Document:

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                                                                   Exhibit 10.23

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                               CREDIT AGREEMENT

                                by and between

              SOMERA COMMUNICATIONS, INC., a Delaware corporation

                                      and

                       WELLS FARGO HSBC TRADE BANK, N.A.

                                  Dated as of

                                February 9, 2001

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                       Exhibit A - Addendum to Agreement
              Exhibit B - Trade Cycle Finance Facility Supplement
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WELLS FARGO HSBC TRADE BANK                                     CREDIT AGREEMENT
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SOMERA COMMUNICATIONS, INC., a corporation ("Borrower"), organized under the
laws of the State of Delaware whose chief executive office is located at the
address specified after its signature to this Agreement ("Borrower's Address")
and WELLS FARGO HSBC TRADE BANK, N.A. ("Trade Bank"), whose address is specified
after its signature to this Agreement, have entered into this CREDIT AGREEMENT
as of February 9, 2001 ("Effective Date"). All references to this "Agreement"
include those covenants included in the Addendum to Agreement ("Addendum")
attached as Exhibit A hereto.

                              I.  CREDIT FACILITY
                                  ---------------

   1.1   The Facility. Subject to the terms and conditions of this Agreement,
         ------------
Trade Bank will make available to Borrower a Trade Cycle Finance Facility
("Facility") for which a Facility Supplement ("Supplement") is attached as
Exhibit B hereto. Additional terms for the Facility (and each subfacility
thereof ("Subfacility")) are set forth in the Supplement. The Facility will be
available from the Closing Date up to and until October 1, 2001 ("Facility
                                                ---------------
Termination Date").

   1.2   Credit Extension Limit. The aggregate outstanding amount of all Credit
         ----------------------
Extensions may at no time exceed Three Million Dollars ($3,000,000) ("Overall
                                 ----------------------------------
Credit Limit"). The aggregate outstanding amount of all Credit Extensions
outstanding at any time under Trade Cycle Finance Facility may not exceed that
amount specified as the "Credit Limit" in the Supplement for the Facility, and
the aggregate outstanding amount of all Credit Extensions outstanding at any
time under each Subfacility (or any subcategory thereof) may not exceed that
amount specified as the "Credit Sublimit" in the Supplement for the Facility. An
amount equal to 100% of each unfunded Credit Extension shall be used in
calculating the outstanding amount of Credit Extensions under this Agreement.

The Subfacility(s) of the Trade Cycle Finance Facility are as follows:

         (a)   Sight Commercial Letters of Credit
         (b)   Standby Letters of Credit

   1.3   Overadvance. All Credit Extensions made hereunder shall be added to and
         -----------
deemed part of the Obligations when made. If, at any time and for any reason,
the aggregate outstanding amount of all Credit Extensions made pursuant to this
Agreement exceeds the dollar limitation in Section 1.2, then Borrower shall
immediately pay to Trade Bank on demand, in cash, the amount of such excess.

   1.4   Repayment; Interest and Fees. Each funded Credit Extension shall be
         ----------------------------
repaid by Borrower, and shall bear interest from the date of disbursement at
those per annum rates and such interest shall be paid, at the times specified in
the Supplement, Note or Facility Document. Borrower agrees to pay to Trade Bank
the fees specified in the Supplement as well as those fees specified in the
relevant Facility Document(s). Interest and fees will be calculated on the basis
of a 360 day year, actual days elapsed. Any overdue payments of principal (and
interest to the extent permitted by law) shall bear interest at a per annum
floating rate equal to the Prime Rate plus 5.0%.

   1.5   Prepayments. Credit Extensions under any Facility may only be prepaid
         -----------
in accordance with the terms of the Supplement. At the time of any prepayment
(including, but not limited to, any prepayment which is a result of the
occurrence of an Event of Default and an acceleration of the Obligations)
Borrower will pay to Trade Bank all interest accrued on the amount so prepaid to
the date of such prepayment and all costs, expenses and fees specified in the
Loan Documents.

                      II.  REPRESENTATIONS AND WARRANTIES
                           ------------------------------

     Borrower represents and warrants to Trade Bank that the following
representations and warranties are true and
<PAGE>

correct:

   2.1   Legal Status. Borrower is duly organized and existing and in good
         ------------
standing under the laws of the jurisdiction indicated in this Agreement, and is
qualified or licensed to do business in all jurisdictions in which such
qualification or licensing is required and in which the failure to so qualify or
to be so licensed could have a material adverse affect on Borrower.

   2.2   Authorization and Validity. The execution, delivery and performance of
         --------------------------
this Agreement, and all other Loan Documents to which Borrower is a party, have
been duly and validly authorized, executed and delivered by Borrower and
constitute legal, valid and binding agreements of Borrower, and are enforceable
against Borrower in accordance with their respective terms.

   2.3   Borrower's Name. The name of Borrower set forth at the end of this
         ---------------
Agreement is its correct name. If Borrower is conducting business under a
fictitious business name, Borrower is in compliance with all laws relating to
the conduct of such business under such name.

   2.4   Financial Condition and Statements. All financial statements of
         ----------------------------------
Borrower delivered to Trade Bank have been prepared in conformity with GAAP, and
completely and accurately reflect the financial condition of Borrower (and any
consolidated Subsidiaries) at the times and for the periods stated in such
financial statements. Neither Borrower nor any Subsidiary has any material
contingent liability not reflected in the aforesaid financial statement. Since
the date of the financial statements delivered to Trade Bank for the last fiscal
period of Borrower to end before the Effective Date, there has been no material
adverse change in the financial condition, business or prospects of Borrower.
Borrower is solvent.

   2.5   Litigation. Except as disclosed in writing to Trade Bank prior to the
         ----------
Effective Date, there is no action, claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower's knowledge) threatened by or
against or affecting Borrower or any Subsidiary in any court or before any
governmental authority, administrator or agency which may result in (a) any
material adverse change in the financial condition or business of Borrower's, or
(b) any material impairment of the ability of Borrower to carry on its business
in substantially the same manner as it is now being conducted.

   2.6   No Violation. The execution, delivery, and performance by Borrower of
         ------------
each of the Loan Documents do not violate any provision of any law or
regulation, or contravene any provision of the Articles of Incorporation or By-
Laws of Borrower, or result in a breach of or constitute a default under any
contract, obligation, indenture, or other instrument to which Borrower is a
party or by which Borrower may be bound.

   2.7   Income Tax Returns. Borrower has no knowledge of any pending
         ------------------
assessments or adjustments of its income tax payable with respect to any year.

   2.8   No Subordination. There is no agreement, indenture, contract, or
         ----------------
instrument to which Borrower is a party or by which Borrower may be bound that
requires the subordination in right of payment of any of Borrower's obligations
subject to this Agreement to any other obligation of Borrower.

   2.9   ERISA. Borrower is in compliance in all material respects with all
         -----
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended or recodified from time to time ("ERISA"); Borrower has not violated any
provision of any defined employee pension benefit plan (as defined in ERISA)
maintained or contributed to by Borrower (each, a "Plan"); no Reportable Event,
as defined in ERISA, has occurred and is continuing with respect to any Plan
initiated by Borrower; Borrower has met its minimum funding requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as they come due in accordance with the Plan documents and
under GAAP.

   2.10  Other Obligations. Except as disclosed in writing to Trade Bank prior
         -----------------
to the Effective Date, neither Borrower nor any Subsidiary are in default of any
obligation for borrowed money, any purchase money obligation or any material
lease, commitment, contract, instrument or obligation.

   2.11  No Defaults. No Event of Default, and event which with the giving of
         -----------
notice or the passage of time or
<PAGE>

both would constitute an Event of Default, has occurred and is continuing.

   2.12  Information Provided to Trade Bank. The information provided to the
         ----------------------------------
Trade Bank concerning Borrower's business is true and correct.

   2.13  Environmental Matters. Except as disclosed by Borrower to Trade Bank
         ---------------------
in writing prior to the Effective Date, Borrower (as well as any Subsidiary) is
each in compliance in all material respects with all applicable Federal or state
environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any Borrower's or
any Subsidiary's operations and/or properties, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Toxic Substances Control Act
and the California Health and Safety Code, as any of the same may be amended,
modified or supplemented from time to time. None of the operations of Borrower
or of any Subsidiary is the subject of any Federal or state investigation
evaluating whether any remedial action involving a material expenditure is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment.

                   III.  CONDITIONS TO EXTENDING FACILITIES
                         ----------------------------------

   3.1   Conditions to Initial Credit Extension. The obligation of Trade Bank to
         --------------------------------------
make the first Credit Extension is subject to the fulfillment to Trade Bank's
satisfaction of the following conditions:

         (a) Approval of Trade Bank Counsel. All legal matters relating to
             ------------------------------
             making the Facility available to Borrower must be satisfactory to
             counsel for Trade Bank.

         (b) Documentation. Trade Bank must have received, in form and substance
             --------------
             satisfactory to Trade Bank, the following documents and instruments
             duly executed and in full force and effect:

                    (1)  a corporate borrowing resolution and incumbency
                         certificate if Borrower is a corporation, a partnership
                         or joint venture borrowing certificate if Borrower is a
                         partnership or joint venture, and a limited liability
                         company borrowing certificate if Borrower is a limited
                         liability company;

                    (2)  the Facility Documents for the Facility, including, but
                         not limited to, note(s) ("Notes") for any Revolving
                         Credit or Term Loan Facility, Trade Bank's standard
                         Continuing Commercial Letter of Credit Agreement or
                         Continuing Standby Letter of Credit Agreement for any
                         letter of credit Facility;

                    (3)  those guarantees, security agreements, deeds of trust,
                         subordination agreements, intercreditor agreements,
                         factoring agreements, tax service contracts, and other
                         Collateral Documents required by Trade Bank to evidence
                         the collateral/credit support specified in the
                         Supplement;

                    (4)  if an audit or inspection of any books, records or
                         property is specified in the Supplement for the
                         Facility, an audit or inspection report from Wells
                         Fargo or another auditor or inspector acceptable to
                         Trade Bank reflecting values and property conditions
                         satisfactory to Trade Bank; and

                    (5)  if insurance is required in the Addendum, the insurance
                         policies specified in the Addendum (or other
                         satisfactory proof thereof) from insurers acceptable to
                         Trade Bank.

   3.2   Conditions to Making Each Credit Extension. The obligation of Trade
         ------------------------------------------
Bank to make each Credit Extension is subject to the fulfillment to Trade Bank's
satisfaction of the following conditions:

         (a)        Representations and Warranties. The representations and
                    ------------------------------
                    warranties contained in this Agreement, the Facility
                    Documents and the Collateral Documents will be true and
                    correct on
<PAGE>

                    and as of the date of the Credit Extension with the same
                    effect as though such representations and warranties had
                    been made on and as of such date;

         (b)        Documentation. Trade Bank must have received, in form and
                    -------------
                    substance satisfactory to Trade Bank, the following
                    documents and instruments duly executed and in full force
                    and effect:

                    (1)  if the Credit Extension is the issuance of a Commercial
                         Letter of Credit, Trade Bank's standard Application For
                         Commercial Letter of Credit or standard Application and
                         Agreement For Commercial Letter of Credit;

                    (2)  if the Credit Extension is the issuance of a Standby
                         Letter of Credit, Trade Bank's standard Application For
                         Standby Letter of Credit or standard Application and
                         Agreement For Standby Letter of Credit;

                    (3)  if a Borrowing Base Certificate is required for the
                         Credit Extension, a Borrowing Base Certificate
                         demonstrating compliance with the requirements for such
                         Credit Extension.

         (c)        Fees. Trade Bank must have received any fees required by
                    ----
                    the Loan Documents to be paid at the time such Credit
                    Extension is made.

