent, or (ii)
the fair market value per share of Avant! Common Stock on the date such right is
exercised. Within 10 business days after the Effective Time, Avant! will issue
to each person who, immediately prior to the Effective Time was a holder of an
outstanding Meta Purchase Right, a document in form and substance reasonably
satisfactory to Meta evidencing the foregoing assumption of such Meta Purchase
Right by Avant!.

(c) From and after the assumption by Avant! of the Meta 1995 Equity
Incentive Plan, the Meta 1995 Directors' Stock Option Plan, the Meta 1992 Stock
Option/Appreciation Plan and the Meta ESPP, and the outstanding options and
subscriptions thereunder, and, with regard to each such plan, until such time as
none of the participants thereunder are subject to Section 16(b) of the Exchange
Act, Avant! shall take all steps necessary to ensure that any transaction under
the Meta 1995 Equity Incentive Plan, the Meta 1995 Directors' Stock Option Plan,
the Meta 1992 Stock Option/Appreciation Plan or the Meta ESPP by any such
participant shall comply with Rule 16b-3 under the Exchange Act (to the extent
such plans shall have complied with Rule 16b-3 prior to the Effective Time).

(d) Following the Effective Time, Avant! shall provide or cause to
be provided health, life, disability and severance pay benefits and
participation in bonus, savings, incentive and retirement plans of Avant! to the
employees of Meta and its subsidiaries which, in the aggregate, are no less
favorable to the employees of Meta than those provided to them by Meta at the
time of the Closing. Avant! shall grant to such employees after the Effective
Time credit for all service with Meta and its subsidiaries prior to the
Effective Time as if such service was with Avant! and its subsidiaries with
respect to all benefit arrangements maintained by Avant! and its subsidiaries.
Avant! shall continue to honor the terms of all agreements (including, but not
limited to, employment and consulting and severance agreements) between Meta and
any of its subsidiaries and any employee or employees which relate to employment
or

38
<PAGE>

compensation or benefits; provided, however, that nothing contained herein shall
be construed to require the continued employment of any specific employee.
Avant! shall waive any pre-existing condition exclusion and actively-at-work
requirements under any medical or dental benefit plan; provided, however, that
no such waiver shall apply to any employee of Meta who was, on the Effective
Date, excluded from participation in such plan by virtue of any such pre-
existing condition. Avant! shall provide that any covered expenses incurred on
or before the Effective Date by an employee of Meta or such employee's covered
dependent shall be taken into account for purposes of satisfying applicable
deductible, co-insurance and maximum out-of-pocket provisions after the
Effective Date to the same extent and for the same period such expenses are
taken into account for employees of Avant!.

(e) Avant! and Meta agree to appoint representatives who, in the
period following the execution of this Agreement, will meet and in good faith
negotiate to reach agreement prior to the Effective Date with respect to the
manner in which the Meta employee benefit plans will be integrated with the
Avant! employee benefit plans.

5.12 Letter of Avant!'s and Meta's Accountants.
-----------------------------------------

(a) Avant! shall use all reasonable efforts to cause to be
delivered to Meta a letter of KPMG Peat Marwick LLP, ("KPMG") Avant!'s
independent auditors, dated a date within two business days before the date on
which the Registration Statement shall become effective and addressed to Meta,
in form reasonably satisfactory to Meta and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement.

(b) Meta shall use all reasonable efforts to cause to be delivered
to Avant! a letter of KPMG, Meta's independent auditors, dated a date within two
business days before the date on which the Registration Statement shall become
effective and addressed to Avant!, in form reasonably satisfactory to Avant! and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement.

5.13 Form S-8. Avant! agrees to file, no later than ten days after the
--------
Closing, a registration statement on Form S-8 covering the shares of Avant!
Common Stock issuable pursuant to (i) outstanding options under the Meta 1995
Equity Incentive Plan, the Meta 1995 Directors' Stock Option Plan and the Meta
1992 Stock Option/Appreciation Plan assumed by Avant! and (ii) outstanding Meta
Purchase Rights under the Meta ESPP assumed by Avant!. Meta shall cooperate with
and assist Avant! in the preparation of such registration statement.

5.14 Indemnification.
---------------

(a) From and after the Effective Time, Avant! and the Surviving
Corporation jointly and severally shall indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date of this Agreement
or who becomes prior to the Effective Time, an officer, director or employee of
Meta or any of its subsidiaries (the "Indemnified Parties") in respect of acts
or omissions occurring on or prior to the Effective Time

39
<PAGE>

to the fullest extent authorized or permitted under Meta's Articles of
Incorporation, Bylaws and indemnification agreements in effect on the date
hereof; provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable law. Without limitation of the
foregoing, in the event any such Indemnified Party is or becomes involved in any
capacity in any action proceeding or investigation in connection with any matter
relating to this Agreement or the transactions contemplated hereby occurring on
or prior to the Effective Time, Avant! and the Surviving Corporation shall
jointly and severally pay as incurred such Indemnified Party's reasonable legal
and other expenses (including the cost of any investigation and preparation)
incurred in connection therewith. The provisions of this Section 5.14 are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party, his or her heirs and representatives.

(b) If Avant! or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person or entity and shall not be the continuing or surviving person of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person or entity, then and in each such case,
proper provision shall be made so that such successors or assigns of Avant! or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.14.

(c) Avant! shall use good faith efforts to cause to be maintained
in effect for a period of not less than three years subsequent to the Effective
Time the current policies of the directors' and officers' liability insurance
maintained by Avant! and shall use good faith efforts to cause coverage to be
provided to the former directors and officer of Meta thereunder (provided that
Avant! may substitute therefor policies of at least the same coverage containing
terms and conditions that are not less advantageous to the former directors and
officers of Meta) with respect to matters occurring prior to the Effective Time.

(d) All agreements in effect at the Effective Time pursuant to
which Meta covenants and agrees in any respect to indemnify or defend any
director or executive officer of Meta from and against any liability, cost or
expense shall be expressly assumed by Avant! at the Effective Time.

(e) Promptly after the Effective Time, Avant! shall enter into
indemnification agreements with directors and officers of Meta who become
directors or officers of the Surviving Corporation, which agreements shall be
substantially identical to those which Avant! has entered into with its current
directors and officers.

5.15 Listing of Additional Shares. Prior to the Effective Time, Avant!
----------------------------
shall file with the Nasdaq National Market a Notification Form for Listing of
Additional Shares with respect to the shares referred to in Section 6.1(f).

5.16 Pooling Letters.
---------------

(a) Meta shall use all reasonable efforts to cause to be delivered
to Meta a preliminary letter of KPMG as soon as practicable following the
execution of this Agreement to the effect that, assuming Avant! is a corporation
eligible to be a party to a

40
<PAGE>

transaction seeking pooling of interests accounting treatment and that the
participation of Avant! in the Merger will not, in and of itself, disqualify the
Merger from qualifying for pooling of interests accounting treatment, the Merger
will qualify for pooling of interests accounting treatment if consummated in
accordance with this Agreement. Such letter shall be in a form reasonably
satisfactory to Avant! and Meta and shall be customary in scope and substance
for letters delivered by independent public accountants in connection with
transactions of this type. Meta shall also use all reasonable efforts to cause
KPMG to deliver to Meta a final copy of such letter dated the Effective Date.

(b) Avant! shall use all reasonable efforts to cause to be
delivered to Avant! a preliminary letter of KPMG as soon as practicable
following the execution of this Agreement to the effect that the Merger will
qualify for pooling of interests accounting treatment if consummated in
accordance with this Agreement. Such letter shall be in a form reasonably
satisfactory to Avant! and Meta and shall be customary in scope and substance
for letters delivered by independent public accountants in connection with
transactions of this type. Avant! shall also use all reasonable efforts to cause
KPMG to deliver to Avant! a final copy of such letter dated the Effective Date.

5.17 Best Efforts and Further Assurances. Each of the parties to this
-----------------------------------
Agreement shall use its best efforts to discharge its obligations under this
Agreement to effectuate the transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to closing under this Agreement. Each party
hereto, at the reasonable request of another party hereto, shall execute and
deliver such other instruments and do and perform such other acts and things as
may be necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.

5.18 Notification of Certain Matters. Meta shall give prompt notice to
-------------------------------
Avant!, and Avant! shall give prompt notice to Meta, of (i) the occurrence, or
non-occurrence, of any event, the occurrence or non-occurrence of which would be
likely to cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate at or prior to the Effective Time and (ii)
any failure of Meta, Avant! or Merger Sub, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 5.18 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.

5.19 Shareholders Agreement. Meta and the Shareholders shall enter into
----------------------
the shareholders agreement at Exhibit B concurrent with the execution of this
---------
Agreement.

5.20 HSR Act Filings. If applicable, each of Avant! and Meta shall
---------------
promptly make its respective filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and thereafter shall make
any required submissions under the HSR Act with respect to the Merger, and shall
cooperate with each other with respect to the foregoing. Meta and Avant! shall
give each other prior notice and consult with each other prior to any meeting
with the United States Federal Trade Commission or Department of Justice with
respect to their respective filings under the HSR Act or any review by either of
the foregoing agencies.

41
<PAGE>

Each of Avant! and Meta shall take all reasonable actions necessary to cause the
expiration of the waiting periods under the HSR Act as promptly as possible.

5.21 Operations of Avant! Post Merger. After the Effective Time, the
--------------------------------
Chief Executive Officer of Avant! shall have general management authority of
Avant!, including, without limitation, all strategic, technical, organization
and operational issues.

ARTICLE VI

CONDITIONS TO THE MERGER
------------------------

6.1 Conditions to Obligations of Each Party to Effect the Merger. The
------------------------------------------------------------
respective obligations of each party to this Agreement to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties hereto:

(a) Stockholder Approval. This Agreement and the Merger shall have
--------------------
been approved and adopted by (i) the holders of Meta Common Stock representing a
majority of the total votes entitled to be cast on such matters at the Meta
Shareholders Meeting at which a quorum is present in person or by proxy (ii) the
holders of shares of Avant! Common Stock representing a majority of the total
votes cast on such matters at the Avant! Stockholders Meeting at which a quorum
is present in person or by proxy, and (iii) Avant! as the sole stockholder of
Merger Sub.

(b) Registration Statement Effective. The SEC shall have declared
--------------------------------
the Registration Statement effective. No stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the Proxy
Statement, shall have been initiated or threatened by the SEC; and all requests
for additional information on the part of the SEC shall have been complied with
to the reasonable satisfaction of the parties hereto.

(c) No Injunctions or Restraints; Illegality. No temporary
----------------------------------------
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger shall be in effect; nor
shall there be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal; and no temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint provision limiting
or restricting Avant!'s conduct or operation of the business of Meta and its
subsidiaries following the Merger shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other Governmental Entity,
domestic or foreign, seeking the foregoing be pending. In the event an
injunction or other order shall have been issued, each party agrees to use its
reasonable diligent efforts to have such injunction or other order lifted.

42
<PAGE>

(d) Governmental Approval. Avant!, Meta and Merger Sub and their
---------------------
respective subsidiaries shall have timely obtained from each Governmental Entity
all approvals, waivers, authorizations and consents, if any, necessary for
consummation of or in connection with the Merger and the several transactions
contemplated hereby, including such approvals, waivers, authorizations and
consents as may be required under the HSR Act, Securities Act, Exchange Act and
under state Blue Sky laws.

(e) Tax Opinions. Avant! and Meta shall have received substantially
------------
identical written opinions of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP and Venture Law Group, respectively, in form and substance
reasonably satisfactory to them, and dated on or about the Effective Date and
shall be to the effect that the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Code, and such opinions shall not have been
withdrawn. In rendering such opinions, counsel shall be entitled to rely upon,
among other things, reasonable assumptions as well as representations of Avant!,
Merger Sub and Meta and certain shareholders of Meta.

(f) Listing of Additional Shares. The filing with the Nasdaq
----------------------------
National Market of a Notification Form for Listing of Additional Shares with
respect to the shares of Avant! Common Stock issuable upon conversion of the
Meta Common Stock in the Merger and upon exercise of the options under the Meta
Stock Plans, and upon the exercise of Meta Purchase Rights under the Meta ESPP,
assumed by Avant! shall have been made.

(g) Avant! Management. After the Effective Time, the Board of
-----------------
Directors of Avant! shall consist of Gerald C. Hsu, Y. Eric Cho, Robert C.
Kagle, Tench Coxe, Tatsuya Enomoto and Shawn M. Hailey. Mr. Hsu shall be
Chairman of the Board, President and Chief Executive Officer of Avant!, and Kim
L. Hailey shall have been appointed Chief Technical Officer of Avant!.

6.2 Additional Conditions to Obligations of Meta. The obligations of
--------------------------------------------
Meta to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing, by
Meta:

(a) Representations, Warranties and Covenants. (i) The
-----------------------------------------
representations and warranties of Avant! and Merger Sub in this Agreement shall
be true and correct in all material respects (other than representations and
warranties regarding litigation connected with the Merger or other proceedings
connected with the Merger, which shall be governed solely by the standard set
forth in Section 6.1(c) and except for such representations and warranties that
are qualified by their terms by a reference to materiality which representations
and warranties as so qualified shall be true in all respects) on and as of the
Effective Time as though such representations and warranties were made on and as
of such time (except to the extent such representations and warranties speak as
of an earlier date), and (ii) Avant! and Merger Sub shall have performed and
complied in all material respects with all covenants, obligations and conditions
of this Agreement required to be performed and complied with by them as of the
Effective Time.

43
<PAGE>

(b) Certificate of Avant!. Meta shall have been provided with a
---------------------
certificate dated, the Effective Date, executed on behalf of Avant! by its
President and its Chief Financial Officer to the effect that, as of the
Effective Time, the condition provided for in subsection (a) above has been
satisfied.

(c) Legal Opinion. Meta shall have received a legal opinion, dated
-------------
the Effective Date, from Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to Avant! and Merger Sub, in form and substance
reasonably satisfactory to Meta.

(d) No Material Adverse Changes. There shall not have occurred any
---------------------------
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations, results
of operations or prospects of Avant! and its subsidiaries, taken as a whole.

(e) Third Party Consents. Meta shall have been furnished with
--------------------
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of Avant! or any of its subsidiaries or otherwise.

(f) Fairness Opinion. Meta shall have received the written opinion
----------------
of Wessels, Arnold & Henderson, L.L.C., or a written confirmation of the opinion
previously delivered, dated as of the date the Proxy Statement is first mailed
to the shareholders of Meta, to the effect that the consideration to be received
by Meta's shareholders in the Merger is fair, from a financial point of view, to
the shareholders of Meta.

6.3 Additional Conditions to the Obligations of Avant! and Merger Sub.
-----------------------------------------------------------------
The obligations of Avant! and Merger Sub to consummate and effect this Agreement
and the transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, by Avant!:

(a) Representations, Warranties and Covenants. (i) The
-----------------------------------------
representations and warranties of Meta in this Agreement shall be true and
correct in all material respects (other than representations and warranties
regarding litigation connected with the Merger or other proceedings connected
with the Merger, which shall be governed solely by the standard set forth in
Section 6.1(c) and except for such representations and warranties that are
qualified by their terms by a reference to materiality, which representations
and warranties as so qualified shall be true in all respects) on and as of the
Effective Time as though such representations and warranties were made on and as
of such time, and (ii) Meta shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by it as of the Effective Time.

(b) Certificate of Meta. Avant! shall have been provided with a
-------------------
certificate, dated the Effective Date, executed on behalf of Meta by its
President and its Chief Financial Officer to the effect that, as of the
Effective Time, the condition provided for in subsection (a) above has been
satisfied.

44
<PAGE>

(c) Legal Opinion. Avant! shall have received a legal opinion,
-------------
dated the Effective Date, from Venture Law Group, legal counsel to Meta, in form
and substance reasonably satisfactory to Avant!.

(d) Third Party Consents. Avant! shall have been furnished with
--------------------
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of Meta or any of its subsidiaries or otherwise.

(e) No Material Adverse Changes. There shall not have occurred any
---------------------------
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations, results
of operations or prospects of Meta and its subsidiaries, taken as a whole.

(f) Letters from Accountants. Avant! shall have received the
------------------------
preliminary and final letters referred to in Section 5.17(b) from KPMG and the
letter referred to in Section 5.13(b) from KPMG.

(g) Affiliate Agreements. Avant! shall have received from each of
--------------------
the Affiliates of Meta identified on Schedule 5.8 an executed Affiliate
------------
Agreement in substantially the form attached hereto as Exhibit A.
---------

(h) Fairness Opinion. Avant! shall have received the written
----------------
opinion of [Morgan Stanley & Co., Inc.,] or a written confirmation of the
opinion previously delivered, dated as of the date the Proxy Statement is first
mailed to the shareholders of Avant!, to the effect that the consideration to be
received by Avant!'s shareholders in the Merger is fair, from a financial point
of view, to the stockholders of Avant!.

(i) Dissenting Shares. Dissenting Shares shall consist of no more
-----------------
ten percent (10%) of the then outstanding shares of Meta Capital Stock.

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER
---------------------------------

7.1 Termination. At any time prior to the Effective Time, whether before
-----------
or after approval of the matters presented in connection with the Merger by the
shareholders of Meta, this Agreement may be terminated:

(a) by mutual consent of Avant! and Meta;

(b) by either Avant! or Meta, if the Effective Date shall not have
occurred on or before January 31, 1997; provided that the right to terminate
this Agreement pursuant to this paragraph (b) shall not be available to any
party whose failure to fulfill any

45
<PAGE>

obligation under this Agreement has been a significant cause of, or resulted in,
the failure of the Effective Date to occur on or before such date;

(c) by Avant!, if (i) Meta shall breach any of its representations,
warranties or obligations hereunder, which breach would result in a material
adverse change in the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations, results of
operations or prospects of Meta and its subsidiaries, taken as a whole, and such
breach shall not have been cured within ten business days following receipt by
Meta of written notice of such breach, (ii) (x) there shall have occurred any
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations, results
of operations or prospects of Meta and its subsidiaries, taken as a whole, and
(y) Meta shall not, within 20 business days of notice from Avant! to the effect
that Avant! intends to terminate this Agreement pursuant to this clause (ii),
have proposed to Avant! a plan to mitigate the effect of such material adverse
change which plan shall be reasonably acceptable to Avant!, or (iii) the Board
of Directors of Meta shall have withdrawn or modified its recommendation of this
Agreement or the Merger in a manner adverse to Avant! or shall have resolved to
do any of the foregoing;

(d) by Meta, if (i) Avant! shall breach any of its representations,
warranties or obligations hereunder, which breach would result in a material
adverse change in the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations, results of
operations or prospects of Avant! and its subsidiaries, taken as a whole, and
such breach shall not have been cured within ten business days following receipt
by Avant! of written notice of such breach, (ii) (x) there shall have occurred
any material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of Avant! and its subsidiaries,
taken as a whole, and (y) Avant! shall not, within 20 business days of notice
from Meta to the effect that Meta intends to terminate this Agreement pursuant
to this clause (ii), have proposed to Meta a plan to mitigate the effect of such
material adverse change which plan shall be reasonably acceptable to Meta, or
(iii) the Board of Directors of Avant! shall have withdrawn or modified its
recommendation of this Agreement or the Merger in a manner adverse to Meta or
shall have resolved to do any of the foregoing; or

(e) by either Avant! or Meta, if (i) any permanent injunction or
other order of a court or other competent authority preventing the consummation
of the Merger shall have become final and nonappealable or (ii) at the Meta
Shareholders Meeting (including any adjournment or postponement thereof) the
requisite vote of shareholders of Meta shall not have been obtained, or (iii) at
the Avant! Stockholders Meeting (including any adjournment or postponement
thereof) the requisite vote of stockholders of Avant! shall not have been
obtained.

7.2 Effect of Termination. In the event of termination of this Agreement
---------------------
as provided in Section 7.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Avant!, Merger Sub or Meta or
their respective officers, directors, stockholders or affiliates, except to the
extent that such termination results from the breach by a party hereto of any of
its representations, warranties or covenants set forth in this

46
<PAGE>

Agreement; provided that the provisions of Section 5.4 (Confidentiality),
--------
Section 7.3 (Expenses and Termination Fees) and this Section 7.2 and the
Confidentiality Agreement shall remain in full force and effect and survive any
termination of this Agreement.

7.3 Expenses and Termination Fees.
-----------------------------

(a) Whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (including, without limitation, the fees and expenses of its advisers,
accountants and legal counsel) shall be paid by the party incurring such
expense, except that, in the event the Merger shall not be consummated for any
reason or if this Agreement shall be terminated for any reason other than
pursuant to Section 7.1(d), expenses incurred in connection with printing the
Proxy Materials and the Registration Statement, registration and filing fees
incurred in connection with the Registration Statement, the Proxy Materials and
the listing of additional shares pursuant to Section 6.1(f) and fees, costs and
expenses associated with compliance with applicable state securities laws in
connection with the Merger shall be shared equally by Meta and Avant!.

(b) In the event that (i) either Avant! or Meta shall terminate this
Agreement pursuant to Section 7.1(e)(ii) following a failure of the shareholders
of Meta to approve this Agreement and, prior to the time of the meeting of
Meta's shareholders, there shall have been (A) a Trigger Event with respect to
Meta or (B) a Takeover Proposal with respect to Meta which at the time of the
meeting of Meta's shareholders shall not have been rejected by Meta and
withdrawn by the third party, or (ii) Avant! shall terminate this Agreement
pursuant to Section 7.1(c), due in whole or in part to any failure by Meta to
use the requisite efforts required by the terms of this Agreement to perform and
comply with all agreements and conditions required by this Agreement to be
performed or complied with by Meta prior to or on the Closing Date or any
failure by Meta's affiliates to take any actions required to be taken hereby,
(and if Meta is not entitled to terminate this Agreement by reason of Section
7.1(d)), and prior thereto there shall have been (A) a Trigger Event with
respect to Meta or (B) a Takeover Proposal with respect to Meta which shall not
have been rejected by Meta and withdrawn by the third party, then Meta shall
promptly pay to Avant! the sum of $4,800,000; provided, however, that with
respect to Section 7.3(b)(i)(A) and Section 7.3(b)(ii)(A), a Trigger Event shall
not be deemed to include the acquisition by any Person of securities
representing 10% or more of Meta if such Person has acquired such securities not
with the purpose nor with the effect of changing or influencing the control of
Meta, nor in connection with or as a participant in any transaction having such
purpose or effect, including without limitation (i) making any public
announcement with respect to the voting of such shares at any meeting to
consider any merger, consolidation, sale of substantial assets or other business
combination or extraordinary transaction involving Meta, (ii) making, or in any
way participating in, any "solicitation" of "proxies" (as such terms are defined
or used in Regulation 14A under the Exchange Act) to vote any voting securities
of Meta (including, without limitation, any such solicitation subject to Rule
14a-11 under the Exchange Act) or seeking to advise or influence any Person with
respect to the voting of any voting securities of Meta, (iii) forming, joining
or in any way participating in any "group" within the meaning of Section
13(d)(3) of the Exchange Act with respect to any voting securities of Meta or
(iv) otherwise acting, alone or in concert with others, to seek control of Meta
or to seek

47
<PAGE>

to control or influence the management or policies of Meta. As used herein, a
"Trigger Event" shall occur if any Person acquires securities representing 10%
or more, or commences a tender or exchange offer following the successful
consummation of which the offeror and its affiliate would beneficially own
securities representing 25% or more, of the voting power of Meta.

(c) If this Agreement is terminated by Meta pursuant to any
subsection of Section 7.1(d) hereof, due in whole or in part to any failure by
Avant! to use the requisite efforts required by the terms of this Agreement to
perform and comply with all agreements and conditions required by this Agreement
to be performed or complied with by Avant! prior to or on the Closing Date or
any failure by Avant!'s affiliates to take any actions required to be taken
hereby (and Avant! is not entitled to terminate this Agreement by reason of
Section 7.1(c) hereof), then, Avant! shall promptly pay to Meta a termination
fee of $4,800,000.

7.4 Amendment. The boards of directors of the parties hereto may cause
---------
this Agreement to be amended at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto; provided that an
amendment made subsequent to adoption of this Agreement by the stockholders of
Meta, Avant! or Merger Sub shall not (i) alter or change the amount or kind of
consideration to be received on conversion of the Meta Common Stock, (ii) alter
or change any term of the Articles of Incorporation of the Surviving Corporation
to be effected by the Merger, or (iii) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely affect
the holders of Meta Common Stock or Avant! Common Stock.

