<PAGE>

                        REGISTRATION RIGHTS AGREEMENT


     THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement"), 
entered into as of February 13, 1997, between CAPITAL VENTURES INTERNATIONAL, 
with offices at 1 Capital Place, P.O. Box 1787GT, Grand Cayman, Cayman 
Islands (the "Purchaser"), and ZYCAD CORPORATION, a Delaware corporation with 
offices at 47100 Bayside Parkway, Fremont, California 94538  (the "Company") 

                            W I T N E S S E T H:
                                           
     WHEREAS, pursuant to a Convertible Securities Subscription Agreement, 
dated as of February 13, 1997 (the "Agreement"), by and between the Company 
and the Purchaser, the Company has agreed to sell and the Purchaser has 
agreed to purchase up to One Million and Seven Hundred and Fifty Thousand 
Dollars (U.S. $1,750,000) of the Company's 6% Convertible Subordinated 
Debenture due February 13, 2000 (the "Debentures") convertible into shares of 
the Company's Common Stock, $.10 par value.  The Company has further agreed, 
pursuant to the Agreement and under the circumstances provided therein, to 
issue Warrants to purchase additional shares of such Common Stock.  The 
shares of such Common Stock issuable upon conversion of the Debentures and 
exercise of such Warrants are collectively referred to herein as the "Shares".

     WHEREAS, pursuant to the terms of, and in partial consideration for, the 
Purchaser's agreement to enter into the Agreement, the Company has agreed to 
provide the Purchaser with certain registration rights with respect to the 
Shares under certain circumstances set forth in the Agreement;

     NOW, THEREFORE, in consideration of the mutual promises, 
representations, warranties, covenants and conditions set forth in the 
Agreement and this Registration Rights Agreement, the Company and the 
Purchaser agree as follows:

1.       CERTAIN DEFINITIONS.  As used in this Agreement, the following terms 
shall have the following respective meanings.  Other terms used herein which 
are defined in the Agreement, the Debentures or the Warrants shall have the 
same meanings herein as they do in such other documents.

     "Commission" or "SEC" shall mean the Securities and Exchange Commission 
or any other federal agency at the time administering the Securities Act.

     "Registrable Securities" shall mean:  (i) Shares issued to Purchaser or 
its designee upon conversion of the Debentures, upon exercise of the Warrants 
(including the Debentures and Warrants to be sold to the Purchaser on the 
First Closing Date and on the Second Closing Date pursuant to the Agreement) 
or upon any stock split, stock dividend, recapitalization or similar event 
with respect to such Shares; and (ii) any securities issued 


                                      -1-
<PAGE>

or issuable to Purchaser or any Holder upon the conversion or exercise or 
exchange of any Debentures, Warrants or Shares.

     The terms "register", "registered" and "registration" shall refer to a 
registration effected by preparing and filing a registration statement in 
compliance with the Securities Act and applicable rules and regulations 
thereunder, and the declaration or ordering of the effectiveness of such 
registration statement.

     "Registration Expenses" shall mean all expenses to be incurred by the 
Company in connection with Purchaser's exercise of its registration rights 
under this Agreement, including, without limitation, all registration and 
filing fees, printing expenses, fees and disbursements of counsel for the 
Company, blue sky fees and expenses, reasonable fees and disbursements of 
counsel to Holder for a "due diligence" examination of the Company, and the 
expense of any special audits incident to or required by any such 
registration (but excluding the compensation of regular employees of the 
Company, which shall be paid in any event by the Company).

     "Selling Expenses" shall mean all underwriting discounts and selling 
commissions, if any, applicable to the sale of Registrable Securities and all 
fees and disbursements of counsel for Holder not included within 
"Registration Expenses."

     "Holder" shall include the Purchaser and any transferee of Debentures, 
Warrants, Shares or Registrable Securities which have not been sold to the 
public to whom the registration rights conferred by this Agreement have been 
transferred in compliance with Section 10 of this Agreement.