                          IV.  AFFIRMATIVE COVENANTS
                               ---------------------

     Borrower covenants that so long as Trade Bank remains committed to make
Credit Extensions to Borrower, and until payment of all Obligations and Credit
Extensions, Borrower will comply with each of the following covenants: (For
purposes of this Article IV, and Article V below, reference to "Borrower" may
also extend to Borrower's subsidiaries, if so specified in the Addendum.)

     4.1       Punctual Payments. Punctually pay all principal, interest, fees
               -----------------
and other Obligations due under this Agreement or under any Loan Document at the
time and place and in the manner specified herein or therein.

     4.2       Notification to Trade Bank. Promptly, but in no event more than 5
               --------------------------
calendar days after the occurrence of each such event, provide written notice in
reasonable detail of each of the following:

               (a)  Occurrence of a Default. The occurrence of any Event of
                    -----------------------
                    Default or any event which with the giving of notice or the
                    passage of time or both would constitute an Event of
                    Default;

               (b)  Borrower's Trade Names;Place of Business. Any change of
                    ----------------------------------------
                    Borrower's (or any subsidiary's) name, trade name or place
                    of business, or chief executive officer;

               (c)  Litigation. Any action, claim, proceeding, litigation or
                    ----------
                    investigation threatened or instituted by or against or
                    affecting Borrower (or any Subsidiary) in any court or
                    before any government authority, administrator or agency
                    which may materially and adversely affect Borrower's (or any
                    Subsidiary's) financial condition or business or Borrower's
                    ability to carry on its business in substantially the same
                    manner as it is now being conducted;

               (d)  Uninsured or Partially Uninsured Loss. Any uninsured or
                    -------------------------------------
                    partially uninsured loss through liability or property
                    damage or through fire, theft or any other cause affecting
                    Borrower's (or any Subsidiary's) property in excess of the
                    aggregate amount required hereunder;

               (e)  Reports Made to Insurance Companies. Copies of all material
                    -----------------------------------
                    reports made to insurance companies; and
<PAGE>

               (f)  ERISA. The occurrence and nature of any Reportable Event or
                    -----
                    Prohibited Transaction, each as defined in ERISA, or any
                    funding deficiency with respect to any Plan.

     4.3       Books and Records. Maintain at Borrower's address books and
               -----------------
records in accordance with GAAP, and permit any representative of Trade Bank, at
any reasonable time, to inspect, audit and examine such books and records, to
make copies of them, and to inspect the properties of Borrower.

     4.4       Tax Returns and Payments. Timely file all tax returns and reports
               ------------------------
required by foreign, federal, state and local law, and timely pay all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower. Borrower may, however, defer payment of any contested taxes, provided
that Borrower (i) in good faith contests Borrower's obligation to pay the taxes
by appropriate proceedings promptly instituted and diligently conducted, (ii)
notifies Trade Bank in writing of the commencement of, and any material
development in, the proceedings, (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral, and (iv) makes provision, to Trade Bank's satisfaction, for eventual
payment of such taxes in the event Borrower is obligated to make such payment.

     4.5       Compliance with Laws. Comply in all material respects with the
               --------------------
provisions of all foreign, federal, state and local laws and regulations
relating to Borrower, including, but not limited to, those relating to
Borrower's ownership of real or personal property, the conduct and licensing of
Borrower's business, and health and environmental matters.

     4.6       Taxes and Other Liabilities. Pay and discharge when due any and
               ---------------------------
all indebtedness, obligations, assessments and taxes, both real and personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Trade Bank's satisfaction, for eventual payment thereof
in the event that Borrower is obligated to make such payment.

     4.7       Insurance. Maintain and keep in force insurance of the types and
               ---------
in amounts customarily carried in lines of business similar to that of Borrower,
including, but not limited to, fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance to be in
amounts satisfactory to Trade Bank and to be carried with companies approved by
Trade Bank before such companies are retained, and deliver to Trade Bank from
time to time at Trade Bank's request schedules setting forth all insurance then
in effect. All insurance policies shall name Trade Bank as an additional loss
payee, and shall contain a lenders loss payee endorsement in form reasonably
acceptable to Trade Bank. (Upon receipt of the proceeds of any such insurance,
Trade Bank shall apply such proceeds in reduction of the outstanding funded
Credit Extensions and shall hold any remaining proceeds as collateral for the
outstanding unfunded Credit Extensions, as Trade Bank shall determine in its
sole discretion, except that, provided no Event of Default has occurred, Trade
Bank shall release to Borrower insurance proceeds with respect to equipment
totaling less than $100,000, which shall be utilized by Borrower for the
replacement of the equipment with respect to which the insurance proceeds were
paid, if Trade Bank receives reasonable assurance that the insurance proceeds so
released will be so used.) If Borrower fails to provide or pay for any
insurance, Trade Bank may, but is not obligated to, obtain the insurance at
Borrower's expense.

     4.8       Further Assurances. At Trade Bank's request and in form and
               ------------------
substance satisfactory to Trade Bank, execute all documents and take all such
actions at Borrower's expense as Trade Bank may deem reasonably necessary or
useful to perfect and maintain Trade Bank's perfected security interest in the
Collateral and in order to fully consummate all of the transactions contemplated
by the Loan Documents.

                            V.  NEGATIVE COVENANTS
                                ------------------

     Borrower covenants that so long as Trade Bank remains committed to make any
Credit Extensions to Borrower and until all Obligations and Credit Extensions
have been paid, Borrower will not:

     5.1       Merge or Consolidation, Transfer of Assets. Merge into or
               ------------------------------------------
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of
<PAGE>

Borrower's assets except in the ordinary course of its business.

   5.2   Use of Proceeds. Borrower will not use the proceeds of any Credit
         ---------------
Extension except for the purposes, if any, specified for such Credit Extension
in the Supplement covering the Facility under which such Credit Extension is
made.

   5.3   Liens. Mortgage, pledge, grant or permit to exist a security interest
         -----
in, or lien upon, all or any portion of Borrower's assets now owned or hereafter
acquired, except any of the foregoing in favor of Trade Bank or which is
existing as of, and disclosed to Trade Bank in writing prior to, the date
hereof.

   5.4   Acquisitions of Assets. Borrower will not acquire any assets or enter
         ----------------------
into any other transaction outside the ordinary course of Borrower's business.

   5.5   Loans and Investments. Borrower will not make any loans or advances to,
         ---------------------
or investments in, any person or entity except for accounts receivable created
in the ordinary course of Borrower's business.

   5.6   Indebtedness For Borrowed Money. Borrower will not incur any
         -------------------------------
indebtedness for borrowed money, except to Trade Bank and except for
indebtedness subordinated to the Obligations by an instrument or agreement in
form acceptable to Trade Bank.

   5.7   Guarantees. Borrower will not guarantee or otherwise become liable with
         ----------
respect to the obligations of any other person or entity, except for endorsement
of instruments for deposit into Borrower's account in the ordinary course of
Borrower's business.

   5.8   Dividends and Distributions of Capital of C Corporation. If Borrower is
         -------------------------------------------------------
a corporation, Borrower will not pay or declare any dividends or make any
distribution of capital on Borrower's stock (except for dividends payable solely
in stock of Borrower), nor redeem, retire, purchase or otherwise acquire,
directly or indirectly, any shares of any class of Borrower's stock now or
hereafter outstanding.

   5.9   Investments in, or Acquisitions of, Subsidiaries. Borrower will not
         ------------------------------------------------
make any investments in, or form or acquire, any subsidiaries.

   5.10  Capital Expenditures. Borrower shall not make any capital expenditures
         --------------------
in any fiscal year in an aggregate amount in excess of $5,000,000.
                                                       ----------

   With respect to Sections 5.1, 5.4, 5.6, 5.7, 5.9, and 5.10, if Trade Bank
agrees, in its sole and absolute discretion, to waive compliance with such
covenants IN CONNECTION WITH the closing of any acquisition by Borrower,
Borrower shall deliver to Trade Bank cash collateral, in form and substance
satisfactory to Trade Bank in its sole discretion.

                      VI.  EVENTS OF DEFAULT AND REMEDIES
                           ------------------------------

   6.1   Events of Default. The occurrence of any of the following shall
         -----------------
constitute an "Event of Default":

         (a)   Failure to Make Payments When Due. Borrower's failure to pay
               ---------------------------------
               principal, interest, fees or other amounts when due under any
               Loan Document.

         (b)   Failure to Perform Obligations. Any failure by Borrower to comply
               ------------------------------
               with any covenant or obligation in this Agreement or in any Loan
               Document (other than those referred to in subsection (a)above),
               and such default shall continue for a period of twenty calendar
               days from the earlier of (i) Borrower's failure to notify Trade
               Bank of such Event of Default pursuant to Section 4.2(a) above,
               or (ii) Trade Bank's notice to Borrower of such Event of Default.

         (c)   Untrue or Misleading Warranty or Statement. Any warranty,
               ------------------------------------------
               representation, financial
<PAGE>

               statement, report or certificate made or delivered by Borrower
               under any Loan Document is untrue or misleading in any material
               respect when made or delivered.

        (d)    Defaults Under Other Loan Documents. Any "Event of Default"
               -----------------------------------
               occurs under any other Loan Document; any Guaranty is no longer
               in full force and effect (or any claim thereof made by Guarantor)
               or any failure of a Guarantor to comply with the provisions
               thereof; or any breach of the provisions of any Subordination
               Agreement or Intercreditor Agreement by any party other than the
               Trade Bank.

        (e)    Defaults Under Other Agreements or Instruments. Any default in
               ----------------------------------------------
               the payment or performance of any obligation, or the occurrence
               of any event of default, under the terms of any other agreement
               or instrument pursuant to which Borrower, any Subsidiary or any
               Guarantor or general partner of Borrower has incurred any debt or
               other material liability to any person or entity.

        (f)    Concealing or Transferring Property. Borrower conceals, removes
               -----------------------------------
               or transfers any part of its property with intent to hinder,
               delay or defraud its creditors, or makes or suffers any transfer
               of any of its property which may be fraudulent under any
               bankruptcy, fraudulent conveyance or similar law.

        (g)    Judgments and Levies Against Borrower. The filing of a notice of
               -------------------------------------
               judgment lien against Borrower, or the recording of any abstract
               of judgment against Borrower, in any county in which Borrower has
               an interest in real property, or the service of a notice of levy
               and/or of a writ of attachment or execution, or other like
               process, against the assets of Borrower, or the entry of a
               judgment against Borrower.

        (h)    Event or Condition Impairing Payment or Performance. Any event
               ---------------------------------------------------
               occurs or condition arises which Trade Bank in good faith
               believes impairs or is substantially likely to impair the
               prospect of payment or performance by Borrower of the
               Obligations, including, but not limited to any material adverse
               change in Borrower's financial condition, business or prospects.

        (i)    Voluntary Insolvency. Borrower, any Subsidiary or any Guarantor
               --------------------
               (i) becomes insolvent, (ii) suffers or consents to or applies for
               the appointment of a receiver, trustee, custodian or liquidator
               of itself or any of its property, (iii) generally fails to pay
               its debts as they become due, (iv) makes a general assignment for
               the benefit of creditors, or (v) files a voluntary petition in
               bankruptcy, or seeks reorganization, in order to effect a plan or
               other arrangement with creditors or any other relief under the
               Bankruptcy Reform Act, Title 11 of the United States Code, as
               amended or recodified from time to time ("Bankruptcy Code"), or
               under any state or Federal law granting relief to debtors,
               whether now or hereafter in effect.

        (j)    Involuntary Insolvency. Any involuntary petition or proceeding
               ----------------------
               pursuant to the Bankruptcy Code or any other applicable state or
               federal law relating to bankruptcy, reorganization or other
               relief for debtors is filed or commenced against Borrower, any
               Subsidiary or Guarantor, or an order for relief is entered
               against it by any court of competent jurisdiction under the
               Bankruptcy Code or any other applicable state or federal law
               relating to bankruptcy, reorganization or other relief for
               debtors.

