EXHIBIT












                          SECURITIES PURCHASE AGREEMENT

                                  by and among

                           Paradigm Technology, Inc.,

                                 NewLogic Corp.,

                  and Certain Securityholders of NewLogic Corp.

                                   dated as of

                                 April 22, 1996


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                                               TABLE OF CONTENTS

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<S>                      <C>                                                                                 <C>
ARTICLE I                PURCHASE, SALE AND SURRENDER OF SECURITIES...........................................1
           1.1           Purchase, Sale and Surrender of Securities...........................................1
           1.2           The Agreement of Merger..............................................................1
           1.3           Purchase Price.......................................................................2
           1.4           Other NewLogic Securities............................................................3

ARTICLE II               POST-CLOSING CONSIDERATION...........................................................3
           2.1           Post-Closing Consideration...........................................................3
           2.2           Determination of Amount..............................................................3

ARTICLE III              REPRESENTATIONS AND WARRANTIES OF NEWLOGIC...........................................4
           3.1           Organization, Standing and Power.....................................................5
           3.2           Capital Structure....................................................................5
           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......................................................................... 10
           3.10          Conduct in the Ordinary Course..................................................... 10
           3.11          Absence of Undisclosed Liabilities................................................. 12
           3.12          Documents and Information Supplied................................................. 12
           3.13          Certain Agreements................................................................. 12
           3.14          Plans.............................................................................. 12
           3.15          Major Contracts.................................................................... 13
           3.16          Taxes.............................................................................. 15
           3.17          Intellectual Property.............................................................. 16
           3.18          Service Provider Agreements........................................................ 19
           3.19          Restrictions on Business Activities................................................ 19
           3.20          Title to Properties; Absence of Liens and
                         Encumbrances; Condition of Equipment............................................... 19
           3.21          Environmental Matters.............................................................. 19
           3.22          Insurance.......................................................................... 20
           3.23          Labor Matters...................................................................... 20
           3.24          Personnel.......................................................................... 20
           3.25          Third-Party Consents............................................................... 21
           3.26          Related Party Transactions......................................................... 21
           3.27          Brokers or Finders; Professional Fees.............................................. 21
           3.28          Permit Application................................................................. 22

ARTICLE IV               REPRESENTATIONS AND WARRANTIES OF SECURITYHOLDERS.................................. 22
           4.1           Authority.......................................................................... 22
           4.2           Title to Securities................................................................ 23
           4.3           Third-Party Consents............................................................... 23
           4.4           Brokers or Finders; Professional Fees.............................................. 23


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ARTICLE V                REPRESENTATIONS AND WARRANTIES OF PARADIGM......................................... 23
           5.1           Organization; Standing and Power................................................... 23
           5.2           Authority.......................................................................... 24
           5.3           Paradigm Financial Statements...................................................... 25
           5.4           Litigation......................................................................... 25
           5.5           Reports............................................................................ 25
           5.6           Compliance with Laws............................................................... 25
           5.7           Material Contracts................................................................. 26
           5.8           Taxes.............................................................................. 26
           5.9           Restrictions on Business Activities................................................ 26
           5.10          Governmental Authorizations and Licenses........................................... 26
           5.11          Environmental Matters.............................................................. 27
           5.12          Questionable Payments.............................................................. 27
           5.13          Brokers or Finders; Professional Fees.............................................. 27
           5.14          Permit Application................................................................. 28
           5.15          Section 368(a) Reorganization...................................................... 28

ARTICLE VI               COVENANTS OF NEWLOGIC.............................................................. 28
           6.1           Maintenance of Business............................................................ 28
           6.2           Conduct of Business................................................................ 28
           6.3           Necessary Consents................................................................. 29
           6.4           Access to Information.............................................................. 30
           6.5           Further Assurances................................................................. 30
           6.6           Exclusivity; Acquisition Proposals................................................. 30
           6.7           Breach of Representations, Warranties,
                         Agreements and Covenants........................................................... 31
           6.8           Legal Conditions to the Sale or Surrender
                         of the Securities.................................................................. 31
           6.9           Post-Closing Covenants............................................................. 32
           6.10          Public Announcements............................................................... 33

ARTICLE VII              COVENANTS OF PARADIGM.............................................................. 33
           7.1           Necessary Consents................................................................. 33
           7.2           Access to Information.............................................................. 33
           7.3           Further Assurances................................................................. 34
           7.4           Public Announcements............................................................... 34
           7.5           Breach of Representations, Warranties,
                         Agreements and Covenants........................................................... 34
           7.6           Legal Conditions to the Sale of the
                         Securities......................................................................... 34
           7.7           3(a)(10) Fairness Hearing.......................................................... 35
           7.8           Listing of Shares.................................................................. 35

ARTICLE VIII             COVENANTS OF SECURITYHOLDERS....................................................... 35
           8.1           Necessary Consents................................................................. 35
           8.2           Further Assurances................................................................. 35
           8.3           No Transfer........................................................................ 36
           8.4           Breach of Representations Warranties,
                         Agreements and Covenants........................................................... 36
           8.5           Limited Resales.................................................................... 36


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ARTICLE IX               CONDITIONS PRECEDENT TO OBLIGATIONS OF
                         PARADIGM........................................................................... 36
           9.1           Certificates for Securities........................................................ 36
           9.2           Representations and Warranties True................................................ 37
           9.3           Covenants Performed................................................................ 37
           9.4           Certificates....................................................................... 37
           9.5           Opinion of Counsel for NewLogic.................................................... 37
           9.6           No Violations; No Actions.......................................................... 37
           9.7           No Material Adverse Effect......................................................... 37
           9.8           Proceedings and Documents.......................................................... 37
           9.9           Schedules.......................................................................... 37
           9.10          Required Consents.................................................................. 38
           9.11          Accountants' Opinion............................................................... 38
           9.12          Employment, Noncompetition and Proprietary
                         Information Agreements............................................................. 38
           9.13          Tax Forms.......................................................................... 38
           9.14          Signature Pages.................................................................... 38
           9.15          Other Purchase Agreements.......................................................... 39
           9.16          Securities Laws.................................................................... 39

ARTICLE X                CONDITIONS PRECEDENT TO OBLIGATIONS OF
                         NEWLOGIC AND OF THE SECURITYHOLDERS................................................ 39
           10.1          Representations and Warranties True................................................ 39
           10.2          Covenants Performed................................................................ 39
           10.3          No Violations; No Actions.......................................................... 39
           10.4          Proceedings and Documents.......................................................... 40
           10.5          Required Consents.................................................................. 40
           10.6          Certificate........................................................................ 40
           10.7          Opinion of Counsel for Paradigm.................................................... 40
           10.8          Tax Opinion........................................................................ 40
           10.9          3(a)(10) Fairness Hearing.......................................................... 40
           10.10         Accountants' Opinion............................................................... 40

ARTICLE XI               CLOSING............................................................................ 41
           11.1          Time and Place..................................................................... 41
           11.2          Deliveries of NewLogic or the
                         Securityholders.................................................................... 41
                         (a)        Certificates and Instruments............................................ 41
                         (b)        Corporate Documents..................................................... 41
                         (c)        Certificates of Good Standing and
                                    Qualification........................................................... 41
                         (d)        Resolutions............................................................. 41
                         (e)        Books and Records....................................................... 41
                         (f)        Consents................................................................ 41
                         (g)        Opinion of Counsel...................................................... 41
                         (h)        NewLogic Certificate.................................................... 42
                         (i)        FIRPTA.................................................................. 42
                         (j)        Other Documents......................................................... 42
                         (k)        Option Exercise Price................................................... 42
           11.3          Deliveries of Paradigm............................................................. 42
                         (a)        Payment of the Consideration............................................ 42

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                         (b)        Resolutions............................................................. 42
                         (c)        Consents................................................................ 42
                         (d)        Opinion of Counsel...................................................... 42
                         (e)        Paradigm Certificate.................................................... 42
                         (f)        3(a)(10) Permit......................................................... 43
                         (g)        Other Documents......................................................... 43

ARTICLE XII              COVENANT OF SETTLEMENT AND GENERAL RELEASE......................................... 43
           12.1          Settlement and General Release of the
                         Paradigm Released Parties.......................................................... 43
           12.2          Settlement and General Release of the
                         Securityholders Released Parties................................................... 45

ARTICLE XIII             INDEMNIFICATION.................................................................... 46
           13.1          Survival of Representations, Warranties,
                         Covenants and Agreements........................................................... 46
           13.2          Indemnification.................................................................... 47
           13.3          Procedure for Indemnification with Respect
                         to Third-Party Claims.............................................................. 49
           13.4          Procedure For Indemnification with Respect
                         to Non-Third Party Claims.......................................................... 50

ARTICLE XIV              TERMINATION........................................................................ 51
           14.1          Termination........................................................................ 51
           14.2          Breakup Fee........................................................................ 53
           14.3          Bridge Loan........................................................................ 53

ARTICLE XV               MISCELLANEOUS PROVISIONS........................................................... 53
           15.1          Notice............................................................................. 53
           15.2          Entire Agreement................................................................... 54
           15.3          Binding Effect; Assignment......................................................... 54
           15.4          Expenses of Transaction............................................................ 54
           15.5          Waiver; Consent.................................................................... 54
           15.6          Third-Party Beneficiaries.......................................................... 55
           15.7          Counterparts....................................................................... 55
           15.8          Severability....................................................................... 55
           15.9          Governing Law...................................................................... 55
           15.10         Other Remedies..................................................................... 55
           15.11         Mutual Drafting.................................................................... 55
           15.12         Tax Matters........................................................................ 55
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                                                   Schedules

A                        Schedule of Securityholders
1.3(a)                   Payments to Securityholders
1.4                      Other NewLogic Securityholders
2.1                      Post Closing Consideration Table
2.2                      NewLogic Products
3.2                      NewLogic Stock Ledger
11.2(k)                  Option Exercise Payments

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                                                   Exhibits

1.2                      Agreement of Merger
1.3(b)                   Escrow Agreement
9.5                      Form of BP&H Opinion
9.12(a)                  Form of Employment Letter Agreement
9.12(b)                  Form of Non-Competition Agreement
9.12(c)                  Form of Proprietary Information Agreement
10.7                     Form of PM&S Opinion


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                          SECURITIES PURCHASE AGREEMENT


         THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of this
22nd day of April,  1996,  by and among  PARADIGM  TECHNOLOGY,  INC., a Delaware
corporation  ("Paradigm"),  NEWLOGIC CORP., a Delaware corporation ("NewLogic"),
and the  securityholders  of NewLogic listed on Schedule A to this Agreement who
have executed and delivered a signature  page to this  Agreement  (collectively,
the "Securityholders"),

                              W I T N E S S E T H:

         WHEREAS, Paradigm desires to acquire NewLogic in a transaction intended
to qualify as a tax-free  reorganization pursuant to section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"),  pursuant to which  NewLogic will
merge with and into Paradigm, and Paradigm will receive all of the capital stock
of NewLogic, as the surviving entity of the Merger; and

         WHEREAS,   in   furtherance   thereof,   Paradigm   will  pay  to  each
Securityholder  shares of Common Stock of Paradigm for their  securities  or for
the   surrender  of  their   securities   and,  as  an   inducement  to  certain
Securityholders to enter into this Agreement,  certain of these  Securityholders
shall be entitled to receive additional consideration after the Closing:

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:

                                    ARTICLE I

                   PURCHASE, SALE AND SURRENDER OF SECURITIES

         1.1  Purchase,  Sale and  Surrender of  Securities.  Upon the terms and
subject to the conditions of this Agreement,  the Securityholders  shall sell to
Paradigm and Paradigm shall purchase from the  Securityholders all of the shares
of  capital   stock  of   NewLogic   held  by  the   Securityholders,   and  the
Securityholders  shall  surrender  all  unexercised  options and other rights to
purchase   such  shares   held  by  the   Securityholders   (collectively,   the
"Securities") at the Closing (as defined in Section 11.1 hereof).

         1.2 The Agreement of Merger.  At the Closing,  NewLogic shall be merged
with and into Paradigm by a statutory  merger (the "Merger") in accordance  with
the  Delaware  General  Corporation  Law  ("Corporation  Law") on the  terms and
subject to the  conditions  set forth  herein and  pursuant to an  agreement  of
merger in the form attached  hereto as Exhibit 1.2 (the  "Agreement of Merger").
The  Agreement of Merger will be executed and delivered by NewLogic and Paradigm
prior to the Closing and will be filed with the  Secretary of State of the State
of Delaware at or simultaneous with the Closing in accordance with section 251

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of the  Corporation  Law. The Merger shall be effective (the  "Effective Time of
Merger")  as of the time of the  filing  of the  Agreement  of  Merger  with the
Delaware  Secretary of State on the Closing Date,  at which time NewLogic  shall
cease to exist,  and Paradigm  shall be the surviving  entity.  At the Effective
Time of Merger,  the  Securities  shall by virtue of the Merger and  without any
action  on the part of the  Securityholders,  be  converted  into the  number of
shares of common stock of Paradigm as set forth in the Agreement of Merger.

         1.3 Purchase Price. As consideration for the Securities, Paradigm shall
pay to the Securityholders an aggregate of 314,395 shares of the Common Stock of
Paradigm   (collectively,   the  "Stock  Consideration")  and  an  aggregate  of
$165,068.05 in cash (the "Cash  Consideration"),  together with the post-closing
consideration in accordance with Article  (collectively,  the "Purchase Price"),
as follows:

         (a) 176,307 shares of Common Stock of Paradigm, shall be distributed at
the  Closing  to the  Securityholders  set forth on  Schedule  1.3(a) and in the
amounts set forth next to each Securityholder's name on such schedule;

         (b) 138,088 shares of Common Stock of Paradigm (the "Escrowed Shares"),
shall be delivered  irrevocably to a financial  institution or other independent
party to be mutually  agreed upon by Paradigm and NewLogic prior to the Closing,
as  escrow  agent  (the  "Escrow  Agent"),   pursuant  to  an  escrow  agreement
substantially  in the form  attached  as  Exhibit  1.3(b)  hereto  (the  "Escrow
Agreement").  The  Escrowed  Shares  shall be issued in the record  name of Hans
Olsen,  as trustee (the  "Securityholders  Trustee") of the voting trust created
pursuant  to an  agreement  by and  among  each of the  Securityholders  and the
Trustee for the purpose of administering the rights of the Securityholders  with
respect to the Escrowed  Shares (the  "Voting  Trust  Agreement").  The Escrowed
Shares  will  be  held  by  the  Escrow  Agent  for  purposes  of  securing  the
indemnification  obligations of the  Securityholders  as set forth in Article of
this  Agreement  and in the  Escrow  Agreement.  In  accordance  with the Escrow
Agreement,  41,426  shares  of  Common  Stock  of  Paradigm  (together  with any
dividends  or  distributions   paid  thereon),   net  of  any  offsets  made  in
satisfaction of such indemnification obligations ("Offsets"),  shall be released
by the Escrow Agent to the  Securityholders  Trustee on the first anniversary of
the Closing, and thirty-five percent (35%) of the Stock Consideration, or 96,662
shares of Common Stock of Paradigm (together with any dividends or distributions
paid thereon),  net of any Offsets, shall be released by the Escrow Agent to the
Securityholders Trustee on the second anniversary of the Closing.

         (c) The Cash  Consideration  shall be paid to the  Securityholders  set
forth on Schedule 1.3(a), or to NewLogic on behalf of such Securityholders,  and
in the amounts set forth next to

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each such Securityholder's name on such schedule, by check or wire transfer.

         1.4 Other NewLogic Securities.  Schedule 1.4 attached hereto sets forth
the name and number of  NewLogic  shares of capital  stock and  options or other
rights  to  acquire  such  capital  stock  held by each  person  other  than the
Securityholders.  On or before the Closing  Date,  Paradigm  shall  purchase and
acquire  from each  securityholder  named on  Schedule  1.4 all of the  NewLogic
securities held by such Securityholders,  for consideration  consisting entirely
of  cash,  pursuant  to one or  more  purchase  agreements  separate  from  this
Agreement.




                                   ARTICLE II

                           POST-CLOSING CONSIDERATION

         2.1  Post-Closing   Consideration.   Subsequent  to  the  Closing,   in
accordance with Section 2.2 below, all of the  Securityholders  set forth in the
attached Schedule 2.1 shall be entitled to receive additional cash consideration
as set forth in Section 2.2 of this Agreement (the "Gross Margin Payments").

         2.2  Determination of Amount.

         (a) Each such Securityholder set forth in Schedule 2.1 then employed by
Paradigm (or otherwise providing services to Paradigm  substantially  equivalent
to those provided  immediately  prior to the termination of such  employment) at
the time of the distribution  shall be entitled to cash  consideration,  if any,
equal to the product of (i) twelve and one-half  percent (12.5%) of the NewLogic
Product Gross Margin  generated  from and after the Closing  until  December 31,
1997, times (ii) the percentage set forth next to such  Securityholder's name on
such Schedule 2.1 (the "Percentage Interest").

         (b) Each such Securityholder set forth in Schedule 2.1 then employed by
Paradigm (or otherwise providing services to Paradigm  substantially  equivalent
to those provided  immediately  prior to the termination of such  employment) at
the time of the distribution  shall be entitled to cash  consideration,  if any,
equal to the product of (i) five  percent  (5%) of the  NewLogic  Product  Gross
Margin  generated from and after January 1, 1998 until June 30, 1998, times (ii)
such Securityholder's Percentage Interest.

         (c) In the event that a  Securityholder  set forth on Schedule  2.1 for
any reason is not  employed  by Paradigm  (or  otherwise  providing  services to
Paradigm  substantially  equivalent to those provided  immediately  prior to the
termination of such employment) at the time of any Gross Margin  Payments,  such
Securityholder's  Gross Margin Payment shall be allocated and distributed  among
the  remaining  eligible  Securityholders  pro rata  based  on their  Percentage
Interest in such amount (after

                                       -3-


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reallocating  pro  rata  among  them the  Percentage  Interest  of the  departed
Securityholder).

         (d)  "NewLogic  Product  Gross  Margin"  shall be  defined as the gross
margin  generated from the sale of NewLogic (or any legal  successor in interest
to NewLogic)  Products  (defined  below) as determined by Paradigm  applying the
criteria  used by Paradigm  with respect to the sale of Paradigm  products.  The
NewLogic  products subject to this Section 2.2 (the "Products")  shall be as set
forth  in the  attached  Schedule  2.2  Paradigm  shall  act in  good  faith  in
determining  the NewLogic  Product  Gross Margin on any sales of Products and in
developing and marketing the sale of the Products  during the periods  described
in Sections 2.2(a) and 2.2(b) above.  Subject to Subsection 2.2(f) below,  Gross
Margin   Payments  due  under  this  Section  2.2  shall  be  paid  to  eligible
Securityholders,  when earned,  in quarterly  payments on each of April 15, July
15, October 15 and January 15.

