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                            REGISTRATION RIGHTS AGREEMENT


    THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement"),
entered into as of February 13, 1997, between Halifax Fund, L.P., with offices
at c/o Citco Fund Services Ltd., Corporate Centre, West Bay Road, P.O. Box
31106, SMB, 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-

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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-

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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-
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                  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-

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         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-

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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-

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    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-

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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-

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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: Halifax Fund, L.P.

                                 By:  The Palladin Group
                                 Its:

                                       By:  /s/ Andrew Kaplan
                                          ----------------------------

                                       Its: Vice President
                                           ---------------------------


                             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-