7.5 Extension; Waiver. At any time prior to the Effective Time any party
-----------------
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

ARTICLE VIII

GENERAL PROVISIONS
------------------

8.1 Survival. The representations, warranties and agreements set forth
--------
in this Agreement shall terminate at the Effective Time, except that the
agreements set forth in Article I, Section 5.4 (Confidentiality) 5.7 (Pooling
Accounting), 5.8 (Affiliate Agreements), 5.12 (Employee Benefit Plans), 5.13
(Form S-8), 5.14 (Indemnification), 5.15 (Listing of Additional Shares), 5.17
(Best Efforts and Further Assurances), 7.3 (Expenses and Termination Fees), 7.4
(Amendment), and this Article VIII shall survive the Effective Time.

8.2 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with

48
<PAGE>

confirmation of receipt) to the parties at the following address (or at such
other address for a party as shall be specified by like notice):

(a) if to Avant! or Merger Sub, to:

Avant! Corporation
1208 East Arques Avenue
Sunnyvale, California 94086
Attention: President
Facsimile No.: 408-738-8508
Telephone No.: 408-738-8881

with a copy to:

Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
600 Hansen Way
Palo Alto, California 94304
Attention: Steven M. Spurlock, Esq.
Facsimile No.: 415-843-0314
Telephone No.: 415-843-0500

(b) if to Meta, to:

Meta-Software, Inc.
1300 White Oaks Road
Campbell, California 95008
Attention: President
Facsimile No.: 408-371-5738
Telephone No.: 408-369-5400

with a copy to:

Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 94025
Attention: Joshua W.R. Pickus, Esq.
Facsimile No.: 415-233-8386
Telephone No.: 415-854-4488

8.3 Interpretation. When a reference is made in this Agreement to
--------------
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the

49
<PAGE>

date hereof", and terms of similar import, unless the context otherwise
requires, shall be deemed to refer to August 22, 1996. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

8.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

8.5 Entire Agreement; Nonassignability; Parties in Interest. This
-------------------------------------------------------
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits, the
Schedules, including the Meta Disclosure Schedule and the Avant! Disclosure
Schedule (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, except for the Confidentiality Agreement, which shall continue in full
force and effect, and shall survive any termination of this Agreement or the
Closing, in accordance with its terms; (b) are not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in Sections
1.6(a)-(d) and (g), 1.7-1.9, 5.11 and 5.14; and (c) shall not be assigned by
operation of law or otherwise except as otherwise specifically provided.

8.6 Severability. In the event that any provision of this Agreement, or
------------
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.

8.7 Remedies Cumulative. Except as otherwise provided herein, any and all
-------------------
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

8.8 Governing Law. Except insofar as the Merger shall be governed by the
-------------
corporate laws of the State of California, this Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (without
regard to its principles of conflicts of law).

8.9 Rules of Construction. The parties hereto agree that they have been
---------------------
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.

50
<PAGE>

IN WITNESS WHEREOF, Avant!, Merger Sub and Meta have caused this Agreement
to be executed and delivered by their respective officers thereunto duly
authorized, all as of the date first written above.

AVANT! CORPORATION

By:
-----------------------------
Gerald C. Hsu
Chairman of the Board, Chief Executive
Officer and President

NATASHA MERGER CORPORATION

By:
-----------------------------
Gerald C. Hsu
President

META-SOFTWARE, INC.

By:
-----------------------------
Shawn M. Hailey
Chairman of the Board, Chief Executive
Officer and President
<PAGE>

APPENDIX B

(MORGAN STANLEY LOGO)

Morgan Stanley & Co. Incorporated
555 California Street
San Francisco, California 94104
(415) 576-3000

September 9, 1996

Board of Directors
Avant! Corporation
1208 East Arques Avenue
Sunnyvale, CA 94086

Gentlemen:

We understand that Avant! Corporation ("Avant!"), Natasha Merger Corporation,
a wholly-owned subsidiary of Avant! ("Merger Sub"), and Meta-Software, Inc.
("Meta" or the "Company") have entered into an Agreement and Plan of
Reorganization, dated as of August 22, 1996 (the "Merger Agreement"), which
provides, among other things, for the merger (the "Merger") of Merger Sub with
and into Meta. Pursuant to the Merger, Meta will become a wholly-owned
subsidiary of Avant! and each outstanding share of common stock, no par value,
of Meta (the "Meta Common Stock"), other than shares held in treasury or held
by Avant! or any direct or indirect wholly-owned subsidiary of Avant! or Meta
or as to which dissenters' rights have been perfected, will be converted into
the right to receive a certain fraction of a share of common stock, par value
$.0001 per share, of Avant! (the "Avant! Common Stock"), pursuant to a certain
formula set forth in the Merger Agreement. The terms and conditions of the
Merger are more fully set forth in the Merger Agreement.

You have asked for our opinion as to whether the consideration to be paid to
the holders of shares of Meta Common Stock pursuant to the Merger Agreement is
fair from a financial point of view to Avant!

For purposes of the opinion set forth herein, we have:

(i) reviewed certain publicly available financial statements and other
information of the Company and Avant!, respectively;

(ii) reviewed certain internal financial statements and other financial
and operating data concerning the Company and Avant! prepared by
the managements of the Company and Avant!, respectively;

(iii) analyzed certain financial projections provided by the management
of the Company;

(iv) analyzed certain financial projections prepared by the management
of Avant;

(v) discussed the past and current operations and financial condition
and the prospects of the Company with senior executives of the
Company;

(vi) discussed the past and current operations and financial condition
and the prospects of Avant! with senior executives of Avant!, and
analyzed the pro forma impact of the Merger on Avant!'s earnings
per share, consolidated capitalization and financial ratios;

(vii) reviewed and discussed with the management of Avant! their
estimate of the cost savings and other synergies that may be
achieved in the Merger;

(viii) reviewed the reported prices and trading activity for the Meta
Common Stock and the Avant! Common Stock;

(ix) compared the financial performance of the Company and Meta and the
prices and trading activity of the Meta Common Stock and the
Avant! Common Stock with that of certain other comparable
publicly-traded companies and their securities;

B-1
<PAGE>

(x) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;

(xi) reviewed the Merger Agreement and certain related documents; and

(xii) considered such other factors as we have deemed appropriate.

We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for the purposes
of this opinion. With respect to the financial projections, we have assumed
that they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company and Avant!. We have also relied upon, without independent
verification, the estimate of Avanti!'s management of the cost savings and
other synergies that may be achieved if the Merger is consummated. In
addition, we have relied upon, without independent verification, Avant!
management's assessment of the validity of, and the risks associated with,
Meta's products and technology. We have not made any independent valuation or
appraisal of the assets or liabilities of the Company and Avant!, nor have we
been furnished with any such appraisals. We have also assumed that the Merger
will be accounted for as a "pooling-of-interests" business combination in
accordance with U.S. generally accepted accounting principles and will be
consummated in accordance with the terms set forth in the Merger Agreement.
Our opinion is necessarily based on economic, market and other conditions as
in effect on, and the information made available to us as of, the date hereof.

We have been engaged by the Board of Directors of Avant! to render this
opinion and will receive a fee for our services. In the past, Morgan Stanley &
Co. Incorporated and its affiliates have provided financial advisory and
financing services for Avant! and have received fees for the rendering of
these services.

It is understood that this letter is for the information of the Board of
Directors of Avant! and may not be used for any other purpose without our
prior written consent, except that this opinion may be included in its
entirety in any filing made by Avant! with the Securities and Exchange
Commission with respect to the Merger. We express no opinion and make no
recommendation as to how the stockholders of Avant! or Meta should vote at the
stockholders' meeting held in connection with the Merger.

Based on the foregoing, we are of the opinion on the date hereof that the
consideration to be paid to the holders of shares of Meta Common Stock
pursuant to the Merger Agreement is fair from a financial point of view to
Avant!.

Very truly yours,

Morgan Stanley & Co. Incorporated

By: _________________________________
Nicholas D. Osborne Vice President
<PAGE>

APPENDIX C

OPINION OF WESSELS, ARNOLD & HENDERSON, L.L.C.

[LETTERHEAD OF WESSELS, ARNOLD & HENDERSON, L.L.C.]

August 22, 1996

Board of Directors
Meta Software, Inc.
1300 White Oaks Road
Campbell, CA 95008

Attention:Mr. Shawn M. Hailey, President and Chief Executive Officer
Mr. William C. Smith, Vice President, Finance and Chief Financial
Officer

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the stockholders of Meta Software, Inc. (the "Company"), of the
consideration to be received by the stockholders pursuant to the terms of the
proposed Agreement and Plan of Reorganization (the "Agreement") dated August
22, 1996 by and among the Company, Avant! Corporation (the "Acquiror"), and a
wholly-owned subsidiary of Acquiror. Capitalized terms used herein shall have
the meanings used in the Agreement unless otherwise defined herein.

Pursuant to the Agreement, each outstanding share of common stock of the
Company is proposed to be converted into and represent the right to receive
such number of shares of the Acquiror's common stock as is equal to the
Exchange Ratio. The Exchange Ratio is 0.435.

Wessels, Arnold & Henderson, L.L.C. ("Wessels, Arnold & Henderson"), as part
of its investment banking services, is regularly engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions,
corporate restructurings, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements and valuations for
corporate and other purposes. We will render to the Board of Directors an
opinion as to the fairness, from a financial point of view, to the
stockholders of the Company of the consideration to be received by the
stockholders in connection with the Merger, and will receive a fee for our
services. In the ordinary course of business, Wessels, Arnold & Henderson acts
as a market maker and broker in the publicly traded securities of the Company
and the Acquiror and receives customary compensation in connection therewith,
and also provides research coverage for the Company and the Acquiror. In the
ordinary course of business, Wessels, Arnold & Henderson actively trades in
the publicly traded securities of the Company and the Acquiror for its own
account and for the accounts of its customers and, accordingly, may at any
time hold a long or short position in such securities.

In connection with our review of the Merger, and in arriving at our opinion,
we have: (i) reviewed and analyzed the financial terms of the Agreement; (ii)
reviewed and analyzed certain publicly available financial and other data with
respect to the Company and Acquiror and certain other relevant and operating
data relating to the Company and Acquiror made available to us from published
sources and from the internal records of the Company and Acquiror; (iii)
conducted discussions with members of the senior management of the Company
with respect to the business and prospects of the Company; (iv) conducted
discussions with members of the senior management of the Acquiror with respect
to the business and prospects of the Acquiror; (v) analyzed the pro forma
impact of the Merger on the Acquiror's results of operations; (vi) reviewed
the reported prices and trading activity for the Company's Common Stock and
the Acquiror's Common Stock; (vii) compared the financial performance of the
Company and the Acquiror and the prices of the Company's Common Stock and the
Acquiror's Common Stock with that of certain other comparable publicly-traded
companies and their securities; and (viii) reviewed the financial terms, to
the extent publicly available, of certain comparable merger transactions. In
addition, we have conducted such other analyses and examinations and
considered such other financial, economic and market criteria as we have
deemed necessary in arriving at our opinion.

C-1
<PAGE>

We note that we were not provided with any financial forecasts for either
Acquiror or the Company, having been informed by each company's senior
management that it is not their practice to provide financial forecasts.
However, in the course of our discussions with each company's senior
management, we reviewed with them the most recently published analyst earnings
estimates for each company with respect to the third and fourth quarters of
each company's 1996 fiscal year and 1997 fiscal year, publicly available
information regarding the size and forecasted growth rates for the markets
served by each company's products, and various trends affecting or expected to
affect each company's future operating results and financial condition.

In rendering our opinion, we have assumed and relied upon the accuracy and
completeness of the financial, legal, tax, operating and other information
provided to us by the Company and the Acquiror (including without limitation
the financial statements and related notes of the Company and Acquiror), and
have not independently verified such information. Additionally, we have not
considered the possible effects of any legal or other contingency matters.
Further, our opinion is based on the assumption that the Merger will be
accounted for as a pooling-of-interests. We have not performed an independent
evaluation or appraisal of any of the respective assets or liabilities of the
Company or the Acquiror and we have not been furnished with any such
valuations or appraisals.

It is understood that this letter is for the information of the Board of
Directors of the Company, and this letter shall not be published or otherwise
used and no public references to Wessels, Arnold & Henderson, L.L.C. shall be
made without our prior written consent, which consent shall not be
unreasonably withheld; provided, however, that this letter may be included in
its entirety in the proxy statement submitted to the stockholders of the
Company for the purpose of approving the Merger. Further, our opinion speaks
only as of the date hereof, is based on the conditions as they exist and
information which we have been supplied as of the date hereof, and is without
regard to any market, economic, financial, legal or other circumstance or
event of any kind or nature which may exist or occur after such date.

Based on our experience as investment bankers and subject to the foregoing,
including the various assumptions and limitations set forth herein, it is our
opinion that as of the date hereof, the consideration to be received by the
holders of the Company's Common Stock pursuant to the Agreement is fair from a
financial point of view to the holders of the Company's Common Stock.

Very truly yours,

Wessels, Arnold & Henderson, L.L.C.

/s/ William Henderson
By: _________________________________
William Henderson
Managing Director

C-2
<PAGE>

APPENDIX D

CALIFORNIA GENERAL CORPORATION LAW

CHAPTER 13
DISSENTERS' RIGHTS

SEC. 1300. REORGANIZATION OR SHORT-FORM MERGER; DISSENTING SHARES; CORPORATE
PURCHASE AT FAIR MARKET VALUE; DEFINITIONS

(a) If the approval of the outstanding shares (Section 152) of a corporation
is required for a reorganization under subdivisions (a) and (b) or subdivision
(e) or (f) of Section 1201, each shareholder of the corporation entitled to
vote on the transaction and each shareholder of a subsidiary corporation in a
short-form merger may, by complying with this chapter, require the corporation
in which the shareholder holds shares to purchase for cash at their fair
market value the shares owned by the shareholder which are dissenting shares
as defined in subdivision (b). The fair market value shall be determined as of
the day before the first announcement of the terms of the proposed
reorganization or short-form merger, excluding any appreciation or
depreciation in consequence of the proposed action, but adjusted for any stock
split, reverse stock split, or share dividend which becomes effective
thereafter.

(b) As used in this chapter, "dissenting shares" means shares which come
within all of the following descriptions:

(1) Which were not immediately prior to the reorganization or short-form
merger either (A) listed on any national securities exchange certified by
the Commissioner of Corporations under subdivision (o) of Section 25100 or
(B) listed on the list of OTC margin stocks issued by the Board of
Governors of the Federal Reserve System, and the notice of meeting of
shareholders to act upon the reorganization summarizes this section and
Sections 1301, 1302, 1303 and 1304; provided, however, that this provision
does not apply to any shares with respect to which there exists any
restriction on transfer imposed by the corporation or by any law or
regulation; and provided, further, that this provision does not apply to
any class of shares described in subparagraph (A) or (B) if demands for
payment are filed with respect to 5 percent or more of the outstanding
shares of that class.

(2) Which were outstanding on the date for the determination of
shareholders entitled to vote on the reorganization and (A) were not voted
in favor of the reorganization or, (B) if described in subparagraph (A) or
(B) of paragraph (1) (without regard to the provisos in that paragraph),
were voted against the reorganization, or which were held of record on the
effective date of a short-form merger; provided, however, that subparagraph
(A) rather than subparagraph (B) of this paragraph applies in any case
where the approval required by Section 1201 is sought by written consent
rather than at a meeting.

(4) Which the dissenting shareholder has submitted for endorsement, in
accordance with Section 1302.

(c) As used in this chapter, "dissenting shareholder" means the recordholder
of dissenting shares and includes a transferee of record.

SEC. 1301. NOTICE TO HOLDERS OF DISSENTING SHARES IN REORGANIZATIONS; DEMAND
FOR PURCHASE; TIME; CONTENTS

(a) If, in the case of a reorganization, any shareholders of a corporation
have a right under Section 1300, subject to compliance with paragraphs (3) and
(4) of subdivision (b) thereof, to require the corporation to purchase their
shares for cash, such corporation shall mail to each such shareholder a notice
of the approval of the reorganization by its outstanding shares (Section 152)
within 10 days after the date of such approval, accompanied by a copy of
Sections 1300, 1302, 1303, 1304 and this section, a statement of the price
determined by the corporation to represent the fair market value of the
dissenting shares, and a brief description of the procedure to be followed if
the shareholder desires to exercise the shareholder's right under such
sections. The statement of price constitutes an offer by the corporation to
purchase at the price stated any dissenting shares as defined in subdivision
(b) of Section 1300, unless they lose their status as dissenting shares under
Section 1309.

D-1
<PAGE>

(b) Any shareholder who has a right to require the corporation to purchase
the shareholder's shares for cash under Section 1300, subject to compliance
with paragraphs (3) and (4) of subdivision (b) thereof, and who desires the
corporation to purchase such shares shall make written demand upon the
corporation for the purchase of such shares and payment to the shareholder in
cash of their fair market value. The demand is not effective for any purpose
unless it is received by the corporation or any transfer agent thereof (1) in
the case of shares described in clause (i) or (ii) of paragraph (1) of
subdivision (b) of Section 1300 (without regard to the provisos in that
paragraph), not later than the date of the shareholders' meeting to vote upon
the reorganization, or (2) in any other case within 30 days after the date on
which the notice of the approval by the outstanding shares pursuant to
subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder.

(c) The demand shall state the number and class of the shares held of record
by the shareholder which the shareholder demands that the corporation purchase
and shall contain a statement of what such shareholder claims to be the fair
market value of those shares as of the day before the announcement of the
proposed reorganization or short-form merger. The statement of fair market
value constitutes an offer by the shareholder to sell the shares at such
price.

SEC. 1302. SUBMISSION OF SHARE CERTIFICATES FOR ENDORSEMENT; UNCERTIFICATED
SECURITIES

Within 30 days after the date on which notice of the approval by the
outstanding shares or the notice pursuant to subdivision (i) of Section 1110
was mailed to the shareholder, the shareholder shall submit to the corporation
at its principal office or at the office of any transfer agent thereof, (a) if
the shares are certificated securities, the shareholder's certificates
representing any shares which the shareholder demands that the corporation
purchase, to be stamped or endorsed with a statement that the shares are
dissenting shares or to be exchanged for certificates of appropriate
denomination so stamped or endorsed or (b) if the shares are uncertificated
securities, written notice of the number of shares which the shareholder
demands that the corporation purchase. Upon subsequent transfers of the
dissenting shares on the books of the corporation, the new certificates,
initial transaction statement, and other written statements issued therefor
shall bear a like statement, together with the name of the original dissenting
holder of the shares.

SEC. 1303. PAYMENT OF AGREED PRICE WITH INTEREST; AGREEMENT FIXING FAIR MARKET
VALUE; FILING; TIME OF PAYMENT

(a) If the corporation and the shareholder agree that the shares are
dissenting shares and agree upon the price of the shares, the dissenting
shareholder is entitled to the agreed price with interest thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the
fair market value of any dissenting shares as between the corporation and the
holders thereof shall be filed with the secretary of the corporation.

(b) Subject to the provisions of Section 1306, payment of the fair market
value of dissenting shares shall be made within 30 days after the amount
thereof has been agreed or within 30 days after any statutory or contractual
conditions to the reorganization are satisfied, whichever is later, and in the
case of certificated securities, subject to surrender of the certificates
therefor, unless provided otherwise by agreement.

SEC. 1304. ACTION TO DETERMINE WHETHER SHARES ARE DISSENTING SHARES OR FAIR
MARKET VALUE; LIMITATION; JOINDER; CONSOLIDATION; DETERMINATION OF
ISSUES; APPOINTMENT OF APPRAISERS

(a) If the corporation denies that the shares are dissenting shares, or the
corporation and the shareholder fail to agree upon the fair market value of
the shares, then the shareholder demanding purchase of such shares as
dissenting shares or any interested corporation, within six months after the
date on which notice of the approval by the outstanding shares (Section 152)
or notice pursuant to subdivision (i) of Section 1110 was mailed to the
shareholder, but not thereafter, may file a complaint in the superior court of
the proper county praying the court to determine whether the shares are
dissenting shares or the fair market value of the dissenting shares or both or
may intervene in any action pending on such a complaint.

(b) Two or more dissenting shareholders may join as plaintiffs or be joined
as defendants in any such action and two or more such actions may be
consolidated.

D-2
<PAGE>

(c) On the trial of the action, the court shall determine the issues. If the
status of the shares as dissenting shares is in issue, the court shall first
determine that issue. If the fair market value of the dissenting shares is in
issue, the court shall determine, or shall appoint one or more impartial
appraisers to determine, the fair market value of the shares.

SEC. 1305. REPORT OF APPRAISERS; CONFIRMATION; DETERMINATION BY COURT;
JUDGMENT; PAYMENT; APPEAL; COSTS

(a) If the court appoints an appraiser or appraisers, they shall proceed
forthwith to determine the fair market value per share. Within the time fixed
by the court, the appraisers, or a majority of them, shall make and file a
report in the office of the clerk of the court. Thereupon, on the motion of
any party, the report shall be submitted to the court and considered on such
evidence as the court considers relevant. If the court finds the report
reasonable, the court may confirm it.

(b) If a majority of the appraisers appointed fail to make and file a report
within 10 days from the date of their appointment or within such further time
as may be allowed by the court or the report is not confirmed by the court,
the court shall determine the fair market value of the dissenting shares.

(c) Subject to the provisions of Section 1306, judgment shall be rendered
against the corporation for payment of an amount equal to the fair market
value of each dissenting share multiplied by the number of dissenting shares
which any dissenting shareholder who is a party, or who has intervened, is
entitled to require the corporation to purchase, with interest thereon at the
legal rate from the date on which judgment was entered.

(d) Any such judgment shall be payable forthwith with respect to
uncertificated securities and, with respect to certificated securities, only
upon the endorsement and delivery to the corporation of the certificates for
the shares described in the judgment. Any party may appeal from the judgment.

(e) The costs of the action, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable, but, if the appraisal exceeds the price offered by
the corporation, the corporation shall pay the costs (including in the
discretion of the court attorneys' fees, fees of expert witnesses and interest
at the legal rate on judgments from the date of compliance with Sections 1300,
1301 and 1302 if the value awarded by the court for the shares is more than
125 percent of the price offered by the corporation under subdivision (a) of
Section 1301).

SEC. 1306. PREVENTION OF IMMEDIATE PAYMENT; STATUS AS CREDITORS; INTEREST

To the extent that the provisions of Chapter 5 prevent the payment to any
holders of dissenting shares of their fair market value, they shall become
creditors of the corporation for the amount thereof together with interest at
the legal rate on judgments until the date of payment, but subordinate to all
other creditors in any liquidation proceeding, such debt to be payable when
permissible under the provisions of Chapter 5.

SEC. 1307. DIVIDENDS ON DISSENTING SHARES

Cash dividends declared and paid by the corporation upon the dissenting
shares after the date of approval of the reorganization by the outstanding
shares (Section 152) and prior to payment for the shares by the corporation
shall be credited against the total amount to be paid by the corporation
therefor.

SEC. 1308. RIGHTS OF DISSENTING SHAREHOLDERS PENDING VALUATION; WITHDRAWAL OF
DEMAND FOR PAYMENT

Except as expressly limited in this chapter, holders of dissenting shares
continue to have all the rights and privileges incident to their shares, until
the fair market value of their shares is agreed upon or determined. A
dissenting shareholder may not withdraw a demand for payment unless the
corporation consents thereto.

SEC. 1309. TERMINATION OF DISSENTING SHARE AND SHAREHOLDER STATUS

Dissenting shares lose their status as dissenting shares and the holders
thereof cease to be dissenting shareholders and cease to be entitled to
require the corporation to purchase their shares upon the happening of any of
the following:

D-3
<PAGE>

(a) The corporation abandons the reorganization. Upon abandonment of the
reorganization, the corporation shall pay on demand to any dissenting
shareholder who has initiated proceedings in good faith under this chapter all
necessary expenses incurred in such proceedings and reasonable attorneys'
fees.

(b) The shares are transferred prior to their submission for endorsement in
accordance with Section 1302 or are surrendered for conversion into shares of
another class in accordance with the articles.

(c) The dissenting shareholder and the corporation do not agree upon the
status of the shares as dissenting shares or upon the purchase price of the
shares, and neither files a complaint or intervenes in a pending action as
provided in Section 1304, within six months after the date on which notice of
the approval by the outstanding shares or notice pursuant to subdivision (i)
of Section 1110 was mailed to the shareholder.

(d) The dissenting shareholder, with the consent of the corporation,
withdraws the shareholder's demand for purchase of the dissenting shares.

SEC. 1310. SUSPENSION OF RIGHT TO COMPENSATION OR VALUATION PROCEEDINGS;
LITIGATION OF SHAREHOLDERS' APPROVAL

If litigation is instituted to test the sufficiency or regularity of the
votes of the shareholders in authorizing a reorganization, any proceedings
under Sections 1304 and 1305 shall be suspended until final determination of
such litigation.