        (k)    Change in Ownership. Any change in the ownership of Borrower, any
               -------------------
               general partner of Borrower or any Guarantor which the Trade Bank
               determines, in its sole discretion, may adversely affect the
               creditworthiness of Borrower or credit support for the
               Obligations.

   6.2  Remedies. Upon the occurrence of any Event of Default, or at any time
        --------
thereafter, Trade Bank, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by Borrower), may do any one or more
of the following: (a) terminate Trade Bank's obligation to make Credit
Extensions or to make available to Borrower the Facility or other financial
accommodations; (b) accelerate and declare all or any part of the Obligations to
be immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any
<PAGE>

instrument evidencing or relating to any Credit Extension; and/or (c) exercise
all its rights, powers and remedies available under the Loan Documents, or
accorded by law, including, but not limited to, the right to resort to any or
all Collateral or other security for any of the Obligations and to exercise any
or all of the rights of a beneficiary or secured party pursuant to applicable
law. Notwithstanding the provisions in the foregoing sentence, if any Event of
Default set out in subsections (i) and (j) of Section 6.1 above shall occur,
then all the remedies specified in the preceding sentence shall automatically
take effect without notice or demand of any kind (all of which are hereby
expressly waived by Borrower) with respect to any and all Obligations. All
rights, powers and remedies of Trade Bank may be exercised at any time by Trade
Bank and from time to time after the occurrence of an Event of Default, are
cumulative and not exclusive, and shall be in addition to any other rights,
powers or remedies provided by law or equity.

                           VII.  GENERAL PROVISIONS
                                 ------------------

   7.1   Notices. All notices to be given under this Agreement shall be in
         -------
writing and shall be given personally or by regular first-class mail, by
certified mail return receipt requested, by a private delivery service which
obtains a signed receipt, or by facsimile transmission addressed to Trade Bank
or Borrower at the address indicated after their signature to this Agreement, or
at any other address designated in writing by one party to the other party.
Trade Bank is hereby authorized by Borrower to act on such instructions or
notices sent by facsimile transmission or telecommunications device which Trade
Bank believes come from Borrower. All notices shall be deemed to have been given
upon delivery, in the case of notices personally delivered or delivered by
private delivery service, upon the expiration of 3 calendar days following the
deposit of the notices in the United States mail, in the case of notices
deposited in the United States mail with postage prepaid, or upon receipt, in
the case of notices sent by facsimile transmission.

   7.2   Waivers. No delay or failure of Trade Bank in exercising any right,
         -------
power or remedy under any of the Loan Documents shall affect or operate as a
waiver of such right, power or remedy; nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, consent or approval by Trade Bank under any of the Loan Documents
must be in writing and shall be effective only to the extent set out in such
writing.

   7.3   Benefit of Agreement. The provisions of the Loan Documents shall be
         --------------------
binding upon and inure to the benefit of the respective successors, assigns,
heirs, executors, administrators, beneficiaries and legal representatives of
Borrower and Trade Bank; provided, however, that Borrower may not assign or
transfer any of its rights under any Loan Document without the prior written
consent of Trade Bank, and any prohibited assignment shall be void. No consent
by Trade Bank to any assignment shall release Borrower from its liability for
the Obligations unless such release is specifically given by Trade Bank to
Borrower in writing. Trade Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Trade Bank's rights and benefits under each of the Loan Documents. In connection
therewith, Trade Bank may disclose any information relating to the Facility,
Borrower or its business, or any Guarantor or its business.

   7.4   Joint and Several Liability. If Borrower consists of more than one
         ---------------------------
person or entity, the liability of each of them shall be joint and several, and
the compromise of any claim with, or the release of, any one such Borrower shall
not constitute a compromise with, or a release of, any other such Borrower.

   7.5   No Third Party Beneficiaries. This Agreement is made and entered into
         ----------------------------
for the sole protection and benefit of Borrower and Trade Bank and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, any of the Loan Documents to which it is not a
party.

   7.6   Governing Law and Jurisdiction. This Agreement shall, unless provided
         ------------------------------
differently in any Loan Document, be governed by, and be construed in accordance
with, the internal laws of the State of California, except to the extent Trade
Bank has greater rights or remedies under federal law whether as a national bank
or otherwise. Borrower and Trade Bank (a) agree that all actions and proceedings
relating directly or indirectly to this Agreement shall be litigated in courts
located within California; (b) consent to the jurisdiction of any such court and
consent to service of process in any such action or proceeding by personal
delivery or any other method permitted by law; and (c) waive any and all rights
Borrower may have to object to the jurisdiction of any such court or to transfer
or change the venue of any such action or
<PAGE>

proceeding.

   7.7   Mutual Waiver of Jury Trial. Borrower and Trade Bank each hereby waive
         ---------------------------
the right to trial by jury in any action or proceeding based upon, arising out
of, or in any way relating to, (a) any Loan Document, (b) any other present or
future agreement, instrument or document between Trade Bank and Borrower, or (c)
any conduct, act or omission of Trade Bank or Borrower or any of their
directors, officers, employees, agents, attorneys or any other persons or
entities affiliated with Trade Bank or Borrower, which waiver will apply in all
of the mentioned cases whether the case is a contract or tort case or any other
case. Borrower represents and warrants that no officer, representative or agent
of Trade Bank has represented, expressly or otherwise, that Trade Bank would not
seek to enforce this waiver of jury trial.

   7.8   Severability. Should any provision of any Loan Document be prohibited
         ------------
by, or invalid under applicable law, or held by any court of competent
jurisdiction to be void or unenforceable, such defect shall not affect, the
validity of the other provisions of the Loan Documents.

   7.9   Entire Agreement; Amendments. This Agreement and the other Loan
         ----------------------------
Documents are the final, entire and complete agreement between Borrower and
Trade Bank concerning the Credit Extensions and the Facility; supersede all
prior and contemporaneous negotiations and oral representations and agreements.
There are no oral understandings, representations or agreements between the
parties concerning the Credit Extensions or the Facility which are not set forth
in the Loan Documents. This Agreement and the Supplement may not be waived,
amended or superseded except in a writing executed by Borrower and Trade Bank.

   7.10  Collection of Payments. Unless otherwise specified in any Loan
         ----------------------
Document, other than this Agreement or any Note, all principal, interest and any
fees due to Trade Bank by Borrower under this Agreement, the Addendum, any
Supplement, any Facility Document, any Collateral Document or any Note, will be
paid by Trade Bank having Wells Fargo debit any of Borrower's accounts with
Wells Fargo and forwarding such amount debited to Trade Bank, without
presentment, protest, demand for reimbursement or payment, notice of dishonor or
any other notice whatsoever, all of which are hereby expressly waived by
Borrower. Such debit will be made at the time principal, interest or any fee is
due to Trade Bank pursuant to this Agreement, the Addendum, any Supplement, any
Facility Document, any Collateral Document or any Note.

   7.11  Costs, Expenses and Attorneys' Fees. Borrower will reimburse Trade
         -----------------------------------
Bank for all costs and expenses, including, but not limited to, reasonable
attorneys' fees and expenses (which counsel may be Trade Bank or Wells Fargo
employees), expended or incurred by Trade Bank in the preparation and
negotiation of this Agreement, the Notes, the Collateral Documents, the
Addendum, and the Facility Documents, in amending this Agreement, the Collateral
Documents, the Notes, the Addendum, or the Facility Documents, in collecting any
sum which becomes due Trade Bank on the Notes, under this Agreement, the
Collateral Documents, the Addendum, the Supplement, or any of the Facility
Documents, in the protection, perfection, preservation and enforcement of any
and all rights of Trade Bank in connection with this Agreement, the Notes, any
of the Collateral Documents, the Supplement, any of the Addendum, or any of the
Facility Documents, including, without limitation, the fees and costs incurred
in any out-of-court work out or a bankruptcy or reorganization proceeding.

                              VIII.  DEFINITIONS
                                     -----------

   8.1   "Accounts Receivable" means all presently existing and hereafter
          -------------------
arising "Rights to Payment" (as that term is defined in the "Continuing Security
Agreement - Rights to Payment and Inventory" executed by Borrower in favor of
Trade Bank) which arise from the sale, lease or other disposition of Inventory,
or from performance of contracts for service, manufacture, construction or
repair, together with all goods returned by Borrower's customers in connection
with any of the foregoing.

   8.2   "Agreement" means this Agreement and the Addendum attached hereto, as
          ---------
corrected or modified from time to time by Trade Bank and Borrower.

   8.3   "Banking Day" means each day except Saturday, Sunday and a day
          -----------
specified as a holiday by federal or California statute.
<PAGE>

     8.4   "Closing Date" means the date on which the first Credit Extension is
            ------------
made.

     8.5   "Collateral" means all property securing the Obligations.
            ----------

     8.6   "Collateral Documents" means those security agreement(s), deed(s) of
            --------------------
trust, guarantee(s), subordination agreement(s), intercreditor agreement(s), and
other credit support documents and instruments required by the Trade Bank to
effect the collateral and credit support requirements set forth in the
Supplement with respect to the Facility.

     8.7   "Credit Extension" means each extension of credit under the Facility
            ----------------
(whether funded or unfunded), including, but not limited to, (a) the issuance of
sight or usance commercial letters of credit or commercial letters of credit
supported by back-up letters of credit, (b) the issuance of standby letters of
credit, (c) the issuance of shipping guarantees, (d) the making of revolving
credit working capital loans, (e) the making of loans against imports for
letters of credit, (f) the making of clean import loans outside letters of
credit, (g) the making of advances against export orders, (h) the making of
advances against export letters of credit, (i) the making of advances against
outgoing collections, (j) the making of term loans, and (k) the entry into
foreign exchange contracts.

     8.8   "Credit Limit" means, with respect to the any Facility, the amount
            ------------
specified under the column labeled "Credit Limit" in the Supplement for that
related Facility.

     8.9   "Credit Sublimit" means, with respect to any Subfacility, the amount
            ---------------
specified after the name of that Subfacility under the column labeled "Credit
Sublimit" in the Supplement for the related Facility.

     8.10  "Dollars" and "$" means United States dollars.
            -------       -

     8.11  "Facility Documents" means, with respect to the Facility, those
            ------------------
documents specified in the Supplement for the Facility, and any other documents
customarily required by Trade Bank for said Facility.

     8.12  "GAAP" means generally accepted accounting principles, which are
            ----
applicable to the circumstances, as of the date of determination, set out in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession.

     8.13  "Inventory" has the meaning assigned to such term in the "Continuing
            ---------
Security Agreement - Rights to Payment and Inventory" executed by Borrower in
favor of Trade Bank.

     8.14  "Loan Documents" means this Agreement, the Addendum, the Supplement,
            --------------
the Facility Documents and the Collateral Documents.

     8.15  "Note" has the meaning specified in Section 3.1(b)(2) above.
            ----

     8.16  "Obligations" means (a) the obligation of Borrower to pay principal,
            -----------
interest and fees on all funded Credit Extensions and fees on all unfunded
Credit Extensions, and (b) the obligation of Borrower to pay and perform when
due all other indebtedness, liabilities, obligations and covenants required
under the Loan Documents.

     8.17  "Person" means and includes natural persons, corporations, limited
            ------
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
<PAGE>

     8.18  "Prime Rate" means the rate most recently announced by Wells Fargo at
            ----------
its principal office in San Francisco, California as its "Prime Rate", with the
understanding that the Prime Rate is one of Wells Fargo's base rates and serves
as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as Wells Fargo may
designate. Any change in an interest rate resulting from a change in the Prime
Rate shall become effective as of 12:01 a.m. of the Banking Day on which each
change in the Prime Rate is announced by Wells Fargo.