         (e) The  Securityholders  holding a majority  in  interest of the Stock
Consideration  or their duly authorized  agents shall have the right, (i) during
normal business hours and following reasonable prior written notice to Paradigm,
to conduct  audits  with  respect  to the  applicable  books and  records in the
possession or under the control of Paradigm  reasonably relating to the Products
for the purpose of verifying  Paradigm's  determination  of the NewLogic Product
Gross Margin, and (ii) to modify the allocation of the Percentage  Interests set
forth on Schedule 2.1 among  eligible  Securityholders  or third  parties,  upon
prior written notice to Paradigm.

         (f) The parties hereto acknowledge that NewLogic has on the date hereof
an uncollected,  unearned milestone payment receivable in the amount of $600,000
relating to its research and development contract with Winbond Electronics Corp.
dated  January  1, 1996  (the  "R&D  Milestone  Payment").  Notwithstanding  the
provisions of this Section 2.2, from and after the Closing date, no Gross Margin
Payments shall be distributed to eligible  Securityholders  except to the extent
such Gross Margin Payments in the aggregate exceed the  then-current  balance of
the R&D  Milestone  Payment.  In the event,  following  the full offset of Gross
Margin  Payments  against  the R&D  Milestone  Payment as set forth  above,  any
portion of the R&D Milestone Payment is collected by Paradigm, such amount shall
be  promptly  distributed  to the  eligible  Securityholders  pursuant  to their
Percentage Interests.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF NEWLOGIC

         Except as specifically  set forth in the NewLogic  disclosure  schedule
certified by the President and Chief Executive Officer of NewLogic and delivered
by NewLogic to Paradigm prior to the

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execution of this  Agreement  (the  "NewLogic  Disclosure  Schedule"),  NewLogic
represents and warrants to Paradigm that the  representations and warranties set
forth  in  this  Article  are  true  and  correct  as of the  date  hereof.  All
disclosures  set  forth in such  NewLogic  Disclosure  Schedule  shall be deemed
representations  and  warranties  of NewLogic.  As used in this  Agreement,  (a)
"Business  Condition"  with  respect  to  NewLogic  shall  refer  to  NewLogic's
financial condition,  business,  prospects,  results of operations and assets as
presently  conducted or as proposed to be conducted;  (b) a disclosure or result
will be  deemed  "material  and  adverse"  if it gives or could  give  rise to a
substantial  diminution in the economic value of NewLogic as presently conducted
or as proposed to be conducted;  and (c) "to the knowledge of NewLogic" and like
phrases shall, unless otherwise qualified,  refer to the knowledge of NewLogic's
executive officers and directors following reasonable inquiry.

         3.1  Organization,  Standing and Power.  NewLogic is a corporation duly
organized,  validly existing and in good standing under the laws of the State of
Delaware 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.
NewLogic is qualified to do business as a foreign  corporation  in the states of
Washington  and  California,  and  is  not  required  to  qualify  as a  foreign
corporation  in any other  jurisdiction  except  where the failure to so qualify
would not have a material adverse effect on the Business  Condition of NewLogic.
NewLogic has delivered or made available to Paradigm complete and correct copies
of its (a)  Certificate  of  Incorporation  and  Bylaws,  (b)  minutes of all of
directors' and stockholders' meetings, which are complete and accurate as of the
date  hereof,  (c) stock  certificate  books and all other  records of NewLogic,
which  collectively  correctly set forth the record ownership of all outstanding
shares of capital stock and all rights to purchase capital stock of NewLogic and
(d) form of stock certificates,  option agreements and rights to purchase shares
of capital stock of NewLogic.

         3.2  Capital Structure.

         (a) The  authorized  capital  stock of NewLogic  consists of 10,765,000
shares of Common  Stock,  $0.01 par value per  share,  and  4,235,000  shares of
Preferred Stock,  $0.01 par value per share, of which 60,000  authorized  shares
are  designated  Series A  Preferred  Stock,  3,750,000  authorized  shares  are
designated  Series  B-1  Preferred  Stock  and  425,000  authorized  shares  are
designated  Series B-2 Preferred Stock. As of the date of this Agreement,  there
were  issued  and  outstanding:   2,375,380  shares  of  NewLogic  common  stock
("NewLogic  Common  Stock");  no shares of NewLogic  Series A  Preferred  Stock;
1,825,000 shares of NewLogic Series B-1 Preferred Stock  convertible into shares
of Common  Stock at the rate of one (1) share of NewLogic  Common Stock for each
share of NewLogic Series B-1 Preferred Stock; and no shares

                                       -5-



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of NewLogic Series B-2 Preferred Stock. As of the date of this Agreement,  there
were an aggregate of (i) 4,235,000  shares of NewLogic Common Stock reserved for
issuance  upon  conversion  of the NewLogic  Preferred  Stock,  and (ii) 826,780
shares of Common Stock  reserved for issuance  upon the exercise of  outstanding
NewLogic  options to acquire  NewLogic  Common Stock (the  "NewLogic  Options").
There are currently  outstanding  options to purchase 826,780 shares of NewLogic
Common Stock and 973,220  shares of NewLogic  Common Stock  available  for grant
under options.  There are no outstanding shares of NewLogic capital stock or any
other right to receive or purchase equity securities of NewLogic  (collectively,
"NewLogic  capital  stock"),  other than  shares of  NewLogic  Common  Stock and
NewLogic Series B-1 Preferred Stock and the NewLogic Options.

         (b) All  outstanding  shares of  NewLogic  capital  stock are,  and any
shares of NewLogic  capital  stock issued upon  exercise of any NewLogic  Option
(subject to receipt of the exercise price as provided  therein) will be, validly
issued,  fully  paid and  nonassessable  and not  subject to  preemptive  rights
created by statute,  NewLogic's  Certificate of  Incorporation  or Bylaws or any
agreement to which  NewLogic is a party or by which  NewLogic may be bound.  All
outstanding  NewLogic  securities have been issued in compliance with applicable
federal and, to the Company's  knowledge,  based on written information provided
by the  Securityholders,  state securities laws. Other than as described herein,
there  are no  options,  warrants,  calls,  conversion  rights,  commitments  or
agreements  of any character to which  NewLogic is a party or by which  NewLogic
may be bound that do or may legally obligate NewLogic to issue, deliver or sell,
or cause to be issued,  delivered or sold, additional shares of NewLogic capital
stock or that do or may legally obligate NewLogic to grant, extend or enter into
any such option, warrant, call, conversion right, commitment or agreement.

         (c) Schedule  3.2  contains a complete  and  accurate  list of, and the
number of shares owned of record by, the holders of outstanding  NewLogic Common
Stock, NewLogic Series B-1 Preferred Stock and NewLogic Options. Schedule 3.2 is
complete  and  accurate on the date  hereof,  and an updated  Schedule 3.2 to be
attached hereto will be complete and accurate as of the Closing Date.

         (d) All NewLogic Options have been issued in accordance with NewLogic's
stock equity plans and, to the Company's knowledge, based on written information
provided by the  Securityholders,  all state securities laws. The NewLogic stock
equity  plans and all  amendments  thereto have been  approved by all  requisite
NewLogic  securityholder  action.  NewLogic  does not have in  effect  any stock
appreciation  rights  plan  and  no  stock  appreciation  rights  are  currently
outstanding.

         (e) Except as set forth in NewLogic's  Certificate of Incorporation and
except for any restrictions imposed by appli-

                                       -6-



<PAGE>



cable state and federal  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 NewLogic Common Stock.

         (f)   NewLogic  is  not  a  party  or  subject  to  any   agreement  or
understanding,  and, to the best of NewLogic's knowledge,  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
NewLogic.

         3.3  Subsidiaries.  NewLogic  does  not  own or  control,  directly  or
indirectly, any corporation, partnership, business, trust or other entity.

         3.4  Authority.

         (a) NewLogic has all requisite  corporate  power and authority to enter
into this Agreement, to execute,  deliver and perform its obligations hereunder,
and to  consummate  the  transactions  contemplated  hereby.  The  execution and
delivery of this  Agreement,  the  performance  by  NewLogic of its  obligations
hereunder and the consummation of the  transactions  contemplated  hereby,  have
been duly and validly  authorized by all necessary  corporate action on the part
of  NewLogic,  including  approval  by  its  Board  of  Directors.  No  NewLogic
shareholder  vote is required in connection with the  transactions  set forth in
this  Agreement.  This  Agreement is a legal,  valid and binding  obligation  of
NewLogic  enforceable  against NewLogic 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 this
Agreement, to NewLogic's knowledge,  the execution,  delivery and performance of
this Agreement does not and the performance and consummation of the transactions
contemplated  hereby will not, conflict with or result in any material violation
of any material statute,  law, rule,  regulation,  judgment,  order,  decree, or
ordinance  applicable to NewLogic or its properties or assets,  or conflict with
or result in any  conflict  with,  breach or  violation  of 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 material obligation
or the loss of a material  benefit under, or result in the creation of a lien or
encumbrance on any of the  properties or assets of NewLogic  pursuant to (i) any
provision of the Certificate of  Incorporation or Bylaws of NewLogic or (ii) any
agreement,  contract,  note, mortgage,  indenture,  lease,  instrument,  permit,
concession,  franchise  or  license  to  which  NewLogic  is a party or by which
NewLogic or any of its properties or assets may be bound or affected except such
violations that would not

                                       -7-



<PAGE>



have a  material and  adverse  effect  on the  Business  Condition  of NewLogic.

         (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 NewLogic in  connection  with the  execution,
delivery and  performance of this Agreement by NewLogic or the  consummation  by
NewLogic of the  transactions  contemplated  hereby,  except for such  consents,
approvals, orders, authorizations,  registrations,  declarations, qualifications
or filings (i) as may be required  under  state  securities  or Blue Sky laws in
connection with the  transactions set forth herein and (ii) the failure of which
to obtain would not have a material and adverse effect on the Business Condition
of NewLogic.

         3.5 Financial Statements. NewLogic has furnished to Paradigm a complete
and  accurate  copy of its  audited  balance  sheet as of June 30,  1995 and its
audited statements of operations,  changes in stockholders' equity (deficit) and
cash flow for the  period  ended  June 30,  1995  (collectively,  the  "NewLogic
Audited Financial  Statements").  The NewLogic Audited Financial Statements have
been  prepared in  accordance  with  generally  accepted  accounting  principles
("GAAP")  consistently  applied  and fairly  present the  financial  position of
NewLogic as and at the dates thereof and  NewLogic's  results of operations  and
cash flows for the periods  then ended.  NewLogic  has  furnished  to Paradigm a
complete and accurate copy of its  unaudited  balance sheet as of March 31, 1996
and its unaudited  statement of operations and cash flow for the nine (9) months
ended  March  31,  1996   (collectively,   the  "NewLogic   Unaudited  Financial
Statements,"  collectively with the NewLogic Audited Financial  Statements,  the
"NewLogic Financial  Statements").  The NewLogic Unaudited Financial  Statements
have been  prepared in accordance  with GAAP  consistently  applied,  subject to
normal year-end adjustments and except for the absence of footnotes,  and fairly
present  the  financial  position  of  NewLogic  as and at the date  thereof and
NewLogic's results of operations and cash flows for the period then ended.

         3.6  Payables; Receivables.

         (a) The NewLogic  Disclosure  Schedule sets forth a listing of accounts
payable and accounts  receivable of NewLogic in the aggregate and by creditor as
of March 31, 1996.

         (b)  NewLogic's  revenue  recognition  policies  with  respect  to  the
NewLogic Financial  Statements have been made in accordance with GAAP.  NewLogic
maintains  a standard  system of  accounting  in  accordance  with GAAP.  All of
NewLogic's  general  ledgers,  books  and  records  are  located  at  NewLogic's
principal

                                       -8-




<PAGE>



place of business. NewLogic 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 NewLogic.  NewLogic's  financial  reserves are adequate to
cover claims already incurred.

         3.7  Compliance  with Laws.  To  NewLogic's  knowledge,  NewLogic 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 NewLogic's  Business  Condition.  To NewLogic's
knowledge, there are no judgments or orders, injunctions,  decrees, stipulations
or  awards  (whether  rendered  by  a  court  or  administrative  agency  or  by
arbitration)  against  NewLogic or against any of its  properties or businesses,
and, to NewLogic's knowledge, none are pending or threatened, which individually
or in the  aggregate  would have a material  and adverse  effect on the Business
Condition of NewLogic.  NewLogic  has not during the past  eighteen  (18) months
received any governmental  notice from any Governmental Entity for any violation
of United  States  laws or  regulations.  NewLogic  has all  permits,  licenses,
orders, authorizations,  registrations, concessions, certificates, approvals and
other instruments of any Governmental  Entity (the "Government  Licenses") (each
of which is in full force and effect)  necessary for the conduct of its business
which other than those the lack of which would  individually or in the aggregate
have a material  and  adverse  effect on the  Business  Condition  of  NewLogic.
NewLogic is in compliance with the terms, conditions, limitations, restrictions,
standards,  prohibitions,   requirements  and  obligations  of  such  Government
Licenses  except  where the failure to so comply  would not have a material  and
adverse  effect on the Business  Condition  of  NewLogic.  NewLogic has made all
filings and  registrations  and the like necessary or required by law to conduct
its  business  except  where its failure to do so would not have a material  and
adverse effect on NewLogic's Business Condition. To NewLogic's knowledge,  there
is not now pending, nor is there threatened,  any action, suit, investigation or
proceeding  against NewLogic before any Governmental  Entity with respect to the
Government  Licenses,  nor is there any issued or outstanding  notice,  order or
complaint  with  respect  to the  violation  by  NewLogic  of the  terms  of any
Government License or any rule or regulation applicable thereto other than those
that would not have a  material  adverse  effect on the  Business  Condition  of
NewLogic.

         3.8 No Defaults.  NewLogic is not, and it has not received  notice that
it is or would be with the passage of time (x) in violation of any  provision of
its Certificate of  Incorporation or Bylaws or (y) to NewLogic's  knowledge,  in
default or viola-

                                       -9-





<PAGE>



tion of (a) any term,  condition or provision of any  judgment,  decree,  order,
injunction or stipulation  applicable to NewLogic,  or (b) any term or condition
of any agreement,  note, mortgage,  indenture,  law, statute,  rule, regulation,
contract, lease, instrument,  permit, concession,  franchise or license to which
NewLogic  is a party or by which  NewLogic  or its  properties  or assets may be
bound,  except for  defaults or  violations  that would not have a material  and
adverse effect on the Business Condition of NewLogic.

         3.9  Litigation.  To NewLogic's  knowledge,  there is no action,  suit,
proceeding,  claim,  arbitration or investigation  pending or threatened against
NewLogic or any of its officers or directors  which, if determined  adversely to
NewLogic  or such  officers  or  directors,  would  have an  adverse  effect  on
NewLogic's  Business  Condition.   There  is  no  action,  suit,  proceeding  or
investigation  by NewLogic  currently  pending or which it intends to  initiate.
NewLogic has delivered or made available to Paradigm correct and complete copies
of all correspondence  prepared by its counsel for NewLogic's independent public
accountants in connection with the last completed audit of NewLogic's  financial
statements and any such correspondence since the date of the last such audit.

         3.10 Conduct in the Ordinary Course. Since March 31, 1996, NewLogic has
conducted its business in the ordinary course and there has not occurred:

         (a) Any  material  and  adverse  change in the  Business  Condition  of
NewLogic from that reflected in the Financial  Statements  other than changes in
the ordinary course of business;

         (b) Any amendments or changes in the  Certificate of  Incorporation  or
Bylaws of NewLogic;

         (c) Any  material  damage,  destruction  or loss,  whether  covered  by
insurance or not, affecting the Business Condition of NewLogic;

         (d) Any issuance, redemption, repurchase or other acquisition of shares
of capital  stock of  NewLogic  (other  than  issuances  pursuant to exercise of
NewLogic  Options,  repurchases of NewLogic Common Stock at cost in the ordinary
course under the terms of preexisting agreements),  or any declaration,  setting
aside or payment of any dividend or other  distribution  (whether in cash, stock
or property) with respect to NewLogic capital stock;

         (e) Other than  compensation  increases not exceeding five percent (5%)
in any individual case and annual bonuses not exceeding fifteen percent (15%) in
any individual  case, any increase in or  modification  of the  compensation  or
benefits payable or to become payable by NewLogic to any of its service

                                      -10-




<PAGE>



providers or changes  pursuant to  employment  agreements  currently in effect;

         (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 NewLogic  individually in
excess of $10,000 or in the aggregate in excess of $25,000, other than inventory
sales in the ordinary  course of business  consistent with past practice or (ii)
mortgage,  pledge, transfer of a security interest in, or lien created by it, or
other  encumbrance  with  respect to any of its material  properties  or assets,
except liens arising under existing lease financing arrangements,  liens arising
in the ordinary course of NewLogic's business and liens for taxes not yet due or
payable,  in each  case or in the  aggregate,  which  are  not  material  to the
Company;

         (h) Any (i) incurrence, assumption or guarantee by NewLogic of any debt
for borrowed money other than trade indebtedness incurred in the ordinary course
of business consistent with past practice;  (ii) waiver or compromise by it of a
valuable  right or of a debt owed to it except that which is not material to its
Business  Condition,  (iii)  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  NewLogic;  or (v)
issuance or sale of options or other rights to acquire from  NewLogic,  directly
or indirectly, debt securities of NewLogic or any securities convertible into or
exchangeable for any such debt securities;

         (i) 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 NewLogic;

         (j) Any  entry  into,  amendment  of,  relinquishment,  termination  or
nonrenewal  by NewLogic of any  contract,  lease,  commitment  or other right or
obligation  other than in the ordinary  course of business  consistent with past
practice;

         (k) Any  transfer or grant of a right under the  NewLogic  Intellectual
Property  Rights (as defined in Section  3.17) other than those  transferred  or
granted in the ordinary course of business;

         (l) 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 NewLogic;


                                      -11-





<PAGE>



         (m) Any  resignation  or  termination  of  employment of any of its key
employees;  and  NewLogic,  to the best of its  knowledge,  does not know of the
impending resignation or termination of employment of any such employee; or

         (n) Any  agreement or  arrangement  made by NewLogic to take any action
which, if taken prior to the date hereof,  would have made any representation or
warranty  set forth in this  Section  3.10 untrue or  incorrect  in any material
respect as of the date when made.