SEC. 1311. EXEMPT SHARES

This chapter, except Section 1312, does not apply to classes of shares whose
terms and provisions specifically set forth the amount to be paid in respect
to such shares in the event of a reorganization or merger.

SEC. 1312. RIGHT OF DISSENTING SHAREHOLDER TO ATTACK, SET ASIDE OR RESCIND
MERGER OR REORGANIZATION; RESTRAINING ORDER OR INJUNCTION; CONDITIONS

(a) No shareholder of a corporation who has a right under this chapter to
demand payment of cash for the shares held by the shareholder shall have any
right at law or in equity to attack the validity of the reorganization or
short-form merger, or to have the reorganization or short-form merger set
aside or rescinded, except in an action to test whether the number of shares
required to authorize or approve the reorganization have been legally voted in
favor thereof; but any holder of shares of a class whose terms and provisions
specifically set forth the amount to be paid in respect to them in the event
of a reorganization or short-form merger is entitled to payment in accordance
with those terms and provisions or, if the principal terms of the
reorganization are approved pursuant to subdivision (b) of Section 1202, is
entitled to payment in accordance with the terms and provisions of the
approved reorganization.

(b) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, subdivision (a) shall not
apply to any shareholder of such party who has not demanded payment of cash
for such shareholder's shares pursuant to this chapter; but if the shareholder
institutes any action to attack the validity of the reorganization or short-
form merger or to have the reorganization or short-form merger set aside or
rescinded, the shareholder shall not thereafter have any right to demand
payment of cash for the shareholder's shares pursuant to this chapter. The
court in any action attacking the validity of the reorganization or short-form
merger or to have the reorganization or short-form merger set aside or
rescinded shall not restrain or enjoin the consummation of the transaction
except upon 10 days' prior notice to the corporation and upon a determination
by the court that clearly no other remedy will adequately protect the
complaining shareholder or the class of shareholders of which such shareholder
is a member.

D-4
<PAGE>

(c) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, in any action to attack the
validity of the reorganization or short-form merger or to have the
reorganization or short-form merger set aside or rescinded, (1) a party to a
reorganization or short-form merger which controls another party to the
reorganization or short-form merger shall have the burden of proving that the
transaction is just and reasonable as to the shareholders of the controlled
party, and (2) a person who controls two or more parties to a reorganization
shall have the burden of proving that the transaction is just and reasonable
as to the shareholders of any party so controlled.

D-5
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the DGCL empowers a Delaware corporation to indemnify any
persons who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceedings, whether civil,
criminal, administrative or investigative (other than action by or in the
right of such corporation), by reason of the fact that such person was an
officer or director of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, for criminal proceedings, had no reasonable cause to
believe his conduct was illegal. A Delaware corporation may indemnify officers
and directors in an action by or in the right of the corporation under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation in the performance of his duty. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director actually and reasonably incurred.

In accordance with the DGCL, Avant!'s Certificate contains a provision to
limit the personal liability of the directors of the Registrant for violations
of their fiduciary duty. This provision eliminates each director's liability
to the Registrant or its stockholders for monetary damages except (i) for any
breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions, or (iv) for any
transaction from which a director derived an improper personal benefit. The
effect of this provision is to eliminate the personal liability of directors
for monetary damages for actions involving a breach of their fiduciary duty of
care, including any such actions involving gross negligence.

Article IX of Avant!'s Certificate and Article VII, Section 6 of Avant!'s
Bylaws provide for indemnification of the officers and directors of the
Registrant to the fullest extent permitted by applicable law.

The Registrant has entered into indemnification agreements with each
director and executive officer which provide indemnification to such directors
and executive officers under certain circumstances for acts or omissions which
may not be covered by directors' and officers' liability insurance.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
2.1 --Agreement and Plan of Reorganization dated as of August 22, 1996
among the Registrant, Merger Sub and Meta (included as Appendix A
to the Joint Proxy Statement/Prospectus included in Part I of
this Registration Statement).
2.2 --Agreement and Plan of Reorganization dated as of August 18, 1996
among the Registrant, AGM Merger Corporation and Anagram, Inc.
*2.3 --Form of Agreement of Merger among the Merger Sub and Meta to be
executed upon approval of the Merger by the shareholders of Meta.
*2.4 --Form of Shareholders Agreement among the Registrant, Merger Sub,
Meta and certain shareholders of Meta.
*2.5 --Form Affiliate's Agreement between Registrant, Merger Sub, Meta
and certain shareholders of Meta.
3.1 --Registrant's Amended and Restated Certificate of
Incorporation.(1)
3.2 --Registrant's Amended and Restated Bylaws.(1)
4.1 --Amended and Restated Investors' Rights Agreement between the
Registrant and certain investors dated September 24, 1994.(1)
</TABLE>

II-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.2 --Specimen certificate of the Registrant's Common Stock.(1)
5.1 --Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
*8.1 --Tax Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
*8.2 --Tax Opinion of Venture Law Group, a Professional Corporation.
11.1 --Statement of Computation of Net Income and Pro Forma Net Income
Per Share.
23.1 --Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP (included in Exhibit 5.1).
23.2 --Consent of Venture Law Group (included in Exhibit 8.2).
23.3 --Consent of KPMG Peat Marwick LLP--Avant!
23.4 --Consent of KPMG Peat Marwick LLP--Meta
23.5 --Consent of Roberts Accountancy Corporation
23.6 --Consent of Morgan Stanley & Co. Incorporated
23.7 --Consent of Wessels, Arnold & Henderson, L.L.C.
24.1 --Power of Attorney (included on page II-4).
99.1 --Form of Avant! Proxy Card.
99.2 --Form of Meta Proxy Card.
99.3 --Consent of Prospective Director.
</TABLE>
- --------
* To be filed by Amendment
(1) Incorporated by reference from the Registrant's Registration Statement
(File No. 33-91128) on Form S-1 as declared effective on June 6, 1995.

(b) Financial Statement Schedules

Schedule II--Valuation and Qualifying Accounts

Schedules not listed above have been omitted because the information
required to be set forth herein is not applicable or is shown in the financial
statements or notes thereto.

ITEM 22. UNDERTAKINGS

The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended (the "Securities Act"),
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

The undersigned Registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.

The Registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification

II-2
<PAGE>

is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.

The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the Registration Statement when it became effective.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
SUNNYVALE, STATE OF CALIFORNIA, ON SEPTEMBER 9, 1996.

AVANT! CORPORATION

/s/ Gerald C. Hsu
By: _________________________________
GERALD C. HSU
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints jointly and severally, Gerald C. Hsu and John
P. Huyett, and each one of them, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any and all
amendments to this Registration Statement (including post effective
amendments), and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:

NAME TITLE DATE

/s/ GERALD C. HSU Chairman of the Board, September 9,
- ------------------------------- President and Chief 1996
GERALD C. HSU Executive Officer
(Principal Executive
Officer)

/s/ JOHN P. HUYETT Vice President of September 9,
- ------------------------------- Financial & 1996
JOHN P. HUYETT Administrative Services,
Chief Financial Officer
and Treasurer (Principal
Financial and Accounting
Officer)

/s/ Y. ERIC CHO Senior Vice President of September 9,
- ------------------------------- Corporate Operations, 1996
Y. ERIC CHO Secretary and Director

/s/ TENCH COXE Director September 9,
- ------------------------------- 1996
TENCH COXE

/s/ TATSUYA ENOMOTO Director September 9,
- ------------------------------- 1996
TATSUYA ENOMOTO

/s/ ROBERT C. KAGLE Director September 9,
- ------------------------------- 1996
ROBERT C. KAGLE

II-4
<PAGE>

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
2.1 --Agreement and Plan of Reorganization dated as of
August 22, 1996 among the Registrant, Merger Sub and
Meta (included as Appendix A to the Joint Proxy
Statement/Prospectus included in Part I of this
Registration Statement).
2.2 --Agreement and Plan of Reorganization dated as of
August 18, 1996 among the Registrant, AGM Merger
Corporation and Anagram, Inc.
*2.3 --Form of Agreement of Merger among the Merger Sub
and Meta to be executed upon approval of the Merger
by the shareholders of Meta.
*2.4 --Form of Shareholders Agreement among the
Registrant, Merger Sub, Meta and certain
shareholders of Meta.
*2.5 --Form Affiliate's Agreement between Registrant,
Merger Sub, Meta and certain shareholders of Meta.
3.1 --Registrant's Amended and Restated Certificate of
Incorporation.(1)
3.2 --Registrant's Amended and Restated Bylaws.(1)
4.1 --Amended and Restated Investors' Rights Agreement
between the Registrant and certain investors dated
September 24, 1994.(1)
4.2 --Specimen certificate of the Registrant's Common
Stock.(1)
5.1 --Opinion of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
*8.1 --Tax Opinion of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
*8.2 --Tax Opinion of Venture Law Group, a Professional
Corporation.
11.1 --Statement of Computation of Net Income and Pro
Forma Net Income Per Share.
23.1 --Consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP (included in Exhibit 5.1).
23.2 --Consent of Venture Law Group (included in Exhibit
8.2).
23.3 --Consent of KPMG Peat Marwick LLP--Avant!
23.4 --Consent of KPMG Peat Marwick LLP--Meta
23.5 --Consent of Roberts Accountancy Corporation
23.6 --Consent of Morgan Stanley & Co. Incorporated
23.7 --Consent of Wessels, Arnold & Henderson, L.L.C.
24.1 --Power of Attorney (included on page II-4).
99.1 --Form of Avant! Proxy Card.
99.2 --Form of Meta Proxy Card.
99.3 --Consent of Prospective Director.
</TABLE>
- --------
* To be filed by Amendment
(1) Incorporated by reference from the Registrant's Registration Statement
(File No. 33-91128) on Form S-1 as declared effective on June 6, 1995.

<PAGE>

EXHIBIT 2.2

AGREEMENT AND PLAN OF REORGANIZATION

DATED AS OF AUGUST 18, 1996,

AMONG

AVANT! CORPORATION,

AGM ACQUISITION CORPORATION,

ANAGRAM, INC.,

AND

THE SHAREHOLDERS' REPRESENTATIVE
<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I THE MERGER....................................................... 1
1.1 Merger; Effective Time of the Merger............................. 1
1.2 Closing.......................................................... 1
1.3 Effects of the Merger............................................ 1
1.4 Tax-Free Reorganization; Pooling of Interests.................... 2
1.5 Escrow........................................................... 2

ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES; SUPPLEMENTARY ACTION............. 2
2.1 Effect on Capital Stock.......................................... 2
2.2 Exchange of Certificates......................................... 4
2.3 Supplementary Action............................................. 5

ARTICLE III REPRESENTATIONS AND WARRANTIES OF ANAGRAM.................... 6
3.1 Organization, Standing and Power................................. 6
3.2 Capital Structure................................................ 6
3.3 Subsidiaries..................................................... 7
3.4 Authority........................................................ 7
3.5 Financial Statements............................................. 8
3.6 Payables; Receivables............................................ 8
3.7 Compliance with Laws............................................. 9
3.8 No Defaults...................................................... 9
3.9 Litigation....................................................... 9
3.10 Conduct in the Ordinary Course.................................. 9
3.11 Absence of Undisclosed Liabilities.............................. 11
3.12 Documents and Information Supplied.............................. 11
3.13 Certain Agreements.............................................. 11
3.14 Employee Plans.................................................. 11
3.15 Major Contracts................................................. 12
3.16 Taxes........................................................... 14
3.17 Intellectual Property........................................... 15
3.18 Employee Agreements............................................. 17
3.19 Restrictions on Business Activities............................. 17
3.20 Title to Properties; Absence of Liens and Encumbrances:
Condition of Equipment.......................................... 17
3.21 Governmental Authorizations and Licenses........................ 18
3.22 Environmental Matters........................................... 18
3.23 Insurance....................................................... 20
3.24 Labor Matters................................................... 21
3.25 Reserved........................................................ 21
3.26 Personnel....................................................... 21
<PAGE>

3.27 Questionable Payments........................................... 21
3.28 Third-Party Consents............................................ 21
3.29 Related Party Transactions...................................... 22
3.30 Customers and Suppliers......................................... 22
3.31 Bank Accounts and Powers of Attorney............................ 22
3.32 Products........................................................ 22
3.33 Brokers or Finders; Professional Fees........................... 22
3.34 Permit.......................................................... 22

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF AVANT! AND SUB.............. 23
4.1 Organization; Standing and Power................................. 23
4.2 Authority........................................................ 23
4.3 Valid Issuance of Shares of Common Stock of Avant!............... 24
4.4 Avant!. Financial Statements..................................... 24
4.5 Litigation....................................................... 24
4.6 Reports.......................................................... 24
4.7 Restrictions on Business Activities.............................. 25
4.8 Brokers or Finders; Professional Fees............................ 25
4.9 Conduct in the Ordinary Course................................... 25
4.10 Third-Party Consents............................................ 25
4.11 Permit.......................................................... 25

ARTICLE V CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME;
ADDITIONAL AGREEMENTS..................................................... 25
5.1 Conduct of Business of Anagram................................... 25
5.2 Access to Information; Provision of Interim Financial Statements. 28
5.3 Company Shareholders' Consent.................................... 28
5.4 Fairness Hearing and Permit...................................... 28
5.5 Exclusivity; Acquisition Proposals............................... 29
5.6 Breach of Representations, Warranties, Agreements and Covenants.. 29
5.7 Consents......................................................... 30
5.8 Best Efforts..................................................... 30
5.9 Legal Conditions to the Merger................................... 30
5.10 Public Announcements............................................ 30
5.11 Affiliates Agreement and Continuity of Interest Certificate..... 31
5.12 Expenses........................................................ 31
5.13 Information to be Supplied...................................... 31
5.14 Registration of Avant! Stock Issuable With Respect to Assumed
Anagram Options................................................. 31
5.15 Pooling of Interests Transaction................................ 31
5.16 Reserved........................................................ 32
5.17 Reserved........................................................ 32
5.18 Schedules....................................................... 32
5.19 Indemnification................................................. 32
5.20 Certain Benefit Plans........................................... 32
5.21 Anagram Registration............................................ 32
5.22 Listing of Shares............................................... 33
<PAGE>

ARTICLE VI CONDITIONS PRECEDENT.......................................... 33
6.1 Conditions to Each Party's Obligation to Effect the Merger....... 33
6.2 Conditions of Obligations of A Cor. and Sub...................... 34
6.3 Conditions of Obligation of AGM.................................. 35

ARTICLE VII INDEMNITY.................................................... 36
7.1 Survival of Representations, Warranties, Covenants and Agreements 36
7.2 Indemnification; Escrow Deposit of Avant!. Common Stock.......... 36
7.3 Termination of Indemnity and Representations and Warranties...... 37
7.4 Exclusivity of Remedies.......................................... 37

ARTICLE VIII TERMINATION................................................. 37
8.1 Termination...................................................... 37

ARTICLE IX GENERAL PROVISIONS............................................ 38
9.1 Amendment........................................................ 38
9.2 Extension; Waiver................................................ 38
9.3 Notices.......................................................... 38
9.4 Interpretation................................................... 39
9.5 Counterparts..................................................... 39
9.6 Entire Agreement................................................. 39
9.7 No Transfer...................................................... 40
9.8 Severability..................................................... 40
9.9 Other Remedies................................................... 40
9.10 Further Assurances.............................................. 40
9.11 Absence of Third-Party Beneficiary Rights....................... 40
9.12 Governing Law................................................... 40

Exhibits

1.1 Agreement of Merger
1.3(a) Articles of Incorporation
1.3(b) Bylaws
1.5 Escrow Agreement
5.11(a) Affiliates Agreement
5.11(b) Continuity of Interest Certificate

Schedules

2.1(d) Holders of Anagram Options Exercisable for Common Stock
2.1(e) Holders of Anagram Restricted Stock
3.3 Jurisdictions Qualified to do Business
3.5 Financial Statements
3.6 Receivables
3.7 Exceptions to Compliance with Laws
3.8 List of Defaults
<PAGE>

3.9 Pending Litigation
3.10 Exceptions to Conduct in the Ordinary Course
3.11 Undisclosed Liabilities
3.13 Certain Agreements
3.14 Anagram Compensation Plans
3.15 Major Contracts
3.17 Anagram Intellectual Property Rights
3.18 Proprietary Information Agreements
3.19 Restrictions on Business Activities
3.20 Real Property Leased; Physical Assets
3.21 Governmental Authorizations and Licenses
3.22 Environmental Matters
3.23 Insurance
3.26 Personnel
3.28 Third-Party Consents
3.29 Related Party Transactions
3.30 Customers
3.31 Bank Accounts and Powers of Attorney
4.5 Avant! Litigation
5.11 List of Affiliates
<PAGE>

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION is dated as of August 18, 1996,
by and among Avant! Corporation, a Delaware corporation ("Avant!"), AGM
Acquisition Corporation, a California corporation and a wholly owned subsidiary
of Avant! ("Sub"), Anagram, Inc., a California corporation ("Anagram"), and
Andrew Yang, a principal shareholder of Anagram (the "Shareholders'
Representative").

INTENDING TO BE LEGALLY BOUND, and in consideration of the promises and
mutual covenants and agreements contained herein, Avant!, Sub, Anagram and the
Shareholders' Representative hereby agree as follows:

ARTICLE I

THE MERGER

1.1 Merger; Effective Time of the Merger. Subject to the terms and
------------------------------------
conditions of this Agreement and Plan of Reorganization (this "Agreement") and
as contemplated by the Agreement of Merger attached hereto as Exhibit 1.1 (the
-----------
"Agreement of Merger"), Sub will be merged with and into Anagram (the "Merger")
in accordance with the applicable provisions of the corporate laws of the State
of California (the "California Law"). The Agreement of Merger provides, among
other things, the mode of effecting the Merger and the manner and basis of
converting each issued and outstanding share of capital stock of Anagram into
shares of Common Stock, par value $.0001 per share, of Avant! ("Avant! Common
Stock"). The Agreement of Merger shall be executed by Anagram, Avant! and Sub
prior to the Effective Date of the Merger (as defined in this Section 1.1).

Subject to the provisions of this Agreement, the Agreement of Merger shall
be filed in accordance with California Law on the Closing Date (as defined in
Section 1.2). The Merger shall become effective upon such filing of the
Agreement of Merger (the date of such filing being hereinafter referred to as
the "Effective Date of the Merger" and the time of confirmation of such filing
being hereinafter referred to as the "Effective Time of the Merger") in the
State of California.

1.2 Closing. The closing of the Merger (the "Closing") will take place
-------
as soon as practicable on the first business day after satisfaction or waiver of
the conditions precedent set forth in Article VI of this Agreement (the "Closing
Date"), at the offices of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, 600 Hansen Way, Palo Alto, California, unless a different date
or place is agreed to in writing by Avant!, Sub and Anagram.

1.3 Effects of the Merger. At the Effective Time of the Merger, (a) the
---------------------
separate existence of Sub shall cease and Sub shall be merged with and into
Anagram (Sub and Anagram are sometimes referred to herein as the "Constituent
Corporations" and Anagram after the Merger is sometimes referred to herein as
the "Surviving Corporation"), (b) the Articles of Incorporation of the Surviving
Corporation shall be set forth in Exhibit 1.3(a) hereto, (c) the Bylaws of the
--------------
Surviving Corporation shall be set forth in Exhibit 1.3(b) hereto, (d) the
--------------
directors of the Surviving Corporation shall be Gerald C. Hsu and John P.
Huyett, (e) the officers of the Surviving Corporation shall be Gerald C. Hsu,
President and Chief Executive Officer and John P. Huyett, Vice President, Chief
Financial Officer and Secretary and (f) the Merger shall, from and after the
Effective Time of the Merger, have all the effects provided by applicable law.
<PAGE>

1.4 Tax-Free Reorganization; Pooling of Interests. The Merger is
---------------------------------------------
intended to be a Reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code") and to be accounted for
as a pooling of interests.

1.5 Escrow. Ten percent (10%) of the aggregate number of shares of Avant!
------
Common Stock issued or issuable in connection with the Merger (the "Escrow
Shares") shall be held in escrow as collateral for the indemnification
obligations of Anagram pursuant to Article VII of this Agreement and the
provisions of an escrow agreement ("Escrow Agreement") in the form attached
hereto as Exhibit 1.5. The Escrow Shares shall be withheld pro rata from the
-----------
shares of Avant! Common Stock to be received by the shareholders of Anagram upon
exchange of their shares of Anagram capital stock for Avant! Common Stock.

ARTICLE II

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES; SUPPLEMENTARY ACTION

2.1 Effect on Capital Stock. As of the Effective Time of the Merger, by
-----------------------
virtue of the Merger and without any action on the part of the holder of any
shares of capital stock of Anagram:

(a) Capital Stock of Sub. All issued and outstanding shares of
--------------------
capital stock of Sub shall continue to be issued and outstanding and shall be
converted into 1,000 shares of Common Stock of the Surviving Corporation. Each
stock certificate of Sub evidencing ownership of any such shares shall continue
to evidence ownership of such shares of capital stock of the Surviving
Corporation.

(b) Cancellation of Capital Stock of Anagram.
----------------------------------------

(i) All shares of capital stock of Anagram that are owned
directly or indirectly by Anagram or by any entity controlled by Anagram shall
be canceled and no stock of Avant! or other consideration shall be delivered in
exchange therefor. For this purpose, a controlled entity shall mean a
corporation or other entity whose voting securities are owned or are otherwise
controlled directly or indirectly by a parent corporation or other intermediary
entity in an amount sufficient to elect at least a majority of the board of
directors or other managers of such corporation or other entity.

(ii) Each holder of a certificate representing any shares of
Anagram capital stock after the Effective Time of the Merger shall cease to have
any rights with respect to such shares, except the right either to receive the
Merger Consideration Per Share (as defined below) upon surrender of such
certificate, or to exercise such holder's dissenters' rights, if applicable, as
provided in Section 2.1(g) hereof and pursuant to California Law.

(c) Conversion of Capital Stock of Anagram. Subject to this
--------------------------------------
subsection 2.1(c), each issued and outstanding share of Common Stock and
Preferred Stock of Anagram ("Anagram Capital Stock"), including shares issued or
issuable upon the exercise of any Anagram Option (as defined in Section 2.1(d)
below) prior to the Effective Time, that are issued and outstanding immediately
prior to the Effective Time of the Merger shall automatically be canceled and
extinguished and converted, without any action on the part of the holder
thereof, into the right to receive a fraction of a share of Avant! Common Stock
(the "Merger Consideration Per Share") equal to a fraction, the numerator of

2
<PAGE>

which is 2,413,793 and the denominator of which is the total number of shares of
Anagram Capital Stock outstanding plus the total number of shares of Anagram
Capital Stock issuable upon exercise of outstanding options, in each case as of
the Effective Time of the Merger. The ratio pursuant to which each share of
Capital Stock of Anagram will be exchanged for shares of Avant! Common Stock,
determined in accordance with the foregoing provisions, is hereinafter referred
to as the "Exchange Ratio."

(d) Assumption of Anagram Options.
-----------------------------

(i) At the Effective Time of the Merger, each unexpired and
unexercised option to purchase shares of Anagram Capital Stock (an "Anagram
Option") granted under the stock option plans and agreements, or other
agreements of Anagram outstanding immediately prior to the Effective Time of the
Merger shall be assumed by Avant! (an "Assumed Anagram Option"). Schedule 2.1(d)
---------------
hereto sets forth a true and complete list as of the date hereof of all holders
of Anagram Options exercisable to purchase shares of Anagram Capital Stock,
including the number of shares of Anagram Capital Stock subject to such options,
a breakdown as between vested and unvested options, the exercise price per share
and the term of such options and the residence address of each such holder.
Three (3) days prior to the Closing Date, Anagram shall deliver to Avant! an
updated Schedule 2.1(d) hereto current as of the Closing Date. Each Anagram
---------------
Option so assumed by Avant! will continue to have, and be subject to,
substantially the same terms and conditions set forth in the documents governing
such Anagram Option immediately prior to the Effective Time, except that (A)
such Assumed Anagram Option will be exercisable for that number of whole shares
of Avant! Common Stock equal to the product of the number of shares of Anagram
Capital Stock (on an as-converted to Common Stock basis) that were purchasable
under such Assumed Anagram Option immediately prior to the Effective Time of the
Merger multiplied by the Exchange Ratio, rounded down to the nearest whole
number of shares of Avant! Common Stock, and (B) the per share exercise price
for the shares of Avant! Common Stock issuable upon exercise of such Assumed
Anagram Option will be equal to the quotient obtained by dividing the exercise
price per share of Anagram Capital Stock (on an as-converted to Common Stock
basis) at which such Anagram Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. The
parties intend that the assumption or replacement of the Anagram Options
hereunder will meet the requirements of Section 424(a) of the Code and this
Section 2.1(d) shall be interpreted consistent with such intention. Consistent
with the terms of the Anagram Options and the documents governing such Anagram
Options, the Merger will not terminate or accelerate any Assumed Anagram Option
or any right of exercise, vesting or repurchase relating thereto with respect to
shares of Avant! Common Stock acquired upon exercise of such Anagram Option.
Holders of Anagram Options will not be entitled to acquire Anagram capital stock
following the Merger.

