<PAGE>

                   CONVERTIBLE SECURITIES SUBSCRIPTION AGREEMENT

This Convertible Securities Subscription Agreement (the "Agreement") dated as 
of February 13, 1997 has been executed by the undersigned (the "Subscriber") 
in connection with (a) the sale of 6% Subordinated Convertible Debentures due 
February 13, 2000 (the "Debentures") of Zycad Corporation, a Delaware 
corporation (the "Company"), convertible into shares of Common Stock, par 
value $0.10 per share, (the "Common Stock") of the Company, and (b) the 
issuance by the Company of its warrants to purchase up to 500,000 shares of 
Common Stock (the "Warrants").  The Company is offering an aggregate amount 
of up to $5,000,000 of Debentures, together with the Warrants, at an 
aggregate price of $5,000,000 (the "Offering").  The form of the Debentures, 
including the terms on which the Debentures may be converted into Common 
Stock, is attached hereto as Exhibit A.  The form of the Warrants, including 
the terms upon which the Warrants may be exercised, is attached hereto as 
Exhibit B.  The solicitation of this Agreement and, if accepted by the 
Company, the offer and sale of the Debentures and the Warrants, are being 
made in reliance upon the provisions of Regulation D ("Regulation D") 
promulgated by the Securities and Exchange Commission ("SEC") under the 
United States Securities Act of 1933, as amended (the "Securities Act") or 
upon the provisions of Section 4(2) of the Securities Act.  The Debentures, 
the Warrants and the Common Stock issuable upon conversion or exercise 
thereof are sometimes collectively referred to in this Agreement as the 
"Securities."  The Common Stock issuable upon conversion of the Debentures is 
sometimes referred to as the "Underlying Stock", and the Common Stock 
issuable upon the exercise of the Warrants is sometimes referred to as the 
"Warrant Stock."  The Subscriber wishes to subscribe for, and the Company 
wishes to issue, the principal amount of Debentures and the number of 
Warrants at the aggregate purchase price set forth in Section 14 and in 
accordance with the other terms and conditions of this Agreement.  In 
consideration of the mutual promises, representations, warranties and 
conditions set forth herein, and intending to be legally bounded hereby, the 
Company and the Subscriber agree as follows:

1.  PURCHASE AND SALE OF SECURITIES; CLOSING CONDITIONS

    1.1  PURCHASE AND SALE OF SECURITIES.

         (a)  PURCHASE OF DEBENTURES AND WARRANTS.  The Subscriber hereby 
subscribes for the principal amount of Debentures and for the number of 
Warrants and at the aggregate purchase price set forth in Section 14.  The 
closing of the purchase of such Debentures and Warrants (the "Closing Dates") 
shall take place in two (2) separate closings, the first of which is 
hereinafter referred to as the "First Closing", and the second of which is 
hereinafter referred to as the "Second Closing".  Subject to the satisfaction 
(or waiver) of the conditions thereto set forth in Section 1.2 and 1.3 below: 
(i) at the First Closing, the Company shall issue and sell to the Subscriber, 
and the Subscriber shall purchase from the Company, seven-tenths of the 
aggregate principal amount of 

                                     -1-

<PAGE>

Debentures and all of the Warrants which the Subscriber is purchasing 
hereunder for consideration equal to seven-tenths of the Purchase Price, and 
(ii) at the Second Closing, the Company shall issue and sell to the 
Subscriber and the Subscriber shall purchase from the Company the remainder 
of the aggregate principal amount of Debentures which the Subscriber is 
purchasing hereunder for a price equal to the remainder of the Purchase Price.

         (b)  FORM OF PAYMENT.  On each Closing Date (as defined below), (i) 
the Subscriber shall pay the portion of the Purchase Price for the Securities 
to be issued and sold at the applicable Closing by wire transfer to the 
Company, in accordance with the Company's written instructions, against 
delivery of duly executed Debentures and Warrants which the Subscriber is 
then purchasing and (ii) the Company shall deliver to Subscriber such 
Debentures and Warrants against delivery of such Purchase Price.

         (c)  CLOSING DATES.  Subject to the satisfaction (or waiver) of the 
conditions thereto set forth in Section 1.2 and 1.3 below, the date and time 
of the issuance and sale of the Debentures and Warrants pursuant to this 
Agreement ( the "Closing Dates") shall be (i) in the case of the First 
Closing, 12:00 noon Eastern Standard Time on February 13, 1997 ("First 
Closing Date"), and (ii) in the case of the Second Closing, 12:00 noon 
Eastern Standard Time, three business days following notification of 
satisfaction (or waiver) of the condition to such Closing set forth in 
Section 1.3(b)(viii) below ("Second Closing Date") (subject, in each case, to 
a two (2) business day grace period at either party's option), or, in each 
case, at such mutually agreed upon time.  Provided however, if pursuant to 
Section 6(e) of the Registration Rights Agreement, the Subscriber has the 
right (whether or not exercised) to have the Debentures issued at the First 
Closing redeemed by the Company, the Subscriber shall no longer be obligated 
to, but may at its option exercised in its sole discretion, purchase any part 
or all of the remainder of the aggregate principal amount of Debentures 
otherwise issuable at the Second Closing.__________

    1.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND 
SELL THE DEBENTURES AND WARRANTS.  The obligation hereunder of the Company to 
issue and/or sell the Debentures and Warrants to the Subscriber at each 
Closing is subject to the satisfaction, at or before  such Closing, of each 
of the conditions set forth below.  These conditions are for the Company's 
sole benefit and may be waived by the Company at any time in its sole 
discretion.