     8.19  "Subsidiary" means (i) any corporation at least the majority of whose
            ----------
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by Borrower and/or one or more Subsidiaries,
and (ii) any joint venture or partnership in which Borrower and/or one or more
Subsidiaries has a majority interest.

     8.20  "Wells Fargo" means Wells Fargo Bank, N.A.
            -----------

                                IX. ARBITRATION

     9.1   Arbitration.  Upon the demand of any party, any dispute shall be
           -----------
resolved by binding arbitration in accordance with the terms of this Agreement.
A "Dispute" shall mean any action, dispute, claim or controversy of any kind,
whether in contract or tort, statutory or common law, legal or equitable, now
existing or hereafter arising under or in connection with, or in any way
pertaining to, any of the Loan Documents or the Notes, or any past, present or
future extensions of credit and other activities, transactions or obligations of
any kind related directly or indirectly to any of the Loan Documents or the
Notes, including without limitation, any of the foregoing arising in connection
with the exercise of any self-help, ancillary or other remedies pursuant to any
of the Loan Documents or the Notes. Any party may by summary proceedings bring
an action in court to compel arbitration of a Dispute. Any party who fails or
refuses to submit to arbitration following a lawful demand by any other party
shall bear all costs and expenses incurred by any such other party in compelling
arbitration of any Dispute.

     9.2   Governing Rules. Arbitration proceedings shall be administered by the
           ---------------
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discover activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C.(S)91 or any similar applicable state law.

     9.3   No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
           ----------------------------------------------------------
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation, injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.

     9.4   Arbitrator Qualifications and Powers; Awards. Arbitrators must be
           --------------------------------------------
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other
<PAGE>

applicable law. Any Dispute in which the amount in controversy is $5,000,000 or
less shall be decided by a single arbitrator who shall not render an award of
greater than $5,000,000 (including damages, costs, fees and expenses). By
submission to a single arbitrator, each party expressly waives any right or
claim to recover more than $5,000,000. Any Dispute in which the amount in
controversy exceeds $5,000,000 shall be decided by majority vote of a panel of
three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations.

     9.5   Real Property Collateral; Judicial Reference. Notwithstanding
           --------------------------------------------
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

     9.6   Miscellaneous. To the maximum extent practicable, the AAA, the
           -------------
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents, the Notes or any relationship
between the parties.

Borrower and Trade Bank have caused this Agreement to be executed by their duly
authorized officers or representatives on the date first written above.

                                                       "BORROWER"

                                          SOMERA COMMUNICATIONS, INC.

                                          By:     /s/  Gary J. Owen
                                              ------------------------------

                                          Title:    CFO
                                                 ---------------------------

                                          Borrower's Address:
                                          -------------------
                                          5383 Hollister Ave.
                                          Santa Barbara, CA 93111
<PAGE>

                                                       "LENDER"

                                          WELLS FARGO HSBC TRADE BANK,
                                          NATIONAL ASSOCIATION

                                          By:    /s/ Carlos E. Herrera
                                              ---------------------------------
                                              Carlos E. Herrera
                                          Title:  Relationship Manager

                                          Lender's Address:
                                          -----------------
                                          333 South Grand Avenue, 8th Floor
                                          Los Angeles, CA 90071
<PAGE>

                                                                       EXHIBIT A
WELLS FARGO HSBC TRADE BANK                         ADDENDUM TO CREDIT AGREEMENT
--------------------------------------------------------------------------------

THIS ADDENDUM IS ATTACHED TO THE CREDIT AGREEMENT ("CREDIT AGREEMENT") BETWEEN
WELLS FARGO HSBC TRADE BANK AND THE FOLLOWING BORROWER:

NAME OF BORROWER:  Somera Communications, Inc.

                       ADDITIONAL AFFIRMATIVE COVENANTS
                       --------------------------------

REPORTS.  Borrower will furnish the following information or deliver the
following reports to Trade Bank at the times indicated below:

 .    Annual Financial Statements. Not later than one hundred twenty (120)
                                                 ------------------------
     calendar days after and as of the end of each of Borrower's fiscal years,
     an annual unqualified audited financial statement of Borrower prepared by a
     certified public accountant acceptable to Trade Bank and prepared in
     accordance with GAAP, to include balance sheet, income statement, statement
     of cash flow, and source and application of funds statement.

 .    Quarterly Financial Statements. Not later than forty-five (45) calendar
                                                    ---------------
     days after and as of the end of each of Borrower's fiscal quarters, a
     financial statement of Borrower prepared by Borrower, to include balance
     sheet and income statement.

          Certificate of Accuracy and No Event of Default. At the time each
          financial statement of Borrower required above is delivered to Trade
          Bank, a certificate of the president or chief financial officer of
          Borrower that said financial statements are accurate and that there
          exists no Event of Default under the Agreement nor any condition, act
          or event which with the giving of notice or the passage of time or
          both would constitute an Event of Default.

     FINANCIAL COVENANTS. Borrower will maintain the following (if Borrower has
     any Subsidiaries which must be consolidated under GAAP, the following
     applies to borrower and the consolidated Subsidiaries):

 .    Tangible Net Worth. Not at any time less than $75,000,000. ("Tangible Net
                                                   -----------
     Worth" means the aggregate of total shareholders' equity determined in
     accordance with GAAP plus indebtedness which is subordinated to the
                          ----
     Obligations to Trade Bank under a subordination agreement in form and
     substance acceptable to Trade Bank or by subordination language acceptable
     to Trade Bank in the instrument evidencing such indebtedness less (i) all
                                                                  ----
     assets which would be classified as intangible assets under GAAP,
     including, but not limited to, goodwill, licenses, patents, trademarks,
     trade names, copyrights, capitalized software and organizational costs,
     licenses and franchises, and (ii) assets which Trade Bank determines in its
     business judgment would not be available or would be of relatively small
     value in a liquidation of Borrower's business, including, but not limited
     to, deferred tax assets, prepaid expenses, loans to officers or affiliates
     and other items).

 .    Total Liabilities divided by Tangible Net Worth. Not at any time greater
     than .50 to 1.0. ("Tangible Net Worth" has the meaning given to it above,
          -----------
     and "Total Liabilities" excludes indebtedness which is subordinated to the
     Obligations to Trade Bank under a subordination agreement in form and
     substance acceptable to Trade Bank or by subordination language acceptable
     to Trade Bank in the instrument evidencing such indebtedness.)

 .    Quick Asset Ratio. Not at any time less than 1.0 to 1.0. ("Quick Asset
     Ratio" means "Quick Assets" divided by total current liabilities, and
     "Quick Assets" means cash on hand or on deposit in banks, readily
     marketable securities issued by the United States, readily marketable
     commercial paper rated "A-1" by Standard & Poor's Corporation [or a similar
     rating by a similar rating organization], certificates of deposit and
     banker's acceptances, and accounts receivable [net of allowance for
     doubtful accounts].)

 .    Pre-Tax Profit. Not less than $1 on a quarterly basis (determined as of
     each fiscal quarter-end) based on the sum of the results of four
     consecutive quarters consisting of the present quarter and the three
     preceding quarters.
<PAGE>

BY SIGNING HERE BORROWER AGREES TO THE DESIGNATED PROVISIONS IN THIS ADDENDUM:

                                                   /s/ Gary J. Owen
                                            -------------------------------
                                                           (SIGNATURE)
<PAGE>

                                                                       EXHIBIT B
WELLS FARGO HSBC TRADE BANK              TRADE CYCLE FINANCE FACILITY SUPPLEMENT
--------------------------------------------------------------------------------

THIS SUPPLEMENT IS AN INTEGRAL PART OF THE CREDIT AGREEMENT BETWEEN WELLS FARGO
HSBC TRADE BANK AND THE FOLLOWING BORROWER:

NAME OF BORROWER: Somera Communications, Inc.
----------------

FACILITY TERMINATION DATE: October 1, 2001
-------------------------

CREDIT LIMIT FOR THIS TRADE CYCLE FINANCE LOAN FACILITY AND SUBLIMITS: Credit
---------------------------------------------------------------------
Limit:  $3,000,000 (subject to dollar limitations in Section 1.2 of Agreement)

CREDIT SUBLIMITS: Subject to the Trade Cycle Finance Facility Credit Limit, the
----------------
Credit Sublimit for each Subfacility specified below refers to the aggregate
amount which may be outstanding at any one time under each such Subfacility.

 .  Sight Commercial Letters of Credit                        $3,000,000
 .  Standby Letters of Credit                                 $3,000,000

FACILITY DESCRIPTION: Trade Bank will make the Trade Cycle Finance Facility
--------------------
available to Borrower for the specific purposes set forth below.

FEES:
----

 .  Non-Utilization Fee: Borrower will pay the following Non-Utilization Fee
   payable in arrears on a quarterly basis, computed at a rate per annum of one-
   quarter of one percent (.25%) on the average daily amount of the unused
   portion of the Overall Credit Limit for each such quarter.

 .  Sight Commercial Credits:

     Issuance Fees/Fees For Increasing Credit Amounts or Extending Expiration
     ------------------------------------------------------------------------
     Dates: (Minimum $125) 1/8 of 1% per annum of the amount of each Sight
     -----                 ---------
     Commercial Credit and of any increase in such amount. Payable: At the time
                                                           -------
     each Sight Commercial Credit is issued or increased and at the time the
     expiration date of any Sight Commercial Credit is extended.

     Amendment Fees: (Minimum $90)
     --------------
     $90 for each amendment, unless the amendment is an increase in the Sight
     ---
     Commercial Credit amount or an extension of the expiration date, in which
     case the Issuance Fee above will substitute for any Amendment Fee. Payable:
                                                                        -------
     At the time each amendment is issued.

     Negotiation/Payment/Examination Fees: (Minimum $110)
     ------------------------------------
     1/8 of 1% of the face amount of each drawing under each Sight Commercial
     ---------
     Credit. Payable: At the time any draft or other documents are negotiated,
             -------
     paid or examined.

 .  Standby Credits:

     Commission Fees/Fees For Increasing Credit Amounts or Extending Expiration
     --------------------------------------------------------------------------
     Dates: (Minimum $375) 1.5% of the amount of each Standby Credit and of any
                           ----
     increase in such amount. Payable: At the time each Standby Credit is issued
                              -------
     or increased and at the time the expiration date of any Standby Credit is
     extended.

     Amendment Fees: (Minimum $130)
     --------------
     $130 for each amendment, unless the amendment is an increase in the Standby
     ----
     Credit amount or an extension of the expiration date, in which case the
     Commission Fee above will substitute for any Amendment Fee.
<PAGE>

     Payable: At the time each amendment is issued.
     -------

     Negotiation/Payment/Examination Fees: (Minimum $250)
     ------------------------------------
     1/8 of 1% of the face amount of each drawing under each Standby Credit.
     ---------
     Payable: At the time any draft or other documents are negotiated, paid or
     -------
     examined.

SUBFACILITIES DESCRIPTION, PURPOSE, DOCUMENTS, TERM, AND PREPAYMENTS:
--------------------------------------------------------------------

 .  Sight Commercial Credits:

     Description And Purpose: Trade Bank will issue sight commercial letters of
     -----------------------
     credit (each a "Sight Commercial Credit") for the account of Borrower for
     the purpose or purposes stated below. Subject to the credit sublimits
     specified above, these Sight Commercial Credits will be transferable or not
     transferable and have the goods related to them consigned to or not
     consigned to, or controlled by or not controlled by, Trade Bank. The Sight
     Commercial Credit Sublimit specified above refers to the aggregate undrawn
     amount of all Sight Commercial Credits which may be at any one time
     outstanding under this Facility together with the aggregate amount of all
     drafts drawn under such Sight Commercial Credits which have not been
     reimbursed as provided below at such time.