     "Registration Statement" shall have the meaning set forth in Section 
2(a) herein.

     "Regulation D" shall mean Regulation D as promulgated pursuant to the 
Securities Act, and as subsequently amended.

     "Securities Act" shall mean the Securities Act of 1933, as amended.

2.       THE REGISTRATION REQUIREMENTS.  The Company shall file as promptly as 
possible and in any event by the forty-fifth (45th) calendar day after the 
First Closing Date, and use its diligent best efforts to cause to become 
effective, as promptly as possible and in any event by the ninetieth (90th) 
calendar day after the First Closing Date in the case of the registration of 
the Underlying Stock and the Warrant Stock, a registration statement on Form 
S-3 under the Securities Act or, if Form S-3 is not then available, another 
appropriate form covering the resale of the Underlying Stock issuable on 
conversion of the Debentures and the resale of the Warrant Stock issuable 
upon the exercise of the Warrants, and shall take all action necessary to 
qualify the Underlying Stock and the Warrant Stock under state "blue sky" 
laws as hereinafter provided.  The Company shall use its diligent best 
efforts to effect the registration contemplated by the foregoing (including, 
without limitation, the execution of an undertaking to file amendments and


                                      -2-
<PAGE>

post-effective amendments, appropriate qualification under and compliance 
with applicable blue sky or other state securities laws and appropriate 
compliance with applicable regulations issued under the Securities Act) and 
as would permit or facilitate the sale and distribution of all the 
Registrable Securities in all states reasonably requested by the Holder for 
purposes of maximizing the proceeds realizable by the Holder from such sale 
and distribution.  Such best efforts by the Company shall include, without 
limitation, the following:

         (a)  The Company shall file (i) registration statements with the 
         Commission pursuant to Rule 415 under the Securities Act on Form 
         S-3 under the Securities Act and the Company shall use its best 
         efforts to qualify for the use of such Form (or in the event that 
         the Company is ineligible to use such form, such other form as the 
         Company is eligible to use under the Securities Act) covering the 
         Registrable Securities so to be registered (each, a "Registration 
         Statement"); (ii) such blue sky filings as shall be reasonably 
         requested to permit such sales PROVIDED, HOWEVER, that the Company 
         shall not be required to register the Registrable Securities in any 
         jurisdiction that would subject it to general service of process in 
         any such jurisdiction where it is not then so subject or subject 
         the Company to any tax in any such jurisdiction where it is not 
         then so subject or require the Company to qualify to do business in 
         any jurisdiction where it is not then so qualified; and (iii) any 
         required filings with the National Association of Securities 
         Dealers, Inc. ("NASD") or exchange where the Shares are traded; all 
         as soon as practicable after the date hereof. The Company shall use 
         its best efforts to have the Registration Statements and other 
         filings declared effective as soon thereafter as may be practicable.
         
         (b)  The Company shall enter into such customary agreements 
         (including a customary underwriting agreement with the underwriter 
         or underwriters, if any) and take all such other reasonable actions 
         in connection therewith in order to expedite or facilitate the 
         disposition of such Registrable Securities and in such connection, 
         whether or not the Registrable Securities are to be sold in an 
         underwritten offering, the Company shall:

                      (i)  make such representations and warranties to the 
                  Holder and the underwriter or underwriters, if any, in form 
                  and substance and scope as are customarily made by issuers to 
                  underwriters in secondary underwritten offerings:
                  
                      (ii) cause to be delivered to the sellers of Registrable 
                  Securities and the underwriter or underwriters, if any, 
                  opinions of counsel to the Company, dated the effective day 
                  (or in the case of an underwritten offering, dated the date 
                  of delivery of any Registrable Securities sold pursuant 
                  thereto) of the applicable registration statement (which 
                  counsel, and opinions (in form, scope and substance), shall 
                  be reasonably satisfactory to the managing underwriter or 
                  underwriters, if any, and the 