(ii) Holders of vested Anagram Options may elect to exercise
such options prior to the Effective Time of the Merger and receive the Merger
Consideration Per Share by providing notice of such exercise and payment of the
exercise price thereof to Anagram at any time prior to the Effective Time. In
the event that any holder of vested Anagram Options does not exercise such
Anagram options prior to the Effective Time, such Anagram Options shall become
Assumed Anagram Options.

(iii) As soon as practicable after the Effective Time of the
Merger, Avant! shall issue to each holder of an Assumed Anagram Option a
document evidencing the stock option assumption by Avant!. The right to receive
an Assumed Anagram Option may not be assigned or transferred. Any attempted
assignment contrary to this Section 2.1(d) shall be null and void.

3
<PAGE>

(e) Anagram Capital Stock Subject to Repurchase. All shares of
-------------------------------------------
Avant! Common Stock that are received in the Merger in exchange for shares of
Anagram Capital Stock that, under applicable stock purchase, stock restriction
or similar agreements with Anagram, are unvested or subject to a repurchase
option or other condition of forfeiture that by its terms does not terminate due
to the Merger ("Anagram Restricted Stock") will also be unvested or subject to
the same repurchase option or other condition, as the case may be, and the
certificates evidencing such shares will be marked with appropriate legends.
Schedule 2.1(e) hereto sets forth a true and complete list of all holders of
- ---------------
Anagram Restricted Stock, including the number of shares of Anagram Restricted
Stock held and a breakdown as between vested and unvested shares. On the Closing
Date, Anagram shall deliver to Avant! an updated Schedule 2.1(e) hereto current
---------------
as of the Closing Date.

(f) Adjustment of Exchange Ratio. If, between the date of this
----------------------------
Agreement and the Effective Time of the Merger, the outstanding shares of Avant!
Common Stock shall have been changed into a different number of shares or a
different class by reason of any reclassification, recapitalization, split-up,
stock dividend, stock combination, exchange of shares or readjustment, the
Exchange Ratio shall be correspondingly adjusted.

(g) Dissenters' Rights. If, as of the Effective Time of the Merger,
------------------
holders of the issued and outstanding Anagram Capital Stock are entitled to
dissenters' rights under California Law and have properly exercised and not lost
such dissenters' rights ("Dissenting Shares") in connection with the Merger,
shares of Anagram Capital Stock shall not be converted into Avant! Common Stock
but shall be converted into the right to receive such consideration as may be
determined to be due with respect to such Dissenting Shares.

(h) Fractional Shares. No fractional shares of Avant! Common Stock
-----------------
shall be issued, but in lieu thereof each holder of shares of Anagram Capital
Stock who would otherwise be entitled to receive a fraction of a share of Avant!
Common Stock shall receive from Avant! an amount of cash equal to the Average
Nasdaq Per Share Price multiplied by the fraction of a share of Avant! Common
Stock to which such holder would otherwise be entitled. The fractional share
interests of each Anagram shareholder shall be aggregated, so that no Anagram
shareholder shall receive cash in an amount greater than the value of one (1)
full share of Avant! Common Stock. The "Average Nasdaq Per Share Price" equals
the average closing sales price of Avant! Common Stock as quoted on the Nasdaq
National Market for the five (5) consecutive trading days ending three (3)
business days prior to the Closing Date of the Merger.

2.2 Exchange of Certificates.
------------------------

(a) Exchange Agent. Prior to the Closing Date, Avant! shall
--------------
appoint Harris Trust Company to act as exchange agent (the "Exchange Agent") in
the Merger.

(b) Avant! to Provide Common Stock. Promptly after the Effective
------------------------------
Time of the Merger (but in no event later than ten (10) business days
thereafter), Avant! shall make available for exchange in accordance with this
Article II, through such reasonable procedures as Avant! may adopt, the shares
of Avant! Common Stock issuable pursuant to Section 2.1 in exchange for
outstanding shares of capital stock of Anagram.

(c) Exchange Procedures. Within ten (10) business days after the
-------------------
Effective Time of the Merger, the Exchange Agent shall mail to each holder of
record of a certificate or certificates that immediately prior to the Effective
Time of the Merger represented outstanding shares of Anagram

4
<PAGE>

Capital Stock (the "Certificates") whose shares are being converted into Avant!
Common Stock pursuant to Section 2.1 hereof (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Avant! may
reasonably specify including appointment of the Shareholders' Representative as
attorney-in-fact for shareholders of Anagram with respect to certain matters)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for Avant! Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Avant!, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor the number of
shares of Avant! Common Stock to which the holder of Anagram capital stock is
entitled pursuant to Section 2.1 hereof. The Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Anagram
capital stock that is not registered on the transfer records of Anagram, the
appropriate number of shares of Avant! Common Stock may be delivered to a
transferee if the Certificate representing such Anagram capital stock is
presented to the Exchange Agent and accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.2, each Certificate shall be deemed at all times after the Effective Time of
the Merger to represent the right to receive upon such surrender the number of
shares of Avant! Common Stock as provided by this Article II and the provisions
of California Law but shall have no other right; provided, however, that
customary and appropriate certifications, indemnities and bonds allowing
exchange against lost or destroyed certificates shall be provided; and provided
further that nothing in this Section 2.2(c) shall require Avant! to exchange its
Common Stock to any holder of Anagram capital stock who shall fail to surrender
a certificate representing such shares or the certification, indemnities and
bonds relating to a lost certificate. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of shares of
Anagram capital stock for any Avant! Common Stock delivered to a public official
pursuant to applicable abandoned property, escheat and similar laws. Promptly
following the date that is six (6) months after the Effective Date, the Exchange
Agent shall return to the Surviving Corporation all shares of Avant! Common
Stock in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
laws) receive in exchange therefor the shares of Avant! Common Stock to which
such holder is entitled pursuant hereto.

(d) No Further Ownership Rights in Capital Stock of Anagram. All
-------------------------------------------------------
Avant! Common Stock delivered upon the surrender for exchange of shares of
capital stock of Anagram in accordance with the terms hereof shall be deemed to
have been delivered in full satisfaction of all rights pertaining to such shares
of capital stock of Anagram. There shall be no further registration of transfers
on the stock transfer books of the Surviving Corporation of the shares of
capital stock of Anagram that were outstanding immediately prior to the
Effective Time of the Merger. If, after the Effective Time of the Merger,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article II.

2.3 Supplementary Action. If, at any time after the Effective Time, any
--------------------
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either Anagram or Sub or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered, in
the name of and on behalf of Anagram and Sub, to execute and deliver any and all
things necessary or proper to vest or to perfect or confirm title to such

5
<PAGE>

property or rights in the Surviving Corporation, and otherwise to carry out the
purposes and provisions of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF ANAGRAM

Anagram represents and warrants to Avant! and Sub that the representations
and warranties set forth below shall be true and correct as of the date hereof,
except as disclosed in a document delivered by Anagram to Avant! prior to the
execution of this Agreement (the "Anagram Disclosure Schedules"). As used in
this Agreement, (a) "Business Condition" with respect to Anagram shall refer to
Anagram's financial condition, business as presently conducted (including
products currently under development), prospects as they relate to products
under current development, property, results of operations and assets; and (b) a
disclosure or result will be deemed "material and adverse" only if, individually
or when aggregated with other similar or related disclosures or results, it
gives rise to a substantial diminution in the value of Anagram.

3.1 Organization, Standing and Power. Anagram is a corporation duly
--------------------------------
organized, validly existing and in good standing under the laws of the State of
California and has all requisite corporate power and authority to own, operate
and lease its properties and to carry on its business as now being conducted.
Anagram is duly qualified as a foreign corporation and is in good standing in
each jurisdiction in which the failure to so qualify would have a material and
adverse effect on Anagram's Business Condition. Anagram has delivered or made
available to Avant! complete and correct copies of its current charter and
Bylaws, and has delivered minutes of all directors' and shareholders' meetings,
complete and accurate as of the date hereof, and stock certificate books of
Anagram, that correctly set forth the record ownership of all outstanding shares
of capital stock of Anagram and the addresses of each of its security holders.

3.2 Capital Structure.
-----------------

(a) The authorized capital stock of Anagram consists of 20,000,000
shares of Common Stock, no par value, and 10,000,000 shares of Preferred Stock,
no par value. As of the date of this Agreement, there were issued and
outstanding 3,831,000 shares of Anagram Common Stock, and there were issued and
outstanding 460,000 shares of Anagram Preferred Stock. As of the date of this
Agreement, there were an aggregate of 378,000 shares of Common Stock reserved
for issuance upon the exercise of outstanding Anagram Options, and 80,000 shares
of Preferred Stock reserved for issuance upon the exercise of outstanding
Anagram Options. There are no outstanding shares of Anagram capital stock or any
other equity securities or rights to purchase equity securities of Anagram,
other than shares of Anagram Capital Stock and Anagram Options as described in
this paragraph.

(b) All outstanding shares of Anagram Capital Stock are, and any
shares of Anagram Capital Stock issued upon exercise of any Anagram Option will
be, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by statute, Anagram's charter or Bylaws or
any agreement to which Anagram is a party or by which Anagram may be bound. All
outstanding Common Stock or other Anagram securities have been issued in
compliance with applicable securities laws. Except for the Anagram Options,
there are no options, warrants, calls, conversion rights, commitments or
agreements of any character to which Anagram is a party or by which Anagram may
be bound that do or may obligate Anagram to issue, deliver or sell, or cause to
be issued,

6
<PAGE>

delivered or sold, additional shares of Anagram capital stock or that
do or may obligate Anagram to grant, extend or enter into any such option,
warrant, call conversion right, commitment or agreement.

(c) Except as set forth on Schedule 3.2, none of the issued and
------------
outstanding shares of Anagram Capital Stock is subject to repurchase or
redemption. All Anagram Options have been issued in accordance with Anagram's
stock option plans and all applicable securities laws, including pursuant to
valid permits or exemptions therefrom. The Anagram stock option plans and all
amendments thereto have been approved by all requisite Anagram shareholder
action. Anagram does not have in effect any stock appreciation rights plan and
no stock appreciation rights are currently outstanding. The consummation of the
Merger shall not cause an acceleration in the vesting of any of Anagram's
capital stock.

(d) Except for any restrictions imposed by applicable securities
laws, there is no right of first refusal, co-sale right, right of participation,
right of first offer, option or other restriction on transfer applicable to any
shares of Anagram capital stock.

(e) Except as set forth herein, Anagram is not a party or subject
to any agreement or understanding, and there is no agreement or understanding
between or among any persons that affects or relates to the voting or giving of
written consent with respect to any outstanding security of Anagram.

3.3 Subsidiaries. Anagram does not own or control, directly or
------------
indirectly, any corporation, partnership, business, trust or other entity.
Schedule 3.3 sets forth a true and complete list of all jurisdictions in which
- ------------
Anagram and its subsidiaries are qualified to do business or own or lease
property or have employees. All of the shares of capital stock of each such
subsidiary are owned free and clear of all liens by Anagram.

3.4 Authority.
---------

(a) Anagram has all requisite corporate power and authority to
enter into this Agreement and the Agreement of Merger and the Escrow Agreement
(collectively, the "Related Agreements") and, subject to approval of this
Agreement and the Agreement of Merger by the shareholders of Anagram, to
execute, deliver and perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements, the performance by
Anagram of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Anagram, including
approval by its Board of Directors, other than approval of the Anagram
shareholders. Each of this Agreement and the Related Agreements is a legal,
valid and binding obligation of Anagram enforceable against Anagram in
accordance with its respective terms, except as enforcement may be limited by
bankruptcy, insolvency, or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.

7
<PAGE>

right of termination, cancellation, forfeiture or acceleration of any obligation
or the loss of a benefit under, or result in the creation of a lien or
encumbrance on any of the properties or assets of Anagram pursuant to (i) any
provision of the current charter or Bylaws of Anagram, or (ii) any agreement,
contract, note, mortgage, indenture, lease, instrument, permit, concession,
franchise or license to which Anagram is a party or by which Anagram or any of
its property or assets may be bound or affected, other than any such conflict,
breach, violation or default which would not have a material and adverse effect
on the Business Condition of Anagram.

(c) No consent, approval, order or authorization of, or registration,
declaration of, or qualification or filing with, any court, administrative
agency, commission, regulatory authority or other governmental or administrative
body or instrumentality, whether domestic or foreign (a "Governmental Entity"),
is required by or with respect to Anagram in connection with the execution and
delivery of this Agreement and the Related Agreements by Anagram or the
consummation by Anagram of the transactions contemplated hereby or thereby,
except for (i) the filing of the Agreement of Merger as required under
California Law and appropriate documents with the relevant authorities of other
jurisdictions in which Anagram is qualified to do business, (ii) the issuance of
a permit by the California Department of Corporations with respect to the
issuance of Avant! Common Stock and assumption of securities pursuant to this
Agreement, and (iii) such other consents, approvals, authorizations,
registrations or qualifications as may be required under applicable securities
or Blue Sky laws in connection with the Merger.

3.5 Financial Statements. Anagram has delivered to Avant! a complete and
--------------------
accurate copy of its audited balance sheet at December 31, 1995, and its
unaudited balance sheet at June 30, 1996, and its statement of operations,
statement of cash flows and statement of shareholders' equity, including notes
thereto, for the year ended December 31, 1995, which have been audited, and the
six months ended June 30, 1996, which are unaudited (collectively, "the Anagram
Financial Statements"). The Anagram Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods indicated and with each other. Except
for the absence of footnotes and customary year-end adjustments in the financial
statements at, and for the six months ended, June 30, 1996, the Anagram
Financial Statements fairly present the financial position and operating results
of Anagram as of the dates, and for the periods, indicated therein.

3.6 Payables; Receivables.
---------------------

(a) All accounts payable and notes payable by Anagram to third
parties as of the date hereof arose, and as of the Closing, will have arisen, in
the ordinary course of business.

(b) All of the accounts receivable and notes receivable, net of
allowances, owing to Anagram as of June 30, 1996 and as of the Closing are, or
will be, set forth in Schedule 3.6 and constitute, and as of the Effective Time
------------
will constitute, valid and enforceable claims arising from bona fide
transactions in the ordinary course of business, and, to Anagram's knowledge,
there are no contingent or asserted claims, refusals to pay, rights of return,
or other rights of set-off against any thereof. As of the date hereof, and as of
the Closing, there is and will be no account receivable or note receivable that
is pledged to any third party by Anagram.

(c) As of June 30, 1996, there are no debts, liabilities or claims
against Anagram that are not reflected in the Anagram Financial Statements, as
applicable, contingent or otherwise, that are or would be of a nature required
to be reflected in a balance sheet prepared in accordance with GAAP and that,
individually exceed $10,000, or in the aggregate, exceed $25,000. As of June 30,
1996, and as

8
<PAGE>

of the Closing, Anagram has, and will have, no debts, liabilities, or claims
other than those specifically set forth in the Anagram Financial Statements or
that have arisen in the ordinary course of business since June 30, 1996.
Anagram's revenue recognition policies with respect to Anagram Financial
Statements have been made in accordance with GAAP. Anagram maintains a standard
system of accounting in accordance with GAAP. All of Anagram's general ledgers,
books and records have been made available to Avant!. Anagram does not have any
of its records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) that (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of Anagram. Anagram's
financial reserves in the Anagram Financial Statements are adequate to cover
claims already incurred. The provision for taxes of Anagram as set forth in the
Anagram Financial Statements is adequate and accurate for taxes due or accrued
as of such date.

3.7 Compliance with Laws. Except as set forth in Schedule 3.7, Anagram
--------------------- ------------
is in compliance and has conducted its business and operations so as to comply
with all laws, ordinances, rules and regulations, judgments, decrees or orders
of any Governmental Entity, except to the extent that failure to comply would
not have a material and adverse effect on Anagram's Business Condition. There
are no judgments or orders, injunctions, decrees, stipulations or awards
(whether rendered by a court or administrative agency or by arbitration) against
Anagram or against any of its properties or businesses, and none are pending or,
to Anagram's knowledge, threatened. Anagram has not during the past three (3)
years received any governmental notice from any Governmental Entity for any
violation of applicable laws or regulations. Anagram has all valid and current
permits, licenses, orders, authorizations, registrations, approvals and other
instruments (each of which is in full force and effect), and Anagram has made
all filings and registrations and the like necessary or required by law to
conduct its business, except in each case where its failure to do so would not
have a material and adverse effect on Anagram's Business Condition.

3.8 No Defaults. Except as set forth in Schedule 3.8, Anagram is not,
----------- ------------
and it has not received notice that it is or would be with the passage of time,
in violation of any provision of its current charter or Bylaws or in default or
violation of any term, condition or provision of (a) any judgment, decree,
order, injunction or stipulation applicable to Anagram, or (b) any agreement,
note, mortgage, indenture, law, statute, rule, regulation, contract, lease,
instrument, permit, concession, franchise or license to which Anagram is a party
or by which Anagram or its properties or assets may be bound, other than any
such conflict, breach, violation or default which would not have a material and
adverse effect on the Business Condition of Anagram.

3.9 Litigation. Except as set forth in Schedule 3.9, there is no action,
---------- ------------
suit, proceeding, claim, arbitration or investigation pending or, to Anagram's
knowledge, threatened against Anagram or, to Anagram's knowledge, any of its
officers or directors, nor is there any reasonable basis therefor known to
Anagram. There is no action, suit, proceeding or investigation by Anagram
currently pending or which it intends to initiate. The Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or Governmental Entity. Anagram has delivered to Avant! correct and
complete copies of all correspondence prepared by its counsel for Anagram's
independent public accountants in connection with the last completed audit of
the Anagram Financial Statements and any such correspondence since the date of
the last such audit.

3.10 Conduct in the Ordinary Course. Except as set forth in Schedule
------------------------------ --------
3.10, since June 30, 1996, Anagram has conducted its business in the ordinary
- ----
course and there has not occurred:

9
<PAGE>

(a) Any change in the assets, liabilities, business condition or
operating results from that reflected in the Anagram Financial Statements at,
and for the six months ended, June 30, 1996 and that is material and adverse to
the Business Condition of Anagram;

(b) Any amendments or changes in the charter or Bylaws of Anagram;

(c) Any damage, destruction or loss, whether covered by insurance
or not, materially and adversely affecting the Business Condition of Anagram;

(d) Any issuance, redemption, repurchase or other acquisition of
shares of capital stock of Anagram (other than issuances pursuant to exercise of
Anagram Options or repurchases of Common Stock at cost in the ordinary course
under the terms of agreements relating to Anagram Restricted Stock), or any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to Anagram capital stock;

(e) Any increase in or modification of the compensation or benefits
payable or to become payable by Anagram to any of its service providers or
changes pursuant to employment agreements currently in effect or changes in
position;

(f) Any increase in or modification of any bonus, pension,
insurance or other employee benefit plan, payment or arrangement (including,
without limitation, the granting of stock options, restricted stock awards or
stock appreciation rights) made to, for or with any of its service providers;

(g) Any (i) sale of the property or assets of Anagram individually
in excess of $10,000 or in the aggregate in excess of $25,000 other than
inventory sales or nonexclusive end user license grants in the ordinary course
of business consistent with past practice or (ii) any mortgage, pledge, transfer
of a security interest in, or lien created by it, with respect to any of its
properties or assets, except liens for taxes not yet due or payable (other than
liens arising under existing lease financing arrangements, liens arising in the
ordinary course of Anagram's business that in the aggregate are not material and
liens for Taxes not yet due and payable);

(h) Any alteration in any term of any outstanding security of
Anagram;

(i) Any (i) incurrence, assumption or guarantee by Anagram of any
debt for borrowed money other than trade indebtedness incurred in the ordinary
course of business consistent with past practice; (ii) any waiver or compromise
by it of a valuable right or of a debt owed to it; (iii) any satisfaction or
discharge of any lien, claim, or encumbrance or payment of any obligation by it,
except that which is not material to its Business Condition; (iv) issuance or
sale of any securities convertible into or exchangeable for debt securities of
Anagram; or (v) issuance or sale of options or other rights to acquire from
Anagram, directly or indirectly, debt securities of Anagram or any securities
convertible into or exchangeable for any such debt securities;

(j) Any creation or assumption by Anagram of any mortgage, pledge,
security interest or lien or other encumbrance on any asset (other than liens
arising under existing lease financing arrangements, liens arising in the
ordinary course of Anagram's business that in the aggregate are not material and
liens for Taxes not yet due and payable);

(k) Any making of any loan, advance or capital contribution to, or
investment in, any person other than advances made in the ordinary course of
business of Anagram;

10
<PAGE>

(l) Any entry into, amendment of, relinquishment, termination or
nonrenewal by Anagram of any contract, lease, commitment or other right or
obligation other than in the ordinary course of business consistent with past
practice;

(m) Any transfer or grant of a right under the Anagram Intellectual
Property Rights (as defined in Section 3.17) other than those transferred or
granted in the ordinary course of business consistent with past practice;

(n) Any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of Anagram;

(o) Any resignation or termination of employment of any of its key
employees; and Anagram does not know of the impending resignation or termination
of employment of any such employee; or

(p) Any agreement or arrangement made by Anagram to take any action
that, if taken prior to the date hereof, would have made any representation or
warranty set forth in this Section 3.10 untrue or incorrect as of the date when
made.

3.11 Absence of Undisclosed Liabilities. Except as set forth in Schedule
---------------------------------- --------
3.11 and in the Anagram Financial Statements, Anagram has no liabilities or
- ----
obligations (whether absolute, accrued or contingent, and whether or not
determined or determinable) of a character that should be accrued, shown,
disclosed, reserved or indicated in a balance sheet of Anagram (including the
footnotes thereto).

3.12 Documents and Information Supplied. The copies of all instruments,
----------------------------------
agreements, other documents and information delivered or communicated by
Anagram, its shareholders and professional advisors to Avant! and Sub or their
counsel and accountants are and will be complete, accurate and correct in all
respects. No representations or warranties made by Anagram in this Agreement,
nor any document, information, statement, financial statement, communication,
letter, certificate or exhibit prepared and furnished or to be prepared and
furnished by Anagram or its representatives to Avant! or Sub pursuant hereto or
in connection with the transactions contemplated hereby contain or will contain
any untrue statement of a material fact, or omit or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein, in light of the circumstances under which made, not misleading.

3.13 Certain Agreements. Except as set forth in Schedule 3.13, neither
------------------ -------------
the execution and delivery of this Agreement or any of the Related Agreements
nor the consummation of the transactions contemplated hereby or thereby will (a)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any service
provider of Anagram under any Plan (as defined in Section 3.14 below) or
otherwise, (b) materially increase any benefits otherwise payable under any
Plan, or (c) result in the acceleration of the time of payment or vesting of any
such benefits.

3.14 Employee Plans.
--------------

(a) Anagram has not failed to comply in any respect with Title VII
of the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, all
applicable federal, state, and local laws, rules, and regulations relating to
employment, and all applicable laws, rules, and regulations governing payment of
minimum

11
<PAGE>

wages and overtime rates, and the withholding and payment of compensation of
employees, except where the failure to so comply will not have a material and
adverse effect on Anagram's Business Condition.

(b) Anagram is not a party to, nor has Anagram made any
contribution to or otherwise incurred any obligation under, any "multiemployer
plan" as defined in Section 3(37) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").

(c) All plans, programs, policies, commitments or other
arrangements (whether or not set forth in a written document) maintained by or
on behalf of Anagram that provide deferred or incentive compensation, stock
options or other stock purchase rights, severance or termination pay, medical
dental, life, disability or accident benefits (whether or not insured),
collective bargaining agreements, or pension, profit sharing, savings or
retirement benefits to, or for the benefit of, any active, former or retired
service provider of Anagram or their spouses or dependents are set forth in
Schedule 3.14 (collectively, the "Plans").
- -------------

(d) Anagram has made available to Avant! or their counsel complete
and accurate copies of each Plan. Anagram has prepared in good faith and timely
filed all requisite governmental reports and has properly and timely posted, or
distributed all notices and reports to employees required to be filed, posted,
or distributed with respect to each Plan, except where the failure to so comply
will not have a material and adverse affect on Anagram's Business Condition.
Each Plan has at all times been operated and administered in all material
respects in accordance with its terms and all applicable laws currently in
effect, including ERISA and the Code, and including but not limited to,
amendments to Section 401(a) of the Code enacted by the Tax Reform Act of 1986,
the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation
Act of 1987, the Technical and Miscellaneous Revenue Act of 1988, and the
Omnibus Budget Reconciliation Act of 1989.