         (a)  ACCURACY OF THE SUBSCRIBER'S REPRESENTATION AND WARRANTIES.  
         The representations and warranties of the Subscriber shall be true and
         correct as of the date when made and as of the applicable Closing Date
         as though made at each such time.

         (b)  PERFORMANCE BY THE SUBSCRIBER.  The Subscriber shall have 
         performed, satisfied and complied in all respects with all covenants,

                                     -2-

<PAGE>

         agreements and conditions required by this Agreement to be performed,
         satisfied or complied with by the Company at or prior to the applicable
         Closing.

         (c)  NO INJUNCTION.  No statute, rule, regulation, executive order, 
         decree, ruling or injunction shall have been enacted, entered, 
         promulgated or endorsed by any court or governmental authority of 
         competent jurisdiction which prohibits or adversely effects any of the
         transactions contemplated by this Agreement, and no proceeding shall 
         have been commenced which may have the effect of prohibiting or 
         adversely affecting any of the transactions contemplated by this 
         Agreement.

         (d)  PAYMENT OF PURCHASE PRICE.  The Subscriber shall have delivered
         to the Company that portion of the Purchase Price payable by the 
         Subscriber at the applicable Closing.

    1.3  CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SUBSCRIBER TO ACQUIRE 
THE DEBENTURES AND WARRANTS.  The obligation of Subscriber hereunder to 
acquire and pay for the Debentures and Warrants at each of the First Closing 
and the Second Closing, as applicable, is subject to the satisfaction, at or 
before the Closing Date in respect of such Closing, of each of the following 
conditions. Each of these conditions is for Subscriber's sole benefit and may 
be waived by Subscriber at any time in its sole discretion.

         (a)  As to the First Closing:

              (i) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. 
         The representations and warranties of the Company shall be true and 
         correct as of the date when made and as of the First Closing Date as
         though made at each such time.
    
              (ii) PERFORMANCE BY THE COMPANY.  The Company shall have 
         performed, satisfied and complied in all respects with covenants, 
         agreements and conditions required by this Agreement and by all other
         agreements related to this agreement to be performed, satisfied or 
         complied with by the Company at or prior to the First Closing.

              (iii) NO INJUNCTION.  No statute, rule, regulation, executive 
         order, decree, ruling or injunction shall have been enacted, entered, 
         promulgated or endorsed by any court or governmental authority of 
         competent jurisdiction which prohibits or adversely effects any of the
         transactions contemplated by this Agreement, and no proceeding shall 
         have been commenced which may have the effect of prohibiting or 
         adversely affecting any of the transactions contemplated by this 
         Agreement.

                                     -3-

<PAGE>

              (iv) ADVERSE CHANGES.  Since December 31, 1995, no event which 
         had or is likely to have a material adverse effect on the Company has 
         occurred, except as described in the Company's form 10-Q's for the 
         quarterly periods ended March 31, June 30, September 30, 1996, as well
         as the Company's press release of February 5, 1997, a copy of which has
         been furnished to the Subscriber.

              (v) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. 
         As of the First Closing Date, the trading of the Common Stock shall
         not have been suspended by the SEC, the Nasdaq Stock Market (the 
         "Exchange") or the National Association of Securities Dealers, Inc.
         (the "NASD") and the Common Stock shall not have been delisted from
         the Exchange.

              (vi) THE LEGAL OPINION.  The Company shall have delivered to 
         the Subscriber the opinion of Wilson, Sonsini, Goodrich & Rosati, 
         independent counsel to the Company, in form and substance reasonably
         satisfactory to the Subscriber. 

              (vii) OFFICER'S CERTIFICATE.  The Company shall have delivered 
         to the Subscriber a certificate in substantially the form and substance
         of the Officer's Certificate Exhibit which is annexed hereto and hereby
         made a part hereof or in such other form and substance as shall be 
         reasonably satisfactory to the Subscriber, executed in either case by
         an executive officer of the Company as of the First Closing Date, to 
         the effect that all the conditions to the First Closing shall have been
         satisfied.

              (viii) REGISTRATION RIGHTS AGREEMENT.  The Company and the
         Subscriber shall have entered into the Registration Rights Agreement
         contemplated by Section 4.1.

              (ix) IRREVOCABLE LETTER OF INSTRUCTION.  The Company shall have 
         issued to the transfer agent for its Common Stock (and to any 
         substitute or replacement transfer agent for it's Common Stock 
         coterminous with the Company's appointment of any such substitute or 
         replacement transfer agent) instructions in substantially the form and
         substance of the Transfer Agent Irrevocable Instruction Exhibit which
         is annexed hereto and hereby made a part hereof.

         (b)  As to the Second Closing:

              (i)  ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.  
          The representations and warranties of the Company shall be true and
          correct as of the date when made and as of the Second Closing Date as
          though made at each such time.

                                     -4-

<PAGE>

              (ii) PERFORMANCE BY THE COMPANY.  The Company shall have 
          performed, satisfied and complied in all respects with all covenants,
          agreements and conditions required by this Agreement and by all other
          agreements related to this Agreement to be performed, satisfied or 
          complied with by the Company at or prior to the Second Closing. 