                                      -3-
<PAGE>

                  appointed representative or counsel of the Holder, addressed 
                  to the Holder and each underwriter, if any, covering the 
                  matters customarily covered in opinions requested in 
                  secondary underwritten offerings and, in the case of any 
                  underwritten offering, such other matters as may be 
                  reasonably requested by the Holder;

                  (iii)  cause to be delivered, immediately prior to the 
                  effectiveness of the applicable Registration Statement (and, 
                  in the case of an underwritten offering, at the time of 
                  delivery of any Registrable Securities sold pursuant 
                  thereto), letters from the Company's independent certified 
                  public accountants addressed to the Holder and each 
                  underwriter, if any, stating that such accountants are 
                  independent public accountants within the meaning of the 
                  Securities Act and the applicable published rules and 
                  regulations thereunder, and otherwise in customary form and 
                  covering such financial and accounting matters as are 
                  customarily covered by letters of the independent certified 
                  public accountants delivered in connection with secondary 
                  underwritten public offerings;
                  
                      (iv) if an underwriting agreement is entered into, cause 
                  the same to set forth indemnification and contribution 
                  provisions and procedures which are no less favorable to the 
                  Holder and the Company than those contemplated by sections 9 
                  and 10 with respect to all parties to be indemnified pursuant 
                  to such sections; 

                      (v)  deliver such documents and certificates as may be 
                  reasonably requested by the Holder of the Registrable 
                  Securities being sold or the managing underwriter or 
                  underwriters, if any, to evidence compliance with clause (i) 
                  above and with any customary conditions contained in the 
                  underwriting agreement, if any, or other agreement entered 
                  into by the Company;
                  
the foregoing in this paragraph 2(b) shall be done at each closing under any 
such underwriting or similar agreement or as and to the extent required 
thereunder; provided, however, the foregoing in paragraph 2(b) shall not be 
required on more than two (2) occasions.  

(c)  The Company shall make available for inspection and review by the 
Holder, a representative or representatives of the Holder, any underwriter 
participating in any disposition pursuant to a Registration Statement, and 
any attorney or accountant retained by such Holder or underwriter, any such 
registration statement or amendment or supplement or any blue sky, NASD or 
other filing, all financial and other records, pertinent corporate documents 
and properties of the Company as they may reasonably request for the purpose, 
and cause the Company's officers, directors and employees to supply all 
information reasonably requested by any such representative, underwriter, 
attorney or 


                                      -4-
<PAGE>

         accountant in connection with such Registration Statement; 
         PROVIDED, HOWEVER, that the Holder shall first agree in writing 
         with the Company that any information that is reasonably and in 
         good faith designated by the Company in writing as confidential at 
         the time of delivery of such information shall be kept confidential 
         by the Holder and that the Holder will use reasonable efforts to 
         cause its representatives and such other persons so to keep such 
         information confidential, unless (i) disclosure of such information 
         is required by court or administrative order or is necessary to 
         respond to inquiries of regulatory authorities, (ii) disclosure of 
         such information is required by law (including any disclosure 
         requirements pursuant to Federal securities laws in connection with 
         the filing of any Registration Statement or the use of any 
         prospectus referred to in this Agreement), (iii) such information 
         becomes generally available to the public other than as a result of 
         a disclosure or failure to safeguard by any such person, (iv) such 
         information becomes available to any such person from a source 
         other than the Company and such source, to the knowledge of such 
         persons, is not bound by a confidentiality agreement with the 
         Company, or (v) such information was known to or is developed by 
         such persons without reference to such confidential information of 
         the Company.
         
3.       UNDERWRITTEN DISTRIBUTION.  If the Holder intends to distribute the 
Registrable Securities covered by a Registration Statement by means of an 
underwriting, the Holder shall so advise the Company and, within 30 days of 
the date thereof and without limiting the generality of other provisions 
hereof, the Company will prepare and file such amendment or amendments to the 
Registration Statement and make such other filings as may be necessary or 
appropriate to effect any such underwritten distribution.