(e) Anagram has not violated in any material respect any of the
health care continuation coverage requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") applicable to its employees prior to
the Time of Closing.

(f) There are no "reportable events" under Section 4043 of ERISA
with respect to any pension benefit plan within the meaning of Section 3(2) of
ERISA, subject to Title IV of ERISA, and Anagram has not incurred any liability
under Title IV of ERISA in connection with the termination of any pension
benefit plan or the complete or partial withdrawal from any multiemployer plan
within the meaning of Section 3(37) of ERISA.

3.15 Major Contracts. Except as set forth in Schedule 3.15, Anagram is
--------------- -------------
not a party to or subject to:

(a) Any union contract or any employment or consulting contract or
arrangement other than stock option or stock purchase agreements or proprietary
information agreements, written or oral with any director, officer or affiliate;

(b) Any original equipment manufacturer agreement, distribution
agreement, volume or quantity purchase agreement or other similar agreement, or
joint venture contract or arrangement or any other agreement that has involved
or is expected to involve a sharing of profits with other persons or provides
for payments of more than $10,000 per annum;

12
<PAGE>

(d) Any instrument evidencing or related in any way to indebtedness
incurred in the acquisition of companies or other entities or indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, leasehold obligations or otherwise;

(e) Any license agreement over $500,000, either as licensor or
licensee;

(f) Any contract containing covenants purporting to limit the
freedom of Anagram to compete in any line of business in any geographic area;

(g) Any agreement of indemnification, except indemnification
provided in the ordinary course of business for officers and directors pursuant
to applicable corporate law;

(h) Any agreement, contract or commitment relating to capital
expenditures involving payments of more than $50,000 per annum;

(i) Any agreement, contract or commitment relating to the
disposition or acquisition by Anagram of any assets (other than Inventory) or
any Anagram Intellectual Property Rights (as defined in Section 3.17 below),
other than nonexclusive end user license grants in the ordinary course of
business;

(j) Any agreement providing for minimum payment or resale
obligations, ongoing support or research and development obligations, or
warranty obligations on the part of Anagram, except arrangements entered into in
the ordinary course of business;

(k) Any agreement for the provision of products or securities to any
Governmental Entity, except customer agreements entered into in the ordinary
course of business;

(l) Any agreement requiring a commitment of Anagram resources or
personnel to market, distribute or license products or technology, whether on a
best-efforts basis or otherwise, except customer agreements entered into in the
ordinary course of business;

(m) Any other agreement, contract, letter of intent, memorandum of
understanding or commitment that is material to Anagram;

(n) Service contracts in excess of $100,000 for products and
contracts relating to material amounts of deferred revenues; or

(o) Any sole or limited source supplier agreements (written or
oral).

Except as set forth on Schedule 3.15, to Anagram's knowledge each
agreement, contract, mortgage, indenture, plan, lease, instrument, permit,
concession, franchise, arrangement, license and commitment to which Anagram is a
party or by which it is bound as set forth in Schedule 3.15 (or required to be
set forth in Schedule 3.15) (i) is valid and binding on Anagram, (ii) is in full
force and effect, (iii) has not been breached by Anagram or to Anagram's
knowledge any other party thereto in a manner that is material and adverse to
the Business Condition of Anagram, and (iv) contains no liquidated damages,
indemnification obligation, penalty or similar provision. To Anagram's
knowledge,

13
<PAGE>

no party to any such contract, agreement or instrument intends to cancel,
withdraw, modify or amend such contract, agreement or arrangement. Anagram is
not aware of any facts from which it should reasonably conclude that it will not
be able to perform in all material respects the obligations required to be
performed by it subsequent to the date hereof under each such agreement.

3.16 Taxes.
-----

(a) All Tax returns, statements, reports, declarations and other
forms and documents (including without limitation estimated Tax returns and
reports and material information returns and reports) required to be filed with
any Tax authority with respect to any Taxable period ending on or before the
Closing, by or on behalf of Anagram (collectively, "Tax Returns" and
individually a "Tax Return"), have been or will be completed and filed when due
(including any extensions of such due date), all such Tax Returns were or will
be complete and accurate as filed, and all amounts shown due on such Tax Returns
on or before the Effective Time have been or will be paid on or before such
date. The Anagram Financial Statements (i) fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through June 30,
1996 and Anagram has not and will not incur any Tax liability in excess of the
amount reflected on its June 30, 1996 balance sheet included in the Anagram
Financial Statements with respect to such periods, other than Taxes incurred in
the ordinary course of its business following June 30, 1996, and (ii) properly
accrues in accordance with GAAP all material liabilities for Taxes payable after
June 30, 1996 with respect to all transactions and events occurring on or prior
to such date. All information set forth in the notes to the Anagram Financial
Statements relating to Tax matters is true, complete and accurate in all
material respects. No material Tax liability since June 30, 1996 has been
incurred by Anagram other than in the ordinary course of business and adequate
provision has been made by Anagram for all Taxes since that date in accordance
with GAAP on at least a quarterly basis. Anagram has withheld and paid to the
applicable financial institution or Tax authority all amounts required to be
withheld. To the knowledge of Anagram, no Tax Returns filed with respect to
Taxable years of Anagram through the Taxable year ended December 31, 1995 in the
case of the United States, have been examined and closed. Anagram (or any member
of any affiliated or combined group of which Anagram has been a member) has not
granted any extension or waiver of the limitation period applicable to any Tax
Returns that is still in effect. There is no material claim, audit, action,
suit, proceeding, or (to the knowledge of Anagram) investigation now pending or
(to the knowledge of Anagram) threatened against or with respect to Anagram in
respect of any Tax or assessment. No notice of deficiency or similar document of
any Tax authority has been received by Anagram, and there are no liabilities for
Taxes (including liabilities for interest, additions to Tax and penalties
thereon and related expenses) with respect to the issues that have been raised
(and are currently pending) by any Tax authority that could, if determined
adversely to Anagram, materially and adversely affect the liability of Anagram
for Taxes. There are no liens for Taxes (other than for current Taxes not yet
due and payable) upon the assets of Anagram. Anagram has never been a member of
an affiliated group of corporations, within the meaning of Section 1504 of the
Code. Anagram is in full compliance with all the terms and conditions of any Tax
exemptions or other Tax-sharing agreement or order of a foreign government and
the consummation of the Merger will not have any adverse effect on the continued
validity and effectiveness of any such Tax exemption or other Tax-sharing
agreement or order. Neither Anagram nor any person on behalf of Anagram has
entered into or will enter into any agreement or consent pursuant to the
collapsible corporation provisions of Section 341(f) of the Code (or any
corresponding provision of state, local or foreign income tax law) or agreed to
have Section 341(f)(2) of the Code (or any corresponding provision of state,
local or foreign income tax law) apply to any disposition of any asset owned by
Anagram. None of the assets of Anagram is property that Anagram is required to
treat as being owned by any other person pursuant to the so-called "safe harbor
lease" provisions of former Section 168(f)(8) of the Code. None of the assets of
Anagram directly or indirectly secures any debt the interest on which is tax
exempt

14
<PAGE>

under Section 103(a) of the Code. None of the assets of Anagram is "tax-exempt
use property" within the meaning of Section 168(h) of the Code. Anagram has not
made and will not make a deemed dividend election under Treas. Reg. (S)1.1502-
32(f)(2) or a consent dividend election under Section 565 of the Code. Anagram
has not participated in (and will not participate in) an international boycott
within the meaning of Section 999 of the Code. No Anagram shareholder is other
than a United States person within the meaning of the Code. Anagram does not
have and has not had a permanent establishment in any foreign country, as
defined in any applicable tax treaty or convention between the United States of
America and such foreign country and Anagram has not engaged in a trade or
business within any foreign country. Apart from Anagram's election to be treated
as an S corporation, all material elections with respect to Anagram's Taxes made
during the fiscal years ending, December 31, 1993, 1994 and 1995 are reflected
on the Anagram Tax Returns for such periods, copies of which have been provided
or made available to Avant!. After the date of this Agreement, no material
election with respect to Taxes will be made without the prior written consent of
Avant!, which consent will not be unreasonably withheld or delayed. Anagram is
not party to any joint venture, partnership, or other arrangement or contract
which could be treated as a partnership for federal income tax purposes. Anagram
is not currently and never has been subject to the reporting requirements of
Section 6038A of the Code. There is no agreement, contract or arrangement to
which Anagram is a party that could, individually or collectively, result in the
payment of any amount that would not be deductible by reason of Sections 280G
(as determined without regard to Section 280G(b)(4), 162 (other than 162(a)) or
404 of the Code. Anagram is not a party to or bound by any Tax indemnity, Tax
sharing or Tax allocation agreement (whether written or unwritten or arising
under operation of federal law as a result of being a member of a group filing
consolidated Tax returns, under operation of certain state laws as a result of
being a member of a unitary group, or under comparable laws of other states or
foreign jurisdictions) which includes a party other than Anagram nor does
Anagram owe any amount under any such Agreement. Anagram has previously provided
or made available to Avant! true and correct copies of all income, franchise,
and sales Tax Returns, and, as reasonably requested by Avant!, prior to or
following the date hereof, presently existing information statements and
reports. Anagram is not, and has not been, a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code. Anagram has not been
and will not be required to include any material adjustment in Taxable income
for any Tax period (or portion thereof) pursuant to Section 481 or 263A of the
Code or any comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Merger. For
purposes of this Agreement, the following terms have the following meanings:
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means any and all
taxes including, without limitation, (i) any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, value added, net worth, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Entity (a "Tax authority") responsible for the imposition of any
such tax (domestic or foreign), (ii) any liability for the payment of any
amounts of the type described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable period or as
the result of being a transferee or successor thereof and (iii) any liability
for the payment of any amounts of the type described in (i) or (ii) as a result
of any express or implied obligation to indemnify any other person. As used in
this Section 3.16, the term "Anagram" means Anagram and any entity included in,
or required under GAAP to be included in, any of the Anagram Financial
Statements.

3.17 Intellectual Property.
---------------------

15
<PAGE>

(a) Except as otherwise set forth in Schedule 3.17, Anagram owns,
-------------
or is licensed or otherwise entitled to exercise, without restriction, all
rights to all patents, trademarks, trade names, service marks, copyrights, mask
work rights, trade secret rights and other intellectual property rights, and any
applications or registrations therefor, and all mask works, net lists,
schematics, technology, source code, know-how, computer software programs and
all other tangible and intangible information or material used in the business
of Anagram as currently conducted or in connection with products currently under
development without any conflict or infringement of the rights of others
(collectively, the "Anagram Intellectual Property Rights"). All of the
trademarks, trade names, service marks and copyrights included in such Anagram
Intellectual Property Rights are set forth in Schedule 3.17. Anagram has no
-------------
patents, patent applications or copyright registrations.

(b) Schedule 3.17 also lists (i) all patents and patent applications
-------------
and all registered copyrights, trade names, trademarks, service marks and other
company, product or service identifiers included in the Anagram Intellectual
Property Rights, and specifies the jurisdictions in which each such Anagram
Intellectual Property Right has been registered, including the respective
registration numbers; and (ii) other than end user licenses entered into in the
ordinary course of business, all licenses, sublicenses and other agreements as
to which Anagram is a party and pursuant to which Anagram or any other person is
authorized to use any Anagram Intellectual Property Right. Copies of all
licenses, sublicenses, and other agreements identified pursuant to clause (ii)
above have been delivered by Anagram to Avant!.

(c) Anagram is not in violation in any material respect of any
license, sublicense or agreement described in Schedule 3.17. As a result of the
-------------
execution and delivery of this Agreement or the performance of Anagram's
obligations hereunder, Anagram will not be in violation in any material respect
of any license, sublicense or agreement described in Schedule 3.17, or lose or
-------------
in any way impair any rights pursuant thereto.

(d) Anagram is the absolute owner or a nonexclusive or exclusive
licensee of, with all necessary right, title and interest in and to (free and
clear of any liens, encumbrances or security interests), the Anagram
Intellectual Property Rights and has rights to the use, sale, license or
disposal thereof in connection with the services or products in respect of which
the Anagram Intellectual Property Rights are being used or proposed to be used
in connection with products currently under development.

(e) No claims with respect to the Anagram Intellectual Property
Rights have been asserted to Anagram, or to Anagram's knowledge, are threatened
by any person, and Anagram knows of no claims (i) to the effect that Anagram
infringes any copyright, patent, trade secret, or other intellectual property
right of any third party or violates any license or agreement with any third
party, (ii) contesting the right of Anagram to use, sell, license or dispose of
any Anagram Intellectual Property Rights, or (iii) challenging the ownership,
validity or effectiveness of any of the Anagram Intellectual Property Rights.

(f) To Anagram's knowledge, all trademarks, service marks, and
other company, product or service identifiers held by Anagram are valid and
subsisting.

(g) To Anagram's knowledge, there has not been and there is not now
any unauthorized use, infringement or misappropriation of any of the Anagram
Intellectual Property Rights by any third party, including, without limitation,
any service provider of Anagram; Anagram has not been sued or charged as a
defendant in any claim, suit, action or proceeding that involves a claim of
infringement of any patents, trademarks, service marks, copyrights or other
intellectual property rights;

16
<PAGE>

and Anagram does not have any infringement liability with respect to any patent,
trademark, service mark, copyright or other intellectual property right of
another.

(h) No Anagram Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting in any
manner the licensing thereof by Anagram. Anagram has not entered into any
agreement to indemnify any other person against any charge of infringement of
any Anagram Intellectual Property Right, except in the ordinary course of
business. Anagram has not entered into any agreement granting any third party
the right to bring infringement actions with respect to, or otherwise to enforce
rights with respect to, any Anagram Intellectual Property Right. Anagram has the
exclusive right to file, prosecute and maintain all applications and
registrations with respect to the Anagram Intellectual Property Rights developed
or owned by Anagram.

3.18 Employee Agreements. To Anagram's knowledge, no service provider of
-------------------
Anagram is in violation of any term of any judgment, decree or order, or any
term of an employment contract (whether written or verbal), patent or trademark
disclosure agreement or any other contract or agreement relating to the
relationship of any such service provider with Anagram or any other party
(including prior employers), because of the nature of the business now conducted
by Anagram. Each current and former service provider of Anagram has executed a
proprietary information and inventions agreement (or similar agreement) with
Anagram in the form then being used by Anagram, all of which forms have been
attached to Schedule 3.18.
-------------

3.19 Restrictions on Business Activities. Except as set forth in
------------------------------------
Schedule 3.19, there is no agreement, judgment, injunction, order or decree
- -------------
binding upon Anagram or which has or could reasonably be expected to have the
effect of prohibiting or significantly impairing any business practice of
Anagram, any acquisition of property by Anagram, or the continuation of the
business of Anagram as currently conducted.

3.20 Title to Properties; Absence of Liens and Encumbrances: Condition of
--------------------------------------------------------------------
Equipment.
- ---------

(a) Anagram does not own any real property.

(b) All of the existing Anagram Real Property leases have been
previously delivered to Avant!. Schedule 3.20 sets forth a complete and accurate
-------------
list of all real property leased by Anagram.

(c) Anagram owns or has valid leasehold interests in all of its
tangible properties and assets, real personal and mixed, used in its business,
free and clear of any liens (other than liens for Taxes that are not yet
delinquent), charges, pledges, security interests or other encumbrances, except
as reflected in the Anagram Financial Statements and except for such
imperfections of title and encumbrances, if any, that are not substantial in
character, amount or extent, and that do not and are not reasonably likely to
materially detract from the value, or interfere with the use, as presently
conducted, of the property subject thereto or affected thereby. Anagram has
delivered to Avant! correct and complete copies of each lease identified in
Schedule 3.20 and such lease(s) are valid and enforceable by Anagram in
accordance with their terms. Anagram has received no notice that, and no
circumstance exists which, with the passage of time or the giving of notice
could constitute a default under, any such lease(s). No consent of any party is
required to any lease of which Anagram is a party as a consequence of the
Merger.

(d) Each item of machinery and equipment (the "Equipment") owned or
leased by Anagram is listed in Schedule 3.20, except such Equipment which
-------------
individually has a net book value of

17
<PAGE>

less than $5,000. The Equipment is (i) adequate for the conduct of the business
of Anagram consistent with its past practice, (ii) suitable for the uses to
which it is currently employed, (in) in good operating condition, (iv) regularly
and properly maintained, and (v) not obsolete, dangerous or in need of renewal
or replacement, except for renewal or replacement in the ordinary course of
business.

(e) Since June 30, 1996, there has not occurred any transfer of
title other than in the ordinary course of business, any material abandonment,
or any material pilferage or any other material loss with respect to, any of its
property, plant or equipment.

(f) Schedule 3.20 also contains a true and correct list of all of
-------------
the physical assets (including fixed assets) having a net book value in excess
of $5,000 owned or leased by Anagram or on consignment. All improvements on
leased property used in the business of Anagram and the present use thereof are
performed in all material respects in accordance with all applicable laws. The
net book value of any fixed assets used in Anagram's business has not been
written up or down, other than pursuant to depreciation or amortization expense
in accordance with its historical practice.

3.21 Governmental Authorizations and Licenses. Schedule 3.21 sets forth
---------------------------------------- -------------
all of Anagram's licenses, authorizations, permits, concessions, certificates
and other franchises of any Governmental Entity required to operate its business
(collectively, the Government Licenses). Anagram is in compliance in all
material respects with the terms, conditions, limitations, restrictions,
standards, prohibitions, requirements and obligations of such Government
Licenses. The Government Licenses are in full force and effect. There is not now
pending, nor, to Anagram's knowledge, is there threatened, any action, suit,
investigation or proceeding against Anagram before any Governmental Entity (as
defined in Section 3.22 below) with respect to the Government Licenses, nor is
there any issued or outstanding notice, order or complaint with respect to the
violation by Anagram of the terms of any Government License or any rule or
regulation applicable thereto.

3.22 Environmental Matters.
---------------------

(a) For purposes of this Section 3.22, the following terms shall
have the following meanings:

"Court Order" shall mean any judgment, order, award or decree of any
foreign, federal, provincial, state, local or other court or tribunal, or any
Governmental Entity, and any award in any arbitration proceeding.

"Disposal Site" shall mean landfill, disposal agent, waste hauler or
recycler of Hazardous Materials.

"Environmental Encumbrance" shall mean any lien, claim, charge,
security interest, mortgage, pledge, easement, conditional sale or other title
retention agreement, defect in title, covenant or other restrictions of any kind
in favor of any Governmental Entity for (i) any liability under any
Environmental Law or (ii) damages arising from, or costs incurred by such
Governmental Entity in response to, a Release or threatened Release of a
Hazardous Material into the environment.

"Environmental Laws" shall mean all Requirements of Laws that relate
to any Hazardous Material, any Hazardous Materials Activities or the use,
handling, transportation, production, spin, lead pumping, injection, deposit,
disposal discharge, Release, threatened Release, migration, emission, sale or
storage of, or the exposure of any person to, a Hazardous Material

18
<PAGE>

"Governmental Permits" shall mean all licenses, franchises, permits,
privileges, immunities, approvals and other authorizations from a Governmental
Entity.

"Hazardous Material" shall mean any material or substance that is
prohibited or regulated by any Requirement of Law or that is designated by any
Governmental Entity to be radioactive, toxic, hazardous or otherwise a danger to
health, reproduction or the environment.

"Hazardous Materials Activities" shall mean the use, handling,
transportation, distribution, sale, Release or threatened Release of, or
Remedial Action concerning any Hazardous Material, performed in connection with
Anagram's business or the Real Property.

"Real Property" shall mean real property now or at any time in the
past owned or leased by Anagram or any predecessors.

"Release" shall mean release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Hazardous Material in, on, under or through the Real Property or the air, soil,
surface water, ground water or improvements thereof.

"Remedial Action" shall mean any reporting, investigation,
characterization, feasibility study, health assessment, risk assessment,
remediation, treatment, recycling, removal, transport, monitoring, maintenance
or any other activity incident to the Release, threatened Release,
investigation, remediation or removal of a Hazardous Material existing on the
Real Property or in, on, under or through the air, soil, ground water, surface
water or improvements thereof. "Requirements of Laws" shall mean any laws,
statutes, regulations, rules, guidelines, codes, ordinances, judgments,
injunctions' decrees, orders, permits, approvals, treaties or protocols enacted,
adopted, issued or promulgated by any Governmental Entity (including, without
limitation, those pertaining to electrical building, zoning, environmental and
occupational safety and health requirements) or common law in effect on the date
hereof.

(b) Except as set forth in Schedule 3.22,
-------------

(i) Anagram complies in all material respects with all
applicable Environmental Laws;

(ii) Anagram has obtained all material environmental health
and safety Governmental Permits necessary for its operation or required by any
Environmental Laws, all such Governmental Permits are in good standing, and
Anagram is in compliance in all material respects with all terms and conditions
of such permits;

(iii) to Anagram's knowledge, none of Anagram nor any of the
Real Property or present or past Anagram operations is subject to any pending or
ongoing investigation by notice or order from or agreement with any person with
respect to (A) any claim of Environmental Law, (B) any Remedial Action or (C)
any claim of losses and expenses arising from the Release or threatened Release
of a Hazardous Material;

(iv) Anagram is not subject to any pending or existing
judicial or administrative proceeding, Court Order or settlement alleging or
addressing a violation of or liability under any Environmental Law;

19
<PAGE>

(v) Anagram has not filed, and Anagram does not intend to file
any notice or report under any Environmental Law reporting a violation of any
Environmental Law;

(vi) to Anagram's knowledge, there is not now, and there has
never been, on or under any Real Property; (A) any underground storage tank or
surface impoundment; or (B) any landfill or waste pile that either is or was
used to dispose or store any Hazardous Material or contains or contained of
Hazardous Material;

(vii) Anagram has not received any notice of claim to the
effect that it is or may be liable to any person as a result of the Release or
threatened Release of a Hazardous Material into the environment or any Hazardous
Materials Activities from or on any Real Property;

(viii) Anagram is not aware of any Environmental Encumbrance on
any Real Property;

(ix) to Anagram's knowledge, any asbestos-containing material
that is on or part of any Real Property is in good repair according to the
current standards and practices governing such material, and its presence or
condition does not violate any currently applicable Environmental Law;

(x) none of the products Anagram manufactures, distributes or
sells or has manufactured, distributed or sold in the past, contains substantial
amounts of asbestos containing material;

(xi) to Anagram's knowledge, no Hazardous Material is present
on Real Property;

(xii) Hazardous Materials Activities (A) have been conducted in
compliance with applicable Environmental Laws, and (B) have not resulted in the
exposure of any person to a Hazardous Material in a manner that has or will
cause an adverse health effect to such person;

(xiii) no Court Order, action, proceeding, liability or claim
exists or, to Anagram's knowledge, is threatened, against any Disposal Site used
by Anagram or against Anagram with respect to any transfer or release of
Hazardous Materials by Anagram to a Disposal Site used by Anagram, and there is
no valid basis for such claim based on any conduct of Anagram;

(xiv) Anagram is not aware of any fact or circumstance that is
reasonably expected to involve Anagram in any environmental litigation or impose
upon Anagram any environmental liability that would have a material and adverse
effect on the Business Condition of Anagram; and

(xv) Anagram has no records pertaining to environmental audits
or environmental assessments of any Real Property.

3.23 Insurance. Schedule 3.23 lists all insurance policies and fidelity
--------- -------------
bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of Anagram, and the amounts of coverage under
each such policy and bond of Anagram. Anagram has not been refused any requested
coverage and no claim made by Anagram has been denied by the underwriters of
such policies or bonds. All premiums payable under all such policies and bonds
have been paid, and Anagram is otherwise in full compliance with the terms of
such policies and bonds (or other policies and bonds

20
<PAGE>

providing substantially similar insurance coverage). Anagram is in compliance in
all material respects with each of such policies. Anagram does not know of any
threatened termination of, the invalidation of any coverage of or premium
increase with respect to, any of such policies.

3.24 Labor Matters. Anagram is in compliance in all material respects
-------------
with all currently applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment and wages and
hours and occupational safety and health and employment practices, and Anagram
is not engaged in any unfair labor practice. Anagram has not received any notice
from any Governmental Entity; and, to Anagram's knowledge, there has not been
asserted before any Governmental Entity, any claim action or proceeding to which
Anagram is a party or involving Anagram, and there is neither pending nor, to
Anagram's knowledge, threatened any investigation or hearing concerning Anagram
arising out of or based upon any such laws, regulations or practices. There are
no strikes or labor disputes pending or threatened by or any attempts at union
organization of any Anagram employees. No employee or group of employees whose
continued services are material to Anagram business as presently conducted and
as intended to be conducted with regard to products currently under development
has terminated employment and, to Anagram's knowledge, there is none that
intends to do so.