              (iii) ADVERSE CHANGES.  Since December 31, 1995, no event which
          had or is likely to have a material adverse effect on the Company has
          occurred, except as described in the Company's form 10-Q's for the 
          quarterly periods ended March 31, June 30, September 30, 1996, as well
          as the Company's press release of February 5, 1997, a copy of which 
          has been furnished to the Subscriber.

              (iv) NO SUSPENSION OF TRADING OR DELISTING OF COMMON STOCK.  As of
          the Second Closing Date, the trading of the Common Stock shall not 
          have been suspended by the SEC, the Exchange or the NASD,  and the 
          Common Stock shall not have been delisted from the Exchange.

              (v) THE LEGAL OPINION.  The Company shall have delivered to the
          Subscriber the opinion of Wilson, Sonsini, Goodrich & Rosati, 
          independent counsel to the Company, dated as of the Second Closing 
          Date, in form and substance reasonably satisfactory to the Subscriber.

              (vi) OFFICER'S CERTIFICATE.  The Company shall have delivered to
          the Subscriber a certificate in substantially the form and substance 
          of the Officer's Certificate Exhibit which is annexed hereto and 
          hereby made a part hereof or in such other form and substance as shall
          be reasonably satisfactory to the Subscriber, executed in either case
          by an executive officer of the Company as of the Second Closing Date,
          to the effect that all the conditions to the Second Closing shall have
          been satisfied.

              (vii) REGISTRATION STATEMENT.  The registration statement filed by
          the Company pursuant to Section 2 of the Registration Rights Agreement
          covering the resale of the Registrable Securities (as defined in the 
          Registration Rights Agreement) underlying (i) the Debentures issued at
          the First Closing and to be issued at the Second Closing and (ii) the
          Warrants issued at the First Closing (the "Registration Statement") 
          shall be effective, and no stop order shall have been issued in 
          respect thereof and  the registration statement and use of the related
          prospectus have not been suspended and there is no reason or basis for
          such suspension in either case pursuant to Section 8 of the 
          Registration Rights Agreement.

              (viii) FORM OF DEBENTURE.  The form of Debenture to be executed 
          and delivered on the Second Closing Date pursuant to this Agreement 

                                     -5-

<PAGE>

          shall be in the same form and substance as the Debentures issued at 
          the First Closing, but dated as at the Second Closing Date, completed
          to reflect the appropriate principal amounts thereof, and otherwise 
          amended only to reflect adjustments to the Applicable Percentages (as
          defined in the Debentures) pursuant to the Registration Rights 
          Agreement prior to the Second Closing Date, as though such Debentures
          had been issued on the First Closing Date.

2.  REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

    The Subscriber represents and warrants to the Company that:

    2.1  NO GOVERNMENT RECOMMENDATION OR APPROVAL.  The Subscriber understands
that no United States federal or state agency or similar agency of any other
country, has passed upon or made any recommendation or endorsement of the
Company or the offering of the Securities.

    2.2  INTENT.  The Subscriber is purchasing the Securities for its own 
account and not with a view towards distribution and the Subscriber has no 
present arrangement (whether or not legally binding) at any time to sell the 
Securities to or through any person or entity; provided, however, that by 
making the representations herein, the Subscriber does not agree to hold the 
Securities for any minimum or other specific term and reserves the right to 
dispose of the Securities at any time in accordance with federal and state 
securities laws applicable to such disposition.  The Subscriber understands 
that the Securities must be held indefinitely unless such Securities are 
subsequently registered under the Securities Act of 1933 or an exemption from 
registration is available. The Subscriber has been advised or is aware of the 
provisions of Rule 144 promulgated under the Act.

    2.3  SOPHISTICATED INVESTOR.  The Subscriber is a sophisticated investor 
(as described in Rule 506(b)(2)(ii) of Regulation D promulgated under the 
Securities Act ("Regulation D")) and an accredited investor (as defined in 
Rule 501 of Regulation D), and Subscriber has such experience in business and 
financial matters that it is capable of evaluating the merits and risks of an 
investment in Securities.  The Subscriber acknowledges that the Securities 
are speculative and involve a high degree of risk.

    2.4  INDEPENDENT INVESTIGATION.  The Subscriber, in making its decision to
purchase the Securities subscribed for hereunder, has relied upon an independent
investigation made by it and/or its representatives and has not relied /^/ on
any oral or written representations or assurances from the Company or any
representative or agent of the Company, other than as set forth in this
Agreement, in the public filings of the Company and in the documents described
below.  Prior to the date hereof, the Subscriber has been furnished with and has
reviewed the Company's latest proxy statement and Annual Report on Form 10-K
sent to the Company's shareholders and all documents filed by the Company with
the Securities and Exchange Commission (the "Commission") 

                                     -6-

<PAGE>

since December 31, 1995, pursuant to sections 13(a), 13(c), 14 or 15(d) of 
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 
(excluding preliminary proxy statement filings) (such documents are 
collectively referred to in this Agreement as the "Exchange Act Reports").  
The Subscriber has had a reasonable opportunity to ask questions of and 
receive answers from the Company concerning the Company and the Offering and 
has received satisfactory answers to all inquiries it has made with respect 
to the Company and the Securities.  The Subscriber acknowledges the price and 
terms of the Securities offered hereby has been determined by negotiation 
based, in part on the market price for the Common Stock, and does not 
necessarily bear any relationship to the assets, book value or potential 
performance of the Company or any other recognized criteria of value.
    