         3.11  Absence  of  Undisclosed  Liabilities.  Except  as  disclosed  or
reflected  in  the  NewLogic  March  31,  1996  balance  sheet  and  except  for
liabilities and obligations  arising after March 31, 1996 in the ordinary course
of business  which are not material,  NewLogic has no liabilities or obligations
(whether  absolute,  accrued or  contingent,  and whether or not  determined  or
determinable)  of a  character  which,  under GAAP,  should be  accrued,  shown,
disclosed,  reserved  or  indicated  in an  audited  balance  sheet of  NewLogic
(including the footnotes thereto).

         3.12 Documents and Information Supplied.  To NewLogic's knowledge,  the
copies of all instruments, agreements, other documents and information delivered
by  NewLogic  and its  professional  advisors  to  Paradigm  or its  counsel and
accountants are and will be true, accurate and complete in all material respects
as of the date of delivery thereof.

         3.13 Certain  Agreements.  Neither the  execution  and delivery of this
Agreement nor the consummation of the transactions  contemplated hereby will (a)
result  in any  material  payment  (including,  without  limitation,  severance,
unemployment compensation, golden parachute, bonus or otherwise) becoming due to
any  service  provider of  NewLogic  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 material benefits.

         3.14  Plans.  All  plans,  programs,  policies,  commitments  or  other
arrangements  (whether or not set forth in a written document)  maintained by or
on behalf of NewLogic  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),  profit
sharing or retirement benefits to, or for the benefit of, any active,  former or
retired  service  provider of NewLogic or their  spouses or  dependents  and all
collective  bargaining  agreements covering such service providers are listed in
the NewLogic  Disclosure  Schedule  (collectively,  the  "Plans").  NewLogic has
furnished  or made  available  to Paradigm  copies of the Plans and related Plan
documents. All applicable governmental filings and reports required with respect
to such Plans have been correctly prepared and timely filed with the appropriate
agencies. No

                                      -12-





<PAGE>



Plan is covered by Title IV of the Employee  Retirement  Income  Security Act of
1974,  as  amended  ("ERISA")  or  section  412 of the Code.  Each Plan has been
maintained  and  administered  in all respects in compliance  with its terms and
with the requirements prescribed by all statutes, orders, rules and regulations,
which are applicable to such Plan, except to the extent  noncompliance would not
have a material  adverse  effect on the operation of such Plan. To the knowledge
of NewLogic, no suit, administrative proceeding,  action or other litigation has
been brought,  or is  threatened,  against or with respect to any such Plan. The
consummation  of the  transactions  contemplated  by this Agreement will not (i)
entitle any current or former employee or other service  provider of NewLogic to
severance  benefits or any other payment,  except as expressly  provided in this
Agreement,  or (ii) other than with respect to NewLogic Options,  accelerate the
time of payment or vesting,  or increase the amount of compensation due any such
employee or service provider.

         3.15 Major  Contracts.  Except as set forth in the NewLogic  Disclosure
Schedule, NewLogic is not a party to or subject to:

         (a) Any union  contract or any  employment  or  consulting  contract or
arrangement,  written or oral,  with any director,  officer or affiliate,  other
than  indemnification  agreements,  stock option or stock purchase agreements or
proprietary information agreements;

         (b)  Any  OEM  agreement,   distribution  agreement,   volume  purchase
agreement or other similar  agreement,  or joint venture contract or arrangement
or any other agreement which has involved or is expected to involve a sharing of
profits  with other  persons or provides  for  payments of more than $25,000 per
annum;

         (c) Any lease for  personal  property  involving  payments of more than
$10,000 per annum, or any lease for real property;

         (d) Except for trade  indebtedness  incurred in the ordinary  course of
business,  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,  either as licensor or licensee  other than
license agreements entered into in the ordinary course of business;

         (f) Any contract  containing  covenants  purporting to materially limit
the freedom of  NewLogic  to compete in any line of  business in any  geographic
area;


                                      -13-





<PAGE>



         (g) Any agreement of indemnification,  except indemnification  provided
in the ordinary  course of business or for officers  and  directors  pursuant to
state law;

         (h)  Any  agreement,   contract  or  commitment   relating  to  capital
expenditures in excess of $25,000;

         (i) Any agreement,  contract or commitment  relating to the disposition
or  acquisition  by NewLogic of any assets in excess of $25,000 or any  NewLogic
Intellectual Property Rights (as defined herein);

         (j) Any agreement  providing for minimum payment or resale obligations,
ongoing support or research and development obligations, or warranty obligations
on the part of NewLogic, except arrangements entered into in the ordinary course
of business or arrangements involving payments of less than $25,000 per annum;

         (k) Any  agreement  for the  provision  of  products or services to any
Governmental  Entity,  except customer  agreements  entered into in the ordinary
course of business or arrangements  involving  payments of less than $25,000 per
annum;

         (l) Any  agreement  requiring a  commitment  of NewLogic  resources  or
personnel to market,  distribute or license third-party  products or technology,
whether on a best-efforts basis or otherwise or arrangements  involving payments
of less than $25,000 per annum; or

         (m) Any other  agreement,  contract,  letter of intent,  memorandum  of
understanding or commitment which is material to NewLogic.

         Each material agreement,  contract,  mortgage,  indenture, plan, lease,
instrument, permit, concession,  franchise,  arrangement, license and commitment
to which NewLogic is a party or by which it is bound (i) is valid and binding on
NewLogic in all material respects,  (ii) to the knowledge of NewLogic is in full
force and effect,  (iii) has not been materially breached by NewLogic or, to the
best  knowledge  of  NewLogic,  any other party  thereto,  and (iv)  contains no
material liquidated damages, penalty or similar provision. NewLogic has not been
notified that any party to any such contract, agreement or instrument intends to
cancel,  withdraw,  modify  or  amend in any  material  respect  such  contract,
agreement or instrument.  NewLogic has performed all obligations  required to be
performed by it on or prior to the date hereof under each contract,  obligation,
commitment,  agreement,  undertaking,  arrangement  or lease referred to in this
Agreement or any exhibit  hereto,  and is not  actually  aware of any facts from
which it should  reasonably  conclude  that it will not be able to  perform  all
obligations  required to be performed by it  subsequent to the date hereof under
each such  agreement,  other  than  failures  to  perform  that would not have a
material and adverse effect on the Business Condition of NewLogic.

                                      -14-




<PAGE>




         3.16 Taxes. All Tax returns,  statements,  reports and forms (including
without limitation estimated Tax returns and reports and 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  NewLogic
(collectively, the "NewLogic Returns"), have been or will be completed and filed
when due (including any extensions of such due date),  and all amounts shown due
thereon on or before  the  Closing  have been or will be paid on or before  such
date. The NewLogic  Unaudited  Financial  Statements (a) fully accrue all actual
and contingent  liabilities  for Taxes with respect to all periods through March
31, 1996, and (b) properly  accrue in accordance  with GAAP all  liabilities for
Taxes payable after March 31, 1996 with respect to all  transactions  and events
occurring on or prior to such date.  All  information  set forth in the notes to
the NewLogic Financial  Statements relating to Tax matters is true, complete and
accurate in all material  respects.  To  NewLogic's  knowledge,  no material Tax
liability  since March 31,  1996 has been  incurred  other than in the  ordinary
course of business and adequate provision has been made for all Taxes since that
date in accordance  with GAAP.  NewLogic has withheld and paid to the applicable
financial  institution  or Tax  authority  all amounts  required to be withheld.
NewLogic  has not  granted  any  extension  or waiver of the  limitation  period
applicable to any NewLogic Returns. To NewLogic's knowledge,  there is no claim,
audit,  action,  suit,  proceeding,  or investigation  now pending or threatened
against or with  respect to  NewLogic  in respect of any Tax or  assessment.  No
notice of deficiency or similar  document of any Tax authority has been received
by NewLogic,  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 would, if determined adversely to NewLogic,  adversely affect
the liability of NewLogic for Taxes. NewLogic 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 transactions set forth
herein  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  NewLogic  nor any person on behalf of NewLogic has entered into or will
enter into any  agreement  or consent  pursuant  to section  341(f) of the Code.
NewLogic 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.  NewLogic 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  NewLogic  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.  NewLogic is not a party to or bound
by any Tax indemnity, Tax sharing or Tax allocation agreement which includes a

                                      -15-





<PAGE>



party  other than  NewLogic  nor does  NewLogic  owe any  amount  under any such
Agreement.  NewLogic has previously  provided or made available to Paradigm true
and  correct  copies of all  NewLogic  Returns.  Except as may be  required as a
result of the consummation of the  transactions  set forth herein,  NewLogic has
not been and will not be required to include any material  adjustment in Taxable
income for any Tax period (or portion thereof).  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 (c) 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.

         3.17  Intellectual Property.

         (a) To  NewLogic's  knowledge,  without  inquiry,  NewLogic  owns or is
licensed or is otherwise entitled to exercise,  without restriction,  all rights
to all patents,  trademarks, trade names, service marks, copyrights, mask works,
trade secrets and other  intellectual  property rights,  and any applications or
registrations  therefor,  and all  inventions,  mask work  layouts,  net  lists,
schematics,  technical  drawings,  technology,  know-how,  processes,  formulas,
algorithms,  computer software programs,  documentation,  and all other tangible
and intangible  information or material in any form, used or currently  proposed
to be used in the business of NewLogic as currently  conducted or as proposed to
be conducted, without any conflict with or infringement of the rights of others.

         (b)  The  Intellectual  Property  Disclosure  Schedule  lists:  (i) all
copyrights,  patents, patent applications,  trademarks,  service marks and trade
names  owned by or  exclusively  licensed to  NewLogic  ("NewLogic  Intellectual
Property Rights");  (ii) the  jurisdiction(s) in which an application for patent
or application  for  registration  of each such NewLogic  Intellectual  Property
Right has been made,  including the  respective  application  numbers and dates;
(iii) the  jurisdiction(s)  in which each such  NewLogic  Intellectual  Property
Right has been  patented  or  registered,  including  the  respective  patent or
registration numbers

                                      -16-





<PAGE>



and dates; (iv) all licenses, sublicenses and other agreements to which NewLogic
is a party and pursuant to which any other party is authorized to use, exercise,
or receive any benefit from any NewLogic  Intellectual  Property Right;  and (v)
all parties to whom  NewLogic has delivered  copies of  NewLogic's  source code,
whether pursuant to an escrow arrangement or otherwise,  or parties who have the
right to receive such source code.  NewLogic has delivered or made  available to
Paradigm copies of all licenses,  sublicenses,  and other agreements  identified
pursuant to clause (iv) above.

         (c) To NewLogic's knowledge,  without inquiry, NewLogic is the owner or
exclusive  licensee  of, with all right,  title and interest in and to (free and
clear  of  any  liens,   encumbrances  or  security  interests),   the  NewLogic
Intellectual  Property Rights and has the rights to use, sell, license,  assign,
transfer,  convey or dispose  thereof or the  products,  processes and materials
covered thereby. NewLogic has taken all commercially reasonable steps, including
without  limitation  the  filing  and  prosecution  of  patent,  copyright,  and
trademark  applications  to perfect  and protect  its  interest in the  NewLogic
Intellectual  Property  Rights in all countries in which NewLogic does business;
and NewLogic  has the  exclusive  right to file,  prosecute,  and maintain  such
applications and the patents and registrations that issue therefrom.

         (d) To NewLogic's  knowledge,  all patents and  registered  trademarks,
service  marks and trade names and  registered  copyrights  held by NewLogic are
valid and enforceable.  To NewLogic's knowledge, there has not been and there is
not now any unauthorized  use,  infringement or  misappropriation  of any of the
NewLogic  Intellectual  Property Rights by any third party,  including,  without
limitation, any service provider of NewLogic.

         (e)  NewLogic  has not brought any  actions or  lawsuits  alleging  (i)
infringement of any NewLogic  Intellectual Property Rights or (ii) breach of any
license,  sublicense  or other  agreement  authorizing  another party to use the
NewLogic  Intellectual Property Rights. No person has asserted or, to NewLogic's
knowledge,  threatened  to  assert  any  claims  with  respect  to the  NewLogic
Intellectual  Property  Rights  (i)  contesting  the right of  NewLogic  to use,
exercise,  sell,  license,  transfer  or  dispose of any  NewLogic  Intellectual
Property Rights or any products,  processes or materials covered thereby or (ii)
challenging  the ownership,  validity or  enforceability  of any of the NewLogic
Intellectual Property Rights. No NewLogic Intellectual Property Right is subject
to any outstanding order, judgment,  decree, stipulation or agreement related to
or restricting in any manner the licensing,  assignment,  transfer or conveyance
thereof by NewLogic.

         (f) The Intellectual Property Disclosure Schedule separately lists: (i)
all copyrights,  patents, patent applications,  trademarks, service marks, trade
names, and other company,

                                      -17-




<PAGE>



product or service identifiers licensed to NewLogic ("In- licensed  Intellectual
Property Rights"); (ii) all licenses,  sublicenses and other agreements to which
NewLogic  is a party  and  pursuant  to which  NewLogic  is  authorized  to use,
exercise,  or receive any benefit  from any  In-Licensed  Intellectual  Property
Right.  NewLogic  has  delivered  or made  available  to Paradigm  copies of all
licenses,  sublicenses,  and other agreements identified pursuant to clause (ii)
above.  NewLogic is in compliance  with all material terms and conditions of all
such licenses,  sublicenses, and other agreements.  NewLogic has no knowledge of
any assertion, claim or threatened claim that NewLogic has breached any terms or
conditions of such licenses,  sublicenses, or other agreements. To the knowledge
of  NewLogic,  no  In-Licensed  Intellectual  Property  Right is  subject to any
outstanding  order,  judgment,  decree,  stipulation or agreement  related to or
restricting in any manner the use or licensing thereof by NewLogic.

         (g)  NewLogic  is not,  nor will be as a result  of the  execution  and
delivery  of  this  Agreement  or  the  performance  of  NewLogic's  obligations
hereunder,  in violation  of, or lose or in any way impair any  material  rights
pursuant to any license,  sublicense or agreement  described in the Intellectual
Property Disclosure Schedule.

         (h)  NewLogic  knows of no claims to the effect  that the  manufacture,
marketing, license, sale or use of any product or service as now used or offered
or proposed for use or sale by NewLogic 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.  NewLogic has not entered into any
agreement to indemnify any other person  against any charge of  infringement  of
any third party  intellectual  property right,  NewLogic  Intellectual  Property
Right or In-Licensed Intellectual Property Right.

         (i) NewLogic has taken all commercially reasonable steps to protect and
preserve  the   confidentiality   of  all  inventions,   algorithms,   formulas,
schematics,   technical  drawings,  ideas,  know-how,  processes  not  otherwise
protected by patents or patent applications,  source code, program listings, and
trade secrets  ("Confidential  Information"),  including without  limitation the
marking of such  Confidential  Information  with  appropriate  "Proprietary"  or
"Confidential"   legends,  the  establishment  of  policies  for  the  handling,
disclosure,  and use of Confidential  Information,  and the acquisition of valid
written   nondisclosure   agreements  from  any  party  receiving   Confidential
Information.  All  Confidential  Information  is presently and as of the Closing
will be located at NewLogic's address as set forth in this Agreement.  No person
other than NewLogic has used, divulged or appropriated  Confidential Information
except for the benefit of NewLogic. No person has used, divulged or appropriated
Confidential Information to the detriment of NewLogic other than pursuant to the
terms of written agreements between NewLogic and

                                      -18-



<PAGE>



such other persons.  NewLogic has delivered or made available to Paradigm copies
of all  nondisclosure  agreements or other agreements  relating to the handling,
disclosure, and use of Confidential Information.

         3.18 Service Provider Agreements.  To NewLogic's knowledge,  no service
provider of NewLogic  currently  is in  violation  of any  material  term of any
employment agreement (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 NewLogic.  Each employee or  consultant-inventor  has
executed a written  agreement validly assigning his or her rights to NewLogic on
all inventions,  pending patent applications,  all patents issued, and all other
intellectual  property rights  developed by such service  provider while working
for  NewLogic.  NewLogic  does not believe that it is or will be  necessary  for
NewLogic to utilize any inventions of any of its service providers (or people it
currently  intends to hire) made prior to their  employment  by or  relationship
with NewLogic.

         3.19  Restrictions  on Business  Activities.  To NewLogic's  knowledge,
there is no  agreement,  judgment,  injunction,  order or  decree  binding  upon
NewLogic  or which has or could  reasonably  be  expected  to have the effect of
prohibiting  or  significantly  impairing  any  material  business  practice  of
NewLogic,  any material acquisition of property by NewLogic, or the continuation
in all material  respects of the business of NewLogic as currently  conducted or
as currently proposed to be conducted.

         3.20 Title to Properties; Absence of Liens and Encumbrances;  Condition
of Equipment.

         (a)  NewLogic does not own any real property.

         (b)  All of the  existing  NewLogic  real  property  leases  have  been
previously  delivered or made  available to  Paradigm.  The NewLogic  Disclosure
Schedule sets forth a complete and accurate list of all real property  leased by
NewLogic.

         (c)  NewLogic  has valid  leasehold  interests  in all of its  material
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  NewLogic  Financial   Statements  and  except  for  such
imperfections  of title and  encumbrances,  if any, which are not substantial in
character,  amount or extent,  and which do not and are not reasonably likely to
materially  detract from the value,  or  interfere  with the present use, of the
property subject thereto or affected thereby.

         3.21 Environmental  Matters.  To NewLogic's  knowledge,  NewLogic is in
substantial compliance with all applicable

                                      -19-




<PAGE>



federal,  state or 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  reasonably  be expected to have a material and adverse  effect on the
Business Condition of NewLogic.

         3.22  Insurance.  The NewLogic  Disclosure  Schedule lists all material
insurance policies and fidelity bonds covering the assets, business,  equipment,
properties,  operations,  employees, officers and directors of NewLogic, and the
amounts of coverage  under each such policy and bond of  NewLogic.  NewLogic has
not been refused any requested  coverage and no material  claim made by NewLogic
has been denied by the  underwriters  of such  policies or bonds.  All  premiums
payable  under all such  policies  and bonds have been  paid,  and  NewLogic  is
otherwise in full compliance with the terms of such policies and bonds (or other
policies and bonds providing  substantially  similar insurance  coverage) except
where the  failure to be in  compliance  would not have a material  and  adverse
effect on the  Business  Condition of  NewLogic.  NewLogic  does not know of any
threatened  termination  of, the  invalidation  of any  coverage  of or material
premium increase with respect to, any of such material policies.