3.25 Reserved
--------

3.26 Personnel. Set forth on Schedule 3.26 is a true and complete list
--------- -------------
identifying all current directors, officers, regular and temporary employees,
independent contractors and consultants of Anagram, including, without
limitation, all officers of Anagram, setting forth the job title of, and salary
(including bonuses and commissions) payable to each such person. None of such
service providers whose annual base compensation exceeds $50,000 has indicated
to Anagram a present intention to resign or retire. The employment of each of
Anagram's employees is at-will employment. Anagram does not have any obligation
(i) to provide any particular form or period of notice prior to termination or
(ii) to pay any of such employees any severance benefits in connection with
their termination of employment or service. In addition, no severance pay will
become due to any Anagram employees or other service providers in connection
with the Merger, as a result of any Anagram agreement, plan or program. Anagram
has not entered into any consulting agreements with any service provider who
owes services to or are owed compensation by Anagram for services provided.

3.27 Questionable Payments. Neither Anagram nor any director, officer or
---------------------
other employee, agent or representative of Anagram has (a) made any payments or
provided services or other favors in the United States of America or in any
foreign country in order to obtain preferential treatment or consideration by
any Governmental Entity with respect to any aspect of the business of Anagram;
or (b) made any political contributions that would not be lawful under the laws
of the United States or the foreign country in which such payments were made.
Neither Anagram nor any director, officer or other employee, agent or
representative of Anagram or any customer or supplier of any of them has been
the subject of any inquiry or investigation by any Governmental Entity in
connection with payments or benefits or other favors to or for the benefit of
any governmental or armed services official, agent, representative or employee
with respect to any aspect of the business of Anagram or with respect to any
political contribution.

3.28 Third-Party Consents. Except as set forth in Schedule 3.28 and
-------------------- -------------
except for approval of the Merger by Anagram's shareholders, no consent or
approval is needed from any third party in order to effect the Merger or any of
the transactions contemplated hereby, or those that a third party has, to

21
<PAGE>

Anagram's knowledge, decided are necessary to avoid the loss of rights to use
Anagram Intellectual Property Rights.

3.29 Related Party Transactions. Except as set forth in Schedule 3.29, no
-------------------------- -------------
employee, officer or director of Anagram or member of his or her immediate
family is indebted to Anagram, nor is Anagram indebted (or committed to make
loans or extend or guarantee credit) to or subject to a guarantee from any of
them. None of such persons has any direct or indirect ownership interest in any
firm or corporation with which Anagram is affiliated or with which Anagram has a
business relationship, or any firm or corporation that competes with Anagram,
except that the employees, officers or directors of Anagram and members of their
immediate families may own stock in publicly traded companies that may compete
with Anagram. No member of the immediate family of any officer or director of
Anagram is directly interested in any contract with Anagram.

3.30 Customers. Schedule 3.30 sets forth a list of the names of the ten
--------- -------------
(10) largest customers of Anagram during the past twelve (12) months (determined
on the basis of revenues and expenses, respectively, during such period).
Anagram has not been informed by any of such customers that such customer has
terminated, or intends to reduce or terminate the use of Anagram products.

3.31 Bank Accounts and Powers of Attorney. Set forth in Schedule 3.31 is
------------------------------------ -------------
an accurate and complete list showing (a) the name and address of each bank in
which Anagram has an account or safe deposit box, the number of any such account
or any such box and the names of all persons authorized to draw thereon or to
have access thereto and (b) the names of all persons, if any, holding powers of
attorney from Anagram and a summary statement of the terms thereof.

3.32 Products. There are no known defects in the design or technology
--------
embodied in any product which Anagram markets or has marketed in the past that
impair or are likely to impair the intended use of the product or injure any
consumer of the product or third party, except that warranty claims may arise in
the normal course of business for products shipped prior to the Closing Date in
an aggregate amount of no more than the warranty reserves established on the
most recent balance sheet of Anagram provided to Avant!. Anagram has delivered
to Avant! copies of its warranty policies and all outstanding warranties or
guarantees relating to any of Anagram's products other than warranties or
guarantees implied by law. Anagram is not aware of any claim asserting (a) any
damage, loss or injury caused by any product, or (b) any breach of any express
or implied product warranty or any other similar claim with respect to any
product other than standard warranty obligations (to replace, repair or refund)
made by Anagram in the ordinary course of business, except for those claims
that, if adversely determined against Anagram, would not have a material and
adverse effect on Anagram's Business Condition.

3.33 Brokers or Finders; Professional Fees. No third party shall be
-------------------------------------
entitled to receive any brokerage commissions, finder's fees, fees for financial
advisory services or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Anagram or any shareholder of Anagram.

3.34 Permit. The information provided by Anagram or Anagram's
------
representatives in connection with the preparation of the Hearing Documents by
Avant! shall be true and correct in all material respects and shall not state or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

22
<PAGE>

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
OF Avant! AND SUB

Avant! and Sub represent and warrant to Anagram and the shareholders of
Anagram that the representations and warranties set forth below shall be true
and correct as of the date hereof. As used in this Agreement, (a) Business
Condition with respect to Avant! shall refer to Avant! and all of its
subsidiaries taken as a whole and shall mean the financial condition, business
as presently conducted, results of operations and assets of Avant! and all of
its subsidiaries taken as a whole; and (b) a disclosure or result will be deemed
"material and adverse" only if, individually or when aggregated with other
disclosures or results, it gives rise to a substantial diminution in the value
of Avant! and its subsidiaries taken as a whole.

4.1 Organization; Standing and Power. Each of Avant! and Sub is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of its respective state or province of incorporation and has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted. Avant! is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on Avant!'s Business
Condition.

4.2 Authority.
---------

(a) Avant! and Sub have all requisite corporate power and authority
to enter into this Agreement and the Related Agreements, to execute, deliver and
perform their respective obligations hereunder and thereunder, and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Related Agreements, the performance by Avant! and Sub of
their respective obligations hereunder and thereunder and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Avant! and Sub,
including approval by their respective Boards of Directors and the stockholders
of Sub. Each of this Agreement and the Related Agreements is a legal, valid and
binding obligation of Avant! and Sub enforceable against Avant! and Sub in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies is subject to
the discretion of the court before which any proceeding therefor may be brought.

(b) Subject to satisfaction of the conditions set forth in Article
VI hereto, the execution and delivery of this Agreement and the Related
Agreements do not and the performance and consummation of the transactions
contemplated hereby and thereby will not conflict with or result in any
violation of any statute, law, rule, regulation, judgment, order, decree, or
ordinance applicable to Avant! or Sub or their respective properties or assets,
or conflict with or result in any conflict with, breach or violation or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation, forfeiture or acceleration of any obligation
or the loss of a benefit under, or result in the creation of a lien or
encumbrance on any of the properties or assets of Avant! or Sub pursuant to (i)
any provision of their respective Certificate or Articles of Incorporation or
Bylaws, or (ii) any agreement, contract, note, mortgage, indenture, lease,
instrument, permit, concession, franchise or license to which Avant! or Sub is a
party or by which Avant! or Sub or any of their respective property or assets
may be bound or affected.

23
<PAGE>

(c) No consent, approval, order or authorization of, or registration,
declaration, qualification, or filing of or with, any Governmental Entity is
required by or with respect to Avant! or Sub in connection with the execution
and delivery of this Agreement or the Related Agreements or the consummation by
Avant! and Sub of the transactions contemplated hereby, except for (i) the
filing of documents with, and the obtaining of orders from, the various
securities or "blue sky" authorities, (ii) the making of such reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as are
required in connection with the transactions contemplated by this Agreement, and
(iii) the filing of the Agreement of Merger with the appropriate documents with
the relevant governmental authorities.

4.3 Valid Issuance of Shares of Common Stock of Avant!. The Shares of
--------------------------------------------------
Avant! Common Stock, when issued, sold and delivered to the shareholders and
optionholders of Anagram in accordance with the terms hereof for the
consideration described herein, will be duly and validly issued, fully paid and
non-assessable and will be issued in compliance with all applicable securities
laws and will be free and clear of any liens, claims, encumbrances or
restrictions other than liens or encumbrances created by or imposed upon the
holders hereof.

4.4 Avant! Financial Statements. The financial statements of Avant!
---------------------------
included in the Registration Statement on Form S-1, as amended, and the annual,
quarterly or other reports filed on or prior to the Closing Date by Avant! with
the Securities and Exchange Commission (the "SEC") (the "Avant! Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with United States GAAP
consistently applied (except as may be indicated in the notes thereto or, in the
case of unaudited statements as permitted by published rules and regulations of
the SEC) and fairly present the consolidated financial position of Avant! and
its consolidated subsidiaries at the dates thereof and the consolidated results
of their operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal recurring audit
adjustments). There has been no change in Avant!'s accounting policies or
estimates, except as described in the notes to the Avant! Financial Statements.
There has been no material and adverse change in Avant!'s Business Condition
subsequent to June 30, 1996.

4.5 Litigation. There is no action, suit, proceeding, arbitration,
----------
investigation pending against Avant! that in any manner challenges or seeks to
prevent, enjoin, alter or delay any of the transactions contemplated hereby.
Except as set forth in the Avant! Reports (as defined below) or in Schedule 4.5.
------------
Avant! is not aware of any other pending or threatened action, suit, proceeding,
investigation or claim, or any reasonable basis therefor, that individually or
in the aggregate would reasonably be expected to have a material and adverse
effect on Avant!'s Business Condition.

4.6 Reports. Avant! has previously furnished or made available to Anagram
-------
complete and accurate copies, as amended or supplemented, of (i) its
Registration Statement on Form S-1, as amended, filed with the SEC, (ii) its
Quarterly Reports on Form 10-Q filed with the SEC since Avant! became obligated
to file such reports and (iii) all reports and filings made with the SEC since
Avant! became obligated to file such reports (such reports and other filings,
together with any amendments or supplements thereto, are collectively referred
to herein as the "Avant! Reports"). As of their respective dates, the Avant!
Reports did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Avant! Reports comply in all material respects with the
rules and regulations promulgated by the SEC. Avant! has made all filings
required under the rules and regulations promulgated by the SEC.

24
<PAGE>

4.7 Restrictions on Business Activities. There is no agreement, judgment,
-----------------------------------
injunction, order or decree binding upon Avant! that has or could reasonably
have the effect of prohibiting or significantly impairing any business practice
of Avant!, any acquisition of property by Avant!, or the continuation of the
business of Avant! as currently conducted or as currently proposed to be
conducted.

4.8 Brokers or Finders; Professional Fees. No third party shall be
-------------------------------------
entitled to receive any brokerage commissions, finder's fees, or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of Avant! or Sub.

4.9 Conduct in the Ordinary Course. Since June 30, 1996, there has not
------------------------------
occurred any amendments or changes in the charter or Bylaws of Avant! or any
agreement or arrangement made by Avant! to do the same.

4.10 Third-Party Consents. No consent or approval is needed from any
--------------------
third party in order to enable Avant! and Sub to effect the Merger or any of the
transactions contemplated hereby.

4.11 Permit. The Hearing Documents, as defined in Section 5.4 of this
------ -----------
Agreement, as of the date they are filed and as of the date of the Anagram
shareholder approval, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements, in light of the circumstances under which they were made,
not misleading. The Hearing Documents will comply in all material respects with
the rules and regulations pursuant to Section 25121 of the California Corporate
Securities Law of 1968, as amended; provided, however, the representations and
warranties set forth in this Section 4.11 do not apply to statements or
------------
omissions in the Hearing Documents based upon information furnished to Avant! or
Avant!'s legal counsel by Anagram or Anagram's legal counsel for use in such
Hearing Documents.

ARTICLE V

CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE
TIME; ADDITIONAL AGREEMENTS

5.1 Conduct of Business of Anagram. During the period from the date
------------------------------
hereof and continuing until the earlier of the termination of this Agreement or
the Effective Time of the Merger, Anagram shall carry on its business in the
usual, regular and ordinary course in substantially the same manner as conducted
prior to the date of this Agreement and, to the extent consistent with such
business, use its best efforts to preserve intact its present business
organizations, keep available the services of its present service providers and
preserve its relationships with customers, suppliers, distributors, licensers,
licensees, and others with whom it has business dealings, to the end that its
goodwill and ongoing businesses shall be unimpaired at the Effective Time of the
Merger. Anagram shall promptly notify Avant! of any material event or occurrence
not in the ordinary course of business of Anagram, and any event that could have
a material and adverse effect on the Business Condition of Anagram. Except as
expressly contemplated by this Agreement, Anagram, without the prior written
consent of Avant! or Sub shall not:

(a) Accelerate, amend or change the period of exercisability of
options, warrants, stock or purchase rights or authorize cash payments in
exchange therefor or perform any actions that could prohibit the pooling of
interests accounting treatment;

25
<PAGE>

(b) Enter into any commitment or transaction not in the ordinary
course of business to be performed over a period longer than six (6) months in
duration, or, except as in accordance with its existing capital budget
previously disclosed to Avant!, to purchase fixed assets with an aggregate
purchase price exceeding $10,000;

(c) Grant any severance or termination pay to any service provider,
except in the ordinary course of business consistent with past practice or
mandatory payments made pursuant to standard written agreements outstanding on
the date hereof (with any such agreement or arrangement to be disclosed in
Schedule 3.18);
- -------------

(d) Transfer to any person or entity any rights to the Anagram
Intellectual Property Rights, except licenses of Intellectual Property Rights in
connection with the sale of Anagram products in the ordinary course of business
consistent with past practice;

(e) Enter into or amend any agreements pursuant to which any other
party is granted marketing or other similar rights of any type or scope with
respect to any products of Anagram;

(f) Except in the ordinary course of business with prior notice to
Avant!, violate, amend or otherwise modify, in any material respect, the terms
of any contract listed in Schedule 3.15;
-------------
(g) Except with prior consultation with Avant!, commence a lawsuit
other than for the routine collection of bills;

(h) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any Anagram Capital Stock, or
split, combine or reclassify any of its Common Stock or issue or authorize the
issuance of other securities in respect of, in lieu of, or in substitution for
shares of Anagram Capital Stock, or repurchase or otherwise acquire, directly or
indirectly, any shares of Anagram Capital Stock except as set forth in the
Anagram Disclosure Schedule, pursuant to the exercise of outstanding Anagram
Options or pursuant to repurchases of Common Stock at cost from former service
providers in accordance with the terms of agreements providing for the
repurchase of shares in connection with any termination of service to Anagram;

(i) Issue, deliver or sell or authorize or propose the issuance,
delivery or sale of or authorization of, the purchase of any shares of Anagram
capital stock or securities convertible into, or subscriptions, rights, warrants
or options to acquire, or other agreements or commitments of any character
obligating it to issue any such shares or other convertible securities, other
than the issuance of shares of Anagram Capital Stock upon the exercise of
Anagram Options;

(j) Cause or permit any amendments to Anagram's charter or Bylaws,
or take any action or make any filings with any federal or state regulatory
agency or department that would modify or alter Anagram's corporate, legal or
regulatory status in any material respect;

(k) Acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets that are material, individually or in the aggregate, to the Business
Condition of Anagram, except as in accordance with its existing capital budget
previously disclosed to Avant!, to purchase fixed assets with an aggregate
purchase price exceeding $10,000;

26
<PAGE>

(l) Sell, lease, license or otherwise dispose of any of its
properties or assets except in the ordinary course of business;

(m) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others;

(n) Adopt or amend any plan, or enter into any employment contract,
pay any special bonus or special remuneration to any service provider, or
increase the salaries or wage rates of its employees other than pursuant to
scheduled employee reviews under normal employee review cycles or pursuant to
Anagram's existing bonus plans, as the case may be, or in connection with the
hiring of employees other than officers in the ordinary course of business, in
all cases consistent with past practice, or otherwise increase or modify the
compensation or benefits payable or to become payable by Anagram to any of its
service providers, except in the ordinary course of business, consistent with
past practice, or for changes pursuant to employment agreements in effect as of
the date hereof or changes in position;

(o) Re-value in any material respect any of its assets, including,
without limitation, writing down the value of inventory or accounts receivable;

(p) Pay, discharge or satisfy in an amount in excess of $10,000 in
any one case any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business consistent with past practice of
liabilities reflected or reserved against in the Anagram Financial Statements;

(q) Make any material tax election other than in the ordinary course
of business and consistent with past practice, change any material tax election,
adopt any tax accounting method other than in the ordinary course of business
and consistent with past practice, change any tax accounting method, file any
tax return (other than any estimated tax returns, immaterial information
returns, payroll tax returns or sales tax returns) or any amendment to a tax
return, enter into any closing agreement, settle any Tax claim or assessment or
consent to any Tax claim or assessment provided that Avant! shall not
unreasonably withhold or delay approval of any of the foregoing actions;

(r) Engage in any activities or transactions that are outside the
ordinary course of its business consistent with past practice, including the
forming, financing or contributing any property to any business entity;

(s) Fail to pay or otherwise satisfy its monetary obligations as
they become due or consistent with past practice, except such as are being
contested in good faith;

(t) Waive or commit to waive any rights of substantial value;

(u) Cancel, amend or, other than in the ordinary course upon
expiration of a policy term, renew any insurance policy;

(v) Alter, or enter into any commitment to alter, in any material
respect its interest in any corporation, association, joint venture, partnership
or business entity in which Anagram directly or indirectly holds any interest on
the date hereof;

27
<PAGE>

(w) Pay its employees bonuses, other than in the ordinary course of
business, or any other extraordinary payments to its employees or shareholders,
including, without limitation, dividends or other distributions with respect to
its outstanding capital stock;

(x) Issue any new options, warrants or any instruments to purchase
the Company's capital stock; or

(y) Take, or agree (in writing or otherwise) to take, any of the
actions described in this Section 5.1 or any action that would make any of the
representations or warranties or covenants of Anagram contained in this
Agreement untrue or incorrect.

Notwithstanding the provisions of this Section 5.1, Anagram may issue,
pursuant to outstanding offer letters, options to acquire up to 50,000 shares
of Anagram Common Stock.

5.2 Access to Information; Provision of Interim Financial Statements.
----------------------------------------------------------------

(a) Anagram shall afford Avant! and its accountants, counsel and
other representatives, reasonable access during normal business hours during the
period from the date of this Agreement until the earlier of the Effective Time
of the Merger or the termination of this Agreement to (i) all properties, books,
contracts, commitments and records, and (ii) all other information concerning
the business, properties and personnel as may reasonably be requested, provided
that any information provided pursuant hereto or any investigation by each party
hereto shall not affect such party's right to rely on the representations,
warranties, agreements and covenants made by the other party herein. Anagram
shall cause Anagram's accountants to cooperate with Avant! in auditing the
financial statements of Anagram's business, including but not limited to,
executing any and all customary representation or other letters or agreements
required by Avant!'s accountants. Anagram shall cause Anagram's accountants to
consent in writing or agree to consent in writing on a timely basis to the
inclusion of Anagram's financial statements in any registration statement or in
any report to be filed with the SEC.

(b) Anagram shall provide Avant! with an unaudited monthly balance
sheet, income statement and statement of cash flows within fifteen (15) days of
each month-end prior to the Effective Time of the Merger as well as copies of
such other internal financial statements as may be requested by Avant!.

(c) Anagram shall provide Avant! with all information necessary for
the preparation of any documents or filings prepared by Avant! to be filed with
the SEC and any applicable securities or blue sky commissions.

(d) Each party shall use its respective best efforts to not take any
actions that would hinder Avant! from being able to account for the Merger on a
pooling of interests basis.

5.3 Company Shareholders' Consent. Anagram shall solicit the consent of
-----------------------------
its shareholders as promptly as practicable after the date hereof for the
purpose of obtaining the shareholder approval required in connection with the
transactions contemplated hereby, and shall use its best efforts to obtain such
approval.

5.4 Fairness Hearing and Permit. Avant! and Anagram shall prepare an
---------------------------
Application for Qualification of Securities by Permit under Section 25121 of the
California Corporate Securities Law of 1968, as amended, a related Notice of
Hearing and a proxy statement and other disclosure materials (the

28
<PAGE>

"Disclosure Document") to be supplied to the shareholders of Anagram in
connection with the transactions contemplated hereby (collectively, the "Hearing
Documents"). Avant! and Anagram will file the Disclosure Document and the
Hearing Documents as promptly as practicable with the California Department of
Corporations and request a hearing on the fairness of the Merger pursuant to
Section 25142 of such California Corporate Securities Law. Avant! and Anagram
will thereafter endeavor in good faith to obtain a finding of fairness and the
issuance of a permit to such effect by the California Department of Corporations
as a result of such hearing, but they shall in no event be required to alter the
terms of the Merger in order to obtain such finding and issuance.

5.5 Exclusivity; Acquisition Proposals. Until the earlier of (i) the
----------------------------------
Closing or (ii) the termination of this Agreement:

(a) Anagram shall not knowingly, and shall not knowingly cause or
permit, directly or indirectly, through any officer, director, agent or
representative (including, without limitation, investment bankers, attorneys,
accountants and consultants), or otherwise:

(i) Solicit, initiate or further the submission of proposals or
offers from, or enter into any agreement with, any firm, corporation,
partnership, association, group (as defined in Section 13(d)(3) of the Exchange
Act) or other person or entity, individually or collectively (including, without
limitation, any managers or other employees of Anagram or any affiliates), other
than Avant! and Sub (a "Third Party"), relating to any acquisition or purchase
of all or any substantial portion of the assets of, or any equity interest in,
Anagram or any merger, consolidation or business combination with Anagram;

(ii) Participate in any discussions or negotiations regarding,
or furnish to any Third Party any confidential information with respect to
Anagram in connection with any acquisition or purchase of all or any substantial
portion of the assets of, or any equity interest in, Anagram or any merger,
consolidation or business combination with Anagram; or

(iii) Otherwise knowingly cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any Third
Party to undertake or seek to undertake any acquisition or purchase of all or
any portion of the assets of, or any equity interest in, Anagram, or any merger,
consolidation or business combination with Anagram.

(b) In the event Anagram receives prior to termination of this
Agreement any offer or indication of interest from any Third Party relating to
any acquisition or purchase of all or any portion of the assets of, or any
equity interest in, Anagram or any merger, consolidation or business combination
with Anagram, Anagram shall promptly notify Avant! and Sub in writing, and shall
in any such notice, set forth in reasonable detail the identity of the Third
Party, the terms and conditions of any proposal and any other information
requested of it by the Third Party or in connection therewith.

(c) Anagram shall immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Third Party conducted
prior to the date of this Agreement with respect to any of the foregoing.

5.6 Breach of Representations, Warranties, Agreements and Covenants.
---------------------------------------------------------------
Each of Avant!, Sub and Anagram shall use its respective best efforts to not
take, or fail to take, any action that from the date hereof through the Closing
would cause or constitute a breach of any of its respective representations,
warranties, agreements and covenants set forth in this Agreement. In the event
of, and

29
<PAGE>

promptly after becoming aware of, the actual, pending or threatened occurrence
of any event that would cause or constitute such a breach or inaccuracy, each
party shall give detailed notice thereof to the other parties and shall use its
best efforts to prevent or promptly remedy such breach or inaccuracy.

5.7 Consents. Each of Avant! and Anagram shall promptly apply for or
--------
otherwise seek and use its best efforts to obtain, all consents and approvals
required to be obtained by it for the consummation of the Merger, and Anagram
shall use its best efforts to obtain all necessary consents, waivers and
approvals under any of Anagram's agreements, contracts, licenses or leases in
connection with the Merger, except such consents and approvals which are not
material to the Business Condition of Anagram (the existence of which Anagram
shall have notified Avant! of) or which Avant! and Anagram agree Anagram shall
not seek to obtain.

5.8 Best Efforts. If applicable, each of Avant! and Anagram shall use
------------
best efforts to effectuate the transactions contemplated hereby and to fulfill
and cause to be fulfilled the conditions to closing under this Agreement.

5.9 Legal Conditions to the Merger.
------------------------------

(a) Anagram shall take all reasonable actions necessary to comply
promptly with all legal requirements that may be imposed on Anagram with respect
to the Merger and will promptly cooperate with and furnish information to Avant!
in connection with any such requirements imposed upon Avant! or Sub in
connection with the Merger. Anagram shall take all reasonable actions to obtain
(and to cooperate with Avant! and Sub in obtaining) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity required to
be obtained or made by Anagram (or by Avant! or Sub) in connection with the
Merger or the taking of any action contemplated thereby or by this Agreement,
and to defend such lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated hereby as Anagram
deems advisable in good faith, to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby as Anagram deems advisable in
good faith, and to effect all necessary registrations and filings and
submissions of information as Anagram deems advisable in good faith required by
any Governmental Entity, and to fulfill all conditions to this Agreement.