    2.5  AUTHORITY.  This Agreement has been duly authorized and validly 
executed, and delivered by the Subscriber and is a valid and binding 
agreement enforceable in accordance with its terms, subject to general 
principles of equity and to bankruptcy or other laws affecting the 
enforcement of creditors' rights generally.
    
    2.6  NO LEGAL ADVICE FROM COMPANY.  The Subscriber acknowledges that it 
has had the opportunity to review this Agreement and the transactions 
contemplated by this Agreement with his or its own legal counsel and tax 
advisors.  Except for any statements or representations of the Company made 
in this Agreement and in the Exchange Act Reports, the Subscriber is relying 
solely on such counsel and advisors and not on any statements or 
representations of the Company or any of its representative or agents for 
legal, tax or investment advice with respect to this investment, the 
transactions contemplated by this Agreement or the securities laws of any 
jurisdiction.
    
    2.7  NO BROKERS.  The Subscriber has taken no action which would give 
rise to any claim by any person for brokerage commission, finder's fees or 
similar payments by the Company relating to this Agreement or the 
transactions contemplated hereby, except for dealings with Promethean 
Investment Group, L.L.C., whose fees will be paid for by the Subscriber.
    
    2.8  NOT AN AFFILIATE.  The Subscriber is not an officer, director or 
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of 
the Company.
    
    2.9  RELIANCE ON REPRESENTATIONS AND WARRANTIES.  The Subscriber 
understands that the Securities are being offered and sold to it in reliance 
on specific provisions of United States federal and state securities laws and 
that the Company is relying upon the truth and accuracy of the 
representations, warranties, agreements, acknowledgments and understandings 
of the Subscriber set forth in this Agreement in order to determine the 
applicability of such provisions.
    
3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

    The Company represents and warrants to the Subscriber that:

                                     -7-

<PAGE>

    3.1  COMPANY STATUS.  The Company has registered its Common Stock 
pursuant to Section 12(b) or 12(g) of the Exchange Act of 1934, is in full 
compliance with all reporting requirements of the Exchange Act, and the 
Company has maintained all requirements for the continued listing of its 
common stock, and such common stock is currently listed on the Exchange.
    
    3.2  CURRENT PUBLIC INFORMATION.  The Exchange Act Reports are the only 
filings made by the Company since December 31, 1995, pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act.
    
    3.3  NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION IN REGARD TO 
THIS TRANSACTION.  Neither the Company nor any of its affiliates nor any 
distributor or any person acting on its or their behalf has conducted any 
"directed selling efforts" with respect to the Debentures or the Warrants nor 
has the Company conducted any general solicitation (as that term is used in 
Regulation D) with respect to any of the Securities, nor have they made any 
offers or sales of any security or solicited any offers to buy any security, 
under circumstances that would require registration of the Securities under 
the Act.
    
    3.4  VALID ISSUANCE OF DEBENTURES AND CAPITAL STOCK.  The Company has an 
authorized capitalization consisting of 40,000,000 shares of Common Stock, 
par value $0.10 and 2,000,000 shares of Preferred Stock, par value $0.10, 
warrant outstanding for 194,500 shares of Common Stock, and stock options 
granted to employees as described in the Exchange Act Reports.  The Company 
has issued and outstanding 25,223,412 shares of Common Stock.  None of such 
Preferred Stock has been issued or is outstanding.  All of the issued shares 
of Common Stock of the Company have been duly and validly authorized and 
issued and are fully paid and non-assessable; upon issuance of the 
Securities, the Securities will be duly and validly issued, fully paid and 
non-assessable; the shares of Common Stock issuable upon conversion of the 
Debentures and exercise of the Warrants, when issued and delivered in 
accordance with the terms of the Debentures and the Warrants respectively, 
will be duly and validly issued, fully paid and non-assessable; and the 
holders of outstanding Capital Stock of the Company are not and shall not be 
entitled to preemptive or other rights afforded by the Company to subscribe 
for the capital stock or other securities of the Company as a result of the 
sale of the Securities or the issuance of Common Stock upon the conversion or 
exercise thereof.
    
    3.5  ORGANIZATION AND QUALIFICATION.  The Company is a corporation duly 
incorporated and existing in good standing under the laws of the State of 
Delaware and has the requisite corporate power to own its properties and to 
carry on its business as now being conducted.  The Company does not have any 
subsidiaries, except for those listed on the Subsidiary Exhibit annexed 
hereto and hereby made a part hereof.  The Company and each such subsidiary, 
if any, is duly qualified as a foreign corporation to do business and is in 
good standing in every jurisdiction in which the nature of the business 
conducted or property owned by it makes such qualification necessary other 
than those in which the 

                                     -8-

<PAGE>

failure so to qualify would not have a Material Adverse Effect.  "Material 
Adverse Effect" means any effect on the business, operations, properties, 
prospects, or financial condition of the entity with respect to which such 
term is used and which is material and adverse to such entity or to other 
entities controlling or controlled by such entity, and/or any condition or 
situation which would prohibit or otherwise interfere with the ability of the 
entity with respect to which said term is used to enter into and perform its 
obligations under this Agreement.
    