4.       MULTIPLE HOLDERS.  If there is more than one Holder, such Holders 
         shall act with respect to their rights under this Agreement 
         according to the vote of a majority-in-interest.
         
5.       EXPENSES OF REGISTRATION.  All Registration Expenses incurred in 
         connection with any registration, qualification or compliance 
         pursuant to this Agreement shall be borne by the Company, and all 
         Selling Expenses shall be borne by the Holder.
         
6.       REGISTRATION DELAY OR FAILURE.  The Company acknowledges that its 
         failure to register the Registrable Securities in accordance with 
         the Agreement and this Registration Rights Agreement will cause the 
         Holder to suffer damages and undertake risks in amounts that will 
         be difficult to ascertain and were not anticipated in negotiating 
         the terms hereof or of the Agreement, the Debentures or the 
         Warrants.  Accordingly the parties agree that it is appropriate to 
         include herein a provision for liquidated damages and to compensate 
         the Holder fairly for the additional risk undertaken by the Holder 
         resulting from the Company's delay or failure to effect such 
         registrations.  The parties acknowledge and agree that the 
         provisions hereinafter set forth in this Paragraph 6 represent the 
         parties' good faith effort to quantify such damages and to 
         compensate for such additional risk and, as 


                                      -5-
<PAGE>

         such, agree that the form and amount of damages and risk 
         compensation are reasonable and will not constitute a penalty.
             
         (a)  If the Registration Statement covering the resale of the 
         Underlying Stock and the Warrant Stock is not effective by the 
         ninetieth (90th) calendar day after the First Closing Date, then, 
         with respect to the Debentures outstanding on such ninetieth day , 
         each of the X%s (as defined in the Debentures) used in determining 
         the Conversion Date Market Price (as defined in the Debentures) 
         shall be reduced by two (2) percentage points, and the X%s as so 
         reduced shall then and thereafter be applicable to and upon the 
         conversion of such Debentures, in lieu and in place of the X%s 
         provided in the Debentures but subject to further reduction as 
         hereinafter provided in this Paragraph 6.  
         
         (b)  If such Registration Statement still has not become effective 
         by the one hundred twentieth (120th) calendar day (or any lesser 
         number of days greater than the 90th calendar day after the First 
         Closing Date then each of the X%s applicable to the Debentures, as 
         theretofore reduced pursuant to Paragraph 6(a) hereof, shall be 
         further reduced by three (3) percentage points (or a prorated 
         portion for each day between the 90th and 120th calendar days) and, 
         as further so reduced, shall then and thereafter be applicable to 
         and upon conversion of the  Debentures, but subject to further 
         reduction as hereinafter provided.  
         
         (c)  If such Registration Statement still has not become effective 
         by the one hundred fiftieth (150th) calendar day (or any lesser 
         number of days greater than the 120th calendar day) after the First 
         Closing Date, then each of the X%s applicable to the Debentures, as 
         theretofore reduced pursuant to Paragraphs 6(a) and (b) hereof, 
         shall be further reduced by three (3) percentage points (or a 
         prorated portion for each day between the 120th and 150th calendar 
         days) on such 150th calendar day, and the X%s applicable to the 
         Debentures, as so reduced, shall then and thereafter be applicable 
         to and upon the conversion of such Debentures. 
         
         (d)  If such Registration Statement still has not become effective 
         by the one hundred eightieth (180th) calendar day after the First 
         Closing Date, then there shall be paid to each Holder by the 
         Company, in cash, on such 180th day and on each succeeding 30th day 
         thereafter upon which such Registration Statement still has not 
         become effective, an amount equal to 3% of the Outstanding 
         Principal Amount of the Debentures held by the Holder on such 180th 
         day or succeeding 30th day, as the case may be, plus an amount 
         equal to 3% of the Original Principal Amount of any Debentures 
         converted prior to such 180th day or succeeding 30th day, as the 
         case may be, (each such payment, a "30 Day Delay Payment") and if 
         such Registration Statement shall become effective after the one 
         hundred fiftieth (150th) calendar day after the First Closing Date 
         but before such 180th day or any such succeeding 30th day, there 
         shall also be paid to the Holder, in cash, on the effective date of 
         the Registration Statement a 30 Day Delay 


                                      -6-
<PAGE>

         Payment pro-rated according to the portion of the then current 30 
         day period ending on such effective date.
         