     This Subfacility may only be used for the following purpose: Issuance of
     Sight Commercial Credits to facilitate the purchase of telecommunications
     equipment.

     Documents:
     ---------
        Before the first Sight Commercial Credit is issued:
            Trade Bank's standard form Continuing Commercial Letter of Credit
            Agreement;
            Trade Bank On-Line Internet Agreement

        Before each Sight Commercial Credit is issued:
            Trade Bank's standard form Application For Commercial Letter of
            Credit;

        Before each Sight Commercial Credit is amended:
            Trade Bank's standard form Application For Amendment To Letter of
            Credit;

Term: No Sight Commercial Credit may expire more than one hundred eighty (180)
----                                                  ------------------------
calendar days after the date it is issued.

 .  Standby Credits:

     Description And Purpose: Trade Bank will issue standby letters of credit
     -----------------------
     (each a "Standby Credit") for the account of Borrower the purpose or
     purposes stated below. Subject to the credit sublimits specified above,
     these Standby Credits will be issued to support Borrower's open account
     trade terms, bid and performance bonds, industrial revenue bonds, worker's
     compensation obligations and or the moving of Borrower as a new customer
     from another bank to Trade Bank. The Standby Credit Sublimit specified
     above refers to the aggregate undrawn amount of all Standby Credits which
     may be at any one time outstanding under this Subfacility together with the
     aggregate amount of all drafts drawn under such Standby Credits which have
     not been reimbursed as provided below at such time.

     This Subfacility may only be used for the following purpose: Issuance of
     Standby Credits in support of open account trade items in connection with
     the purchase of telecommunications equipment and/or support lease
     obligations of Borrower to landlord(s).

     Documents:
     ---------
        Before the first Standby Credit is issued:
            Trade Bank's standard form Continuing Standby Letter of Credit
            Agreement.
            Trade Bank On-Line Internet Agreement

        Before each Standby Credit is issued:
            Trade Bank's standard form Application For Standby Letter of Credit.
<PAGE>

        Before each Standby Credit is amended:
            Trade Bank's standard form Application For Amendment To Letter of
            Credit.

Term: No Standby Credit will expire more than one hundred eighty (180) calendar
----
days after the date it is issued. Standby Credits will be available by sight
drafts only.

REIMBURSEMENTS FOR SIGHT COMMERCIAL CREDITS AND STANDBY CREDITS:
---------------------------------------------------------------

        The amount of each drawing paid by Trade Bank under a Sight Commercial
        Credit or Standby Credit will be reimbursed to Trade Bank as follows:

        by Trade Bank having Wells Fargo Bank debit any of Borrower's accounts
        with Wells Fargo Bank and forwarding such amount debited to Trade Bank;
        or

        immediately on demand of Trade Bank.

DEFAULT INTEREST RATE ON UNREIMBURSED SIGHT COMMERCIAL CREDITS AND STANDBY
--------------------------------------------------------------------------
CREDITS:
-------

        Default interest will accrue at a per annum rate equal to the Prime Rate
        plus five percent (5.0%) ("Default Interest Rate") and be paid at least
        once each month as follows:

            All drawings (i) under Sight Commercial Credits and (ii) under
            Standby Credits, not reimbursed on the day they are paid by Trade
            Bank, will bear interest at the Default Interest Rate from the date
            they are paid to the date such payment is fully reimbursed.

BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS SUPPLEMENT:  /s/ GO
                                                                       ---------<PAGE>

                                                                     Exhibit 4.2

                         MAGMA DESIGN AUTOMATION, INC.

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

          THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this
"Agreement") is made and entered into as of the 15th day of August, 2000, by
and among MAGMA DESIGN AUTOMATION, INC., a Delaware corporation (the "Company"),
          -----------------------------
and the persons identified as "Holders" or "Investors" on the signature pages
hereto. This Agreement amends and restates the Amended and Restated Investor
Rights Agreement dated as of December 6, 1999 (the "Prior Agreement") in its
entirety. The undersigned persons collectively hold at least fifty-one percent
(51%) of the outstanding shares of the Company's Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock, and those shares of
Series D Preferred Stock which are outstanding pursuant to the Original Series D
Preferred Stock Purchase Agreement dated as of December 6, 1999 (the "Original
Series D Purchase Agreement"), and all of the outstanding shares of Series F-1
Preferred Stock and Series F-2 Preferred Sock of the Company.

          RECITALS:

          A.  Certain of the Holders hold shares of the Company's Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock by means of the Series A Preferred Stock Purchase Agreement
dated as of May 12, 1997 (the "Series A Agreement") the Restated Series B
Preferred Stock Purchase Agreement dated as of April 29, 1998 (the "Series B
Agreement"), the Series C Preferred Stock Purchase Agreement dated as of March
1, 1999 and amended as of April 27, 1999 (the "Series C Agreement"), and the
Original Series D Purchase Agreement, respectively, and were granted
registration rights, information rights, rights of first refusal and other
rights pursuant to the Prior Agreement.

          B.  Certain Holders are parties to the Original Series D Purchase
Agreement, which Holders have agreed to amend and restate the Original Series D
Purchase Agreement, and to assume the rights and obligations pursuant to the
Amended and Restated Series D Preferred Stock Purchase Agreement dated as of
August 15, 2000 (the "Amended Series D Purchase Agreement") in lieu of the
rights granted to them under the Original Series D Agreement. The execution and
delivery of the Amended Series D Purchase Agreement are conditioned upon the
execution and delivery of this Agreement by such Holders and the Company.

          C.  The holders of the Company's Series F-1 Preferred Stock and Series
F-2 Preferred Stock (collectively the "Series F Preferred Stock") are former
holders (the "Moscape Holders") of the Series B Preferred Stock and Series C
Preferred Stock, respectively, of Moscape, Inc., a Delaware corporation
                                  -------------
("Moscape"), and are acquiring the Company's Series F Preferred Stock under that
certain Second Amended and Restated Agreement and Plan of Reorganization dated
as of July 7, 2000 between the Company, Magma Acquisition Corp. and Moscape (the
"Merger Agreement"), the execution and delivery of which contemplate the
execution and delivery of this Agreement by the Moscape Holders and the Company.

                                      -1-
<PAGE>

          D.  The Holders of Series F Preferred Stock shall have no preemptive
right or right of first offer to acquire the Company's Series D Preferred Stock
under the Amended Series D Purchase Agreement, and nothing in this Agreement is
intended to confer or imply such a right.

          E.  The Holder of Series F Preferred Stock shall have no rights
conferred under Section 1 of this Agreement, and nothing in this Agreement is
intended to confer or imply such a right.

          F.  The Holders who are parties to the Prior Agreement desire to amend
and restate the Prior Agreement and to assume the rights and obligations created
pursuant hereto in lieu of the rights granted to them under the Prior Agreement.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, each Holder who is a party to the Prior Agreement and each
additional undersigned person hereby agrees that the Prior Agreement shall be
amended and restated and superseded in its entirety as follows:

                                   SECTION 1
                                   ---------

      Restrictions on Transferability of Securities; Registration Rights
      ------------------------------------------------------------------

          1.1  Certain Definitions. As used in this Agreement, the following
               -------------------
terms shall have the meanings set forth below:

          (a)  "Closing" shall mean the date of the subsequent sale of shares of
the Company's Series D Preferred Stock under the Amended Series D Agreement.

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

          (c)  "Common Stock" shall mean the Common Stock, $0.0005 par value, of
the Company.

          (d)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

          (e)  "Holder" shall mean any Investor who holds Registrable Securities
and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section
1.12 hereof; provided that the holders of Series F Preferred Stock shall have no
             --------
rights under Section 1 of this Agreement in their capacity as holders of the
Series F Preferred Stock (or the Common Stock issuable upon conversion of the
Series F Preferred Stock).

          (f)  "Investors" shall mean persons who purchased or acquired Shares
pursuant to the Series A Agreement, the Series B Agreement, the Series C
Agreement, the Original Series D Purchase Agreement or the Amended Series D
Purchase Agreement, and persons who have acquired or will acquire shares of
Series F Preferred Stock pursuant to the Merger Agreement.

                                      -2-
<PAGE>

          (g)  "Initiating Holders" shall mean any Holder or Holders who in the
aggregate hold not less than forty percent (40%) of the outstanding Series C
Preferred Stock and Series D Preferred Stock.

          (h)  "Other Stockholders" shall mean persons other than Holders who,
by virtue of agreements with the Company, are entitled to include their
securities in certain registrations hereunder.

          (i)  "Registrable Securities" shall mean (i) shares of Common Stock
issued or issuable pursuant to the conversion of the Shares and (ii) any Common
Stock issued as a dividend or other distribution with respect to or in exchange
for or in replacement of the shares referenced in (i) above; provided, however,
                                                             --------  -------
that Registrable Securities shall not include any shares of Common Stock which
have previously been registered or which have been sold to the public; and
provided, further that Registrable Securities shall not include (iii) any shares
--------  -------
of Series F Preferred Stock, (iv) any shares of Common Stock issued or issuable
pursuant to the conversion of Series F Preferred Stock or (v) any Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of the shares referenced in (iii) or (iv) above.

          (j)  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.

          (k)  "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of any regular or special audits incident to or
required by any such registration, but shall not include Selling Expenses
(excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).

          (l)  "Rule 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

          (m)  "Rule 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

          (n)  "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

          (o)  "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.

                                      -3-
<PAGE>

          (p)  "Shares" shall mean the Company's Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock.

          1.2  Restrictions on Transfer.
               ------------------------

          (a)  Each Holder agrees not to make any disposition of all or any
portion of the Registrable Securities unless and until the transferee has agreed
in writing for the benefit of the Company to be bound by this Section 1.2,
provided and to the extent such Section is then applicable, and:

               (i)   There is then in effect a registration statement under the
          Securities Act covering such proposed disposition and such disposition
          is made in accordance with such registration statement; or

               (ii)  (A) Such Holder shall have notified the Company of the
          proposed disposition and shall have furnished the Company with a
          detailed statement of the circumstances surrounding the proposed
          disposition, and (B) if reasonably requested by the Company, such
          Holder shall have furnished the Company with an opinion of counsel,
          reasonably satisfactory to the Company, that such disposition will not
          require registration of such shares under the Securities Act. It is
          agreed that the Company will not require opinions of counsel for
          transactions made pursuant to Rule 144 except in unusual
          circumstances.

               (iii) Notwithstanding the provisions of paragraphs (i) and (ii)
          above, no such registration statement or opinion of counsel shall be
          necessary for a transfer by a Holder which is (A) a partnership to its
          partners or retired partners in accordance with partnership interests,
          (B) a corporation to its stockholders in accordance with their
          interest in the corporation, (C) a limited liability company to its
          members or former members in accordance with their interest in the
          limited liability company, or (D) to the Holder's family member or
          trust for the benefit of an individual Holder, provided the transferee
          will be subject to the terms of this Section 1.2 to the same extent as
          if such transferee were an original Holder hereunder.

          (b)    Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):

     THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED,
     ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH
     ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
     EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
     REGISTRATION IS NOT REQUIRED.