    3.6  AUTHORIZATION; ENFORCEMENT.  (i) The Company has the requisite 
corporate power and authority to enter into and perform this Agreement and to 
issue the Securities in accordance with the terms hereof and thereof, (ii) 
the execution, issuance and delivery of this Agreement, the Debentures and 
the Warrants by the Company and the consummation by it of the transactions 
contemplated hereby and thereby, including without limitation the issuance of 
Common Stock upon the conversion or exercise thereof, have been duly 
authorized by all necessary corporate action, and no further consent or 
authorization of the Company or its Board of Directors or stockholders is 
required, (iii) this Agreement has been duly executed and delivered by the 
Company, and (iv) this Agreement and the Debentures and Warrants constitute, 
and upon execution, issuance and delivery thereof the Debentures and Warrants 
shall be, valid and binding obligations of the Company enforceable against 
the Company in accordance with their terms, except as such enforceability may 
be limited by applicable bankruptcy, insolvency, or similar laws relating to, 
or affecting generally the enforcement of, creditors' rights and remedies or 
by other equitable principles of general application.

    3.7  CORPORATE DOCUMENTS.  The Company has furnished or made available to 
the Subscriber true and correct copies of the Company's Certificate of 
Incorporation as in effect on the date hereof (the "Certificate"), and the 
Company's By-Laws, as in effect on the date hereof (the "By-Laws").
    
    3.8  NO CONFLICTS.  The execution, delivery and performance of this 
Agreement and the Debentures and the Warrants by the Company and the 
consummation by the Company of the transactions contemplated hereby and 
thereby, including without limitation the issuance of Common Stock upon the 
conversion or exercise thereof, do not and will not (i) result in a violation 
of the Company's Certificate of Incorporation or By-Laws or (ii) conflict 
with, or constitute a default (or an event which with notice or lapse of time 
or both would become a default) under, or give to others any rights of 
termination, amendment, acceleration or cancellation of, any material 
agreement, indenture or instrument to which the Company or any of its 
subsidiaries is a party, or result in a violation of any federal, state, 
local or foreign law, rule, regulation, order, judgment or decree (including 
federal and state securities laws and regulations) applicable to the Company 
or any of its subsidiaries or by which any property or asset of the Company 
or any of its subsidiaries is bound or affected (except for such conflicts, 
defaults, terminations, amendments, accelerations, cancellations and 
violations as would not, individually or in the aggregate, have a Material 
Adverse Effect); provided that, for purposes of such representation as to 
federal, state, local or foreign law, rule or 

                                     -9-

<PAGE>

regulation, no representation is made herein with respect to any of the same 
applicable solely to the Subscriber and not to the Company.  The business of 
the Company is not being conducted in violation of any law, ordinance or 
regulations of any governmental entity, except for possible violations which 
either singly or in the aggregate do not and will not have a Material Adverse 
Effect.  The Company is not required under federal, state or local law, rule 
or regulation in the United States to obtain any consent, authorization or 
order of, or make any filing or registration with, any court or governmental 
agency in order for it to execute, deliver or perform any of its obligations 
under this Agreement or issue and sell the Securities in accordance with the 
terms hereof and thereof (other than any SEC, NASD or state securities 
filings which may be required to be made by the Company subsequent to either 
the First Closing or the Second Closing, and any registration statement which 
may be filed pursuant hereto); provided that, for purposes of the 
representation made in this sentence, the Company is assuming and relying 
upon the accuracy of the relevant representations and agreements of the 
Subscriber herein.
    
    3.9  EXCHANGE ACT REPORTS.  The Company has delivered or made available 
to the Subscriber true and complete copies of the Exchange Act Reports 
(including, without limitation, proxy information and solicitation 
materials).  The Company has not provided to the Subscriber any information 
which, according to applicable law, rule or regulation, should have been 
disclosed publicly prior to the date hereof by the Company but which has not 
been so disclosed.  As of their respective dates, the Exchange Act Reports 
complied in all material respects with the requirements of the Exchange Act 
and rules and regulations of the SEC promulgated thereunder and other 
federal, state and local laws, rules and regulations applicable to such 
Exchange Act Reports, and none of the Exchange Act Reports contained any 
untrue statement of a material fact or omitted to state a 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.  The financial statements of the Company included in the Exchange 
Act Reports comply as to form in all material respects with applicable 
accounting requirements and the published rules and regulations of the SEC or 
other applicable rules and regulations with respect thereto.  Such financial 
statements have been prepared in accordance with generally accepted 
accounting principles applied on a consistent basis during the periods 
involved (except (i) as may be otherwise indicated in such financial 
statements or the notes thereto or (ii) in the case of unaudited interim 
statements, to the extent they may not include footnotes or may be condensed 
or summary statements) and fairly present in all material respects the 
financial position of the Company as of the dates thereof and the results of 
operations and cash flows for the periods then ended (subject, in the case of 
unaudited statements, to normal year-end audit adjustments).

    3.10 NO MATERIAL ADVERSE CHANGE.  Since December 31, 1995, the date 
through which the most recent annual report of the Company on Form 10-K which 
has been prepared and filed with the SEC, a copy of which is included in the 
Exchange Act Reports, no Material Adverse Effect has occurred or exists with 
respect to the Company or its subsidiaries, except as described in the 
Company's form 10-Q's for the quarterly 

                                    -10-

<PAGE>

periods ended March 31, June 30, September 30, 1996 as well as the Company's 
press release of February 5, 1997, a copy of which has been furnished to the 
Subscriber.