(b) Each of Avant! and Sub shall take all reasonable actions
necessary to comply promptly with all legal requirements that may be imposed on
them with respect to the Merger and will promptly cooperate with and furnish
information to Anagram in connection with any such requirement imposed upon
Anagram or any subsidiary of Anagram in connection with the Merger. Avant! and
Sub shall take all reasonable actions to obtain (and to cooperate with Anagram
in obtaining) any consent, authorization order or approval of, or exemption by,
any Governmental Entity required to be obtained or made by Avant! or Sub (or by
Anagram or any of its subsidiaries) in connection with the Merger or the taking
of any action contemplated thereby or by this Agreement, and to defend such
lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby as Avant! and Sub deem
advisable in good faith, to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby as Avant! and Sub deem advisable in good faith,
and to effect all necessary registrations and filings and submissions of
information as Avant! and Sub deem advisable in good faith, required by any
Governmental Entity, and to fulfill all conditions to this Agreement.

5.10 Public Announcements. Avant! and Anagram will make joint
--------------------
announcements to employees and the public after the execution of this Agreement.
Each party will consult in advance with

30
<PAGE>

the other concerning the timing and content of any announcements, press releases
or public statements concerning the Merger and will not make any such
announcement, release or statement to any party who is not entitled to have
knowledge of the Merger without the other's prior written consent (which consent
shall not be unreasonably withheld); provided, however, that Avant! may make any
public statement concerning the Merger without Anagram's consent, after it has
used reasonable efforts to obtain Anagram's consent, and in the opinion of
counsel for Avant!, such statement or announcement is required or advisable to
comply with applicable law.

5.11 Affiliates Agreement and Continuity of Interest Certificate. The
-----------------------------------------------------------
shareholders of Anagram listed on Schedule 5.11 are, in Anagram's reasonable
-------------
judgment, the only "affiliates" of Anagram within the meaning of Rule 145 (each
such person, together with the persons identified below, an "Affiliate")
promulgated under the Securities Act of 1933, as amended (the "Securities Act")
("Rule 145"). Anagram shall use its best efforts to deliver or cause to be
delivered to Avant!, concurrently with the execution of this Agreement, from
each of the Affiliates of Anagram who are directors or officers of Anagram, and
concurrently with or promptly following execution of this Agreement from each
other Affiliate, an Affiliates Agreement and Continuity of Interest Certificate
in the forms attached hereto as Exhibit 5.11(a) and Exhibit 5.11(b). Avant! and
--------------- ---------------
Sub shall be entitled to place appropriate legends on the certificates
evidencing any Avant! Common Stock to be received by such Affiliates pursuant to
the terms of this Agreement and the Agreement of Merger, and to issue
appropriate stop transfer instructions to the transfer agent for Avant! Common
Stock, consistent with the terms of such Affiliates Agreement and Continuity of
Interest Certificate.

5.12 Expenses. All costs and expenses incurred in connection with this
--------
Agreement and the Related Agreements and the transactions contemplated hereby
and thereby, including fees of any finders or brokers or investment bankers,
attorneys and accountants retained by such party, shall be paid by the party
incurring such expense. All parties to this Agreement acknowledge and agree
that the legal fees and expenses of Wilson, Sonsini, Goodrich & Rosati, P.C. in
connection with the transactions contemplated hereby are being performed as
counsel to Anagram and shall be paid by Anagram prior to the Closing in the
amount of $125,000 plus reasonable out of pocket expenses.

5.13 Information to be Supplied. All information supplied by Anagram,
--------------------------
Avant! and Sub for inclusion in the Anagram shareholder solicitation materials
as described in Section 5.3 above, the Hearing Documents, and any other
-----------
solicitation materials relating to the Merger or relating to any offering of
securities by Avant! shall not contain any untrue statement of fact and shall
not omit to state any fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading.

5.14 Registration of Avant! Stock Issuable With Respect to Assumed Anagram
---------------------------------------------------------------------
Options. As soon as practicable after the Effective Time of the Merger, but in
- -------
accordance with the other provisions of this Agreement, Avant! shall cause the
shares of Avant! Common Stock issuable pursuant to Section 2.1(d) above with
respect to the Assumed Anagram Options to be registered pursuant to the
Securities Act and such registration shall remain effective for so long as
Avant! has other effective registrations or is required to file reports with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended.

5.15 Pooling of Interests Transaction. Upon the execution of this
--------------------------------
Agreement, KPMG Peat Marwick LLP ("KPMG"), shall have delivered to Avant!, an
opinion, in form and substance satisfactory to Avant!, that the Merger would
qualify as a pooling of interests transaction for financial reporting purposes
were the Merger to close as of the date hereof and as of the Closing Date.

31
<PAGE>

5.16 Reserved.
--------

5.17 Reserved.
--------

5.18 Schedules. From time to time prior to the Closing Date, each of
---------
Avant! and Anagram will promptly supplement or amend the Anagram or Avant!
Disclosure Schedules, as the case may be, with respect to any matter hereafter
arising that, if existing or occurring at or prior to the date of this
Agreement, would have been required to be set forth or described in the Anagram
or Avant! Disclosure Schedules, as the case may be, or that is necessary to
correct any information in the Anagram or Avant! Disclosure Schedules, as the
case may be, or in any representation and warranty of each of Avant!, and
Anagram that has been rendered inaccurate thereby. For purposes of determining
the accuracy of the respective representations and warranties contained in
Articles III and IV, and in order to determine the fulfillment of the conditions
set forth in Sections 6.2(a) and 6.3(a), the Anagram or Avant! Disclosure
Schedules, as the case may be, shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to exclude
any information contained in any subsequent supplement or amendment thereto;
provided, however that for the purpose of determining the availability of rights
to indemnification under Article VII below or otherwise, such revised Anagram or
Avant! Disclosure Schedules, as the case may be, shall be deemed to include all
information contained in such revised Anagram or Avant! Disclosure Schedules, as
the case may be.

5.19 Indemnification.
---------------

(a) From and after the Effective Time, Avant! and the Surviving
Corporation jointly and severally shall, indemnify, defend and hold harmless
each person who is now, or has been at any time prior to the date of this
Agreement or who becomes prior to the Effective Time, an officer, director or
employee of Anagram (the "Indemnified Parties") in respect of acts or omissions
occurring on or prior to the Effective Time to the extent provided under
Anagram's Articles of Incorporation and Bylaws and Indemnification Agreements in
effect on the date hereof; provided that such indemnification shall be subject
--------
to any limitation imposed from time to time under applicable law. The provisions
of this Section 5.19 are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Party, his or her heirs and representatives.

5.20 Certain Benefit Plans. Subject to compliance with pooling-of-interest
---------------------
accounting treatment of the Merger, Avant! shall take such reasonable actions as
are necessary to allow eligible employees of Anagram to participate in the
benefit programs of Avant!, or alternative benefits programs substantially
comparable to those applicable to employees of Avant! on similar terms, as soon
as practicable after the Effective Time. For purposes of satisfying the terms
and conditions of such programs, Avant! shall give full credit for eligibility,
vesting or benefit accrual for each participant's period of service with
Anagram.

5.21 Anagram Registration. In the event that a Permit is not issued by the
--------------------
California Department of Corporations as described in Section 5.4 of this
Agreement, or in the case the shares of

32
<PAGE>

Avant! Common Stock issued pursuant to this Merger (the "Merger Shares") are not
freely tradeable pursuant to Rule 145(d) promulgated under the Securities Act
(without the requirement of any holding period under Rule 144 promulgated under
the Securities Act) Avant! shall, upon request of any shareholder of Anagram
promptly effect the registration under the Securities Act of the Merger Shares
(the "Anagram Registration"). Such registration shall be at the expense of
Avant!. Avant! shall maintain the effectiveness of such registration for such
period of time as shall be necessary for the shareholders of Anagram to dispose
of their Avant! Common Stock, provided that upon notice from Avant! the
shareholders of Anagram agree not to sell their shares of Avant! Common Stock
for a period of 90 days, with such 90 day restriction to occur no more than
twice in any 12 month period. Avant! shall not be required to initiate or
maintain the effectiveness of such registration statement when all shares held
by the shareholders of Anagram may be sold in any three-month period. In the
event that Avant! shall furnish to the shareholders of Anagram a statement
signed by the President of Avant! stating that in the good faith judgment of the
Board of Directors of Avant!, it would be seriously detrimental to Avant! and
its stockholders for such registration statement to be filed or remain effective
and it is therefore essential to defer the filing or withdraw the effectiveness
of such registration statement, Avant! shall have no obligation pursuant to this
Section 5.21 for a period of not more than 120 days, provided, however, that
Avant! may not utilize this right more than once in any twelve month period.

5.22 Listing of Shares. Upon Closing, Avant! will amend its listing
-----------------
application with the Nasdaq National Market to include the Avant! Common Stock
issued under this Agreement.

ARTICLE VI

CONDITIONS PRECEDENT

6.1 Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligations of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing of the following conditions:

(a) Approvals. All authorizations, consents, orders or approvals
---------
of, or declarations or filings with or expiration of waiting periods imposed by,
any Governmental Entity necessary for the consummation of the transactions
contemplated by this Agreement shall have been filed, occurred or been obtained.

(b) Issuance of Permit. The California Department of Corporations
------------------
shall have issued a permit under Section 25121 of the California Corporate
Securities Law of 1968, as amended, covering the issuance of the Avant! Common
Stock and the assumption of securities following a hearing as to the fairness of
the Merger conducted pursuant to Section 25142 of the California Corporate
Securities Law.

(c) Legal Action. No temporary restraining order, preliminary
------------
injunction or permanent injunction or other order preventing the consummation of
the Merger shall have been issued by any Governmental Entity and remain in
effect, and no litigation shall be pending the ultimate resolution of which may
in Avant!'s opinion (i) result in the issuance of such an order or injunction,
or the imposition against Anagram or Avant! of substantial damages if the Merger
is consummated, or (ii) render Avant!, Sub or Anagram unable to consummate the
Merger. in the event any such order or injunction shall have been issued, each
party agrees to use its best efforts to have any such injunction lifted.

33
<PAGE>

(d) Statutes. No action shall have been taken, and no statute, rule,
--------
regulation or order shall have been enacted, promulgated or issued or deemed
applicable to the Merger by any Governmental Entity that would (i) make the
consummation of the Merger illegal or (ii) render Avant!, Sub or Anagram unable
to consummate the Merger, except for any waiting period provisions.

(e) Tax-Free Reorganization. Each of Anagram and Avant! shall have
-----------------------
received a written opinion from their respective counsel to the effect that the
Merger will constitute a reorganization within the meaning of Section 368 of the
Code, which opinions shall be substantially identical in form and substance. In
preparing the Anagram and the Avant! tax opinions, counsel may rely on
reasonable assumptions and may also rely on (and to the extent reasonably
required, the parties and Anagram's shareholders shall make) reasonable
representations related thereto.

6.2 Conditions of Obligations of Avant! and Sub. The obligations of
-------------------------------------------
Avant! and Sub to effect the Merger are also subject to the satisfaction of the
following conditions, unless waived by Avant! and Sub:

(a) Representations and Warranties. The representations and
------------------------------
warranties of Anagram set forth in this Agreement that are qualified as to
materiality shall be true and correct as so qualified, and the representations
and warranties of Anagram set forth in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of the Closing.

(b) No Material Adverse Change. There shall have been no material
--------------------------
adverse change in the Business Condition (either actual or as such condition has
been represented pursuant to Article III hereof) of Anagram from the date hereof
through the Closing Date. Avant! shall have received a certificate on behalf of
Anagram signed by the chief executive officer and the chief financial officer of
Anagram confirming that there has been no material adverse change in the
Business Condition of Anagram from the date hereof through the Closing Date.

(c) Performance of Obligations of Anagram. Anagram shall have
-------------------------------------
performed in all material respects all obligations and covenants required to be
performed by it under this Agreement prior to the Closing Date, and Avant! shall
have received a certificate signed on behalf of Anagram by the chief executive
officer and the chief financial officer of Anagram to such effect.

(d) Affiliates Agreement and Continuity of Interest Certificate.
-----------------------------------------------------------
Avant! shall have received from each shareholder of Anagram listed on
Schedule 5.11, a duly executed Affiliates Agreement, and from each shareholder
- -------------
of Anagram a duly executed Continuity of Interest Certificate, substantially in
the form attached hereto and approved by Avant!'s and Anagram's respective
counsel.

(e) Escrow Agreement. The Escrow Agreement shall be executed by all
----------------
appropriate parties.

(f) Opinion of Anagram's Counsel. Avant! shall have received an
----------------------------
opinion dated the Closing Date of Wilson, Sonsini, Goodrich & Rosati, P.C.,
counsel to Anagram, in form and substance reasonably satisfactory to Avant!.

(g) Dissenting Shares. Dissenting Shares shall consist of no more
-----------------
ten percent (10%) of the then outstanding shares of Anagram Capital Stock.

34
<PAGE>

(h) Consents. Avant! shall have received duly executed copies of
--------
all third-party consents and approvals contemplated by this Agreement or the
Anagram Schedules in form and substance reasonably satisfactory to Avant!.

(i) Pooling of Interests Transaction. Avant! shall have received
--------------------------------
an opinion from KPMG, in form and substance satisfactory to Avant!, that the
Merger will qualify as a pooling of interests transaction for financial
reporting purposes.

(j) Proprietary Agreements. All Anagram employees, consultants and
----------------------
contractors shall have entered into Avant!'s standard proprietary information
and inventions agreement provided by Avant!'s counsel.

(k) FIRPTA. Anagram shall, prior to the Closing Date, provide
------
Avant! with a properly executed Foreign Investment and Real Property Tax Act of
1980 ("FIRPTA") Notification Letter, in form and substance satisfactory to
Avant!, which states that shares of capital stock of Anagram do not constitute
"United States real property interests" under Section 897(c) of the Code, for
purposes of satisfying Avant!'s obligations under Treasury Regulation Section
1.1445-2(c)(3). In addition, simultaneously with delivery of such Notification
Letter, Anagram shall have provided to Avant!, as agent for Anagram, a form of
notice to the Internal Revenue Service in accordance with the requirements of
Treasury Regulation Section 1.897-2(h)(2) along with written authorization for
Avant! to deliver such notice form to the Internal Revenue Service on behalf of
Anagram upon the Closing of the Merger.

6.3 Conditions of Obligation of Anagram. The obligation of Anagram to
-----------------------------------
effect the Merger is also subject to the satisfaction of the following
conditions unless waived by Anagram:

(a) Representations and Warranties. The representations and
------------------------------
warranties of Avant! set forth in this Agreement that are qualified as to
materiality shall be true and correct as so qualified, and the representations
and warranties of Avant! set forth in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of the Closing.

(b) Performance of Obligations of Avant! and Sub. Avant! and Sub
--------------------------------------------
shall have performed in all material respects all obligations and covenants
required to be performed by them under this Agreement and the Agreement of
Merger prior to the Closing Date.

(c) No Material Adverse Change. There shall have been no material
--------------------------
adverse change in the Business Condition (either actual since the date of this
Agreement or as such condition has been represented pursuant to Article IV
hereof) of Avant! taken as a whole from the date hereof through the Closing
Date; provided, however, that Anagram and the shareholders of Anagram
acknowledge and agree that any developments, changes or results arising out of
or related to the litigation described in Schedule 4.5 shall not be considered
------------
for purposes of this Section 6.3(c). Anagram shall have received a certificate
signed on behalf of Avant! by the chief executive officer and the chief
financial office of Avant! confirming that there has been no material adverse
change in the Business Condition of Avant! (other than as provided in the
preceding sentence) from the date hereof through the Closing Date.

(d) No Stop Order. The SEC shall not have issued any stop order
-------------
preventing the sale of any Common Stock of Avant!.

35
<PAGE>

(e) Opinion of Avant!'s Counsel. Anagram shall have received an
---------------------------
opinion dated the Closing Date Of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to Avant!, in form and substance reasonably satisfactory
to Anagram.

ARTICLE VII

INDEMNITY

7.1 Survival of Representations, Warranties, Covenants and Agreements.
-----------------------------------------------------------------

(a) Notwithstanding any investigation conducted at any time with
regard thereto by or on behalf of any party to this Agreement, all
representations, warranties, covenants and agreements of the parties hereto
shall survive the execution, delivery, and performance of this Agreement in
accordance with Section 7.3 of this Agreement. No investigation made by or on
behalf of a party hereto with respect to another party shall be deemed to affect
the party's reliance on the representations, warranties, covenants and
agreements made by the other party contained in this Agreement and shall not be
a waiver of Avant!'s or Sub's rights to indemnity as herein provided for the
breach or inaccuracy of or failure to perform or comply with any of Anagram's
representations, warranties, covenants or agreements under this Agreement or the
Escrow Agreement. All representations and warranties of each party set forth in
this Agreement shall be deemed to have been made again by such party at and as
of the Closing Date.

(b) As used in this Article VII, any reference to a representation,
warranty, agreement or covenant contained in any section of this Agreement shall
include the schedule attached hereto.

(c) Nothing in this Agreement shall be construed as limiting in any
way the remedies that may be available to a party in the event of fraud relating
to the representations, warranties, agreements or covenants made by any other
party in this Agreement.

(d) The Anagram Shareholders (as defined below) shall have
liabilities and obligations for Damages (as defined below) under this Agreement
only with respect to claims submitted or notice of claims provided during the
time period of survivability of the specific representation, warranty, covenant
or agreement as set forth in Section 7.3. Notwithstanding the expiration date of
-----------
the representations, warranties, covenants and agreements set forth herein, if
Avant! or Anagram shall notify the Shareholders' Representative with respect to
the submission of a claim during the time period of survivability of such
representation, warranty, covenant or agreement, each Anagram Shareholder's
liability or obligation for Damages shall continue in full force and effect
until settled with respect to those claims timely made.

(e) Avant! shall be entitled to use the Escrow Shares as the sole
remedy for the obligations of the Anagram Shareholders pursuant to this Article
VII of this Agreement.

7.2 Indemnification; Escrow Deposit of Avant! Common Stock. Subject to
------------------------------------------------------
the limitations set forth in this Article VII, the Shareholders' Representative,
on behalf of and as attorney-in-fact and agent for each of the shareholders of
Anagram (such shareholders are referred to in this Article VII as the "Anagram
Shareholders") hereby agrees to indemnify, reimburse, defend and hold harmless
Avant!, Anagram and Sub and each of their respective affiliates (other than the
Anagram Shareholders) against any and all losses, liabilities, damages, demands,
claims, suits, actions, judgments, and causes of action, assessments, costs, and
expenses, including, without limitation, interest, penalties, attorneys' fees,
any
36
<PAGE>

and all expenses incurred in investigating, preparing, and defending against
any litigation, commenced or threatened, and any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation (collectively,
"Damages"), asserted against, resulting from, imposed upon, or incurred or
suffered, directly or indirectly, by Avant!, Anagram or Sub and each of their
respective affiliates (other than the Anagram Shareholders), directly or
indirectly, as a result of or arising from or in connection with any inaccuracy
in or breach or nonfulfillment of or noncompliance with any of the
representations, warranties, covenants, or agreements made by Anagram in this
Agreement (including any exhibit, letter, schedule, certificate or document
delivered pursuant hereto or other instrument referred to herein) or the Escrow
Agreement or any facts or circumstances constituting such an inaccuracy, breach,
nonfulfillment or noncompliance (all of which shall also be referred to as
"Indemnifiable Claims").

Avant! and Sub shall be entitled to make claims under this Article VII
only to the extent that Damages exceed $100,000 in the aggregate.

7.3 Termination of Indemnity and Representations and Warranties. The
-----------------------------------------------------------
Indemnity obligations of the Anagram Shareholders pursuant to this Article VII
for a breach or inaccuracy of or a failure to perform or comply with any or all
of Anagram's representations, warranties, covenants and agreements, and the
representations and warranties of Avant!, Anagram and the Anagram Shareholders
shall terminate upon the earlier to occur of: (i) one (1) year after the
Effective Time of the Merger, or (ii) the date of the issuance of the first
audited financial statements that contain the combined actual results of Avant!,
Sub and Anagram. The covenants of Article V listed in Section 9.11 are
unaffected by the termination provisions of this Section 7.3. For purposes of
the indemnification set forth herein, the fair market value of one share of
Avant! Common Stock shall equal the Average Nasdaq Per Share Price.

7.4 Exclusivity of Remedies. Subject to the terms of this Agreement
-----------------------
(including, without limitation, Section 7.1(c)), the total liability of the
Anagram Shareholders under or in connection with this Agreement shall be limited
to the Escrow Shares of such shareholder, and Avant! (and the other persons
indemnified hereunder) may look solely to such Escrow Shares for the
satisfaction of any claims against the Anagram Shareholders under or in
connection with this Agreement.

ARTICLE VIII

TERMINATION

8.1 Termination.
-----------

(a) In addition to the provisions of Section 2.1(c), this Agreement
may be terminated at any time prior to the Effective Time of the Merger, whether
before or after approval of the Merger by the shareholders of Anagram:

(i) by mutual agreement of the Boards of Directors of Avant!
and Anagram;

(ii) by Avant!, if there has been a breach by Anagram or
Anagram Shareholder of any representation, warranty, covenant or agreement set
forth in this Agreement;

(iii) by Anagram, if there has been a breach by Avant! or Sub
of any representation, warranty, covenant or agreement set forth in this
Agreement.

37
<PAGE>

(iv) by Anagram or Avant!, if any permanent injunction or other
order of a court preventing the Merger shall have become final and nonappealable
or shall render unlikely within a reasonable period of time the consummation of
the Merger on the terms contemplated hereby; or

(v) by Anagram or Avant!, if any Governmental Entity shall have
issued a temporary restraining order, preliminary injunction or permanent
injunction or other order preventing the consummation of the Merger or any
litigation shall be pending, the ultimate resolution of which is likely in
Avant!'s opinion to (i) result in the issuance of such an order or injunction,
or the imposition against the Surviving Corporation or Avant! of substantial
damages if the Merger is consummated, or (ii) render Avant!, Sub or Anagram
unable to consummate the Merger.

(b) Where action is taken to terminate this Agreement pursuant to
this Section 8.1, it shall be sufficient authorization for such action to be
authorized by the Board of Directors of the party taking such action.

(c) In the event of termination of this Agreement as provided in
this Section 8.1 or a failure to meet all of the closing conditions prior to
October 15, 1996, this Agreement shall forthwith become null and void; provided,
however, that the agreements contained or referred to in Sections 5.5 and 5.12
shall survive and be legally enforceable.

(d) If the Effective Date of the Merger shall not have occurred on
or before October 15, 1996, this Agreement may be terminated by Avant! or
Anagram with prior written notice to the other party.

ARTICLE IX

GENERAL PROVISIONS

9.1 Amendment. This Agreement may be amended by the parties hereto at
---------
any time before or after approval of the Merger by the shareholders of Anagram;
provided, however, that following approval of the Merger by the shareholders of
Anagram, no amendment shall be made that by law requires the further approval of
such shareholders without obtaining such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.

9.2 Extension; Waiver. At any time prior to the Effective Time, each of
-----------------
Anagram and Avant!, to the extent legally allowed, (a) may extend the time for
the performance of any of the obligations or other acts of the other, (b) may
waive any inaccuracies in the representations and warranties made to it
contained herein or in any document delivered pursuant hereto, and (c) may waive
compliance with any of the agreements or conditions for the benefit of it
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.

9.3 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given (a) on the same day if delivered personally,
(b) three (3) business days after being mailed by registered or certified mail
(return receipt requested), or (c) on the same day if sent by facsimile,
confirmation received, to the parties at the following addresses and facsimile
numbers (or at such other address or number for a party as shall be specified by
like notice):

38
<PAGE>

If to Avant! or Sub, to:

Avant! Corporation
1208 East Arques Avenue
Sunnyvale, CA 94086
Attention: John P. Huyett
Telephone No.: 408-523-8803
Facsimile No.: 408-523-8981

with copy to:

Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
600 Hansen Way, Second Floor
Palo Alto, California 94304
Attention: Steven M. Spurlock, Esq.
Telephone No.: (415) 843-0500
Facsimile No.: (415) 843-0314
If to Anagram, Inc.:

Anagram, Inc.
617 Palomar Avenue
Sunnyvale, CA 94086
Attention: Andrew Yang
Telephone No.: 408-720-7400

with copy to:

Wilson, Sonsini, Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304
Attention: Barry Taylor, Esq.
Telephone No.: 415-493-9300
Facsimile No.: 415-496-4092

9.4 Interpretation. When a reference is made in this Agreement to
--------------
Sections, Exhibits or Schedules, such references shall be to a Section, Exhibit
or Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation."