         (e)  If such Registration Statement still has not become effective 
         by the first anniversary of the First Closing Date, then, at the 
         Holder's option exercised at any time thereafter, the Company shall 
         redeem the Holder's Debentures at a date designated by such Holder, 
         and at the redemption price provided in Paragraph 9(b) of the 
         Debentures, as though the date so designated were the date of a 
         Conversion Notice for purposes of such Paragraph 9(b).
         
7.       REGISTRATION PROCEDURES. In the case of each registration effected 
by the Company pursuant to this Agreement, the Company will keep the Holder 
advised in writing as to initiation of each registration and as to the 
completion thereof. At its expense, the Company will use its best efforts to:

         (a) Keep such registration effective for the period ending (i) sixty 
(60) months after initial issuance of the Debentures, (ii) when the Holder 
has completed the distribution of the Registrable Securities described in the 
registration statement relating thereto, or (iii) the date on which the 
Registrable Securities are distributed to the public pursuant to Rule 144(k) 
or are saleable pursuant to Rule 144(k) promulgated under the Securities Act, 
whichever first occurs.

         (b) Furnish such number of prospectuses and other documents incident 
thereto as the Holder from time to time may reasonably request.

8.       SUSPENSION OF USE OF REGISTRATION STATEMENT. The Holder agrees that, 
upon receipt of any notice from the Company of (A) the happening of any event 
which makes any statements made in the registration statement(s) or related 
prospectus(es) filed pursuant to this Registration Rights Agreement, or any 
document incorporated or deemed to be incorporated therein by reference, 
untrue in any material respect or which requires the making of any changes in 
such registration statement(s) or prospectus(es) so that, in the case of such 
registration statement(s), it will not contain any untrue statement of a 
material fact or omit to state any material fact required to be stated 
therein or necessary to make the statements therein, in light of the 
circumstance under which they were made, not misleading or (B) that, in the 
judgment of the Company's Board of Directors, it is advisable to suspend use 
of the prospectus(es) for a discrete period of time due to pending corporate 
developments which are or may be material to the Company but have not been 
disclosed in the Registration Statement(s) or in relevant public filings with 
the SEC, or (C) the SEC has issued a stop order suspending the effectiveness 
of the Registration Statement(s), the Holder will forthwith discontinue 
disposition of such Shares covered by such Registration Statement(s) or 
prospectus(es) until it is advised in writing by the Company that use of the 
applicable prospectus may be resumed, and has received copies of any 
additional or supplemented filings that are incorporated or deemed to be 
incorporated by reference in such prospectus(es). The Company shall use all 
reasonable best efforts to insure that the use of the prospectus(es) may be 
resumed as soon as 


                                      -7-
<PAGE>

practicable, and in any event shall not be entitled to require the Holder to 
suspend use of the prospectus(es) for more than thirty (30) consecutive days 
on any one occasion, more than forty-five (45) consecutive days in the 
aggregate on two occasions which are not at least 90 days apart or more than 
an aggregate of sixty (60) days in any twelve month period.