    3.11 NO UNDISCLOSED LIABILITIES.  The Company and its subsidiaries have 
no liabilities or obligations which are material, individually or in the 
aggregate, and are not disclosed in the Exchange Act Reports, other than 
those incurred in the ordinary course of the Company's or its subsidiaries' 
respective businesses since December 31, 1995, and which, individually or in 
the aggregate, do not or would not have a Material Adverse Effect on the 
Company and its subsidiaries taken as a whole.
    
    3.12 NO UNDISCLOSED EVENTS OR CIRCUMSTANCES.  No event or circumstance 
has occurred or exists with respect to the Company or its subsidiaries or 
their respective businesses, properties, prospects, operations or financial 
condition, which, under applicable law, rule or regulation, requires public 
disclosure or announcement prior to the date hereof by the Company but which 
has not been so publicly announced or disclosed.
    
    3.13 NO INTEGRATED OFFERING.  Neither the Company, nor any of its 
affiliates, nor any person acting on its or their behalf has, directly or 
indirectly, made any offers or sales of any security or solicited any offers 
to buy any security, under circumstances that would require registration of 
the Securities under the Act.
    
    3.14 NO BROKERS.  The Company has taken no action which would give rise 
to any claim by any person for brokerage commissions, finder's fees or 
similar payments by the Subscriber relating to this Agreement for the 
transactions contemplated hereby, except for dealings with Promethean 
Investment Group, L.L.C., whose fees will be paid for by the Subscriber.
    
4.  COVENANTS OF THE COMPANY

    4.1  REGISTRATION RIGHTS.  The Company agrees that, at the First Closing, 
it will enter into a Registration Rights Agreement with the Subscriber, in 
the form and substance of the Registration Rights Agreement Exhibit which is 
annexed hereto and hereby made a part hereof.
    
    4.2  RESERVATION OF COMMON STOCK.  As of the date hereof, the Company has 
reserved and the Company shall continue to reserve and keep available at all 
times, free of preemptive rights, shares of Common Stock for the purpose of 
enabling the Company to satisfy any obligation to issue shares of its Common 
Stock upon conversion of the Debentures; and exercise of the Warrants; 
provided, however, that the number of shares so reserved shall, except as 
hereinafter and in the Debentures provided, shall be 1,750,000 shares, 
subject to reduction and increase as hereinafter provided.  The number of 
shares so reserved may be reduced by the number of shares actually delivered 
pursuant to conversion of Debentures or exercise of the Warrants (provided 
that in no event shall the number of shares so reserved be less than the 
maximum number required to satisfy the remaining conversion rights on the 
unconverted Debentures and the remaining exercise 

                                    -11-

<PAGE>

rights under unexercised Warrants) and the number of shares so reserved shall 
be increased to reflect stock splits and stock dividends and distributions.  
In the event the number of shares so reserved shall be insufficient for 
issuance upon the conversion of the Debentures and exercise of the Warrants, 
or if the Holders of the Debentures would at any time upon conversion thereof 
be entitled to the issuance of shares of Common Stock in excess of the 
limitation in Paragraph 5(d) of the Debentures, then in either case the 
Company shall use its best efforts and all due diligence to obtain the 
approval by its shareholders of this Subscription Agreement and all 
transactions contemplated hereunder, including the authorization of such 
additional shares as may be required to issue such shares in excess of the 
number so reserved or in excess of such limitation, as the case may be.    

    
    4.3  LISTING OF UNDERLYING SHARES.  The Company hereby agrees, promptly 
following the First Closing of the transactions contemplated by this 
Agreement, to take such action to cause the Underlying Stock and the Warrant 
Stock to be listed on the Exchange as promptly as possible but no later than 
90 days following the First Closing Date.  The Company further agrees, if the 
Company applies to have the Common Stock traded on any principal stock 
exchange or market, it will include in such application the Underlying Stock 
and the Warrant Stock and will take such other action as is necessary or 
desirable to cause the Underlying Stock and the Warrant Stock to be listed on 
such other exchange or market as promptly as possible.
    
    4.4  EXCHANGE ACT REGISTRATION.  The Company will cause its Common Stock 
to continue to be registered under Section 12(g) or 12(b) of the Exchange 
Act, will comply in all respects with its reporting and filing obligations 
under said Act, and will not take any action or file any document (whether or 
not permitted by said Act or the rules thereunder) to terminate or suspend 
such registration or to terminate or suspend its reporting and filing 
obligations under said Act. The Company will take all action under its 
control to continue the listing and trading of its Common Stock on the 
Exchange and will comply in all respects with the Company's reporting, filing 
and other obligations under the bylaws or rules of the NASD and the Exchange.
    
    4.5  LEGENDS.  The Underlying Stock and the Warrant Stock and 
certificates evidencing the same shall, upon the effectiveness of the 
Registration Statement be free of legends (except as provided in Section 5.1 
below), "stop transfers," so-called, "stock transfer restrictions," 
so-called, or other restrictions.
    
    4.6  CORPORATE EXISTENCE.  The Company will take all steps necessary to 
preserve and continue the corporate existence of the Company.