         3.23 Labor Matters. To NewLogic's knowledge,  NewLogic 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 NewLogic is not engaged in any unfair labor  practice.  NewLogic
has not  received  any notice from any  Governmental  Entity and, to  NewLogic's
knowledge,  there has not been  asserted  before any  Governmental  Entity,  any
claim,  action or  proceeding  to which  NewLogic is a party and, to  NewLogic's
knowledge,  there is neither pending nor threatened any investigation or hearing
concerning  NewLogic arising out of or based upon any such laws,  regulations or
practices.

         3.24  Personnel.

         (a) NewLogic has supplementally provided to Paradigm a list identifying
all  current  directors,   officers,  employees,   independent  contractors  and
consultants of NewLogic,  setting forth the job title of, and salary  (including
bonuses and commissions)  payable to each such person. The employment of each of
NewLogic's  employees  is "at  will"  employment.  NewLogic  does  not  have any
contractual  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 NewLogic  employees under any
NewLogic agreement, plan or program as a result of the transactions set forth in
this Agreement. NewLogic has not entered into any consulting agreements with any

                                      -20-





<PAGE>



service  provider who owes services to or are owed  compensation by NewLogic for
services provided in excess of $10,000.

         (b)  NewLogic  has  no  outstanding  obligation  (whether  contractual,
statutory,  at law or in equity) to pay to its former employee Peter  MacCormick
any compensation, severance or other benefits or other payments, or to issue Mr.
MacCormick any shares of capital stock of or other equity  interest in NewLogic,
and NewLogic has incurred no other  liability to Mr.  MacCormick,  other than an
obligation to sell to Mr. MacCormick,  upon the timely and valid exercise of his
purchase right, up to 24,000 shares of NewLogic Common Stock,  which the parties
acknowledge and agree possess a maximum aggregate monetary value of $15,609. Mr.
MacCormick  on the date hereof has no right,  title or interest in or to (i) any
of  NewLogic's  products,  patents,  trademarks,  trade  names,  service  marks,
copyrights,  mask works, trade secrets or other intellectual property rights, or
any applications or registrations  therefor,  or (ii) any inventions,  mask work
layouts,  schematics,  technical  drawings,  technology,   processes,  formulas,
algorithms,  computer  software  programs,  documentation  or other  tangible or
intangible  information or material in any form,  used or proposed to be used in
the business of NewLogic as currently  conducted or as proposed to be conducted,
that were created or developed by Mr.  MacCormick,  in whole or in part,  during
the period he was  employed by or provided  services  to  NewLogic.  The parties
agree that any liability of Paradigm to Mr.  MacCormick  arising from the breach
of this  Section  3.24(b)  shall be a 13.2(a)  Indemnifiable  Claim  (defined in
Section 13.2(a) below).

         3.25  Third-Party  Consents.  To  NewLogic's  knowledge,  no consent or
approval is needed from any third party in order to effect the sale or surrender
of the Securities or any of the other transactions contemplated hereby.

         3.26 Related Party  Transactions.  No employee,  officer or director of
NewLogic or member of his or her immediate  family is indebted to NewLogic,  nor
is NewLogic  indebted (or committed to make loans or extend or guarantee credit)
to any of them. To NewLogic's knowledge,  none of such persons has any direct or
indirect  ownership  interest in any firm or corporation  with which NewLogic is
affiliated or with which  NewLogic has a business  relationship,  or any firm or
corporation that competes with NewLogic, except that the employees,  officers or
directors of NewLogic and members of their  immediate  families may own stock in
publicly  traded  companies  that may compete  with  NewLogic.  No member of the
immediate  family of any officer or director of NewLogic is directly  interested
in any material contract with NewLogic.

         3.27  Brokers  or  Finders;   Professional  Fees.  No  agent,   broker,
investment  banker or other  firm or  person  is,  or will be,  pursuant  to any
agreement made or entered into by NewLogic, entitled to any broker's or finder's
fee or any other commission

                                      -21-





<PAGE>



or similar fee in connection with any of the transactions contemplated  by  this
Agreement.

         3.28 Permit  Application.  The information  supplied by NewLogic on its
behalf and on behalf of the Securityholders for inclusion in the application for
issuance of a permit  pursuant to section 25121 of the  California  Corporations
Code pursuant to which the Stock  Consideration  will be qualified  shall not at
the  time  the  fairness  hearing  is held  pursuant  to  section  25142  of the
California  Corporations  Code and the time the qualification of such securities
is effective under section 25122 of the California Corporations Code contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the circumstances under which they were made, not misleading.

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF SECURITYHOLDERS

         Each  Securityholder  represents  and  warrants  to  Paradigm  that the
representations and warranties set forth in this Article are true and correct as
of the date hereof. The  representations  and warranties of each  Securityholder
are made by and on behalf of that  Securityholder  alone, and are not made by or
on behalf of any other Securityholder.

         4.1  Authority.

         (a) Such  Securityholder has all requisite power and authority to enter
into this Agreement, to execute,  deliver and perform its obligations hereunder,
including  the  surrender  of any  NewLogic  Options to be  surrendered  by such
Securityholder,  and to consummate the transactions  contemplated  hereby.  This
Agreement  is a legal,  valid and  binding  obligation  of such  Securityholder,
enforceable  against such Securityholder 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 this
Agreement,  to such  Securityholder's  knowledge,  the execution and delivery of
this Agreement does not and the performance and consummation of the transactions
contemplated  hereby will not, conflict with or result in any material violation
of any material statute,  law, rule,  regulation,  judgment,  order,  decree, or
ordinance  applicable to such Securityholder or any material agreement affecting
such Securityholder or the Securities held by such Securityholder.


                                      -22-






<PAGE>



         (c) No consent,  approval,  order or authorization of, or registration,
declaration  of, or  qualification  or filing with, any  Governmental  Entity is
required  by or with  respect  to such  Securityholder  in  connection  with the
execution,  delivery and performance of this Agreement by such Securityholder or
the consummation by such Securityholder of the transactions contemplated hereby,
except for such  consents,  approvals,  orders,  authorizations,  registrations,
declarations,   qualifications  or  filings  as  may  be  required  under  state
securities  or Blue  Sky laws in  connection  with the  transactions  set  forth
herein.

         4.2 Title to Securities.  Good and marketable and unencumbered title to
all of the Securities  held by such  Securityholder  shall pass to Paradigm upon
consummation of the transactions set forth in this Agreement.

         4.3 Third-Party Consents.  Except as contemplated by Section 4.1(c), no
consent or  approval  is needed from any third party in order to effect the sale
or surrender of the Securities held by such Securityholder.

         4.4 Brokers or Finders; Professional Fees. No agent, broker, investment
banker,  or other firm or person is, or will be,  pursuant to any agreement made
or entered into by a Securityholder, entitled to any broker's or finder's fee or
any other  commission or similar fee in connection with any of the  transactions
contemplated by this Agreement.

                                    ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF PARADIGM

         Except as described in the Paradigm  disclosure  schedule  certified by
the  President  of Paradigm and  delivered by Paradigm to NewLogic  prior to the
execution of this  Agreement  (the  "Paradigm  Disclosure  Schedule"),  Paradigm
represents and warrants to NewLogic that the  representations and warranties set
forth  below  are  true  and  correct  as of the  date  hereof.  As used in this
Agreement,  (a)  "Business  Condition"  with respect to Paradigm  shall mean the
financial condition,  business,  prospects,  results of operations and assets of
Paradigm and all of its subsidiaries taken as a whole as presently  conducted or
as proposed to be conducted; (b) a disclosure or result will be deemed "material
and adverse" only if,  individually or when aggregated with other disclosures or
results, it gives or could give rise to a substantial diminution in the economic
value of Paradigm and (c) "to the knowledge of Paradigm" and like phrases shall,
unless  otherwise  qualified,  refer to the  knowledge of  Paradigm's  executive
officers and directors upon reasonable inquiry.

         5.1  Organization;  Standing and Power.  Paradigm is a corporation duly
organized,  validly existing and in good standing under the laws of its state of
incorporation and has

                                      -23-




<PAGE>



all  requisite  corporate  power and  authority  to own,  operate  and lease its
properties and to carry on its business as now being conducted. Paradigm 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
Paradigm's Business Condition.

         5.2  Authority.

         (a) Paradigm has all requisite  corporate  power and authority to enter
into this Agreement, to execute,  deliver and perform its obligations hereunder,
and to  consummate  the  transactions  contemplated  hereby.  The  execution and
delivery of this  Agreement,  the  performance  by  Paradigm of its  obligations
hereunder and the consummation of the transactions contemplated hereby have been
duly and validly  authorized  by all necessary  corporate  action on the part of
Paradigm,  including  approval  by its Board of  Directors.  No vote of Paradigm
shareholders is required in connection with the  transactions  set forth in this
Agreement.  This Agreement is a legal,  valid and binding obligation of Paradigm
enforceable against Paradigm 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 this
Agreement,  to Paradigm's knowledge the execution and delivery of this Agreement
does not and the performance and consummation of the  transactions  contemplated
hereby  will  not,  conflict  with or result in any  material  violation  of any
material statute, law, rule, regulation,  judgment,  order, decree, or ordinance
applicable to Paradigm 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 material obligation or the loss of a material benefit under,
or result in the creation of a lien or  encumbrance  on any of the properties or
assets  of  Paradigm  pursuant  to  (i)  any  provision  of its  Certificate  of
Incorporation  or  Bylaws,  or (ii) any  agreement,  contract,  note,  mortgage,
indenture, lease, instrument, permit, concession,  franchise or license to which
Paradigm is a party or by which  Paradigm or any of its properties or assets may
be bound or affected,  except such violations that would not have a material and
adverse effect on the Business Condition of Paradigm.

         (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 Paradigm in  connection  with the  execution  and
delivery of this Agreement or the  consummation by Paradigm of the  transactions
contemplated hereby, except for (i) the filing of documents

                                      -24-





<PAGE>



with,  and the  obtaining of orders  from,  any state  securities  or "blue sky"
authorities and 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 (ii) the failure of which to
obtain would not have a material and adverse effect on the Business Condition of
Paradigm.

         5.3 Paradigm Financial Statements. The financial statements of Paradigm
included in the annual,  quarterly or other  reports  filed by Paradigm with the
Securities  and  Exchange   Commission  (the  "SEC")  (the  "Paradigm  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 generally  accepted
accounting  principles  consistently  applied (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC) and fairly present the consolidated  financial  position of Paradigm
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).

         5.4 Litigation. To the knowledge of Paradigm, there is no action, suit,
proceeding,  arbitration,  investigation or claim pending or threatened  against
Paradigm which in any manner  challenges or seeks to prevent,  enjoin,  alter or
materially delay any of the transactions contemplated hereby.

         5.5  Reports.  Paradigm  has  previously  made  available  to  NewLogic
complete  and accurate  copies,  as amended or  supplemented,  of (a) its Annual
Report on Form 10-K filed with the SEC for the year ended December 31, 1995 (the
"1995 10-K"),  and (b) all other reports and filings made with the SEC since the
filing of the 1995 10-K  (such  reports  and other  filings,  together  with any
amendments or supplements  thereto,  are collectively  referred to herein as the
"Paradigm Reports").  As of their respective dates, the Paradigm 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.

         5.6  Compliance  with Laws.  To  Paradigm's  knowledge,  Paradigm is in
compliance  and has  conducted  its  business  so as to  comply  with all  laws,
ordinances,  rules  and  regulations,   judgments,  decrees  or  orders  of  any
Governmental  Entity,   except  to  the  extent  that  any  failure  to  comply,
individually  or in the aggregate,  would not have a material  adverse effect on
the Business  Condition  of  Paradigm.  To  Paradigm's  knowledge,  there are no
judgments  or orders,  injunctions,  decrees,  stipulations  or awards  (whether
rendered by a court or administrative agency

                                      -25-





<PAGE>



or by arbitration) against Paradigm or any of its properties or businesses, and,
to the knowledge of Paradigm, none are pending or threatened, which individually
or in the  aggregate  would have a material  and adverse  effect on the Business
Condition of Paradigm.

         5.7  Material  Contracts.  Except to the  extent  not  material  to the
Business Condition of Paradigm, each agreement,  contract, mortgage,  indenture,
plan, lease, instrument, permit, concession, franchise, arrangement, license and
commitment to which Paradigm or any of its  subsidiaries is a party or by which,
to its  knowledge,  it is bound  (a) is valid and  binding  on  Paradigm  in all
material  respects,  (b) to the  knowledge  of  paradigm,  is in full  force and
effect,  and (c) has not  been  breached  by  Paradigm  or to the  knowledge  of
Paradigm, any other party thereto. To the knowledge of Paradigm, no party to any
such contract,  agreement or instrument intends to cancel,  withdraw,  modify or
amend such contract, agreement or arrangement,  except to the extent such action
would not have a  material  and  adverse  effect on the  Business  Condition  of
Paradigm.

         5.8  Taxes.

         (a) All Tax returns, statements, reports and forms (including estimated
Tax  returns and reports and  information  returns and  reports)  required to be
filed with any Tax  authority  with respect to any Taxable  period  ending on or
before the consummation of the transactions set forth herein, by or on behalf of
Paradigm (collectively, the "Paradigm Returns"), have been or will be filed when
due (including any extensions of such due date), and all amounts shown to be due
thereon on or before  the  Closing  have been or will be paid on or before  such
date, except to the extent such failure to file or pay has not had and would not
have a material and adverse effect on the Business Condition of Paradigm.

         (b) The  consolidated  financial  statements  of Paradigm  contained in
Paradigm's  Annual Report to  Stockholders  for the year ended December 31, 1995
fully accrue all actual and contingent liabilities for Taxes with respect to all
periods through the date thereof in accordance with GAAP.

         5.9  Restrictions  on  Business  Activities.  There  is  no  agreement,
judgment,  injunction,  order or decree binding upon Paradigm which has or would
have the effect of prohibiting or significantly  impairing any material business
practice of Paradigm,  any material acquisition of property by Paradigm,  or the
continuation  in all material  respects of the business of Paradigm as currently
conducted or as currently proposed to be conducted.

         5.10 Governmental  Authorizations and Licenses.  Paradigm is the holder
of all licenses,  authorizations,  permits, concessions,  certificates and other
franchises of any Governmental

                                      -26-





<PAGE>



Entity required to operate its business (collectively,  the "Paradigm Government
Licenses") which Paradigm  Government Licenses are in full force and effect, and
is in material compliance with the terms, conditions, limitations, restrictions,
standards,   prohibitions,   requirements   and  obligations  of  such  Paradigm
Government  Licenses  except to the  extent  failure to hold and  maintain  such
Paradigm  Government  Licenses  or to so comply  would not have a  material  and
adverse  effect on the  Business  Condition  of  Paradigm.  To the  knowledge of
Paradigm,  there is not now pending, nor is there threatened,  any action, suit,
investigation or proceeding against Paradigm before any Governmental Entity with
respect  to the  Paradigm  Government  Licenses,  nor is  there  any  issued  or
outstanding notice, order or complaint with respect to the violation by Paradigm
of the  terms of any  Paradigm  Government  License  or any  rule or  regulation
applicable  thereto,  except to the extent that any such action would not have a
material and adverse effect on the Business Condition of Paradigm.

         5.11  Environmental  Matters.   Paradigm  is,  to  its  knowledge,   in
substantial compliance with all applicable federal, state or 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 reasonably be expected to
have a material and adverse effect on the Business Condition of Paradigm.

         5.12 Questionable Payments. Neither Paradigm nor, to its knowledge, any
director, officer or other employee, agent or representative of Paradigm 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 Paradigm; or (b) made any political contributions which, to the best
knowledge of Paradigm,  would not be lawful under the laws of the United  States
or the foreign country in which such payments were made.  Neither  Paradigm nor,
to  its  knowledge,   any  director,   officer  or  other  employee,   agent  or
representative  of Paradigm 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 Paradigm or with  respect to any
political contribution.

         5.13 Brokers or Finders;  Professional Fees. Other than as reflected in
that certain letter agreement  between  Paradigm and Bentley Hall & Company,  no
agent,  broker,  investment  banker  or other  firm or  person  is,  or will be,
pursuant to any  agreement  made or entered  into by  Paradigm,  entitled to any
broker's or finder's fee or any other commission or similar fee in

                                      -27-





<PAGE>



connection with any of the transactions contemplated by this Agreement.

         5.14 Permit  Application.  The  information  supplied  by Paradigm  for
inclusion in the  application for issuance of a permit pursuant to section 25121
of the California  Corporations  Code pursuant to which the Stock  Consideration
will be qualified shall not at the time the fairness hearing is held pursuant to
section 25142 of the California Corporations Code and the time the qualification
of  such   securities  is  effective  under  section  25122  of  the  California
Corporations  Code contain any untrue  statement  of a material  fact or omit to
state any material fact  required to be stated  therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

         5.15  Section  368(a)  Reorganization.  Subject  in  each  case  to the
assumptions,  conditions and  representations set forth and relied on in the Tax
Opinion delivered pursuant to Section 10.8 below, the transactions  contemplated
hereby  will   constitute,   with   respect  to  the  Stock   Consideration,   a
reorganization within the meaning of section 368(a) of the Code.

                                   ARTICLE VI

                              COVENANTS OF NEWLOGIC

         6.1 Maintenance of Business.  During the period from the date hereof to
the Closing, NewLogic shall carry on and use all commercially reasonable efforts
to preserve in all material  respects its business,  operations and  facilities,
the goodwill of the business,  operations and facilities and relationships  with
its employees and all significant customers,  suppliers,  agents,  licensees and
others with respect to the business,  operations and facilities in substantially
the same manner as NewLogic  did prior to the date hereof.  If NewLogic  becomes
aware of a deterioration in a relationship with any such employee or significant
customer,  supplier, licensee or agent with respect to the business,  operations
and facilities,  NewLogic will promptly bring such  information to the attention
of Paradigm  and will use all  commercially  reasonable  efforts to restore such
relationship.