9.       INDEMNIFICATION.

         (a) COMPANY INDEMNITY. The Company will indemnify the Holder, each 
of its officers, directors and partners, and each person controlling Holder 
within the meaning of Section 15 of the Securities Act and the rules and 
regulations thereunder with respect to which registration, qualification or 
compliance has been effected pursuant to this Agreement, and each 
underwriter, if any, and each person who controls, within the meaning of 
Section 15 of the Securities Act and the rules and regulations thereunder, 
any underwriter, against all claims, losses, damages and liabilities (or 
actions in respect thereof) arising out of or based on any untrue statement 
(or alleged untrue statement) of a material fact contained in any prospectus, 
offering circular or other document (including any related registration 
statement, notification or the like) incident to any such registration, 
qualification or compliance, or based on any omission (or alleged omission) 
to state therein a material fact required to be stated therein or necessary 
to make the statements therein not misleading, or any violation by the 
Company of the Securities Act or any state securities law or in either case, 
any rule or regulation thereunder applicable to the Company and relating to 
action or inaction required of the Company in connection with any such 
registration, qualification or compliance, and will reimburse the Holder, 
each of its officers, directors and partners, and each person controlling 
such Holder, each such underwriter and each person who controls any such 
underwriter, for any legal and any other expenses reasonably incurred in 
connection with investigating and defending any such claim, loss, damage, 
liability or action, provided that the Company will not be liable in any such 
case to the extent that any such claim, loss, damage, liability or expense 
arises out of or is based on any untrue statement or omission (or alleged 
untrue statement or omission) based upon written information furnished to the 
Company by Holder or the underwriter and stated to be specifically for use 
therein. The Indemnity agreement contained in this Section 9(a) shall not 
apply to amounts paid in settlement of any such loss, claim, damage, 
liability or action if such settlement is effected without the consent of the 
Company (which consent will not be unreasonably withheld).

         (b) HOLDER INDEMNITY. The Holder will, if Registrable Securities 
held by it are included in the securities as to which such registration, 
qualification or compliance is being effected, indemnify the Company, each of 
its directors, officers, partners, and each underwriter, if any, of the 
Company's securities covered by such a registration statement, each person 
who controls the Company or such underwriter within the meaning of Section 15 
of the Securities Act and the rules and regulations thereunder, each other 
Holder (if any), and each of their officers, directors and partners, and each 
person controlling such other Holder against all claims, losses, damages and 
liabilities (or actions in respect thereof arising out of or based on any 
untrue statement (or alleged 


                                      -8-
<PAGE>

untrue statement) of a material fact contained in any such registration 
statement, prospectus, offering circular or other document, or any omission 
(or alleged omission) to state therein a material fact required to be stated 
therein or necessary to make the statement therein not misleading, and will 
reimburse the Company and such other Holders and their directors, officers 
and partners, underwriters or control persons for any legal or any other 
expenses reasonably incurred in connection with investigating or defending 
any such claim, loss, damage, liability or action, in each case to the 
extent, but only to the extent, that such untrue statement (or alleged untrue 
statement) or omission (or alleged omission) is made in such registration 
statement, prospectus, offering circular or other document in reliance upon 
and in conformity with written information furnished to the Company by Holder 
and stated to be specifically for use therein; provided, however, that the 
obligations of Holder shall not apply to amounts paid in settlement of any 
such claims, losses, damages or liabilities if such settlement is effected 
without the consent of Holder (which consent shall not be unreasonably 
withheld).

         (c) PROCEDURE. Each party entitled to indemnification under this 
Article (the "Indemnified Party") shall give notice to the party required to 
provide indemnification (the "Indemnifying Party") promptly after such 
Indemnified Party has actual knowledge of any claim as to which indemnity may 
be sought, and shall permit the Indemnifying Party to assume the defense of 
any such claim in any litigation resulting therefrom, provided that counsel 
for the Indemnifying Party, who shall conduct the defense of such claim or 
any litigation resulting therefrom, shall be approved by the Indemnified 
Party (whose approval shall not be unreasonably withheld), and the 
Indemnified Party may participate in such defense at such party's expense, 
and provided further that the failure of any Indemnified Party to give notice 
as provided herein shall not relieve the Indemnifying Party of its 
obligations under this Article except to the extent that the Indemnifying 
Party is actually prejudiced by such failure to provide notice. No 
Indemnifying Party, in the defense of any such claim or litigation, shall, 
except with the consent of each Indemnified Party, consent to entry of any 
judgment or enter into any settlement which does not include as an 
unconditional term thereof the giving by the claimant or plaintiff to such 
Indemnified Party of a release from all liability in respect to such claim or 
litigation. Each Indemnified Party shall furnish such information regarding 
itself or the claim in question as an Indemnifying Party may reasonably 
request in writing and as shall be reasonably required in connection with the 
defense of such claim and litigation resulting therefrom.