5.  LEGENDS

                                    -12-

<PAGE>

    5.1  LEGENDS.  The Company will issue one or more Debentures in the name 
of the Subscriber and in such denominations (but no less than $50,000 each) 
to be specified by the Subscriber prior to (or from time to time subsequent 
to) the Closings.  The Debentures, the Warrants, certificates evidencing any 
shares of Common Stock issued upon conversion or exercise thereof prior to 
the effectiveness of the Registration Statement and, except as hereinafter 
provided in this Section 5.1, certificates evidencing shares of Common Stock 
issued upon conversion or exercise of the Debentures or Warrants, as the case 
may be, after effectiveness of the Registration Statement, will bear the 
following legend (the "Legend"):

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933 OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED 
         FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO
         THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
         OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

         Prior to the First Closing, the Company will issue to the transfer 
agent for its Common Stock (and to any substitute or replacement transfer 
agent for its Common Stock coterminous with the Company's appointment of any 
such substitute or replacement transfer agent) instructions in substantially 
the form and substance of the Transfer Agent Irrevocable Instruction Exhibit 
which is annexed hereto and hereby made a part hereof.  Such instructions 
shall be irrevocable by the Company from and after the First Closing or from 
and after the issuance thereof to any such substitute or replacement transfer 
agent, as the case may be, except as otherwise expressly provided in the 
Registration Rights Agreement.  It is the intent and purpose of such 
instructions, as provided therein, to require the transfer agent for the 
Common Stock from time to time to issue certificates evidencing Underlying 
Stock or Warrant Stock free of the Legend during the following periods and 
under the following circumstances and without consultation by the transfer 
agent with Company or its counsel and without the need for any further advice 
or instruction to the transfer agent by or from the Company or its counsel:

              (a) At any time from and after the effectiveness of the 
     Registration Statement except during a Suspension Period (as defined in 
     the Registration Rights Agreement):

                   (i) upon any surrender of one or more Debentures or Warrants
          for conversion or exercise into Underlying Stock or Warrant Stock, as
          the case may be, to the extent such surrender is accompanied by a  
          Conversion or Exercise Notice requesting the issuance of certificates
          evidencing such Stock free of the Legend and either containing or also
          accompanied by representations to the effect that the Holder of the 
          surrendered Debentures or Warrants intends to effect one or more sales
          of 

                                    -13-

<PAGE>

          such Underlying or Warrant Stock pursuant to and in accordance with 
          the Registration Statement, including the prospectus delivery 
          requirements applicable thereto; and 

                   (ii) upon any surrender of one or more certificates 
          evidencing Underlying Stock or Warrant Stock and which bear the 
          Legend, to the extent accompanied by a notice requesting the 
          issuance of new certificates free of the Legend to replace those
          surrendered and containing or also accompanied by representations 
          by the Holder of the surrendered Stock to the effect of those 
          described in Section 5.1(a)(i) above; and 

              (b) At any time from and after the First Closing Date, upon any 
     surrender of one or more certificates evidencing Underlying Stock or 
     Warrant Stock and which bear the Legend, to the extent accompanied by a 
     notice requesting the issuance of new certificates free of the Legend to 
     replace those surrendered and containing or also accompanied by 
     representations that (i) the Holder thereof is permitted to dispose thereof
     pursuant to Rule 144(k) under the Act or (ii) the Holder intends to effect
     the sale or other disposition of such Stock, whether or not pursuant to 
     the Registration Statement, to a purchaser or purchasers who will not be 
     subject to the registration requirements of the Act, or (iii) such Holder
     is not then subject to such requirements.

     In addition, and if applicable, the Company shall reissue the Debentures 
and Warrants without the Legend set forth above at such time as (i) the 
Holder thereof is permitted to dispose thereof pursuant to Rule 144(k) under 
the Act or (ii) the Holder intends to effect a sale thereof to a purchaser or 
purchasers who will not be subject to the registration requirements of the 
Act, or (iii) the Holder is not then subject to such requirements.

5.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS.  No Legend has been or 
shall be placed on the share certificates representing the Securities and no 
instructions or "stop transfers," so called, "stock transfer restrictions," 
so called, or other restrictions have been or shall be given to the Company's 
transfer agent with respect thereto other than as set forth in this Section 5.

    5.3  SUBSCRIBER'S COMPLIANCE.  Nothing in this section shall affect in 
any way the Subscriber's obligations under and agreement to comply with all 
applicable securities laws upon resale of the Securities.

6.  OTHER ISSUANCES OF SECURITIES

    6.1  OTHER EQUITY OFFERINGS.  During the period beginning on the First 
Closing Date and expiring 180 calendar days following the effectiveness of 
the Registration Statement, the Company will not make any Equity Offerings, 
as defined in the 

                                    -14-

<PAGE>

Debentures, except for an offering of rights to subscribe for shares of the 
Company's Common Stock pursuant to any exemption from the registration 
requirements of the Securities Act of 1933, as amended, including without 
limitation the exemption provided by Regulations D and S promulgated 
thereunder.

    7.   CHOICE OF LAW AND VENUE; WAIVER OF JURY TRIAL
    
     THIS AGREEMENT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF NEW 
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW.  The 
parties hereby agree that all actions or proceedings arising directly or 
indirectly from or in connection with this Agreement shall, at the option of 
either party, be litigated only in the United States District Court for the 
Southern District of New York located in New York County, New York.  The 
parties consent to the jurisdiction and venue of the foregoing courts and 
consent that any process or notice of motion or other application to either 
of said courts or a judge thereof may be served inside or outside the State 
of New York or the Southern District of New York by registered mail, return 
receipt requested, directed to the party for which it is intended at its 
address set forth in this Agreement (and service so made shall be deemed 
complete five (5) days after the same has been posted as aforesaid) or by 
personal service or in such other manner as may be permissible under the 
rules of said courts.
    