         6.2 Conduct of Business. From the date hereof until the Closing, except
as expressly  permitted  hereby,  NewLogic  shall not without  Paradigm's  prior
written consent:

         (a)  incur  any  indebtedness  for  money  borrowed  or  guarantee  any
indebtedness or obligation of any other party except in the ordinary course;

         (b) set aside or pay any  dividend  or  distribution  of assets  to, or
repurchase any of its stock from any of its shareholders;

                                      -28-






<PAGE>




         (c) issue or grant any securities or securities convertible into common
stock or grant or issue any  options,  warrants or rights to  subscribe  for its
common stock or securities convertible into its common stock;

         (d)  enter  into,  amend or  terminate  any  employment  or  consulting
agreement or any similar agreement or arrangement;

         (e) increase or modify the compensation payable or to become payable to
any of its  officers,  directors,  employees  or  agents,  or adopt or amend any
employee benefit plan or arrangement;

         (f) acquire or dispose of by sale,  lease,  license or other means, any
properties  or assets  used in its  business  except in the  ordinary  course of
business;

         (g) waive or commit to waive any rights of substantial value;

         (h)  permit  any  material  change in the manner in which its books and
records are maintained;

         (i)  create  or suffer  to be  imposed  any  material  lien,  mortgage,
security interest or other charge on or against its properties or assets;

         (j)  enter  into,  amend or  terminate  any  lease of real or  personal
property otherwise than in the ordinary course of business;

         (k)  amend its Certificate of Incorporation or Bylaws;

         (l) engage in any  activities  or  transactions  outside  the  ordinary
course of its business;

         (m) make any  material  amendments  or  changes in any  instruments  or
agreements delivered by it or its representatives to Paradigm or its counsel;

         (n) grant any severance or  termination  pay to any director,  officer,
employee or  consultant,  except  mandatory  payments  made pursuant to standard
written  agreements  outstanding  on the date hereof (with any such agreement or
arrangement to be disclosed in the NewLogic Schedule); or

         (o)  transfer  to any  person or  entity  any  rights  to the  NewLogic
Intellectual Property Rights.

         6.3  Necessary  Consents.  Prior to the  Closing,  at the  request  and
direction of Paradigm,  NewLogic will use its commercially reasonable efforts to
obtain such written  consents and take such other  actions as may be  reasonably
necessary or appropriate to allow the continuation of its businesses in all

                                      -29-




<PAGE>



material respects by Paradigm after the Closing as conducted on the date hereof.

         6.4 Access to  Information.  NewLogic  shall give to  Paradigm  and its
accountants,  legal counsel and other  representatives full and complete access,
during normal  business hours  throughout the period from the date hereof to the
Closing,  to all of the properties,  books,  contracts,  commitments and records
relating to the business,  assets and liabilities of NewLogic,  and will furnish
Paradigm,  its accountants,  legal counsel and other representatives during such
period all such  information  concerning  its affairs as Paradigm may reasonably
request.

         6.5 Further Assurances.  NewLogic will use all commercially  reasonable
efforts to perform and fulfill all  obligations  to be performed  and  fulfilled
under  this  Agreement,  and  to  cause  all  the  conditions  precedent  to the
consummation  of the  transactions to be timely  satisfied,  to the end that the
transactions  contemplated by this Agreement shall be effected  substantially in
accordance with its terms. Notwithstanding the foregoing,  NewLogic will use its
best efforts to ensure that all  Securityholders  will enter into this Agreement
promptly  following  the  issuance of the  fairness  determination  described in
Section 5.14 above.  NewLogic shall  cooperate with Paradigm in such actions and
in securing  requisite  approvals  and shall  deliver such further  documents as
Paradigm may reasonably request as necessary to evidence such transactions.

         6.6 Exclusivity;  Acquisition Proposals. Until the earliest to occur of
May 15, 1996, valid termination of this Agreement, or the Closing:

         (a) NewLogic  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
         employees of NewLogic or any affiliates), other than Paradigm (a "Third
         Party"),  relating  to  any  acquisition  or  purchase  of  all  or any
         significant  portion  of the  assets  of, or any  equity  interest  in,
         NewLogic or any merger,  consolidation  or  business  combination  with
         NewLogic;

                  (ii)  other  than  in  the   ordinary   course  of   business,
         participate in any discussions or negotiations regarding, or furnish to
         any Third Party any

                                      -30-





<PAGE>



         confidential  information  with  respect to  NewLogic  or  Paradigm  in
         connection  with any  acquisition or purchase of all or any significant
         portion of the assets of, or any equity  interest  in,  NewLogic or any
         merger, consolidation or business combination with NewLogic; or

                  (iii)  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  significant  portion of the assets of, or any equity  interest in,
         NewLogic or any merger,  consolidation  or  business  combination  with
         NewLogic.

         (b) In the event that,  prior to  termination  of this Agreement or the
Closing,  NewLogic  receives 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, NewLogic or any merger,  consolidation  or
business  combination with NewLogic,  NewLogic shall promptly notify Paradigm 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 NewLogic  by the Third Party or in  connection
therewith.

         (c) NewLogic  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.

         (d) In the event the  Fairness  Hearing  (defined in Section 7.7 below)
has not occurred by May 15, 1996, the exclusive  dealing  covenants set forth in
this Section 6.6 shall  automatically be extended for ten (10) day periods until
the earlier to occur of the Closing or the valid termination of this Agreement.

         6.7 Breach of  Representations,  Warranties,  Agreements and Covenants.
NewLogic  shall not knowingly  take, or knowingly fail to take, any action which
from the date hereof  through the Closing  would cause or  constitute a material
breach of any of its representations,  warranties,  agreements and covenants set
forth in this Agreement. Promptly after becoming aware of the actual, pending or
threatened  occurrence  of any event  which  would  cause or  constitute  such a
material  breach or  inaccuracy,  NewLogic shall give notice thereof to Paradigm
and shall use all commercially  reasonable efforts to prevent or promptly remedy
such breach or inaccuracy.

         6.8  Legal  Conditions  to the  Sale or  Surrender  of the  Securities.
NewLogic  shall  take,  and shall  cause to be  taken,  all  reasonable  actions
necessary to comply promptly with all legal requirements which may be imposed on
NewLogic with respect

                                      -31-





<PAGE>



to the  consummation  of the  transactions  set forth  herein and will  promptly
cooperate with and furnish  information to Paradigm in connection  with any such
requirements  imposed upon Paradigm in connection  with the  consummation of the
transactions set forth herein. NewLogic shall take, and shall cause to be taken,
all  reasonable  actions to obtain (and to cooperate with Paradigm in obtaining)
any  consent,  authorization,  order or approval  of, or any  exemption  by, any
Governmental Entity required to be obtained or made by NewLogic (or by Paradigm)
in connection with the  consummation of the transactions set forth herein or the
taking of any  action  contemplated  thereby  or by this  Agreement,  to lift or
rescind  any  injunction  or  restraining  order or other order  materially  and
adversely  affecting the ability of the parties to consummate  the  transactions
contemplated hereby as NewLogic deems advisable in good faith, and to effect all
necessary  registrations  and filings and submissions of information as NewLogic
deems  advisable  in good faith  required  by any  Governmental  Entity,  and to
fulfill all conditions to this Agreement.

         6.9  Post-Closing Covenants.

         (a) Commencing from and after the Closing,  and for a period of two (2)
years following the Closing,  no Securityholder  shall voluntarily resign his or
her   employment   with  or  Service   Provision  for  Paradigm  (or  any  legal
successor-in-interest to Paradigm), or act or fail to act in such a manner as to
give rise to such Securityholder's termination for "Cause" (as defined below) by
Paradigm  (or  any  such  successor-in-interest).   The  parties  agree  that  a
Securityholder's  resignation  of employment  from, or termination of employment
for Cause by, Paradigm, on or before the second anniversary of the Closing Date,
shall  constitute a Breach (as defined in Section 13.2) of this Section  6.9(a).
Nothing  in  this  Section  6.9(a)  shall  in any  way  prohibit  Paradigm  from
terminating the employment of one or more  Securityholders  for any reason, with
or without Cause.  For purposes of this Section  6.9(a),  "Cause" shall mean (i)
any act of personal  dishonesty taken by the  Securityholder  in connection with
his/her  responsibilities  as an employee of Paradigm  and intended to result in
his/her substantial personal enrichment,  (ii) such Securityholder's  conviction
of a felony which  Paradigm  reasonably  determines  had or will have a material
detrimental  effect  on  Paradigm's  reputation  or  business,  (iii) a  grossly
negligent  or  willful  act  by  such  Securityholder  which  constitutes  gross
misconduct and which is injurious to Paradigm,  or (iv) continued  violations by
such  Securityholder of his/her  obligations  which are demonstrably  willful or
grossly  negligent  on  his/her  part  after  there has been  delivered  to such
Securityholder  a written demand for  performance  from Paradigm which describes
the basis for  Paradigm's  belief  that he/she has not  substantially  performed
his/her duties.  In addition,  for purposes of this Section 6.9(a), in the event
Paradigm,  without Cause and without the affected  Securityholder's consent, (A)
substantially  reduces the amount of such  Securityholder's  base  compensation,
other than any such reduction which is part

                                      -32-





<PAGE>



of, and generally  consistent with, a general reduction of salaries of employees
holding  similar  positions,  (B) materially  adversely  affects his/her working
conditions  at Paradigm in a manner that  disproportionately  adversely  affects
such  Securityholder,  as compared to other Paradigm employees generally, or (C)
unilaterally  and   substantially   changes  his/her  title  and  duties,   such
Securityholder's  resignation of employment  will be treated as a termination of
employment by Paradigm without Cause;  provided,  however,  that with respect to
acts  described  in  subsections  (B)  and  (C)  above,  such   Securityholder's
resignation  will not be treated as a constructive  termination  unless Paradigm
fails to  restore  his/her  prior  working  conditions,  title or  duties in all
material  respects  within  thirty (30) days after  notice to the  President  of
Paradigm  setting  forth in  reasonable  detail  the  respects  in which  he/she
believes the act constitutes constructive termination.

         (b) The parties  acknowledge  that the  Business  Condition of NewLogic
would be  materially  adversely  affected  by the  failure to  replace  its chip
architect,  the  position  held until  recently by Nicholas  Wade.  Prior to the
expiration of sixty (60) days from the date hereof, the Securityholders,  or any
of them, shall identify, recruit and cause to be hired by Paradigm,  pursuant to
employment  terms  reasonably   acceptable  to  Paradigm,   an  individual  with
credentials,  expertise and experience  reasonably  similar in scope and subject
matter to NewLogic's prior chip architect. Paradigm's decision whether to employ
any such  individual  shall be made by  Paradigm  in its  sole  discretion.  The
parties  agree that the failure to complete such  recruitment  and hiring within
the time frame specified above shall  constitute a Breach (as defined in Section
13.2) of this Section 6.9(b).

         6.10  Public  Announcements.  NewLogic  will  consult in  advance  with
Paradigm concerning the timing and content of any announcement, press release or
public  statement  concerning the  transactions  set forth in this Agreement and
will not make any such  announcement,  release or statement  without  Paradigm's
prior written consent.

                                   ARTICLE VII

                              COVENANTS OF PARADIGM

         7.1 Necessary Consents. Prior to the Closing, Paradigm will obtain such
consents and take such other actions as may be necessary or appropriate to allow
the consummation of the transactions contemplated hereby.

         7.2  Access  to  Information.  Paradigm  shall  give  NewLogic  and its
accountants,  legal counsel and other representatives full access, during normal
business  hours  throughout  the  period  prior  to the  Closing,  to all of the
properties, books, contracts,  commitments and records relating to the business,
assets

                                      -33-





<PAGE>



and liabilities of Paradigm, and will furnish NewLogic,  its accountants,  legal
counsel  and other  representatives  during  such  period  all such  information
concerning its affairs as NewLogic may reasonably  request;  provided,  that any
furnishing of such information  pursuant hereto or any investigation by NewLogic
shall not affect  NewLogic's right to rely on the  representations,  warranties,
agreements and covenants made by Paradigm in this Agreement.

         7.3 Further Assurances.  Paradigm will use all commercially  reasonable
efforts to perform and fulfill all  obligations  on its part to be performed and
fulfilled under this Agreement, and to cause all the conditions precedent to the
consummation  of the  transactions to be timely  satisfied,  to the end that the
transactions  contemplated by this Agreement shall be effected  substantially in
accordance  with its terms.  Paradigm  shall  cooperate  with  NewLogic  in such
actions and in securing  requisite  approvals  and shall  deliver  such  further
documents as NewLogic  may  reasonably  request as  necessary  to evidence  such
transactions.

         7.4  Public  Announcements.  Paradigm  will  consult  in  advance  with
NewLogic concerning the timing and content of any announcement, press release or
public  statement  concerning the  transactions  set forth in this Agreement and
will not make any such  announcement,  release or statement  without  NewLogic's
consent;  provided,  however,  that  Paradigm  may  make  any  public  statement
concerning  the  transactions  set forth in this  Agreement  without  NewLogic's
consent,  if, in the reasonable opinion of counsel for Paradigm,  such statement
or announcement is required or advisable to comply with applicable law, statute,
rule or regulation.

         7.5 Breach of  Representations,  Warranties,  Agreements and Covenants.
Paradigm  shall not knowingly  take, or knowingly fail to take, any action which
from the date hereof  through the Closing  would cause or  constitute a material
breach of any of its representations,  warranties,  agreements and covenants set
forth in this Agreement.  In the event of, and promptly after becoming aware of,
the actual,  pending or threatened  occurrence of any event which would cause or
constitute  such a material  breach or  inaccuracy,  Paradigm  shall give notice
thereof to NewLogic and shall use its commercially reasonable efforts to prevent
or promptly remedy such breach or inaccuracy.

         7.6 Legal  Conditions  to the Sale of the  Securities.  Paradigm  shall
take, and shall cause to be taken,  all reasonable  actions  necessary to comply
promptly  with all legal  requirements  which may be  imposed on  Paradigm  with
respect  to the  consummation  of the  transactions  set forth  herein  and will
promptly  cooperate with and furnish  information to NewLogic in connection with
any such requirements  imposed upon NewLogic in connection with the consummation
of the transactions set forth herein. Paradigm shall take, and shall cause to be
taken, all reasonable

                                      -34-





<PAGE>



actions to obtain (and to cooperate  with  NewLogic in  obtaining)  any consent,
authorization,  order or  approval  of, or any  exemption  by, any  Governmental
Entity  required  to be  obtained  or  made  by  Paradigm  (or by  NewLogic)  in
connection  with the  consummation of the  transactions  set forth herein or the
taking of any  action  contemplated  thereby  or by this  Agreement,  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
Paradigm   deems   advisable  in  good  faith,   and  to  effect  all  necessary
registrations  and filings and  submissions  of  information  as Paradigm  deems
advisable in good faith required by any Governmental  Entity, and to fulfill all
conditions to this Agreement.

         7.7 3(a)(10)  Fairness  Hearing.  As promptly as practicable  and in no
event later than May 15, 1996,  Paradigm,  with the  cooperation of NewLogic and
the  Securityholders,  shall prepare and file a permit application under section
25121 of the  California  Corporate  Securities  Law of 1968,  as  amended  (the
"Corporations Code") with the California Department of Corporations with respect
to the transactions  contemplated by this Agreement and Paradigm shall request a
fairness hearing  pursuant to section 25142 of the Corporations  Code ("Fairness
Hearing").  Paradigm  shall  pay all  costs  and  expenses  associated  with the
Fairness  Hearing.  Paradigm shall provide notice of the Fairness Hearing to the
Securityholders in accordance with the requirements of the Corporations Code.

         7.8 Listing of Shares.  As soon as  practicable  following the Closing,
Paradigm  shall take any  action  reasonably  required  to be taken to cause the
Stock  Consideration to be issued in this transaction to be approved for listing
on the Nasdaq National Market.

                                  ARTICLE VIII

                          COVENANTS OF SECURITYHOLDERS

         8.1 Necessary  Consents.  Prior to the Closing each Securityholder will
obtain such written  consents and take such other actions as may be necessary or
appropriate to allow the consummation of the transactions contemplated hereby.

         8.2 Further  Assurances.  Each Securityholder will use all commercially
reasonable  efforts to perform and fulfill all  obligations  to be performed and
fulfilled  under this  Agreement,  and to cause all conditions  precedent to the
consummation  of the  transactions to be timely  satisfied,  to the end that the
transactions  contemplated by this Agreement shall be effected  substantially in
accordance with its terms. Each Selling Securityholder shall execute and deliver
to Paradigm on or before the Closing each agreement and  certificate  applicable
to such  Securityholder  set forth in Sections 9.1, 9.12,  9.13 and below.  Each
Securityholder shall cooperate with NewLogic and Paradigm

                                      -35-





<PAGE>



in such  actions and in securing  requisite  approvals  and shall  deliver  such
further documents as NewLogic and Paradigm may reasonably  request in writing as
necessary to evidence such transactions.

         8.3  No  Transfer.  As  long  as  this  Agreement  is in  effect,  each
Securityholder agrees not to sell, offer for sale, assign, transfer or otherwise
encumber  any of the  Securities  to any third party other than  Paradigm.  Each
Securityholder  also  waives  any  rights of first  offer or  refusal or similar
rights that it has with respect to the transfer of any NewLogic  security by any
NewLogic securityholder to Paradigm.

         8.4 Breach of  Representations  Warranties,  Agreements  and Covenants.
Each  Securityholder  shall not knowingly  take, or knowingly  fail to take, any
action which from the date hereof  through the Closing would cause or constitute
a material  breach of any of its  representations,  warranties,  agreements  and
covenants  set  forth in this  Agreement  or a  material  breach  of  NewLogic's
covenants set forth in Section 6.9. Promptly after becoming aware of the actual,
pending or  threatened  occurrence  of any event which would cause or constitute
such a material  breach or  inaccuracy,  such  Securityholder  shall give notice
thereof to NewLogic  and to Paradigm and shall use all  commercially  reasonable
efforts to prevent or promptly  remedy such material  breach or inaccuracy.  The
parties  agree  that a  Securityholder's  resignation  of  employment  from,  or
termination  of  employment  for Cause by,  Paradigm,  on or before  the  second
anniversary  of the  Closing  Date,  shall  constitute  a Breach (as  defined in
Section 13.2) of this Section 8.4 and Section 6.9.

         8.5  Limited  Resales.  Unless  and until the  Stock  Consideration  is
effectively  registered  under  the  1933  Act or a valid  exemption  from  such
registration  is available  (other than that provided under section  3(a)(10) of
the 1933 Act), each of the Securityholders agrees, for so long as Rule 144 under
the 1933 Act shall apply to such Securityholder, to sell the Stock Consideration
in accordance with the terms and conditions of paragraphs (e)(1), (g) and (h) of
Rule 144 under the 1933 Act.

                                   ARTICLE IX

                 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARADIGM

         The obligations of Paradigm to consummate the transactions contemplated
by this Agreement are subject to the satisfaction,  at or before the Closing, of
all the following conditions, unless waived in writing by Paradigm:

         9.1 Certificates for Securities.  Paradigm shall have received from the
Securityholders  all written  certificates  and other  documents  evidencing the
Securities.