9.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

9.6 Entire Agreement. Except for the mutual nondisclosure agreement
----------------
signed by the parties hereto on August 14, 1996, which shall survive in its
entirety, this Agreement and the documents and instruments and other agreements
among the parties delivered pursuant hereto constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements

39
<PAGE>

and understandings, both written and oral, among the parties with respect to the
subject matter hereof and are not intended to confer upon any other person any
rights or remedies hereunder except as otherwise expressly provided herein.

9.7 No Transfer. This Agreement and the rights and obligations set forth
-----------
herein may not be transferred or assigned by operation of law or otherwise
without the consent of each party hereto. This Agreement is binding upon and
will inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

9.8 Severability. If any provision of this Agreement, or the application
------------
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.

9.9 Other Remedies. Subject to Section 7.4, any and all remedies set
--------------
forth in this Agreement and in the Related Agreements expressly conferred upon a
party will be deemed cumulative with and not exclusive of any other remedy
conferred hereby or by law or equity on such party; and the exercise of any one
remedy will not preclude the exercise of any other.

9.10 Further Assurances. Each party agrees to cooperate fully with the
------------------
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.

9.11 Absence of Third-Party Beneficiary Rights. No provision of this
-----------------------------------------
Agreement is intended, or will be interpreted, to provide to or create for any
third-party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, employee, partner or any party hereto or any
other person or entity, and all provisions hereof will be personal solely
between the parties to this Agreement, except that the provisions of Section
5.19 shall be for the benefit of the directors and officers of Anagram, Section
5.20 shall be for the benefit of the employees of Anagram, and Article IV and
Sections 5.14 and 5.21 shall be for the benefit of the shareholders of Anagram
and shall be enforceable by such individuals against Avant! subject to the terms
and conditions of this Agreement.

9.12 Governing Law. This Agreement shall be governed in all respects,
-------------
including validity, interpretation and effect, by the laws of the State of
California (without giving effect to its choice of law principles).

40
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Reorganization as of the date first above written.

AVANT! CORPORATION

By:
--------------------------------
Gerald C. Hsu
Chairman of the Board, Chief Executive
Officer and President

ANAGRAM, INC.

By:
--------------------------------
Andrew Yang
Chairman of the Board

SUB

By:
--------------------------------
Gerald C. Hsu
President

SHAREHOLDERS' REPRESENTATIVE: ANDREW YANG

------------------------------------
Andrew Yang
<PAGE>

AGREEMENT OF MERGER

BY AND AMONG

AVANT! CORPORATION, NATASHA MERGER CORPORATION, AND

META-SOFTWARE, INC.

THIS AGREEMENT OF MERGER is dated as of _____________ ___, 1996, by and
among Avant! Corporation, a California corporation ("Avant!"), Natasha Merger
Corporation, a California corporation and a wholly owned subsidiary of Avant!
("Sub") and Meta-Software, Inc., a California corporation ("Meta").

RECITALS:
--------

A. The Boards of Directors of Meta, Avant! and Sub believe it is in the
best interests of their respective corporations and the stockholders of their
respective corporations that Meta and Sub combine into a single company through
the statutory merger of Sub with and into Meta (the "Merger") and, in
furtherance thereof, have approved the Merger.

B. To effectuate the Merger, Meta, Sub and Avant! have entered into an
Agreement and Plan of Reorganization (the "Reorganization Agreement"), dated as
of August 22, 1996, whereby all of the outstanding shares of capital stock of
Meta shall be converted into shares of Avant! Common Stock, $.0001 par value
("Avant! Common Stock"), at the rate set forth herein.

C. Meta, Avant! and Sub desire to make certain representations and
warranties and other agreements in connection with the Merger.

NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, and for other good and valuable consideration, the parties agree
as follows:
<PAGE>

ARTICLE I
---------
THE MERGER

1.1 The Merger. At the Effective Time (as defined in Section 1.2) Sub
----------
shall be merged with and into Meta, the separate corporate existence of Sub
shall cease and Meta shall continue as the surviving corporation. Meta as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."

1.2 Effective Time. The Merger shall become effective at such time as
--------------
this Agreement is filed with the Secretary of State of the State of California,
in accordance with the relevant provisions of California Law (the time of such
filing being the "Effective Time").

1.3 Effect of the Merger. At the Effective Time, all the property,
--------------------
rights, privileges, powers and franchises of Meta and Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Meta and Sub
shall become the debts, liabilities and duties of the Surviving Corporation.

1.4 Articles of Incorporation; Bylaws.
---------------------------------

(a) At the Effective Time, the Articles of Incorporation of Sub, as
in effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended; provided,
however, that Article I of the Articles of Incorporation of the Surviving
Corporation shall be amended to read as follows: "The name of the corporation is
Meta."

(b) The Bylaws of Sub, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.

1.5 Directors and Officers. At the Effective Time, the directors of Sub
----------------------
shall be the initial directors of the Surviving Corporation and the officers of
Sub shall be the initial officers of the Surviving Corporation, until their
respective successors are duly elected or appointed and qualified.

ARTICLE II
----------

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES; SUPPLEMENTARY ACTION

2.1 Effect on Capital Stock. By virtue of the Merger and without any
-----------------------
action on the part of Sub, Avant!, Meta or the holders of any of the following
securities:

2
<PAGE>

(a) Conversion of Meta Common Stock. At the Effective Time, each
-------------------------------
share of Meta Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Meta Common Stock to be canceled
pursuant to Section 2.1(b) and any Dissenting Shares (as defined in Section 2.2
below)) will be canceled and extinguished and be converted automatically into
the right to receive a fraction of a share of Avant! Common Stock (the "Exchange
Ratio"), the numerator of which is equal to (i) 5,079,365, and the denominator
of which is equal to (ii) the sum of the aggregate number of shares of Meta
Common Stock issued and outstanding as of the Effective Time, and the aggregate
number of shares of Meta Common Stock issuable upon exercise of all outstanding
options and warrants outstanding as of the Effective Time.

(b) Cancellation of Meta Common Stock Owned by Avant! or Meta. At
---------------------------------------------------------
the Effective Time, each share of Meta Common Stock owned by Avant! or any
direct or indirect wholly owned subsidiary of Avant! or of Meta immediately
prior to the Effective Time shall be canceled and extinguished without any
conversion thereof.

(c) Meta Stock Plans. At the Effective Time, the Meta 1995 Equity
----------------
Incentive Plan, Meta 1995 Directors' Stock Option Plan, and the Meta 1992 Stock
Option/Appreciation Plan, and all options to purchase Meta Common Stock then
outstanding under such agreements and plans shall be assumed by Avant!. The Meta
1995 Equity Incentive Plan, Meta 1995 Directors' Stock Option Plan, and the Meta
1992 Stock Option/Appreciation Plan are sometimes collectively referred to
herein as the "Meta Stock Plans."

(e) Capital Stock of Sub. At the Effective Time, each share of
--------------------
Common Stock, no par value, of Sub ("Sub Common Stock"), issued and outstanding
immediately prior to the Effective Time shall be converted into and exchanged
for one validly issued, fully paid and nonassessable share of Common Stock, no
par value, of the Surviving Corporation. Each stock certificate of Sub
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.

(f) Adjustments to Exchange Ratio. The Exchange Ratio shall be
-----------------------------
adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
Avant! Common Stock or Meta Common Stock), reorganization, recapitalization or
other like change with respect to Avant! Common Stock or Meta Common Stock
occurring after the date hereof and prior to the Effective Time.

3
<PAGE>

fraction, multiplied by (ii) the average last sale price of a share of Avant!
Common Stock for the ten most recent days that Avant! Common Stock has traded
ending on the trading day immediately prior to the Effective Time, as reported
on The Nasdaq National Market.

2.2 Dissenters' Rights. If, as of the Effective Time, holders of
------------------
Meta Common Stock have properly perfected and not forfeited dissenters' rights
("Dissenting Shares") in connection with the Merger under California Law, such
Dissenting Shares shall not be converted into Avant! Common Stock but instead
shall be converted into the right to receive such consideration as may be
determined to be due with respect to such Dissenting Shares pursuant to the
California Law. Each holder of Dissenting Shares (a "Dissenting Shareholder")
who, pursuant to the provisions of California Law, becomes entitled to payment
of the value of shares of Meta Common Stock shall receive payment therefor (but
only after the value therefor shall have been agreed upon or finally determined
pursuant to such provisions). In the event of a legal obligation, after the
Effective Time, to deliver shares of Avant! Common Stock to any holder of shares
of Meta Common Stock who shall have failed to make an effective payment demand
or shall have lost his or her status as a Dissenting Shareholder, Avant! shall
issue and deliver, upon surrender by such Dissenting Shareholder of his or her
certificate or certificates representing shares of Meta Common Stock, the shares
of Avant! Common Stock to which such Dissenting Shareholder is then entitled
under Section 2.1(a) and cash in lieu of fractional shares pursuant to Section
2.1(g).

2.3 Surrender of Certificates.
-------------------------

(a) Exchange Agent. Harris Trust Company of California shall act
--------------
as exchange agent (the "Exchange Agent") in the Merger.

(b) Avant! to Provide Common Stock and Cash. At or prior to the
---------------------------------------
Effective Time, Avant! shall make available to the Exchange Agent for exchange
in accordance with this Article I, through such reasonable procedures as Avant!
may adopt, (i) the shares of Avant! Common Stock issuable pursuant to Section
2.1(a) in exchange for shares of Meta Common Stock outstanding immediately prior
to the Effective Time and (ii) cash in an amount sufficient to permit payment of
cash in lieu of fractional shares pursuant to Section 2.1(g).

4
<PAGE>

with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the holder of record of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing the number of whole shares of Avant! Common Stock and payment in
lieu of fractional shares which such holder of record has the right to receive
pursuant to Section 2.1, and the Certificate so surrendered shall forthwith be
canceled. Until so surrendered, each outstanding Certificate that, prior to the
Effective Time, represented shares of Meta Common Stock will be deemed from and
after the Effective Time, for all corporate purposes, other than as provided in
subsection (d) below, to evidence only the ownership of the number of full
shares of Avant! Common Stock into which such shares of Meta Common Stock shall
have been so converted and the right to receive an amount in cash in lieu of the
issuance of any fractional shares in accordance with Section 2.1.

(d) Distributions With Respect to Unexchanged Shares. No dividends
------------------------------------------------
or other distributions with respect to Avant! Common Stock with a record date
after the Effective Time will be paid to the holder of record of any
unsurrendered Certificate with respect to the shares of Avant! Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law, following surrender of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Avant! Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of any
such dividends or other distributions with a record date after the Effective
Time theretofore payable (but for the provisions of this Section 2.3(d)) with
respect to such shares of Avant! Common Stock.

(f) No Liability. Notwithstanding anything to the contrary in this
------------
Section 2.3, none of the Exchange Agent, the Surviving Corporation or any party
hereto shall be liable to any person for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar law.

2.4 Supplementary Action. If, at any time after the Effective Time, any
--------------------
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either Meta or Sub or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered, in
the name of and on behalf of Meta and Sub, to execute and deliver any and all
things necessary or proper to vest

5
<PAGE>

or to perfect or confirm title to such property or rights in the Surviving
Corporation, and otherwise to carry out the purposes and provisions of this
Agreement.

ARTICLE III
-----------
TERMINATION, AMENDMENT AND WAIVER

3.1 Termination. At any time prior to the Effective Time, whether before
-----------
or after approval of the matters presented in connection with the Merger by the
shareholders of Meta, this Agreement may be terminated:

(a) by mutual consent of Avant! and Meta;

(b) by either Avant! or Meta, if the Effective Date shall not have
occurred on or before December 31, 1996; provided that the right to terminate
--------
this Agreement pursuant to this paragraph (b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been a
significant cause of, or resulted in, the failure of the Effective Date to occur
on or before such date;

3.2 Amendment. The boards of directors of the parties hereto may cause
---------
this Agreement to be amended at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto; provided that an
amendment made subsequent to adoption of this Agreement by the stockholders of
Meta, Avant! or Sub shall not (i) alter or change the amount or kind of
consideration to be received on conversion of the Meta Common Stock, (ii) alter
or change any term of the Articles of Incorporation of the Surviving Corporation
to be effected by the Merger, or (iii) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely affect
the holders of Meta Common Stock or Avant! Common Stock.

3.3 Extension; Waiver. At any time prior to the Effective Time any party
-----------------
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

6
<PAGE>

ARTICLE IV
----------
APPROVAL OF AGREEMENT

The respective Boards of Directors of each of Avant!, Meta and Sub have, by
resolutions duly adopted and approved the Merger, this Agreement, and the
Reorganization Agreement. The Stockholders of Avant!, Meta and Sub have, by
resolutions duly adopted and approved the Merger, this Agreement, and the
Reorganization Agreement in accordance with Delaware Law and California Law.

ARTICLE V
---------
MISCELLANEOUS

5.1 Entire Agreement; Amendments. This Agreement and the Reorganization
----------------------------
Agreement and the other writings and agreements referred to herein or therein or
delivered pursuant thereto contain the entire understanding of the parties with
respect to its subject matter. This Agreement and the Reorganization Agreement
and such other writings and agreements referred to therein supersede all prior
agreements and understandings between the parties with respect to their subject
matter. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto, and any condition to a party's
obligations hereunder may only be waived in writing by such party.

5.2 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

5.3 Headings. The section and paragraph headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

5.4 Assignments, Consents, etc. After the Effective Time of the Merger,
--------------------------
each of the constituent corporations, through such persons who were each
respective constituent corporation's officers immediately prior to the Merger,
shall execute or cause to be executed such further assignments, assurances or
other documents as may be necessary or desirable to confirm title in Meta to
properties, assets and rights of Sub.

5.5 Parties in Interest. This Agreement shall be binding upon, inure to
-------------------
the benefit of, and be enforceable by, the parties hereto and their respective
successors and assigns. Anything contained herein to the contrary
notwithstanding, this Agreement shall not be assigned by any party hereto
without the consent of the other parties hereto.

7
<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the date first above written.

AVANT! CORPORATION,
a Delaware corporation

By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------

NATASHA MERGER CORPORATION,
a California corporation

By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------

META-SOFTWARE, INC.,
a California corporation

By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------

<PAGE>

EXHIBIT 5.1

September 9, 1996

Avant! Corporation
1208 East Arques Avenue
Sunnyvale, California 94086

Re: Registration Statement on Form S-4
----------------------------------

Ladies & Gentlemen:

We have examined the Registration Statement on Form S-4 (File
No. 33- ) originally filed by Avant! Corporation (the "Company") with the
Securities and Exchange Commission (the "Commission") on September 9, 1996, as
thereafter amended or supplemented (the "Registration Statement"), in connection
with the registration under the Securities Act of 1933, as amended, of 5,079,365
shares of the Company's Common Stock (the "Shares"). As your counsel in
connection with this transaction, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares.

It is our opinion that, upon conclusion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares, when issued and sold in the
manner described in the Registration Statement, will be legally and validly
issued, fully paid and non-assessable.

We consent to the use of this opinion as an exhibit to said
Registration Statement, and further consent to the use of our name wherever
appearing in said Registration Statement, including the Joint Proxy
Statement/Prospectus constituting a part thereof, and in any amendment or
supplement thereto.

Very truly yours,

/s/ Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian
GUNDERSON DETTMER STOUGH
VILLENEUVE FRANKLIN & HACHIGIAN

<PAGE>

EXHIBIT 11.1

META-SOFTWARE, INC.

COMPUTATION OF NET INCOME AND PRO FORMA NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
-------------------- ---------------
1993 1994 1995 1995 1996
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net income................................ $ 2,683
Pro forma net income...................... $1,414 $2,134 $2,177 $ 1,333
====== ====== ====== ======= =======
Weighted average common shares outstand-
ing...................................... 7,500 7,500 7,830 7,500 9,910
Common stock equivalents as a result of
stock options outstanding using the
treasury stock method.................... 452 841 687 841 712
Common stock options granted in accordance
with SAB 83.............................. -- 569 620 569 --
Shares deemed outstanding to fund share-
holder distribution...................... 882 882 729 882 --
------ ------ ------ ------- -------
Total................................... 8,834 9,792 9,866 9,792 10,622
====== ====== ====== ======= =======
Net income per share...................... $ 0.25
=======
Pro forma net income per share............ $ 0.16 $ 0.22 $ 0.22 $ 0.14
====== ====== ====== =======
</TABLE>

<PAGE>

EXHIBIT 23.3

The Board of Directors
Avant! Corporation:

We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement.

KPMG Peat Marwick LLP

San Jose, California
September 6, 1996

<PAGE>

EXHIBIT 23.4

The Board of Directors
Meta-Software, Inc.:

We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the registration statement.

KPMG Peat Marwick LLP

San Jose, California
September 6, 1996

<PAGE>

EXHIBIT 23.5

INDEPENDENT AUDITOR'S CONSENT

The Board of Directors
Anagram, Inc.:

We hereby consent to the use of our reports included herein and to the
reference to our firm under the heading of "Experts" in the Joint Proxy
Statement/Prospectus.

Roberts Accountancy Corporation

/s/ Roberts Accountancy
Corporation
By:__________________________________
Name:
Title:

<PAGE>

EXHIBIT 23.6

CONSENT OF MORGAN STANLEY & CO. INCORPORATED

Morgan Stanley & Co. Incorporated hereby consents to the filing of the
opinion letter dated September 9, 1996 as an exhibit to the Registration
Statement on Form S-4 of Avant! Corporation and to the use of our name and the
reference therein to such opinion letter. In giving our consent, we do not
admit that we are of the category of persons from whom such a consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder nor do we
admit that we are experts with respect to any part of such Registration
Statement within the meaning of the term "experts" as used in the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.

Very truly yours,

Morgan Stanley & Co. Incorporated

By: /s/ MORGAN STANLEY & CO. INCORPORATED
-------------------------------------
Name:
Title:

<PAGE>

EXHIBIT 23.7

CONSENT OF WESSELS, ARNOLD & HENDERSON, L.L.C.

Wessels, Arnold & Henderson, L.L.C. hereby consents to the filing of
the opinion letter dated August 22, 1996 as an exhibit to the Registration
Statement on Form S-4 of Avant! Corporation and to the use of our name and the
reference therein to such opinion letter. In giving our consent, we do not admit
that we are of the category of persons from whom such a consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

Wessels, Arnold & Henderson, L.L.C.

By: /s/ WESSELS, ARNOLD & HENDERSON, L.L.C.
---------------------------------------
Name:
Title:

<PAGE>

EXHIBIT 99.1

AVANT! CORPORATION

PROXY FOR SPECIAL MEETING OF STOCKHOLDERS

_______________, 1996

The undersigned stockholder of Avant! Corporation, a Delware corporation
("Avant!"), hereby constitutes and appoints Gerald C. Hsu and Y. Eric Cho, and
each of them, the attorneys and proxies of the undersigned, each with the power
of substitution, to attend and act for the undersigned at the Special Meeting of
Stockholders of Avant! to be held at _______________, California, on 1996 at
______ a.m. local time, and at any adjournments or postponements thereof, and in
connection therewith to vote and represent all of the shares of Common Stock of
Avant! held of record by the undersigned on __________, 1996, as follows on the
reverse side of this proxy.

Said attorneys and proxies, and each of them, shall have all the powers
which the undersigned would have if acting in person. The undersigned hereby
revokes any other proxy to vote at such meeting and hereby ratifies and confirms
all that said attorneys and proxies, and each of them, may lawfully do by virtue
hereof. Said proxies, without hereby limiting their general authority, are
specifically authorized to vote in accordance with their best judgment with
respect to all matters incident to the conduct of the meeting and all matters
presented at the meeting but which are not known to the Board of Directors at
the time of the solicitation of this proxy.

Please mark your choice like [X]
this in blue or black ink

THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF AVANT!

- ------------------------------------- -------------------------------------
Account Number Common

<PAGE>

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 1
---

1. A proposal (the "Avant! Share Issuance Proposal") to issue shares of Avant!
Common Stock in connection with the merger (the "Merger") of Natasha Merger
Corporation, a wholly-owned subsidiary of Avant! ("Merger Sub"), with and
into Meta-Software, Inc., a California corporation ("Meta"), whereby each
share of Meta Common Stock outstanding immediately prior to the consummation
of the Merger will be converted into the right to receive a fraction of a
share of Avant! Common Stock, the numerator of which is 5,079,365 and the
denominator of which is equal to the sum of the aggregate number of Shares
of Meta Common Stock issued and outstanding as of the closing of the Merger
and the aggregate number of shares of Meta Common Stock issuable upon
exercise of all options and subscription rights outstanding as of the
closing of the Merger. In addition, all outstanding options and
subscriptions to purchase Meta Common Stock, together with the underlying
plans and agreements, will be assumed by Avant! and converted into options
and subscriptions to purchase Avant! Common Stock.

[_] FOR [_] AGAINST [_] ABSTAIN

Each of the above-named proxies present at said meeting, either in person or
by substitute, shall have and exercise all the powers of said proxies hereunder.
This proxy will be voted in accordance with the choices specified by the
undersigned on this proxy. In their discretion, each of the above-named proxies
is authorized to vote upon such other business incident to the conduct of the
Special Meeting as may properly come before the meeting or any postponements or
adjournments thereof. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED HEREON,
THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE FOR PROPOSAL NO. 1
AND ON ANY OTHER MATTERS TO BE VOTED UPON.

The undersigned acknowledges receipt of a copy of the Notice of Special
Meeting of Shareholders and Joint Proxy Statement/Prospectus relating to the
meeting.

IMPORTANT: In signing this proxy please sign exactly as your name(s) is
(are) shown on the share certificate to which the proxy applies. When signing as
an attorney, executor, administrator, trustee or guardian, please give your full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person. EACH JOINT TENANT MUST SIGN.

- --------------------------------------
Signature

- --------------------------------------
(Additional signature if held jointly)

DATED: , 1996
----------------------------

PLEASE SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

<PAGE>

EXHIBIT 99.2

META-SOFTWARE, INC.

PROXY FOR SPECIAL MEETING OF SHAREHOLDERS

_______________, 1996

The undersigned shareholder of Meta-Software, Inc., a California
corporation ("Meta") hereby constitutes and appoints Shawn M. Hailey and William
E. Alford and each of them, the attorneys and proxies of the undersigned, each
with the power of substitution, to attend and act for the undersigned at the
Special Meeting of Shareholders of Meta to be held at the principal executive
offices of Meta, 1300 White Oaks Road, Campbell, California, on 1996 at ______
a.m. local time, and at any adjournments or postponements thereof, and in
connection therewith to vote and represent all of the shares of Common Stock of
Meta held of record by the undersigned on __________, 1996, as follows on the
reverse side of this proxy.

Please mark your choice like [X]
this in blue or black ink

THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF META

- ------------------------------------- -------------------------------------
Account Number Common

<PAGE>

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 1
---

1. A proposal (the "Meta Merger Proposal") to approve an Agreement and Plan of
Reorganization dated as of August 22, 1996 (the "Plan of Reorganization"),
among Meta, Avant! Corporation, a Delaware corporation ("Avant!"), and
Natasha Merger Corporation, a California corporation and a wholly-owned
subsidiary of Avant! ("Merger Sub"), and the related Agreement of Merger to
be entered into between Meta and Merger Sub, pursuant to which, among other
things, (i) Merger Sub will be merged with and into Meta (the "Merger"),
following which Meta will become a wholly-owned subsidiary of Avant!, (ii)
each share of Meta Common Stock outstanding immediately prior to the
consummation of the Merger will be converted into the right to receive a
fraction of a share of Avant! Common Stock, the numerator of which is
5,079,365 and the denominator of which is equal to the sum of the aggregate
number of Shares of Meta Common Stock issued and outstanding as of the
closing of the Merger and the aggregate number of shares of Meta Common
Stock issuable upon exercise of all options and subscriptions rights
outstanding as of the closing of the Merger. and (iii) all outstanding
options and subscriptions to purchase Meta Common Stock, together with the
underlying plans and agreements, will be assumed by Avant! and converted
into options and subscriptions to purchase Avant! Common Stock.

[_] FOR [_] AGAINST [_] ABSTAIN

The undersigned acknowledges receipt of a copy of the Notice of Special
Meeting of Shareholders and Joint Proxy Statement/Prospectus relating to the
meeting.

- --------------------------------------
Signature

- --------------------------------------
(Additional signature if held jointly)

DATED: , 1996
----------------------------

PLEASE SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

<PAGE>

EXHIBIT 99.3

CONSENT OF PROSPECTIVE DIRECTOR

I hereby consent (i) to being named in the Registration Statement on
Form S-4 (the "Form S-4") of Avant! Corporation as a person intended to be
appointed as a director of Avant! Corporation, (ii) to this letter being filed
as an exhibit to the Form S-4 and (iii) to the use of my name and biographical
information in the Form S-4 and the reference therein to this letter.

Very truly yours,

September 9, 1996 /s/ SHAWN M. HAILEY
----------------------------------
Shawn M. Hailey