                                      -4-
<PAGE>

     (c)  The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel at such Holder's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

     (d)  Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

     1.3  Requested Registration
          ----------------------

     (a)  Request for Registration. If the Company shall receive from
          ------------------------
Initiating Holders at any time or times not earlier than the earlier of (i)
December 6, 2002 or (ii) six (6) months after the effective date of the first
registration statement filed by the Company covering a firmly underwritten
offering of any of its Common Stock to the general public (an "Initial
Registration"), a written request that the Company effect any registration with
respect to all or a part of the Registrable Securities having an aggregate
offering price, net of underwriting discounts, commissions and expenses,
exceeding either (A) seven million five hundred thousand dollars ($7,500,000) if
such registration is not the Company's Initial Registration or (B) ten million
                     ---
dollars ($10,000,000) if such registration is the Company's Initial
                                           --
Registration, the Company will:

          (i)  promptly give written notice of the proposed registration to all
     other Holders; and

          (ii) as soon as practicable, use its best efforts to effect such
     registration (including, without limitation, filing post-effective
     amendments, appropriate qualifications under applicable blue sky or other
     state securities laws, and appropriate compliance with the Securities Act)
     and take such action as would permit or facilitate the sale and
     distribution of all or such portion of such Registrable Securities as are
     specified in such request, together with all or such portion of the
     Registrable Securities of any Holder or Holders joining in such request as
     are specified in a written request received by the Company within twenty
     (20) days after such written notice from the Company is mailed or
     delivered.

     The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 1.3:

          (A)  In any particular jurisdiction in which the Company would be
     required to execute a general consent to service of process in effecting
     such registration, qualification, or compliance, unless the Company is
     already subject to service in such jurisdiction and except as may be
     required by the Securities Act;

          (B)  After the Company has initiated two (2) such registrations
     pursuant to this Section 1.3(a) (counting for these purposes only
     registrations which have

                                      -5-
<PAGE>

     been declared or ordered effective and pursuant to which securities have
     been sold and registrations which have been withdrawn by the Holders as to
     which the Holders have not elected to bear the Registration Expenses
     pursuant to Section 1.5 hereof and would, absent such election, have been
     required to bear such expenses);

          (C)  During the period starting with the date sixty (60) days prior to
     the Company's good faith estimate of the date of filing of, and ending on a
     date one hundred eighty (180) days after the effective date of, a Company-
     initiated registration; provided that the Company is actively employing in
     good faith all reasonable efforts to cause such registration statement to
     become effective;

          (D)  If the Initiating Holders propose to dispose of shares of
     Registrable Securities which may be immediately registered on Form S-3
     pursuant to a request made under Section 1.6 hereof;

          (E)  If the Initiating Holders do not request that such offering be
     firmly underwritten by underwriters selected by the Initiating Holders
     (subject to the consent of the Company, which consent will not be
     unreasonably withheld); or

          (F)  If the Company and the Initiating Holders are unable to obtain
     the commitment of the underwriter described in clause (E) above to firmly
     underwrite the offer.

     (b)  Subject to the foregoing clauses (A) through (F), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders; provided, however, that if (i) in the good faith
judgment of the Board of Directors of the Company, such registration would be
seriously detrimental to the Company and the Board of Directors of the Company
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (ii) the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company for such registration statement to be filed
in the near future and that it is, therefore, essential to defer the filing of
such registration statement, then the Company shall have the right to defer such
filing for the period during which such disclosure would be seriously
detrimental, provided that (except as provided in clause (C) above) the Company
may not defer the filing for a period in excess of ninety (90) days after
receipt of the request of the Initiating Holders, and, provided further, that
the Company shall not defer its obligation in this manner more than twice in any
twelve (12) month period.

     The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Sections 1.3(b) and 1.14 hereof,
include other securities of the Company, with respect to which registration
rights have been granted, and may include securities of the Company being sold
for the account of the Company.

     (c) Underwriting. The right of any Holder to registration pursuant to
         ------------
Section 1.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of

                                      -6-
<PAGE>

such Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder with respect to such participation and inclusion) to the extent provided
herein. A Holder may elect to include in such underwriting all or a part of the
Registrable Securities he holds.

          (d) Procedures. If the Company shall request inclusion in any
              ----------
registration pursuant to Section 1.3 of securities being sold for its own
account, or if other persons shall request inclusion in any registration
pursuant to Section 1.3, the Initiating Holders shall, on behalf of all Holders,
offer to include such securities in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this Section 1
(including Section 1.13). The Company shall (together with all Holders and other
persons proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by a majority
in interest of the Initiating Holders, which underwriters are reasonably
acceptable to the Company. Notwithstanding any other provision of this Section
1.3, if the representative of the underwriters advises the Initiating Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the number of shares to be included in the underwriting or
registration shall be allocated as set forth in Section 1.14 hereof. If a person
who has requested inclusion in such registration as provided above does not
agree to the terms of any such underwriting, such person shall be excluded
therefrom by written notice from the Company, the underwriter or the Initiating
Holders. The securities so excluded shall also be withdrawn from registration.
Any Registrable Securities or other securities excluded shall also be withdrawn
from such registration. If shares are so withdrawn from the registration and if
the number of shares to be included in such registration was previously reduced
as a result of marketing factors pursuant to this Section 1.3(d), then the
Company shall offer to all Holders who have retained rights to include
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn,
with such shares to be allocated among such Holders requesting additional
inclusion in accordance with Section 1.14.

          1.4  Company Registration.
               --------------------

          (a)  If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders
exercising their respective demand registration rights (other than pursuant to
Section 1.3 or 1.6 hereof), other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
transaction, or a registration on any registration form that does not permit
secondary sales, the Company will:

               (i)  promptly give to each Holder written notice thereof; and

               (ii) use its best efforts to include in such registration (and
          any related qualification under blue sky laws or other compliance),
          except as set forth in Section 1.4(b) hereof, and in any underwriting
          involved therein, all the Registrable Securities specified in a
          written request or requests, made by any Holder and received by the
          Company within twenty (20) days after the written notice from the
          Company described in clause (i) above is mailed or delivered by the
          Company. Such written request may specify all or a part of a Holder's
          Registrable Securities.

                                      -7-
<PAGE>

          (b) Underwriting. If the registration of which the Company gives
              ------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.4(a)(i) hereof. In such event, the right of any Holder to
registration pursuant to this Section 1.4 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.

          Notwithstanding any other provision of this Section 1.4, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. If the registration is the first
Company-initiated registered offering of the Company's securities to the general
public, the Company may limit, to the extent so advised by the underwriters, the
amount of securities (including Registrable Securities) to be included in the
registration by the Company's stockholders (including the Holders), or may
exclude, to the extent so advised by the underwriters, such underwritten
securities entirely from such registration. If such registration is the second
or any subsequent Company-initiated registered offering of the Company's
securities to the general public, the Company may limit, to the extent so
advised by the underwriters, the amount of securities to be included in the
registration by the Company's stockholders (including the Holders); provided,
however, that the aggregate value of securities (including Registrable
Securities) to be included in such registration by the Holders may not be so
reduced to less than thirty percent (30%) of the total value of all securities
included in such registration. The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting shall be
allocated first to the Company for securities being sold for its own account and
thereafter as set forth in Section 1.14 hereof. If any person does not agree to
the terms of any such underwriting, he shall be excluded therefrom by written
notice from the Company or the underwriter. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.

          If shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion in accordance
with Section 1.14 hereof.

          1.5  Expenses of Registration. All Registration Expenses incurred in
               ------------------------
connection with any registration, qualification or compliance pursuant to
Sections 1.3, 1.4 and 1.6 hereof (including the expenses of one (1) special
counsel to the participating Holders) shall be borne by the Company. All Selling
Expenses relating to securities so registered shall be borne by the holders of
such securities pro rata on the basis of the number of shares of securities so
registered on their behalf. The Company shall not, however, be required to pay
for expenses of any regis-

                                      -8-
<PAGE>

tration proceeding begun pursuant to Section 1.3 or 1.6, the request of which
has been subsequently withdrawn by the Initiating Holders unless (i) the
withdrawal is based upon material adverse information concerning the Company of
which the Initiating Holders were not aware at the time of such request or (ii)
the Holders of a majority of Registrable Securities agree to forfeit their right
to one requested registration pursuant to Section 1.3 or Section 1.6, as
applicable, in which event such right shall be forfeited by all Holders. If the
Holders are required to pay the Registration Expenses, such expenses shall be
borne by the holders of securities (including Registrable Securities) requesting
such registration in proportion to the number of shares for which registration
was requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (i) above, then the Holders shall not
forfeit their rights pursuant to Section 1.3 or Section 1.6 to a demand
registration.

          1.6  Registration on Form S-3.
               ------------------------

          (a)  After its initial public offering, the Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms. After the Company has qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of this Section 1,
the Holders of Registrable Securities shall have the right to request
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
methods of disposition of such shares by such Holder or Holders), provided,
however, that the Company shall not be obligated to effect any such registration
if (i) the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) on Form S-3 at an aggregate price
to the public of less than $1,000,000, or (ii) in the event that the Company
shall furnish the certification described in paragraph 1.3(b)(ii) (but subject
to the limitations set forth therein) or (iii) in a given twelve (12) month
period, after the Company has effected two (2) such registrations in any such
period, or (iv) it is to be effected more than four (4) years after the
Company's initial public offering.

          (b)  If a request complying with the requirements of Section 1.4(a)
hereof is delivered to the Company, the provisions of Sections 1.3(a)(i) and
(ii) and Section 1.3(b) hereof shall apply to such registration. If the
registration is for an underwritten offering, the provisions of Sections 1.3(c)
and 1.3(d) hereof shall apply to such registration.

          1.7  Registration Procedures. In the case of each registration
               -----------------------
effected by the Company pursuant to Section 1 hereof, the Company will keep each
Holder advised in writing as to the 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 a period of one hundred
twenty (120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such one hundred twenty (120) day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such one hundred twenty
(120) day period shall be extended, if necessary, to keep the

                                      -9-
<PAGE>

registration statement effective until all such Registrable Securities are sold,
provided that Rule 145, or any successor rule under the Securities Act, permits
an offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
that (A) includes any prospectus required by section 10(a)(3) of the Securities
Act or (B) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (A) and (B)
above to be contained in periodic reports filed pursuant to section 13 or 15(d)
of the Exchange Act in the registration statement;

          (b)  Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

          (c)  Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request;

          (d)  Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;

          (e)  Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;

          (f)  Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;

          (g)  Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, but not more than eighteen (18) months,
beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of section
11(a) of the Securities Act; and

          (h)  In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 1.3 hereof, the Company will
enter into an underwriting agreement

                                      -10-
<PAGE>

reasonably necessary to effect the offer and sale of Common Stock, provided such
underwriting agreement contains customary underwriting provisions and provided
further that if the underwriter so requests the underwriting agreement will
contain customary contribution provisions.

          1.8  Indemnification.
               ---------------

          (a)  The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 1 or Section 2.6 hereof, and each underwriter,
if any, and each person who controls within the meaning of section 15 of the
Securities Act any underwriter, against all expenses, claims, losses, damages,
and liabilities (or actions, proceedings, or settlements 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 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 each such Holder, each of its officers,
directors, partners, legal counsel, and accountants 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 or settling 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 based upon
written information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein. It is agreed that the indemnity
agreement contained in this Section 1.8(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 has not
been unreasonably withheld).

          (b)  Each Holder will, if Registrable Securities held by him 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, legal counsel, and accountants 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, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, 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 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 statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
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

                                      -11-
<PAGE>

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 such Holder
and stated to be specifically for use therein provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld) and provided further
that the obligations of such Holders hereunder shall be limited to an amount
equal to the gross proceeds before expenses and commissions to each such Holder
of Registrable Securities sold as contemplated herein.

          (c)  Each party entitled to indemnification under this Section 1.8
(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 such claim or 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
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; provided, however, that an Indemnified Party
shall have the right to retain its own counsel, with fees and expenses to be
paid by the Indemnifying Party if representation of such Indemnified Party by
the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interest between such Indemnifying Party and any
other party represented by such counsel in such proceeding. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1, to the extent such
failure is not prejudicial. 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 that 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 defense of such claim and litigation resulting therefrom.