                                      -36-





<PAGE>



         9.2  Representations  and  Warranties  True.  All  representations  and
warranties  of  NewLogic  and of the  Securityholders  in  this  Agreement,  the
NewLogic  Disclosure  Schedule and the schedules and exhibits hereto, and in any
written  statement or certificate that shall be delivered to Paradigm under this
Agreement,  shall be true and correct in all material  respects on and as of the
Closing Date as if made on the date thereof.

         9.3 Covenants  Performed.  NewLogic and the Securityholders  shall have
performed,   satisfied,  and  complied  with  all  covenants,   agreements,  and
conditions  required by this  Agreement  to be  performed  or  complied  with by
NewLogic and the Securityholders, as applicable, on or before the Closing Date.

         9.4  Certificates.  Paradigm  shall have  received a  certificate  from
NewLogic, dated the Closing Date, certifying, in such detail as Paradigm and its
counsel may reasonably  request,  that the conditions  specified in this Article
have been satisfied.

         9.5 Opinion of Counsel for  NewLogic.  Paradigm  shall have  received a
final opinion from Brobeck,  Phleger & Harrison LLP, counsel for NewLogic, dated
the Closing Date and in  substantially  the form attached  hereto as Exhibit 9.5
(the "BP&H Opinion").

         9.6  No  Violations;  No  Actions.  Consummation  of  the  transactions
contemplated by this Agreement  shall not violate any order,  decree or judgment
of any court or Governmental Entity having competent  jurisdiction and no action
or proceeding shall have been instituted or threatened by any person,  entity or
Governmental  Entity which, in any such case, in the sole reasonable judgment of
Paradigm,  has a reasonable  probability  of  resulting in (a) the  obtaining of
material damages from Paradigm; or (b) an order, judgment or decree restraining,
prohibiting  or  rendering   unlawful  the   consummation  of  the  transactions
contemplated by this Agreement.

         9.7 No Material  Adverse Effect.  During the period from March 31, 1996
to the Closing, there shall not have been any material and adverse effect on the
Business Condition of NewLogic.

         9.8 Proceedings and Documents.  All corporate and other  proceedings in
connection  with the  transactions  contemplated  hereby and all  documents  and
instruments  incident to such  transactions,  including  without  limitation the
Escrow Agreement and Securityholders'  investment  representation  certificates,
shall be in form and  substance  reasonably  satisfactory  to  Paradigm  and its
counsel,  and Paradigm  shall have  received all such  counterpart  originals or
certified or other copies of such documents as it may reasonably request.

         9.9 Schedules. If necessary or appropriate, NewLogic shall have updated
or amended all schedules and other disclosure

                                      -37-





<PAGE>



required  by this  Agreement  and  Paradigm  shall  be  satisfied  with  its due
diligence investigation and review of such updates, amendments and/or additional
disclosure.

         9.10 Required Consents. All consents,  filings,  registrations,  legend
removal  permits,  approvals  and waivers  from third  parties and  governmental
authorities  necessary for the  consummation of the transactions as contemplated
hereby shall have been obtained or timely filed, as applicable.

         9.11 Accountants'  Opinion.  Paradigm shall have received an opinion of
its  independent  accountants,   in  form  reasonably  acceptable  to  Paradigm,
confirming  certain  accounting  treatment and Purchase Price allocation matters
material to the transactions contemplated under this Agreement.

         9.12 Employment, Noncompetition and Proprietary Information Agreements.

         (a) Each  person  listed on Schedule  2.1  attached  hereto  shall have
accepted  in  writing  an   employment   letter   agreement   from  Paradigm  in
substantially  the form  attached  hereto as Exhibit  9.12(a)  (the  "Employment
Letter  Agreement"),  with such other  changes as the  officers of NewLogic  and
Paradigm deem to be appropriate.

         (b) Each of Messrs. Campbell, Olsen and Roberts shall have entered into
a three (3) year  Non-Competition  Agreement with Paradigm in substantially  the
form attached hereto as Exhibit (the 9.12(b) "Non-Competition Agreements"), with
such  other  changes  as the  officers  of  NewLogic  and  Paradigm  deem  to be
appropriate.

         (c) Each  person  listed  on  Schedule  2.1  shall  have  executed  and
delivered to Paradigm a  proprietary  information  and  inventions  agreement in
substantially  the form  attached  hereto as Exhibit  9.12(c) (the  "Proprietary
Information Agreements"), which shall not exclude any inventions that would have
been  assigned to  NewLogic  had such  Proprietary  Information  Agreement  been
executed and delivered to NewLogic on the date such Securityholder's  employment
with NewLogic commenced.

         9.13 Tax Forms.  Each of the  Securityholders  shall have  provided  to
Paradigm an executed Form W-8 or Form W-9 properly  reporting  the  transactions
set forth in this Agreement.

         9.14 Signature Pages. Each of Messrs.  Campbell,  Olsen and Roberts and
at least six (6) of the seven (7) other  persons  listed on Schedule  2.1 hereto
shall have entered into this  Agreement by executing and  delivering to Paradigm
(a) a Signature Page to this Agreement in the form attached  hereto and (b) each
agreement or certificate  applicable to such  Securityholder  or other person as
set forth in Section 9.12 above.

                                      -38-






<PAGE>




         9.15 Other Purchase Agreements.  Nichimen and each other securityholder
of NewLogic not executing  this  Agreement  shall have executed and delivered to
Paradigm a securities  purchase  agreement  (the "Investor  Securities  Purchase
Agreement") in form and substance satisfactory to Paradigm.

         9.16 Securities Laws. Paradigm shall have received any and all permits,
authorizations, approvals and orders under federal and state securities laws for
the issuance of the Stock Consideration including, without limitation,  approval
of the California  Commissioner of Corporations pursuant to section 25142 of the
California  Corporate  Securities  Law without the  imposition of any conditions
adverse to Paradigm or the  Securityholders  or which would require  Paradigm to
amend its Articles of Incorporation, Bylaws or any contract.

                                    ARTICLE X

                 CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWLOGIC
                           AND OF THE SECURITYHOLDERS

         The  obligations of NewLogic and of the  Securityholders  to consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
at or before the Closing,  of all the  following  conditions,  unless  waived in
writing by NewLogic and by the Securityholders:

         10.1  Representations  and  Warranties  True. All  representations  and
warranties by Paradigm in this Agreement and the schedules and exhibits  hereto,
and in any written  statement or certificate that shall be delivered to NewLogic
or to the  Securityholders  by Paradigm under this  Agreement  shall be true and
correct  in all  material  respects  on and as of the  Closing  as  though  such
representations and warranties were made on and as of that date.

         10.2 Covenants Performed. Paradigm shall have performed, satisfied, and
complied  with  all  covenants,  agreements,  and  conditions  required  by this
Agreement to be performed or complied with by Paradigm on or before the Closing.

         10.3  No  Violations;  No  Actions.  Consummation  of the  transactions
contemplated by this Agreement  shall not violate any order,  decree or judgment
of any court or governmental body having competent jurisdiction and no action or
proceeding  shall have been  instituted or  threatened by any person,  entity or
governmental  agency which, in any such case, in the sole reasonable judgment of
NewLogic or the  Securityholders,  has a reasonable  probability of resulting in
(a) the obtaining of material damages from NewLogic or from the Securityholders,
or (b) an  order,  judgment  or decree  restraining,  prohibiting  or  rendering
unlawful the consummation of the transactions contemplated by this Agreement.


                                      -39-





<PAGE>



         10.4 Proceedings and Documents.  All corporate and other proceedings in
connection  with the  transactions  contemplated  hereby and all  documents  and
instruments  incident to such  transactions,  including  without  limitation the
Escrow  Agreement,  shall be in form and substance  reasonably  satisfactory  to
NewLogic,  the  Securityholders  and its or their counsel,  and NewLogic and the
Securityholders  shall have received all such counterpart originals or certified
or other copies of such documents as it may reasonably request.

         10.5 Required Consents. All consents,  filings,  registrations,  legend
removal  permits,  approvals  and waivers  from third  parties and  governmental
authorities necessary to the transactions as contemplated hereby shall have been
obtained or timely filed, as applicable.

         10.6 Certificate.  The Securityholders and NewLogic shall have received
a certificate from Paradigm,  dated the Closing Date,  certifying in such detail
as NewLogic, the Securityholders and its or their counsel may reasonably request
that the  conditions  specified  in this  Article  that have to be  satisfied by
Paradigm have been satisfied.

         10.7 Opinion of Counsel for Paradigm.  NewLogic and the Securityholders
shall have received an opinion from Pillsbury  Madison & Sutro LLP,  counsel for
Paradigm,  dated the Closing Date, in substantially  the form attached hereto as
Exhibit 10.7 (the "PM&S Opinion").

         10.8 Tax Opinion.  NewLogic and the Securityholders shall have received
a written opinion from Pillsbury Madison & Sutro LLP, counsel to Paradigm, dated
the Closing Date, to the effect that the transactions  contemplated  hereby will
constitute a  reorganization  within the meaning of section  368(a) of the Code,
which  opinion  shall be in a form  reasonably  acceptable  to NewLogic  and its
counsel (the "Tax Opinion"). In rendering the Tax Opinion, such counsel shall be
entitled to rely upon  reasonable  assumptions and conditions and to require and
rely upon reasonable  representations  relating thereto made by NewLogic and the
Securityholders.

         10.9 3(a)(10)  Fairness  Hearing.  The Fairness Hearing shall have been
held  and  a  permit  for  the  issuance  of  the  Stock  Consideration  by  the
Commissioner of Corporations of the State of California shall have been issued.

         10.10 Accountants' Opinion.  Paradigm shall have received an opinion of
its  independent  accountants,   in  form  reasonably  acceptable  to  Paradigm,
confirming  certain  accounting  treatment and Purchase Price allocation matters
material to the transactions contemplated under this Agreement.


                                      -40-





<PAGE>



                                   ARTICLE XI

                                     CLOSING

         11.1 Time and Place. The purchase, sale and surrender of the Securities
hereunder (the "Closing") shall occur at the Menlo Park,  California  offices of
Pillsbury  Madison & Sutro LLP at such  time and date to which the  parties  may
agree in writing (the "Closing Date" or the "Closing").

         11.2  Deliveries  of NewLogic or the  Securityholders.  At the Closing,
NewLogic or the Securityholders will execute and deliver or cause to be executed
and delivered to Paradigm:

         (a)  Certificates  and  Instruments.   Certificates   representing  the
Securities  endorsed  over to Paradigm or  accompanied  by duly  executed  stock
powers or similar  instruments  of transfer or, in the case of  Securities to be
surrendered, instruments effecting such surrender;

         (b) Corporate Documents.  The Certificate of Incorporation of NewLogic,
certified  by the  Secretary  of State of  Delaware  as of a recent date and the
Bylaws of NewLogic,  certified by the Secretary of NewLogic, as in effect at the
Closing;

         (c)  Certificates  of Good Standing and  Qualification.  Certificate of
Good Standing, dated as of a recent date, with respect to NewLogic issued by the
Secretary of State of Delaware,  and Certificate of  Qualification  as a Foreign
Corporation,  dated as of a recent date,  with respect to NewLogic issued by the
Secretary of State of Washington;

         (d) Resolutions. A copy of the resolutions of the Board of Directors of
NewLogic, certified by the Secretary of NewLogic as having been duly and validly
adopted and being in full force and effect,  authorizing  execution and delivery
of this Agreement and  performance of the  transactions  contemplated  hereby by
NewLogic;

         (e) Books and  Records.  All of the minute  books,  stock  ledgers  and
similar corporate records of NewLogic;

         (f)  Consents.  Evidence  that all consents,  filings,  legend  removal
permits, registrations,  approvals, or authorizations of or notifications to any
third parties (including  governmental  agencies), if any, required to issue and
exchange the securities for the consideration set forth herein and to consummate
the transactions  contemplated hereby have been obtained or made, as applicable,
by NewLogic;

         (g)  Opinion of Counsel.  The BP&H Opinion;


                                      -41-




<PAGE>



         (h)  NewLogic  Certificate.  A  certificate  from  NewLogic,  dated the
Closing Date, containing the information required pursuant to Section 9.4;

         (i) FIRPTA.  A Foreign  Investment  and Real  Property  Tax Act of 1980
Notification Letter executed by NewLogic; and

         (j) Other Documents. The Escrow Agreement, the Agreement of Merger, the
Employment Letter Agreements,  the Non-Competition  Agreements,  the Proprietary
Information  Agreements and such other  documents and instruments as Paradigm or
its counsel  reasonably  shall deem  necessary to  consummate  the  transactions
contemplated hereby.

         (k) Option Exercise Price.  Payment in full to NewLogic (or Paradigm on
behalf of NewLogic) of the  aggregate  option  exercise  price set forth next to
each Securityholder optionee identified on Schedule 11.2(k) attached hereto.

         All  documents  delivered  to Paradigm  shall be in form and  substance
satisfactory to Paradigm.

         11.3 Deliveries of Paradigm. At the Closing,  Paradigm will execute and
deliver or cause to be executed and delivered to NewLogic,  the  Securityholders
and/or the Escrow Agent,  as  appropriate,  simultaneously  with delivery of the
items referred to in Section 11.2 above:

         (a)  Payment  of  the   Consideration.   The  Cash   Consideration  and
certificates  representing  the Stock  Consideration  set forth in  Article  and
Schedule 1.3(a);

         (b) Resolutions. A copy of the resolutions of the Board of Directors of
Paradigm,  certified  by the  Secretary  thereof as having been duly and validly
adopted and being in full force and effect,  authorizing  execution and delivery
of this Agreement and  performance of the  transactions  contemplated  hereby by
Paradigm;

         (c)  Consents.  Evidence  that all  consents,  filings,  registrations,
approvals, or authorizations of or notifications to any third parties (including
governmental  agencies),  if any,  required to purchase  the  Securities  and to
consummate the transactions  contemplated  hereby have been obtained or made, as
applicable, by Paradigm;

         (d) Opinion of Counsel. The PM&S Opinion and the Tax Opinion;

         (e) Paradigm Certificate. A certificate from Paradigm dated the Closing
Date, containing the information required pursuant to Section 10.6; and


                                      -42-





<PAGE>



         (f) 3(a)(10) Permit. The permit issued pursuant to section 25121 of the
California Corporations Code qualifying the issuance of the Stock Consideration.

         (g) Other Documents. The Escrow Agreement, the Agreement of Merger, the
Employment  Letter  Agreements,  and such other  documents  and  instruments  as
NewLogic,  the  Securityholders  or its or their counsel  reasonably  shall deem
necessary to consummate the transactions contemplated hereby.

         All documents delivered to NewLogic and/or to the Securityholders shall
be in form and substance satisfactory to NewLogic and/or to the Securityholders,
as appropriate.

                                   ARTICLE XII

                   COVENANT OF SETTLEMENT AND GENERAL RELEASE

         12.1 Settlement and General Release of the Paradigm Released Parties.

         (a) From and after the Closing,  for the consideration set forth herein
and for other due and valid consideration,  the receipt and sufficiency of which
is hereby  acknowledged and received,  each of the  Securityholders,  for and on
behalf of themselves and on behalf of their respective  affiliates,  successors,
assigns,  agents and  representatives  waive and  finally  release  and  forever
discharge Paradigm and NewLogic and each of Paradigm's and NewLogic's respective
officers, directors, stockholders,  affiliates, agents, subsidiaries,  including
officers and directors of subsidiaries,  representatives,  employees, successors
and assigns  (collectively,  the "Paradigm  Released  Parties") from any and all
claims,  causes of action, suits, debts, demands,  costs,  expenses,  attorneys'
fees, contracts, agreements, payments, compensation, liabilities or obligations,
contingent or fixed, liquidated or unliquidated,  matured or unmatured, of every
name and nature,  known or unknown,  arising or which may have  existed from the
beginning of the world  against any such person,  excluding  therefrom  only the
obligations  specifically set forth in subparagraph  12.2(c) hereof (hereinafter
collectively referred to as the "NewLogic/Securityholders' Released Claims").

         (b)  Without   limiting  the  generality  of  the   foregoing,   it  is
specifically agreed that the  NewLogic/Securityholders'  Released Claims include
all claims  arising out of, or related to, the approval of this Agreement by the
Securityholders,  all of the  transactions  contemplated  herein or in any other
document or agreement referred to herein and acceptance of the consideration for
the  purchase  or   surrender  of  the   Securities   set  forth   herein.   The
Securityholders  hereby  acknowledge  and agree that from and after the Closing,
they shall cease to have any further  right,  title or interest in and to any of
the  Securities  purchased or  surrendered  pursuant to this  Agreement and they
shall

                                      -43-





<PAGE>



accordingly  cease to have any equity  interest  in  NewLogic as a result of the
transactions set forth in this Agreement.

         (c) The NewLogic/Securityholders' Released Claims shall not include the
following:  (i) the Stock  Consideration;  (ii) the potential payments set forth
under Article of this Agreement,  if actually earned, and Paradigm's obligations
to act in good faith set forth in Section 2.2(d) above; (iii) the obligations of
Paradigm  under the  Employment  Letter  Agreements to the extent  expressly set
forth   therein;   (iv)  the  right  of  any   Securityholder   of  NewLogic  to
indemnification  or  contribution  from  NewLogic  pursuant  to  (A)  NewLogic's
Certificate  of  Incorporation  or Bylaws in effect on the Closing  Date,(B) for
acts occurring prior to Closing, any written  indemnification  agreement between
NewLogic  and  the  Securityholder  in  effect  at  the  Closing,   or  (C)  any
indemnification  statute,  at common  law or in  equity;  (v) the  rights of the
Securityholders to indemnification  under the terms of Article of this Agreement
and  to  specifically   enforce  Paradigm's  material   obligations  under  this
Agreement;  and (vi) the rights of the Securityholders against Pillsbury Madison
& Sutro LLP with respect to the Tax Opinion.

         (d) Each of the  Securityholders for and on behalf of themselves and on
behalf  of  their  respective  affiliates,   successors,   assigns,  agents  and
representatives  covenants  not to sue or  otherwise  institute  or  cause to be
instituted  or in any way  participate  in any  legal,  administrative  or other
proceeding or action against any of the Paradigm  Released  Parties with respect
to any matter of any kind arising out of the NewLogic/Securityholders'  Released
Claims except as required by court order or statute.