10.      CONTRIBUTION. If the indemnification provided for in Section 9 
herein is unavailable to the Indemnified Parties in respect of any losses, 
claims, damages or liabilities referred to herein, then each such 
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall 
contribute to the amount paid or payable by such Indemnified Party as a 
result of such losses, claims, damages or liabilities (i) as between the 
Company on the one hand and the Indemnified Parties on the other, in such 
proportion as is appropriate to reflect the relative benefits received by the 
Company on the one hand and the Indemnified Parties, as the case may be, on 
the other from the offering of the Registrable Securities, or (ii) if such 
allocation is not permitted by 


                                      -9-
<PAGE>

applicable law, in such proportion as is appropriate to reflect not only such 
relative benefits but also the relative fault of the Company on the one hand 
and of the Indemnified Parties, as the case may be, on the other, in 
connection with the statements or omissions which resulted in such losses, 
claims, damages or liabilities, as well as any other relevant equitable 
considerations.

     The relative benefits received by the Company on the one hand and the 
Indemnified Parties, as the case may be, on the other shall be deemed to be 
in the same proportion as the proceeds from the offering (net of underwriting 
discounts and commissions but before deducting expenses) received by the 
Company from the initial sale of the Debentures by the Company pursuant to 
the Agreement bear to the gain realized by the Holder or the total 
underwriting discounts and commissions received by the underwriters as set 
forth in the table on the cover page of the prospectus, as the case may be. 
The relative fault of the Company on the one hand and of the Holder or 
underwriters, as the case may be, on the other shall be determined by 
reference to, among other things, whether the untrue or alleged untrue 
statement of a material fact or omission to state a material fact relates to 
information supplied by the Company, by the Holder or by the underwriters.

     In no event shall the obligation of any Indemnifying Party to contribute 
under this Section 10 exceed the amount that such Indemnifying Party would 
have been obligated to pay by way of indemnification if the indemnification 
provided for under Section 9(a) or 9(b) hereof had been available under the 
circumstances.

     The Company and the Holder agree that it would not be just and equitable 
if contribution pursuant to this Section 10 were determined by pro rata 
allocation (even if the Indemnified Parties were treated as one entity for 
such purpose) or by any other method of allocation which does not take 
account of the equitable considerations referred to in the immediately 
preceding paragraphs. The amount paid or payable by an Indemnified Party as a 
result of the losses, claims, damages and liabilities referred to in the 
immediately preceding paragraphs shall be deemed to include, subject to the 
limitations set forth above, any legal or other expenses reasonably incurred 
by such Indemnified Party in connection with investigating or defending any 
such action or claim. Notwithstanding the provisions of this section, no 
Indemnified Party shall be required to contribute any amount in excess of the 
amount by which (i) in the case of the Holder, the net proceeds received by 
the Holder from the sale of Registrable Securities or (ii) in the case of an 
underwriter, the total price at which the Registrable Securities purchased by 
it and distributed to the public were offered to the public exceeds, in any 
such case, the amount of any damages that the Holder or underwriter has 
otherwise been required to pay by reason of such untrue or alleged untrue 
statement or omission or alleged omission. No person guilty of fraudulent 
misrepresentation (within the meaning of Section 11(f) of the Securities Act) 
shall be entitled to contribution from any person who was not guilty of such 
fraudulent misrepresentation.