          (d)  If the indemnification provided for in this Section 1.8 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided that the obligations of each holder hereunder
shall be limited to an amount equal to the gross proceeds

                                      -12-
<PAGE>

before expenses and commissions to each Holder of Registrable Securities sold as
contemplated hereby.

          (e)  The obligations of the Company and Holders under this Section 1.8
shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this Agreement.

          1.9  Information by Holder. Each Holder of Registrable Securities
               ---------------------
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder 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 Section 1 or in Section 2.6
hereof.

          1.10 Limitations on Registration of Issues of Securities. From and
               ---------------------------------------------------
after the date of this Agreement, the Company shall not, without the prior
written consent of a majority in interest of the Holders, enter into any
agreement with any holder or prospective holder of any securities of the Company
giving such holder or prospective holder any registration rights the terms of
which are more favorable than the registration rights granted to the Holders
hereunder.

          1.11 Rule 144 Reporting. With a view to making available the benefits
               ------------------
of certain rules and regulations of the Commission that may permit the sale of
the Restricted Securities to the public without registration, the Company agrees
to use its best efforts to:

          (a)  Make and keep public information regarding the Company available
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;

          (b)  File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements; and

          (c)  So long as a Holder owns any Restricted Securities, furnish to
the Holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.

          1.12 Transfer or Assignment of Registration Rights. The rights to
               ---------------------------------------------
cause the Company to register securities granted to a Holder by the Company
under this Section 1 may be transferred or assigned by a Holder only to a
transferee or assignee of not less than 75,000 shares of Registrable Securities
(as presently constituted and subject to subsequent adjustments for stock
splits, stock dividends, reverse stock splits, and the like), provided that the
Company is given written notice at the time of or within a reasonable time after
such transfer or assignment, stating the

                                      -13-
<PAGE>

name and address of the 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
assumes the obligations of such Holder under this Section 1.

          1.13 "Market Stand-Off" Agreement. If requested by the Company and
                ---------------------------
an underwriter of Common Stock (or other securities) of the Company, a Holder
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) (a) during the one hundred eighty (180) day period following the
effective date of the initial registration statement of the Company filed under
the Securities Act, or (b) from or after the effective date of a registration
statement of the Company with respect to any subsequent public offering of the
Company's Common Stock (or other securities) and continuing for ninety (90) days
thereafter; provided, however, that this Section 1.13(ii) shall not apply to any
holder who on April 27, 1999 held greater than 300,000 shares of Registrable
Securities.

          The obligations described in this Section 1.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-
transfer instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of such one hundred eighty (180) day period
or ninety (90) day period, as applicable.

          1.14  Allocation of Registration Opportunities. In any circumstance
                ----------------------------------------
in which all of the Registrable Securities and other shares of Common Stock of
the Company (including shares of Common Stock issued or issuable upon conversion
of shares of any currently unissued series of Preferred Stock of the Company)
with registration rights (the "Other Shares") requested to be included in a
registration on behalf of the Holders or other selling stockholders cannot be so
included as a result of limitations of the aggregate number of shares of
Registrable Securities and Other Shares that may be so included, the number of
shares of Registrable Securities and Other Shares that may be so included shall
be allocated among the Holders and other selling stockholders requesting
inclusion of shares pro rata on the basis of the number of shares of Registrable
Securities and Other Shares that would be held by such Holders and other selling
stockholders, assuming conversion; provided, however, so that such allocation
shall not operate to reduce the aggregate number of Registrable Securities and
Other Shares to be included in such registration, if any Holder or other selling
stockholder does not request inclusion of the maximum number of shares of
Registrable Securities and Other Shares allocated to him pursuant to the above-
described procedure, the remaining portion of his allocation shall be
reallocated among those requesting Holders and other selling stockholders whose
allocations did not satisfy their requests pro rata on the basis of the number
of shares of Registrable Securities and Other Shares which would be held by such
Holders and other selling stockholders, assuming conversion, and this procedure
shall be repeated until all of the shares of Registrable Securities and Other
Shares which may be included in the registration on behalf of the Holders and
other selling stockholders have been so allocated. Notwithstanding anything
herein to the contrary, (a) the Company shall not, without the written consent
of the Holders of a majority of the Registrable Securities, limit the number of
Registrable Securities to be included in a registration pursuant to this
Agreement in order to include shares held by stockholders with no registration
rights or to include founder's

                                      -14-
<PAGE>

stock or any other shares of stock (other than the Shares) issued to employees,
officers, directors or consultants pursuant to any stock option plan adopted by
the Company or, with respect to registrations under Section 1.3 and Section 1.6
hereof, in order to include in such registration securities registered for the
Company's own account, and (b) the aggregate number of Other Shares includable
in the allocation provisions of this Section 1.14 shall not exceed 820,000
without the consent of the holders of a majority of the Registrable Securities.

          1.15  Delay of Registration. No Holder shall have any right to take
                ---------------------
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.

          1.16  Termination of Registration Rights. The right of any Holder to
                ----------------------------------
request registration or inclusion in any registration pursuant to Section 1.3,
1.4, 1.6 or 2.6 hereof shall terminate upon the expiration of five (5) years
after the closing of the first registered public offering of Common Stock of the
Company.

          1.17  No Rights Under this Section Conferred Upon Holder of Series F
                --------------------------------------------------------------
Preferred Stock. Notwithstanding anything herein to the contrary, the Holders
---------------
of Series F Preferred Stock have no registration or other rights under this
Section 1, and nothing in this Section 1 shall be construed to confer any rights
upon the Holders of Series F Preferred Stock in their capacity as such.

                                   SECTION 2
                                   ---------

                             Right of First Offer
                             --------------------

          2.1  Qualified Holders. The Company hereby grants to each Qualified
               -----------------
Holder (as defined in this Section 2) a right of first offer with respect to
future sales of New Securities (as defined in this Section 2) by the Company.
For purposes of this Agreement, a "Qualified Holder" shall mean any Investor who
                                   ----------------
holds at least 75,000 shares of Series A Preferred Stock and/or Series B
Preferred Stock and/or Series C Preferred Stock and/or Series D Preferred Stock
and/or Series F-1 Preferred Stock and/or Series F-2 Preferred Stock and/or
Common Stock (appropriately adjusted for recapitalization, stock splits and the
like); provided, however, that no person or entity shall be deemed a Qualified
Holder for purposes of this Section 2 unless the Company's sale of New
Securities to such person or entity would be exempt from the registration and
qualification requirements of applicable securities laws; and provided further,
that in connection with the sale of additional shares of the Company's Series D
Preferred Stock pursuant to the Amended Series D Purchase Agreement, the Moscape
Holders shall not be Qualified Holders, and the shares of Series F Preferred
              ---
Stock issuable under the Merger Agreement shall not be taken into account for
                                                ---
the purposes of Section 2.3 hereof.

          2.2  New Securities. Except as set forth below, "New Securities"
               --------------
shall mean any shares of capital stock of the Company, including Common Stock
and any series of preferred stock, whether now authorized or not, and rights,
options or warrants to purchase said shares of Common Stock or preferred stock,
and securities of any type whatsoever that are, or may become, convertible into
or exchangeable for said shares of Common Stock or preferred stock.
Notwithstanding the foregoing, "New Securities" does not include (a) the
Registrable Securities, (b) Common Stock offered to the public generally
pursuant to a registration statement under the

                                      -15-
<PAGE>

Securities Act in connection with the Company's initial public offering, (c)
securities issued (i) pursuant to the acquisition of another corporation or
other business entity by the Company by merger, purchase of all or substantially
all of the assets or other reorganization whereby the Company or its
stockholders own more than fifty percent (50%) of the voting power of the
surviving or successor corporation or entity, provided such acquisition is
approved by the Board of Directors of the Company, or (ii) to any current or
proposed vendors or customers of or service providers to the Company, or any
unaffiliated entities in connection with corporate partnering or other business
arrangements not issued for the primary purpose of obtaining equity financing
for the Company, in each case approved by the Board of Directors of the Company,
(d) Common Stock or Preferred Stock or related options, warrants or other rights
to purchase such Common Stock or Preferred Stock issued to employees, officers
and directors of, and consultants to, the Company, pursuant to arrangements
approved by the Board of Directors of the Company, (e) stock issued pursuant to
any rights, agreements or convertible securities, including without limitation
options and warrants, that were outstanding on or before the date of this
Agreement, (f) stock issued in connection with any stock split, stock dividend
or recapitalization by the Company, or (g) warrants to acquire capital stock of
the Company issued to a financial institution or equipment lessor in connection
with a loan to the Company or equipment lease by the Company, in each case
approved by the Board of Directors of the Company.

          2.3  Exercise of First Offer Right. In the event the Company proposes
               -----------------------------
to undertake an issuance of New Securities, it shall give each Qualified Holder
written notice of its intention, describing the amount and type of New
Securities, and the price and terms upon which the Company proposes to issue the
same. Each Qualified Holder shall have fifteen (15) days from the date it is
deemed to have received any such notice to agree to purchase up to its
respective Pro Rata Share (as defined below) of such New Securities for the
price and upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased. A
Qualified Holder's "Pro Rata Share" of New Securities, for purposes of this
                    --------------
right of first offer, is the ratio that (a) the sum of the number of shares of
Common Stock then held by such Qualified Holder and the number of shares of
Registrable Securities issuable upon conversion of the Shares (which, for
purposes of this Section 2.3 only, shall be deemed to include the shares of
Series F Preferred Stock, except for the sale of additional shares of the
Company's Series D Preferred Stock pursuant to the Amended Series D Purchase
Agreement, for which purpose the shares of Series F Preferred Stock shall be
excluded) then held by such Qualified Holder bears to (b) the sum of the total
number of shares of Common Stock then held by all stockholders of the Company
(assuming for clauses (a) and (b) above the conversion of any outstanding
preferred stock or other convertible securities and the exercise of any options,
warrants or other exercisable securities outstanding or reserved for issuance on
the date of this Agreement).

          2.4  Completion of Sale. In the event all of the New Securities are
               ------------------
not elected to be purchased by Qualified Holders pursuant to Section 2.3 above,
the Company shall have ninety (90) days thereafter to sell the New Securities
not elected to be purchased by Qualified Holders at the price and upon the terms
no more favorable to the purchasers of such securities than specified in the
Company's notice. In the event the Company has not sold the New Securities
within said ninety (90) day period, the Company shall not thereafter issue or
sell any New Securities without first offering such securities in the manner
provided above.

                                      -16-
<PAGE>

          2.5  Termination of Right of First Offer. The rights of first offer
               -----------------------------------
granted under Section 2 of this Agreement shall expire and terminate upon, and
shall not be applicable to, the first sale of Common Stock to the public
effected pursuant to a registration statement filed with, and declared effective
by, the Commission under the Securities Act, which registration would trigger an
automatic conversion of the Preferred Stock into Common Stock pursuant to the
Company's Amended and Restated Certificate of Incorporation.