         (e) The  Securityholders  acknowledge  that  this  waiver  and  release
extends to all claims of every nature and kind,  known or unknown,  suspected or
unsuspected, past, present or future, arising from the NewLogic/Securityholders'
Released Claims,  and any and all rights granted to such  Securityholders  under
section 1542 of the California  Civil Code or any analogous state law or federal
law or regulation are hereby  expressly  waived.  Said section 1542 of the Civil
Code of the State of California reads as follows:

         "A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS  WHICH THE CREDITOR  DOES
         NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING  THE
         RELEASE,  WHICH  IF  KNOWN BY HIM MUST  HAVE  MATERIALLY  AFFECTED  HIS
         SETTLEMENT WITH THE DEBTOR."

         (f) This Section 12.1 shall  constitute a complete defense to any claim
released   herein  and  shall   survive   indefinitely,   without   restriction,
qualification or limitation,  notwithstanding  anything in this Agreement to the
contrary.


                                      -44-





<PAGE>



         12.2  Settlement and General  Release of the  Securityholders  Released
Parties.

         (a) From and after the Closing,  for the consideration set forth herein
and for other due and valid consideration,  the receipt and sufficiency of which
is hereby acknowledged and received,  Paradigm and NewLogic,  each severally for
and  on  behalf  of  itself  and  on  behalf  of  its   respective   affiliates,
subsidiaries, successors, assigns, officers, directors, shareholders, agents and
representatives  waives and finally releases and forever  discharges each of the
Securityholders  and their successors and permitted assigns  (collectively,  the
"Securityholders  Released Parties") from any and all claims,  causes of action,
suits, debts, demands, costs, expenses, attorneys' fees, contracts,  agreements,
payments,  compensation,   liabilities  or  obligations,  contingent  or  fixed,
liquidated  or  unliquidated,  matured or  unmatured,  of every name and nature,
known or unknown,  arising or which may have existed  from the  beginning of the
world  against  any  such  person,  excluding  therefrom  only  the  obligations
specifically set forth in subparagraph 12.2(c) hereof (hereinafter  collectively
referred to as the "Paradigm/NewLogic Released Claims").

         (b)  Without   limiting  the  generality  of  the   foregoing,   it  is
specifically  agreed  that the  Paradigm/NewLogic  Released  Claims  include all
claims arising out of, or related to, this  Agreement,  all of the  transactions
contemplated  herein or in any other  document or agreement  referred to herein,
and any  Securityholder's  prior employment  with,  service to, or service as an
officer or  director of NewLogic  (except as  excluded in  subparagraph  12.2(c)
below).

         (c) The  Paradigm/NewLogic  Released  Claims  shall not include (i) the
rights  of  Paradigm  to  indemnification  under the  terms of  Article  of this
Agreement  and to  specifically  enforce  NewLogic's  and each  Securityholder's
material   obligations   under  this  Agreement;   (ii)  each   Securityholders'
obligations  under his or her  confidentiality  and assignment of inventions and
similar  agreements  and any  indemnification  agreements  entered  into with or
inuring to the benefit of NewLogic or Paradigm;  (iii) the  obligations  of each
Securityholder  under  his or her  Employment  Agreement  or  Offer  Letter  and
Noncompete  Agreement to the extent  expressly  set forth in, and in  accordance
with, such agreements and (iv) the rights of Paradigm against Brobeck, Phleger &
Harrison LLP with respect to the BP&H Opinion.

         (d) Paradigm and NewLogic  each  severally  for and on behalf of itself
and on behalf of its respective  officers,  directors,  shareholders and each of
their respective  affiliates,  agents,  representatives,  successors and assigns
covenants not to sue or otherwise  institute or cause to be instituted or in any
way  participate  in any legal,  administrative  or other  proceeding  or action
against any of the Securityholder Released Parties with

                                      -45-





<PAGE>



respect  to any matter of any kind arising out of the Paradigm/NewLogic Released
Claims.

         (e)  Paradigm  and  NewLogic  acknowledge  that this waiver and release
extends to all claims of every nature and kind,  known or unknown,  suspected or
unsuspected,  past,  present  or  future,  arising  from  the  Paradigm/NewLogic
Released  Claims,  and any and all rights granted to Paradigm and NewLogic under
section 1542 of the California  Civil Code or any analogous state law or federal
law or regulation are hereby  expressly  waived.  Said section 1542 of the Civil
Code of the State of California reads as follows:

         "A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS  WHICH THE CREDITOR  DOES
         NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING  THE
         RELEASE,  WHICH  IF  KNOWN BY HIM MUST  HAVE  MATERIALLY  AFFECTED  HIS
         SETTLEMENT WITH THE DEBTOR."

         (f) This Section 12.2 shall  constitute a complete defense to any claim
released   herein  and  shall   survive   indefinitely,   without   restriction,
qualification or limitation,  notwithstanding  anything in this Agreement to the
contrary.

                                  ARTICLE XIII

                                 INDEMNIFICATION

         13.1 Survival of Representations, Warranties, Covenants and Agreements.

         (a)  All  representations,  warranties,  covenants  and  agreements  of
Paradigm,  NewLogic and the  Securityholders in this Agreement shall survive the
execution,  delivery,  and performance of this Agreement in accordance with this
paragraph.  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.  The  representations,  warranties,  covenants  and  agreements of
NewLogic,  the  Securityholders  and Paradigm set forth in this Agreement (other
than Article XII, Section 5.15 and each  Securityholders'  continuing obligation
under his or her confidentiality, employment, non-competition, and assignment of
inventions-agreements  entered into with NewLogic and/or  Paradigm,  which shall
survive  indefinitely)  shall terminate on the second anniversary of the Closing
Date.

         (b) As  used  in  this  Article,  any  reference  to a  representation,
warranty, agreement or covenant contained in any Article of this Agreement shall
include  the  exhibit  and the  portion of the  NewLogic  or  Paradigm  Schedule
relating to such Article.


                                      -46-






<PAGE>



         13.2  Indemnification.

         (a) Subject to the terms and  limitations of this Article XIII, each of
the  Securityholders  hereby  agrees,  severally and not jointly,  to indemnify,
defend and hold harmless each of the Paradigm  Released  Parties (other than any
Paradigm Released Party which is a Securityholder)  from and against any and all
losses,  liabilities,  damages,  demands,  claims, suits, actions,  judgments or
causes  of  action,  assessments,   costs  and  expenses,   including,   without
limitation,  interest, penalties, attorneys' fees, any and all expenses incurred
in investigating,  preparing or defending  against any litigation,  commenced or
threatened,  or any claim  whatsoever and any and all amounts paid in settlement
of any claim or  litigation  or  otherwise  (collectively,  "Damages")  asserted
against,  resulting  from,  imposed upon or incurred or suffered by any Paradigm
Released   Party   (other  than  any   Paradigm   Released   Party  which  is  a
Securityholder),  directly  or  indirectly,  as a result of or arising  from any
inaccuracy in or breach or nonfulfillment of or noncompliance with (hereafter, a
"Breach") any of the representations,  warranties,  covenants or agreements made
by  NewLogic  or by  such  Securityholder  in this  Agreement  or any  facts  or
circumstances  constituting  such a Breach (all of which shall be referred to as
the  "13.2(a)  Identifiable  Claims").   The  Securityholders'   indemnification
obligations hereunder with respect to the representations, warranties, covenants
and agreements made by NewLogic shall survive the Closing in accordance with the
terms of this Section 13.2  notwithstanding the Merger of NewLogic with and into
Paradigm.

         (b) Subject to the terms and limitations of this Article XIII, Paradigm
hereby agrees to indemnify,  defend and hold harmless each of the Securityholder
Released  Parties  from  and  against  any and  all  Damages  asserted  against,
resulting  from,  imposed  upon or incurred  or  suffered by any  Securityholder
Released  Party,  directly  or  indirectly,  as a result of or arising  from any
Breach of any of the representations,  warranties,  covenants or agreements made
by Paradigm in this Agreement or any facts or circumstances  constituting such a
Breach (all of which shall be referred to as "13.2(b)  Identifiable  Claims" and
together  with 13.2(a)  Identifiable  Claims,  collectively,  the  "Identifiable
Claims").

         (c) With respect to the payment of Damages by the Securityholders under
this Agreement,  the sole remedy of the Paradigm  Released  Parties,  other than
with respect to fraud or willful misrepresentation (for which the sole remedy is
set forth in Section 13.2(e)),  shall be the right to offset as payment for such
Damages a portion of the  Escrowed  Shares then held in the Escrow  Account,  in
each case in  accordance  with the terms and  provisions  of, and subject to the
limitations provided in, the Escrow Agreement. For purposes of any such Offsets,
the dollar  value of the Escrowed  Shares  shall be $8.65 per share  (subject in
each case to adjustment relating to stock splits, consolida-

                                      -47-






<PAGE>



tions or  recapitalizations).  Any allocation of Damages (or Offsets relating to
such  Damages)  among  the   Securityholders,   and  the  allocation  among  the
Securityholders of the Escrowed Shares, net of any such Offsets, following their
release from escrow, shall be the responsibility of the Securityholders  Trustee
and the  Securityholders.  Indemnifiable  Claims  that may result in Damages and
Offsets shall be determined by the parties in accordance  with Sections 13.3 and
13.4 below; provided,  however, that the parties hereby agree and stipulate that
any Breach of the  covenants  contained in Section 6.9 shall result  solely in a
payment to the Paradigm  Indemnified  Parties equal to the designated  number of
Escrowed  Shares set forth on Schedule I attached to the Escrow  Agreement;  and
provided,  further,  that no  Damages  shall  be paid to the  Paradigm  Released
Parties  in  connection  with the  Breach  of any  representations,  warranties,
covenants and  agreements  (excluding  those set forth in Section 6.9) contained
herein  unless,  until  and  except  to  the  extent  the  aggregate  amount  of
Indemnifiable Claims resulting in Damages exceeds $75,000.

         (d)  Paradigm's  maximum  liability  to each  such  Securityholder  for
Damages  caused by a breach of its  representations,  warranties,  covenants and
agreements  set forth herein  (absent  fraud or willful  misrepresentation,  for
which the limitation on Damages is set forth in Section  13.2(e) below) shall be
limited to the maximum amount of Damages for which such Securityholder  could be
liable to  Paradigm  (in the event such  Securityholder  were to owe  Damages to
Paradigm) at the time such Damages are payable by Paradigm.

         (e) The sole  remedies that may be available to a party in the event of
fraud  or  willful  misrepresentation  relating  to any of the  representations,
warranties,  agreements  or  covenants  made  by any  other  party(ies)  in this
Agreement  shall be as set forth in this  Section  13.2(e).  With respect to any
fraud  or  willful   misrepresentation   claim  brought  by  any  party  seeking
indemnification  against any other party, the party seeking indemnification will
bear the  burden  of proof of  demonstrating  that the other  party  had  actual
knowledge  of the alleged  falsehood  and  intentionally  misled such party with
respect to same.  Knowledge  of a fact or  omission  on which a fraud or willful
misrepresentation  claim is based may not be  imputed or  attributed  to a party
seeking  indemnification  on the basis of his or her  position  as an officer or
director  of Paradigm  or  NewLogic,  as  applicable,  on access to  information
arising  from such  position  (unless it can be  demonstrated  that in fact such
access  was  used  by  such  party  seeking   indemnification   to  obtain  such
information)   or  on  any  lack  of   investigation   by  such  party   seeking
indemnification.  Each  Securityholder's  maximum  obligation  for  any  Damages
relating  to any fraud or willful  misrepresentation  claim  arising  under this
paragraph  shall be  limited  to the  aggregate  Stock  Consideration  and other
proceeds received or to be received by such  Securityholder  pursuant to Article
of this Agreement, but including only any consideration actually earned pursuant
to

                                      -48-





<PAGE>



Article at the time of the calculation of Damages.  Paradigm's maximum liability
for any Damages relating to any fraud or willful misrepresentation claim arising
under this paragraph shall be limited to the total  consideration paid, or to be
paid,   pursuant  to  Article  of  this   Agreement,   but  including  only  any
consideration  actually paid pursuant to Article at the time of the  calculation
of Damages.

         (f)  Notwithstanding  the  expiration  date  of  the   representations,
warranties,  covenants and agreements set forth herein,  if a party shall notify
the other with  respect to the  submission  of a claim during the time period of
survivability of the representations, warranties, covenants and agreements, such
party's  liability  for Damages  shall  continue in full force and effect  until
settled to the other  party's  satisfaction  with respect to those claims timely
made.

         13.3 Procedure for Indemnification with Respect to Third-Party Claims.

         (a) If any Paradigm or Securityholder Released Party determines to seek
indemnification  under this  Article with  respect to  Identifiable  Claims (the
party seeking such  indemnification  hereinafter referred to as the "Indemnified
Party" and the party against whom such  indemnification is sought is hereinafter
referred  to as the  "Indemnifying  Party")  resulting  from  the  assertion  of
liability by third parties,  the Indemnified  Party shall give written notice to
the Indemnifying Party within thirty (30) days of the Indemnified Party becoming
aware  of  any  such  Identifiable  Claim  or  of  facts  upon  which  any  such
Identifiable  Claim  will be based;  the notice  shall set forth  such  material
information  with  respect  thereto  as is  then  reasonably  available  to  the
Indemnified  Party;  provided,  however,  that  such  written  notice  shall  be
effective only if delivered to the  Indemnifying  Party before the  termination,
pursuant to Sections 13.1 and 13.2 hereof, of the  representations,  warranties,
covenants and agreements upon which such  Identifiable  Claim(s) are based.  All
Indemnifiable  Claims made by Paradigm shall also be  communicated to the Escrow
Agent as  provided  in the  Escrow  Agreement.  In case any  such  liability  is
asserted against the Indemnified  Party, and the Indemnified  Party notifies the
Indemnifying Party thereof,  the Indemnifying  Party will be entitled,  if it so
elects by written notice  delivered to the Indemnified  Party within twenty (20)
days after  receiving  the  Indemnified  Party's  notice,  to assume the defense
thereof with counsel satisfactory to the Indemnified Party.  Notwithstanding the
foregoing, (i) the Indemnified Party shall also have the right to employ its own
counsel in any such case,  but the fees and expenses of such counsel shall be at
the  expense  of the  Indemnified  Party  unless  the  Indemnified  Party  shall
reasonably   determine  that  there  is  a  conflict  of  interest  between  the
Indemnified  Party and the Indemnifying  Party with respect to such Identifiable
Claim,  in which case the fees and expenses of such counsel will be borne by the
Indemnifying Party, (ii) the

                                      -49-





<PAGE>



Indemnified  Party  shall  not have any  obligation  to give any  notice  of any
assertion of liability by a third party unless such  assertion is in writing and
(iii) the rights of the Indemnified Party to be indemnified hereunder in respect
of  Identifiable  Claims  resulting  from the  assertion  of  liability by third
parties shall not be adversely  affected by its failure to give notice  pursuant
to the foregoing  unless,  and, if so, only to the extent that, the Indemnifying
Party is  materially  prejudiced  thereby.  With  respect  to any  assertion  of
liability by a third party that results in an  Identifiable  Claim,  the parties
hereto  shall make  available to each other all  relevant  information  in their
possession material to any such assertion.

         (b) In the event that the Indemnifying  Party,  within twenty (20) days
after receipt of the aforesaid notice of an Identifiable  Claim, fails to assume
the defense of the  Indemnified  Party  against  such  Identifiable  Claim,  the
Indemnified Party shall have the right to undertake the defense,  compromise, or
settlement  of such  action  on behalf  of and for the  account  and risk of the
Indemnifying Party.

         (c) Notwithstanding  anything in this Section to the contrary, if there
is a  reasonable  probability  that an  Identifiable  Claim may  materially  and
adversely  affect the Indemnified  Party,  the Indemnified  Party shall have the
right to participate, at its own cost and expense, in such defense,  compromise,
or settlement  and the  Indemnifying  Party shall not,  without the  Indemnified
Party's  written  consent  (which consent shall not be  unreasonably  withheld),
settle or compromise any Identifiable  Claim or consent to entry of any judgment
in respect thereof unless such settlement, compromise, or consent includes as an
unconditional  term thereof the giving by the  claimant or the  plaintiff to the
Indemnified  Party a release from all liability in respect of such  Identifiable
Claim.

         13.4  Procedure  For  Indemnification  with Respect to Non-Third  Party
Claims. In the event that the Indemnified Party asserts the existence of a claim
giving rise to Damages (but  excluding  claims  resulting  from the assertion of
liability by third  parties),  it shall give written notice to the  Indemnifying
Party.  Such written  notice shall state that it is being given pursuant to this
Section  13.4,  specify  with  particularity  the nature and amount of the claim
asserted,  accompanied  by any written  materials  supporting  such  claim,  and
indicate  the date on which  such  assertion  shall be deemed  accepted  and the
amount  of the  claim  deemed a valid  claim  (such  date to be  established  in
accordance with the next sentence);  provided, however, that such written notice
shall be  effective  only if  delivered  to the  Indemnifying  Party  before the
termination,  pursuant to Sections 13.1 and 13.2 hereof, of the representations,
warranties,  covenants and agreements upon which such Identifiable  Claim(s) are
based. If the Indemnifying  Party,  within thirty (30) days after the mailing of
notice  by  the  Indemnified  Party,  shall  not  give  written  notice  to  the
Indemnified Party announcing its

                                      -50-



<PAGE>



intent to contest such assertion of the Indemnified  Party, such assertion shall
be deemed accepted and the amount of claim shall be deemed a valid claim. In the
event, however, that the Indemnifying Party contests the assertion of a claim by
giving such written notice to the Indemnified Party within said period, then the
parties shall act in good faith to reach agreement  regarding such claim. If the
parties to this  Agreement,  acting in good faith,  cannot reach  agreement with
respect to such claim  within  fifteen  (15) days  after such  notice,  then the
parties may pursue other legal or equitable  remedies in accordance with Section
hereof.