8.  ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT

    8.1  ASSIGNMENT.  Neither this Agreement nor any rights of the Subscriber 
hereunder may be assigned by either party to any other person.  
Notwithstanding the foregoing, the provisions of this Agreement shall inure 
to the benefit of, and be enforceable by, any transferee of any of the 
Securities purchased or acquired by the Subscriber hereunder with respect to 
the Securities held by such person.
    
    8.2  ENTIRE AGREEMENT; AMENDMENT.  This Agreement, the Debentures, the 
Warrants, the Registration Rights Agreement, and the other documents 
delivered pursuant hereto constitute the full and entire understanding and 
agreement between the parties with regard to the subjects hereof and thereof, 
and no party shall be liable or bound to any other party in any manner by any 
warranties, representations or covenants except as specifically set forth in 
this Agreement or therein.  Except as expressly provided in this Agreement, 
neither this Agreement nor any term hereof may be amended, waived, discharged 
or terminated other than by a written instrument signed by the party against 
whom enforcement of any such amendment, waiver, discharge or termination is 
sought.
    
9.  PUBLICITY

         The Company agrees that it will not disclose, and will not include 
in any public announcement, the name of the Subscriber without its consent, 
unless and until 

                                    -15-

<PAGE>

such disclosure is required by law or applicable regulation, and then only to 
the extent of such requirement.
    
10. NOTICES, ETC.; EXPENSES; INDEMNITY

    10.1 NOTICES.  Any notice, demand or request required or permitted to be 
given by either the Company or the Subscriber pursuant to the terms of this 
Agreement shall be in writing and shall be deemed given when delivered 
personally or by facsimile, with a hard copy to follow by two day courier 
addressed to the parties at the addresses of the parties set forth at the end 
of this Agreement or such other address as a party may request by notifying 
the other in writing.  Copies of all notices to the Subscriber shall be sent 
to its designee or representative.
    
    10.2 COSTS AND EXPENSES.  The Company shall be responsible for the 
Subscriber's costs and expenses (including reasonable attorney's fees) 
incurred in entering into this Agreement , but not to exceed $5,000 in the 
aggregate for all Subscribers.
    
    10.3 INDEMNIFICATION.  Each party shall indemnify the other against any 
loss, cost or damages (including reasonable attorney's fees) incurred as a 
result of such parties' breach of any representation, warranty, covenant or 
agreement in this Agreement.
    
11. COUNTERPARTS

         This Agreement may be executed in any number of counterparts, each 
of which shall be enforceable against the parties actually executing such 
counterparts, and all of which together shall constitute one instrument.
    
12. SURVIVAL; SEVERABILITY

    The representations, warranties, covenants and agreements of the parties 
hereto shall survive both the First Closing and the Second Closing.  In the 
event that any provision of this Agreement becomes or is declared by a court 
of competent jurisdiction to be illegal, unenforceable or void, this 
Agreement shall continue in full force and effect without said provision; 
provided that such severability shall be effective if it materially changes 
the economic benefit of this Agreement to any party.

13. TITLE AND SUBTITLES

    The titles and subtitles used in this Agreement are used for convenience 
only and are not to be considered in construing or interpreting this 
Agreement.

                                    -16-

<PAGE>

14. AMOUNT

    The undersigned hereby subscribes for U.S. $500,000 in principal amount 
of Debentures and Warrants to purchase 50,000 shares of Common Stock and 
agrees to pay therefor funds in the amount of Five Hundred Thousand Dollars 
(U.S. $ 500,000).

    The undersigned acknowledges that this subscription shall not be 
effective unless accepted by the Company as indicated below. 

       [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]


                                    -17-

<PAGE>

Subscriber's Representative            Name of Subscriber: 
Promethean Investment Group, L.L.C.    
                                       Joseph A. Umbach
     
                                       By: Promethean Investment Group, L.L.C.
                                       Its:  Investment Advisor
    
                                       By /s/ James F. O'Brien
                                         -------------------------------------
                                         Name:  James F. O'Brien
                                         Title: President
40 West 57th Street, #1520
NEW YORK, NY  10019                    Date of Subscription:   February 13, 1997
______________________________
Address
                                       Place of Execution:   U.S.
(212) 698-0588
Telephone                              Place of Organization or Citizenship:
                                       _______________________________________

(212) 698-0505                                                          
Fax                                    Place of Residency and/or Principal Place
                                       of Business:

                                       c/o Joseph Victori Wines
                                       2525 Palmer Avenue
                                       New Rochelle, New York 10801
 
                                       (Telephone) _________________________
                                       (Fax)       _________________________
                                       Registration Instructions:  ____________
                                       (Name) (Please Print) __________________
    
    THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY AS OF THE 13TH DAY OF
FEBRUARY, 1997.

                                      ZYCAD CORPORATION


                                      By:  /s/ Phillips W. Smith
                                          --------------------------------------

                                      Print Name: Phillips W. Smith
                                                 -------------------------------

                                      Its: President and Chief Executive Officer
                                          --------------------------------------




ATTEST

                                    -18-

<PAGE>



________________________




                                    -19-