                                      -10-
<PAGE>

11.      SURVIVAL. The indemnity and contribution agreements contained in 
Sections 9 and 10 and the representations and warranties of the Company 
referred to in Section 2(b)(i) shall remain operative and in full force and 
effect regardless of (i) any termination of the Agreement or any underwriting 
agreement, (ii) any investigation made by or on behalf of any Indemnified 
Party or by or on behalf of the Company and (iii) the consummation of the 
sale or successive resales of the Registrable Securities. 

12.      INFORMATION BY HOLDER AND ANY UNDERWRITERS. The Holder and the 
underwriters, if any, shall furnish to the Company, within 20 business days 
of the Company's request therefor, such information regarding such Holder or 
underwriters, as the case may be, and the distribution proposed by such 
Holder or underwriters as the Company may reasonably request in writing and 
as shall be reasonably required in connection with any registration, 
qualification or compliance referred to in this Agreement.

13.      TRANSFER OF ASSIGNMENT OF REGISTRATION RIGHTS: The rights, granted to 
Holder by the Company under this Registration Rights Agreement, to cause the 
Company to register Registrable Securities, may be transferred or assigned to 
a transferee or assignee of any of not less than $50,000 in principal amount 
of Debentures and any Warrants, provided that the Company is given written 
notice by Holder at the time of or within a reasonable time after said 
transfer or assignment, stating the name and address of said transferee or 
assignee and identifying the securities with respect to which such 
registration rights are being transferred or assigned, and provided further 
that the transferee or assignee of such rights is not deemed by the board of 
directors of the Company, in its reasonable judgment, to be a competitor of 
the Company; and provided further that the transferee or assignee of such 
rights agrees to be bound by this Registration Rights Agreement.

14.      MISCELLANEOUS.

         (a) ENTIRE AGREEMENT. This Registration Rights Agreement contains 
the entire understanding and agreement of the parties with respect to the 
subject matter hereof, and may not be modified or terminated except by a 
written agreement signed by both parties.

         (b) NOTICES: Any notice or other communication given or permitted 
under this Agreement shall be in writing and shall be deemed to have been 
duly given if personally delivered or sent by registered or certified mail, 
return receipt requested, postage prepaid with a copy in each case sent on 
the same day to the addressee by facsimile, Federal Express or other such 
expedited means, (a) if to Purchaser, at its address hereinabove set forth, 
(b) if to the Company, at its address hereinabove set forth, (c) if, to a 
Holder other than the Purchaser, at the address thereof furnished by like 
notice to the Company, or (d) to any such addressee at such other address or 
addresses as shall be so furnished to the other parties hereto by like notice.

         (c) GENDER OF TERMS. All terms used herein shall be deemed to 
include the feminine and the neuter, and the singular and the plural, as the 
context required.


                                      -11-
<PAGE>

         (d) GOVERNING LAW; CONSENT OF JURISDICTION. This Registration Rights 
Agreement and the validity and performance of the terms hereof shall be 
governed by and construed in accordance with the laws of the State of New 
York, except to the extent that the law of Delaware regulates the Company's 
issuance of securities. The parties hereto hereby consent to, and waive any 
objection to the exercise of, personal jurisdiction in the State of New York 
with respect to any action or proceeding arising out of this Registration 
Rights Agreement.

         (e) TITLE. The titles used in this Registration Rights Agreement are 
used for convenience only and are not to be considered in construing or 
interpreting this Agreement.

         IN WITNESS WHEREOF, the parties hereto have cause this Registration 
Rights Agreement to be duly executed as of the date first above written.

 


                                  By: Capital Ventures International

                              By: Bala International Inc.
                                 ---------------------------
                              Its: Agent
                                  --------------------------

                              By: /s/ Andrew Frost
                                 ---------------------------
                              Its: Director
                                  --------------------------



                              ZYCAD CORPORATION
                              a Delaware Corporation


                              By: /s/ Phillips W. Smith
                                 ---------------------------
                              Print Name: Phillips W. Smith
                                         ----------------------
                              Print Title: President and Chief Executive Officer


ATTEST


/s/ Douglas E. Klint
---------------------


                                     -12-