                                   ARTICLE XIV

                                   TERMINATION

         14.1  Termination.

         (a) This Agreement may be terminated at any time prior to the Closing:

         (i) by mutual  agreement  of the Boards of  Directors  of Paradigm  and
NewLogic;

                  (ii) by Paradigm, if there has been a breach by NewLogic or by
         any of the Securityholders of any representation, warranty, covenant or
         agreement  set forth in this  Agreement  resulting  in a  material  and
         adverse change in the Business Condition of NewLogic and which NewLogic
         fails to cure within five (5)  business  days after  notice  thereof is
         given by Paradigm  (except  that no cure period shall be provided for a
         breach by NewLogic or the Securityholders which by its nature cannot be
         cured);

                  (iii) by  NewLogic,  if there has been a breach by Paradigm of
         any representation,  warranty,  covenant or agreement set forth in this
         Agreement  on the part of Paradigm  resulting in a material and adverse
         change in the Business  Condition of Paradigm and which  Paradigm fails
         to cure within five (5) business days after notice  thereof is given by
         NewLogic  (except that no cure period shall be provided for a breach by
         Paradigm which by its nature cannot be cured);

                  (iv)  by  Paradigm,  if the  Closing  condition  contained  in
         Section 9.14 has not been met within three (3) business days  following
         the issuance by the California Department of Corporations of a fairness
         determination   and  permit  under  section  25121  of  the  California
         Corporations Code with respect to the Stock Consideration;


                                      -51-





<PAGE>



                  (v)  by  Paradigm  or  NewLogic, if the Closing shall not have
         been consummated on or before June 30, 1996;

                  (vi) by Paradigm or NewLogic,  if any permanent  injunction or
         other  order of a court or other  competent  authority  preventing  the
         Closing shall have become final and nonappealable or, in either party's
         reasonable  good  faith  judgment,   shall  render  unlikely  within  a
         reasonable  period of time the  consummation  of the  transactions  set
         forth herein on the terms contemplated hereby; or

                  (vii) by  Paradigm or  NewLogic,  if any  Governmental  Entity
         shall have issued a temporary restraining order, preliminary injunction
         or permanent  injunction or other order  preventing the consummation of
         the  transactions  set forth herein or any litigation shall be pending,
         the  ultimate  resolution  of  which is  likely  to (A)  result  in the
         issuance  of such an order or  injunction,  or the  imposition  against
         NewLogic or Paradigm of  substantial  damages if the  transactions  set
         forth herein are  consummated,  (B) prohibit  Paradigm's  or NewLogic's
         ownership  or  operation  of all or a material  portion of the business
         rights of NewLogic or Paradigm and its  subsidiaries  taken as a whole,
         or to compel Paradigm or NewLogic to dispose of or hold separate all or
         a material  portion of the  business  or assets of NewLogic or Paradigm
         and its subsidiaries  taken as a whole, as a result of the consummation
         of the transactions set forth herein,  (C) materially limit or restrict
         Paradigm's  proposed  conduct or operation of the business of NewLogic,
         or  (D)  render   Paradigm  or  NewLogic   unable  to  consummate   the
         transactions  set  forth  herein.  In  the  event  any  such  order  or
         injunction  shall have been  issued,  each party agrees to use its best
         efforts to have any such order or injunction lifted.

                  (viii) By Paradigm,  if Paradigm  determines in its reasonably
         judgment  that it will be  unable  to obtain  the  accountants  opinion
         described in Section 9.11 and 10.10  above.

         (b) Where action is taken to terminate this Agreement  pursuant to this
Section  5.2,  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 5.2, this Agreement shall forthwith become null and void.


                                      -52-





<PAGE>



         (d) In the event of termination  of this  Agreement  pursuant to any of
the events or conditions set forth in Section 14.1(a),  no party shall be liable
for any costs, charges,  expenses or fees of any other party. In addition, in no
event will any party to this Agreement be liable for special,  consequential  or
indirect damages  relating to or arising out of this Agreement,  except for such
damages arising out of actual fraud or intentional misrepresentation.

         14.2 Breakup Fee. If Paradigm  terminates  this  Agreement  pursuant to
Section  14.1(a)(iv) and, in the circumstances of such  termination,  all of the
Closing conditions  contained in Article would have otherwise been met, NewLogic
shall pay to Paradigm  within fifteen (15) business days after such  termination
in cash the sum of $250,000, plus Paradigm's documented reasonable out-of-pocket
expenses  incurred  through  the date of  termination  in  connection  with this
Agreement  and the  transactions  contemplated  thereby (as evidenced by written
notice  accompanied by such  documentation and delivered to NewLogic by Paradigm
within ten (10) business days of such termination).

         14.3 Bridge Loan. If Paradigm  terminates  this  Agreement  pursuant to
Section 14.1(a)(viii) and, in the circumstances of such termination,  all of the
other Closing  conditions  contained in Article would have  otherwise  been met,
Paradigm shall agree to provide NewLogic with bridge loan financing,  for a term
of up to four (4) months, of up to $400,000 in original  principal amount,  with
interest at the rate of prime plus one percent  (1%) per annum,  and pursuant to
such other  commercially  reasonable  terms and  conditions as shall be mutually
agreed upon in good faith between Paradigm and NewLogic.

                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

         15.1 Notice. All notices and other communications required or permitted
under this  Agreement  shall be in writing and shall be delivered to the parties
at the address set forth below their  respective  signature  blocks,  or at such
other  address that they  designate by notice to all other parties in accordance
with this  Section  15.1.  Any party  delivering  notice to Paradigm  shall also
deliver a copy to:  Pillsbury  Madison & Sutro LLP,  2700 Sand Hill Road,  Menlo
Park,  California  94025,  Attn:  Jorge A. del Calvo,  Esq. Any party delivering
notice to NewLogic or the Securityholders shall also deliver a copy to: Brobeck,
Phleger & Harrison LLP, Two  Embarcadero  Place,  2200 Geng Road,  Palo Alto, CA
94303,  Attn: Warren T. Lazarow,  Esq. All notices and  communications  shall be
deemed to have been received:  (a) in the case of personal delivery, on the date
of such  delivery;  (b) in the case of telex or facsimile  transmission,  on the
date  on  which  the  sender   receives   confirmation  by  telex  or  facsimile
transmission  that such notice was received by the  addressee,  provided  that a
copy of such

                                      -53-





<PAGE>



transmission is additionally  sent by mail as set forth in (d) below; (c) in the
case of overnight  air courier,  on the second  business day  following  the day
sent, with receipt  confirmed by the courier;  and (d) in the case of mailing by
first class  certified or  registered  mail,  postage  prepaid,  return  receipt
requested, on the fifth business day following such mailing.

         15.2 Entire  Agreement.  This  Agreement,  the exhibits  and  schedules
hereto,  and the documents  referred to herein  embody the entire  agreement and
understanding  of the parties  hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings,  oral
or written, relative to said subject matter.

         15.3 Binding Effect; Assignment.  This Agreement and the various rights
and obligations  arising  hereunder shall inure to the benefit of and be binding
upon  NewLogic  and the  Securityholders  and their  respective  successors  and
permitted  assigns and upon Paradigm and its successors  and permitted  assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be  transferred  or assigned (by  operation of law or otherwise) by any of
the  parties  hereto  without  the prior  written  consent  of the other  party;
provided,  however, that Paradigm may, without such written consent,  assign its
rights in connection  with a merger of Paradigm with or into another  entity,  a
sale  of all or  substantially  all of  Paradigm's  assets  or a  reorganization
involving  Paradigm  or a merger or sale of assets of NewLogic to Paradigm or to
one of Paradigm's affiliates.

         15.4 Expenses of Transaction.  NewLogic and the  Securityholders  shall
pay in full all fees and expenses incurred by NewLogic and the  Securityholders,
respectively,   in  connection   with  this   Agreement  and  the   transactions
contemplated  hereby;  provided,  however,  that all  legal  fees  and  expenses
incurred by NewLogic in excess of twenty five thousand  dollars  ($25,000) shall
be  paid by the  Securityholders.  Paradigm  shall  pay all  fees  and  expenses
incurred by Paradigm in  connection  with this  Agreement  and the  transactions
contemplated hereby.  NewLogic and the Securityholders  shall pay all applicable
sales,  use, excise,  transfer,  documentary and any other similar taxes arising
out of the purchase and sale of the Securities.

         15.5  Waiver;  Consent.  This  Agreement  may not be changed,  amended,
terminated,  augmented,  rescinded or discharged (other than by performance), in
whole or in part,  except by a writing  executed by the parties  hereto;  and no
waiver of any of the  provisions or  conditions of this  Agreement or any of the
rights of a party hereto shall be effective or binding  unless such waiver shall
be in  writing  and  signed  by the party  claimed  to have  given or  consented
thereto.  Except to the extent that a party hereto may have otherwise  agreed in
writing, no waiver by that party of any condition of this Agreement or breach by
the other party of any of its obligations or representations

                                      -54-





<PAGE>



hereunder or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the  other  party,  nor shall any  forbearance  by the first  party to seek a
remedy  for any  noncompliance  or breach  by the other  party be deemed to be a
waiver by the first  party of its  rights  and  remedies  with  respect  to such
noncompliance or breach.

         15.6 Third-Party Beneficiaries.  Except as otherwise expressly provided
for in this  Agreement,  nothing  herein,  expressed or implied,  is intended or
shall be construed to confer upon or give to any person,  firm,  corporation  or
legal  entity,  other than the parties  hereto,  any  rights,  remedies or other
benefits under or by reason of this Agreement.

         15.7  Counterparts.  This Agreement may be executed  simultaneously  in
multiple  counterparts,  each of which shall be deemed an  original,  but all of
which taken together shall constitute one and the same instrument.

         15.8 Severability. If one or more provisions of this Agreement are held
to be unenforceable  under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement  shall be interpreted as if such
provision  were so excluded  and shall be  enforceable  in  accordance  with its
terms.

         15.9 Governing  Law. This Agreement  shall in all respects be construed
in  accordance  with and  governed  by the laws of the State of  California,  as
applied to contracts  entered into and to be performed solely within  California
solely between residents of California.

         15.10 Other Remedies.  Any and all rights and remedies herein expressly
conferred upon a party  pursuant to this Agreement or in any agreement  referred
to herein will be deemed cumulative with and not exclusive of any other right or
remedy conferred hereby or thereby;  and the exercise of any one right or remedy
will not  preclude  the  exercise  of any other  right or remedy  under any such
Agreement.

         15.11 Mutual Drafting. This Agreement is the joint product of Paradigm,
NewLogic and the Securityholders,  and shall not be construed for or against any
party hereto.

         15.12 Tax Matters.  Each of the parties to this Agreement  acknowledges
and agrees that any amounts payable under

                                      -55-




<PAGE>



         Article  II of  this  Agreement  shall  be  subject  to all  applicable
withholding requirements.

         IN WITNESS WHEREOF,  the parties hereto have cause this Agreement to be
executed as of the day and year first above written.

                                       PARADIGM TECHNOLOGY, INC.



                                       By_______________________________________
                                         
                                       Title____________________________________

                                       Address         71 Vista Montana
                                                       San Jose, CA 95134


                                       NEWLOGIC CORP.



                                       By_______________________________________

                                       Title____________________________________

                                       Address         11805 N.E. 99th Street
                                                       Suite 1320
                                                       Vancouver, WA 98682


                                      -56-




<PAGE>



                                 SIGNATURE PAGE

                                       TO

                   SECURITIES PURCHASE AGREEMENT BY AND AMONG

                           PARADIGM TECHNOLOGY, INC.,

                                 NEWLOGIC CORP.

                    AND THE SECURITYHOLDERS OF NEWLOGIC CORP.


         The undersigned  hereby  executes and delivers the Securities  Purchase
Agreement (the  "Agreement") to which this Signature Page is attached  effective
as of the date of the Agreement,  which Agreement and Signature  Page,  together
with all counterparts of said Agreement and Signature Pages of the other parties
named  in  said  Agreement,  shall  constitute  one  and the  same  document  in
accordance with the terms of said Agreement.



                                     -------------------------------------------
                                              Name of Securityholder



                                     -------------------------------------------
                                                    Signature

                                     Address
                                            ------------------------------------
                                            ------------------------------------
                                            ------------------------------------





<PAGE>

<TABLE>


                                                   SCHEDULE A
                                                   ----------

                                            NEWLOGIC SECURITYHOLDERS
                                            ------------------------
<CAPTION>

                                                            Common           Common
                                                           Issuable         Issuable
                                                             Upon             Upon
                                                           Exercise         Exercise
                                                              of               of
                                  Outstanding               Vested          Unvested           Series B-1
                                     Common                Options           Options            Preferred           Total
                                  -----------              -------          --------           ----------         ---------

<S>                                <C>                     <C>                 <C>               <C>              <C>      
Hans Olsen                         1,070,000               259,380                  0                  0          1,329,380

Bruce Campbell                       474,880                     0                  0            950,000          1,424,880

Simone Campbell                            0                     0                  0             50,000             50,000

James Campbell,                      504,500                     0                  0                  0            504,500
T'ee

Greg Roberts                         282,000                28,000             30,000                  0            340,000

Dennis Halicki                         8,000                15,000             45,000                  0             68,000

Jamie LeVasseur                        8,000                30,000             30,000                  0             68,000

Richard Shields                        8,000                30,000             30,000                  0             68,000

Gene Sorg                                  0                     0             36,000                  0             36,000

Phil Andrews                               0                     0             48,000                  0             48,000

Dinesh Rao                                 0                     0            132,000                  0            132,000
                                                                                                                   ---------
                                                                                                                   4,068,760
</TABLE>



         In the event any  securityholder  of NewLogic  set forth above fails to
enter into this Agreement and complete its  obligations  provided in Section 8.2
of the Agreement, (i) such securityholder's unvested options and other rights to
purchase Common Stock of NewLogic shall not accelerate,  (ii) all such rights of
such securityholder to acquire such shares shall terminate at the Closing, (iii)
the Securities to be sold to Paradigm hereunder shall be decreased by the number
of shares set forth next to such  securityholder's  name in the column captioned
"Common  Issuable  Upon  Exercise  of  Unvested  Options,"  and (iv)  the  Stock
Consideration  (and Cash  Consideration,  if any)  payable by Paradigm  for such
Securities shall be commensurately reduced.




<PAGE>
<TABLE>



                                 SCHEDULE 1.3(a)
                                 ---------------

                           PAYMENTS TO SECURITYHOLDERS
                           ---------------------------
<CAPTION>

                                                                                   Paradigm
                                                                                Shares Issued          Paradigm
                                                           NewLogic                  and             Shares Issued
                                        Certificate         Shares               Transferred          and Held in          Cash at
                Name                      Numbers         Represented             at Close              Escrow              Close
------------------------------------    -----------      ------------            -----------          -----------       ------------
<S>                                        <C>           <C>                       <C>                <C>               <C>        
Bruce and Simone Campbell B1-2, B1-3                     1,000,000    B-1            76,411            14,498           $      0.79
Bruce Campbell                              21             128,000                    9,624                 0           $      0.52
                                            27             346,880                        0            26,080           $      1.76

James S. Campbell TTEE                      17             192,000                   14,436                 0           $      5.97
                                            23             312,500                    4,530            18,966           $      2.08

Hans Olsen                                  22             320,000                   16,822                 0           $ 62,601.35
                                            28             750,000                   25,916            30,474           $      8.45
                                           TBD             259,380                        0            19,502           $      2.21

Gregory Roberts                             20               4,000                      300                 0           $      6.50
                                            28             278,000                   12,481             8,421           $      2.21
                                           TBD              58,000                        0             4,360           $      7.80

Nicholas Wade                               29              16,000                        0                 0           $ 10,406.02
                                           TBD             113,400                        0                 0           $ 73,752.63

Dennis Halicki                              30               8,000                      601                 0           $      4.36
                                           TBD              60,000                    1,955             2,556           $      2.41

Jamie LeVasseur                             19               4,000                      300                 0           $      8.45
                                            25               4,000                      300                 0           $      8.45
                                           TBD              60,000                    1,955             2,556           $      2.41

Richard Shields                             20               4,000                      300                 0           $      8.45
                                            24               4,000                      300                 0           $      8.45
                                           TBD              60,000                    1,955             2,556           $      2.41

Gene Sorg                                  TBD              36,000                    1,353             1,353           $      6.63

Phil Andrews                               TBD              48,000                    1,805             1,804           $      0.20

Dinesh Rao                                 TBD             132,000                    4,962             4,962           $      7.02

Peter MacCormick                           TBD              24,000                        0                 0           $ 15,609.02

James Demaris                                                2,000                        0                 0           $  1,300.75

Rebecca Williams                                             2,000                        0                 0           $  1,300.75
                                                         ---------                  -------           -------           ------------
                               TOTAL                     4,226,160                  176,306           138,088           $165,068.05

</TABLE>







<PAGE>



                                  SCHEDULE 1.4
                                  ------------

                         OTHER NEWLOGIC SECURITYHOLDERS
                         ------------------------------



          Name                Shares Held
          ----                -----------
Nichimen Corporation      825,000 Series B-1

James Demaris               2,000 Common

Rebecca Williams            2,000 Common

Peter MacCormick           24,000 Common

Nicholas Wade             129,400 Common







<PAGE>



                                  SCHEDULE 2.1
                                  ------------

                        POST CLOSING CONSIDERATION TABLE
                        --------------------------------


     Name                         Initial Percentage Interest
     ----                         ---------------------------

Hans Olsen                               18.5%

Bruce Campbell                           18.5%

Gregory Roberts                            12%

Dennis Halicki                             12%

Jamie LeVasseur                             8%

Rick Shields                                8%

Gene Sorg                                   4%

Phil Andrews                                4%

Dinesh Rao                                  4%

Dale Koch                                   4%

Reserved                                    7%
                                          ----
         TOTAL                            100%







<PAGE>



                                  SCHEDULE 2.2
                                  ------------

                              THE NEWLOGIC PRODUCTS
                              ---------------------


ISC-5             Integrated Pentium "North Bridge" System Controller
                  with Integrated L2 Cache (NewLogic 5610) and
                  derivatives thereof

ISC-6             Integrated Pentium Pro "North Bridge"

ICR-5             High Integration Cache Solution for Pentium PC's

ICR-6             High Integration Cache Solution for Pentium Pro PC's

Other             Any  other   product   substantially   developed  by  NewLogic
                  Securityholders other than Paradigm's normal SRAM products and
                  proposed SRAM products






<PAGE>



                                                SCHEDULE 11.2(k)
                                                ----------------

                                              OPTION EXERCISE PRICE
                                              ---------------------



                      Per Share                                        Aggregate
                      Exercise                 Total                   Exercise
       Name            Price                   Shares                   Price
       ----          --------                 ----------              ----------
Hans Olsen           $0.088 x                 259,380  =              $22,825.44

Gregory Roberts       0.08  x                  58,000  =                4,640.00

Nicholas Wade         0.08  x                 113,400  =                9,072.00

Dennis Halicki        0.08  x                  60,000  =                4,800.00

Jamie LeVasseur       0.08  x                  60,000  =                4,800.00

Richard Shields       0.08  x                  60,000  =                4,800.00

Gene Sorg             0.08  x                  36,000  =                2,880.00

Phil Andrews          0.08  x                  48,000  =                3,840.00

Dinesh Rao            0.08  x                 132,000  =               10,560.00

Peter MacCormick      0.08  x                  24,000  =                1,920.00
                                                                      ----------

         TOTAL                                                        $70,137.44