          2.6  Shelf Registration Statement. The Company hereby covenants and
               ----------------------------
agrees that if the price at which the Company's Common Stock is offered and sold
to the public pursuant to the Initial Registration is less than nine dollars
($9.00) per share (as adjusted for recapitalizations, stock splits and the
like), during the period beginning six (6) months after the Initial Registration
and ending eleven (11) months after the Initial Registration, upon the written
request (the "Shelf Registration Request") of holders of a majority of
Registrable Securities issued upon conversion of the Shares purchased pursuant
to the Amended Series D Agreement (the "Shelf Registrable Securities"), the
Company will use its commercially reasonable efforts to file with the
Commission, a Form S-1 registration statement covering resales of the Shelf
Registrable Securities for which registration has been requested (the "Shelf
Registration"), and use commercially reasonable efforts to cause such
registration statement to become effective, and keep such registration statement
effective for a period (the "Effectiveness Period") through the first
anniversary of the closing under the Amended Series D Agreement or until the
distribution contemplated by the registration statement has been completed. In
the event that, in the judgment of the Company, it is advisable to suspend use
of the prospectus relating to such registration statement for a discrete period
of time (a "Deferral Period") due to pending material corporate developments or
similar material events that have not yet been publicly disclosed and as to
which the Company believes public disclosure will be prejudicial to the Company,
the Company shall deliver a certified resolution of the Board of Directors of
the Company, signed by a duly authorized officer of the Company, to each holder
of Shelf Registrable Securities, to the effect of the foregoing and, upon
receipt of such certificate, such holders agree not to dispose of such
Registrable Securities covered by such registration or prospectus (other than in
transactions exempt from the registration requirements under the Securities
Act); provided, however, that such Deferral Period shall be no longer than sixty
(60) days. Upon receipt of the Shelf Registration Request, the Company will
notify all other holders of Shelf Registrable Securities of the Company's intent
to register shares pursuant to this Section 2.6. Such holders of Shelf
Registrable Securities shall have a period of fifteen (15) days following the
mailing of such notice, in which to notify the Company in writing of the amount
of Shelf Registrable Securities, if any, that such holders wish to be include in
the Shelf Registration. Subject to the provisions of this Section 2.6, the
procedures set forth in Section 1.7 shall be applicable to registrations
effected pursuant to this Section 2.6.

                                   SECTION 3
                                   ---------

                           Covenants of the Company
                           ------------------------

          3.1  Basic Financial Information. The Company will furnish the
               ---------------------------
following reports to each Qualified Holder, as defined in Section 2.1 above:

                                      -17-
<PAGE>

          (a)  As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, a consolidated
balance sheet of the Company and its subsidiaries, if any, as at the end of such
fiscal year, and consolidated statements of income and cash flows of the Company
and its subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles consistently applied and setting forth
in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and audited by independent public accountants of recognized
national standing selected by the Company.

          (b)  As soon as practicable after the end of the first, second, and
third quarterly accounting periods in each fiscal year of the Company, and in
any event within forty-five (45) days thereafter, a consolidated balance sheet
of the Company and its subsidiaries, if any, as of the end of each such
quarterly period, and consolidated statements of income and cash flows of the
Company and its subsidiaries for such period and for the current fiscal year to
date, prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year and to the Company's operating
plan then in effect and approved by its Board of Directors, subject to changes
resulting from normal year-end audit adjustments, all in reasonable detail and
certified by the principal financial or accounting officer of the Company,
except that such financial statements need not contain the notes required by
generally accepted accounting principles.

          (c)  From the date the Company becomes subject to the reporting
requirements of the Exchange Act (which shall include any successor federal
statute), and in lieu of the financial information required pursuant to Sections
3.1(a) and (b) hereof, copies of its annual reports on Form 10-K and its
quarterly reports on Form 10-Q, respectively.

          (d)  As soon as practical after the end of each month and in any event
within thirty (30) days thereafter, a consolidated balance sheet of the Company
as at the end of such month and consolidated statements of income and cash flows
of the Company for each month and for the current fiscal year of the Company to
date, all subject to normal year-end audit adjustments, certified by the
principal financial or accounting officer of the Company.

          (e)  Annually (and in any event no later than ten (10) days after
adoption by the Board of Directors of the Company) the financial plan of the
Company, in such manner and form as approved by the Board of Directors of the
Company, which financial plan shall include at least a projection of income and
a projected cash flow statement for each fiscal quarter in such fiscal year and
a projected balance sheet as of the end of each fiscal quarter in such fiscal
year.

          3.2  Reservation of Common Stock. The Company will at all times
               ---------------------------
reserve and keep available, solely for issuance and delivery upon the conversion
of the Preferred Stock, all Common Stock issuable from time to time upon such
conversion.

          3.3  Stock Vesting. Unless otherwise approved by the Board of
               -------------
Directors, all stock options and other stock equivalents issued after the date
of this Agreement to employees, directors, consultants and other service
providers shall be subject to vesting as follows: (a) twenty-five percent (25%)
of such stock shall vest at the end of the first year following the earlier of
the date of issuance or such person's services commencement date with the
Company, and (b) seventy-five percent (75%) of such stock shall vest monthly
over the remaining three (3)

                                      -18-
<PAGE>

years. With respect to any shares of stock purchased by any such person, the
Company's repurchase option shall provide that upon such person's termination of
employment or service with the Company, with or without cause, the Company or
its assignee (to the extent permissible under applicable securities laws and
other laws) shall have the option to purchase at cost any unvested shares of
stock held by such person.

          3.4  Proprietary Information and Inventions Agreement. The Company
               ------------------------------------------------
shall require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the form attached to the Purchase
Agreement.

          3.5  Directors' Liability and Indemnification. The Company's
               ----------------------------------------
Certificate of Incorporation and Bylaws shall provide (a) for elimination of the
liability of director to the maximum extent permitted by law and (b) for
indemnification of directors for acts on behalf of the Company to the maximum
extent permitted by law.

                                   SECTION 4
                                   ---------

                                 Miscellaneous
                                 -------------

          4.1  Governing Law. This Agreement shall be governed in all respects
               -------------
by the laws of the State of California, without regard to conflicts of laws
principles, as if entered into by and between California residents exclusively
for performance entirely within California.

          4.2  Successors and Assigns. Except as otherwise expressly provided
               ----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.

          4.3  Entire Agreement; Amendment; Waiver. This Agreement (including
               -----------------------------------
the Exhibits hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated,
except by a written instrument signed by the Company and the holders of a
majority of the Registrable Securities, and any such amendment, waiver,
discharge or termination shall be binding on all the Investors, but in no event
shall the obligation of any Investor hereunder be materially increased, except
upon the written consent of such Investor. This Agreement amends, restates and
supersedes in its entirety the terms and conditions of the Prior Agreement, and
the Prior Agreement shall be of no further force or effect.

          4.4  Notices, etc. All notices and other communications required or
               ------------
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, or delivered personally by hand or nationally
recognized courier addressed (a) if to an Investor or Holder, as indicated on
the signature pages hereto, or at such other address as such holder or permitted
assignee shall have furnished to the Company in writing, or (b) if to the
Company, at 2 Results Way, Cupertino, CA 95041, or at such other address as the
Company shall have furnished to each holder in writing. All such notices and
other written communications shall be effective (i) if mailed, five (5) days
after mailing and (ii) if delivered, upon delivery.

                                      -19-
<PAGE>

          4.5  Delays or Omissions. No delay or omission to exercise any right,
               -------------------
power or remedy accruing to any Holder or Investor, upon any breach or default
of the Company under this Agreement, shall impair any such right, power or
remedy of such Holder or Investor nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder or Investor of any breach or default under
this Agreement, or any waiver on the part of any Holder or Investor of any
provisions or conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
Holder or Investor shall be cumulative and not alternative.

          4.6  Rights; Separability. Unless otherwise expressly provided
               --------------------
herein, an Investor's rights hereunder are several rights, not rights jointly
held with any of the other Investors. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          4.7  Information Confidential. Each Investor acknowledges that the
               ------------------------
information received by them pursuant hereto may be confidential and for its use
only, and it will not use such confidential information in violation of the
Exchange Act or reproduce, disclose or disseminate such information to any other
person (other than its employees or agents having a need to know the contents of
such information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Investor is required to disclose such
information by a governmental body.

          4.8  Titles and Subtitles. The titles of the paragraphs and
               --------------------
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

          4.9  Counterparts. This Agreement may be executed in any number of
               ------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

          4.10 Subsequent Closings. In the event that the Company shall
               -------------------
conduct subsequent sales of Series D Preferred Stock pursuant to and in
accordance with the terms of Section 1.3 of the Amended Series D Purchase
Agreement, any holder of such shares of Series D Preferred Stock shall be deemed
an Investor with all of the rights of an Investor under this Agreement; provided
that as a condition thereto such Investor and the Company shall sign a
counterpart signature page to this Agreement.

                                      -20-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement effective as of the day and year first
above written.

                                                MAGMA DESIGN AUTOMATION, INC.

                                                By /s/ Rajeev Madhavan
                                                   -----------------------------
                                                        Rajeev Madhavan
                                                           President

                      [Counterpart Signature Pages Follow]

                                      -21-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                            DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                 /s/ Admirals, L.P.
                                ----------------------------------------
                                         [Print Name of Holder]

                             By /s/  Thomas E. Fernandez
                                ----------------------------------------
                                               Signature

                             Address 135 East 57/th/ st, 16/th/ Floor
                                     ---------------------------------

                                     New York, NY 10022
                                     ---------------------------------

                                     _________________________________

                                      -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                 Aezed S. Raza
                                          --------------------------------------
                                              [Print Name of Holder]

                                          By /s/ Aezed S. Raza
                                              ----------------------------------
                                                          Signature

                                          Address  17550 Manzanita Drive
                                                  ------------------------------
                                                   Morgan Hill, CA 90537
                                                  ------------------------------

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

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                     Alliance Ventures I, L.P.
                                 -------------------------------------------
                                      [Print Name of Holder]

                                 By     V.R. Ranganath
                                    ----------------------------------------
                                                   Signature
                                  President, Alliance Venture Management, LLC

                                 Address 2575 Augustine Drive
                                         -----------------------------------
                                         Santa Clara, CA 95054
                                         -----------------------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                              Altos Creek Ventures LLC
                                              ------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Allison M. L. Tilley
                                              ------------------------------
                                                       Signature

                                                   Managing Member

                                           Address 26217 Dori Lane
                                                   -------------------------

                                                   Los Altos Hills, CA 94022
                                                   -------------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Andreas Bechtolsheim
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Andreas Bechtolsheim
                                              -----------------------------
                                                       Signature

                                           Address   999 Mountain Home Rd.
                                                     -----------------------

                                                     Woodside CA 94002
                                                     -----------------------

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Andrew T. Yang
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Andrew T. Yang
                                              -----------------------------
                                                       Signature

                                           Address   16856 S.E. 58th Pl.
                                                     -----------------------

                                                     Belleune WA 98006
                                                     -----------------------

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED OF AS AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                              Brobeck, Phleger & Harrison LLP
                                           ----------------------------------
                                                 [Print Name of Holder]

                                           By /s/ ILLEGIBLE
                                              ------------------------------
                                                       Signature

                                           Address  One Market Plaza
                                                    -----------------------

                                                    Spear Street Tower
                                                    -----------------------

                                                    San Francisco, CA 94105
                                                    -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Brodnax Partners

                                           Charles T. Brodnax
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Charles T. Brodnax
                                              -----------------------------
                                                       Signature

                                           Address   2710 Woods Lane
                                                     -----------------------

                                                     Garland TX 75044
                                                     -----------------------

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           /s/ Chester J. Silvestri
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By    Chester J. Silvestri
                                              -----------------------------
                                                       Signature

                                           Address   13935 La Paloma Rd.
                                                     -----------------------
                                                     Los Altes Hills,CA
                                                     -----------------------
                                                     94022
                                                     -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED OF AS AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.
                                            CMEA Ventures II, L.P.
                                            --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ ILLEGIBLE
                                              ------------------------------
                                                       Signature
                                           Address
                                                    ________________________

                                                    ________________________

                                                    ________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED OF AS AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.
                                               Crystalynn Jacobson
                                            --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Crystalynn Jacobson
                                              ------------------------------
                                                       Signature

                                           Address  4830 Trail Run Ct
                                                    ------------------------
                                                    San Jose, CA 95136
                                                    ------------------------

                                                    ________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Ju-Kyung Cho
                                           -----------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Ju-Kyung Cho
                                              --------------------------------
                                                       Signature

                                           Address 6th Fl. Yuhwa Securities
                                                   ----------------------------
                                                   Bldg. 23-7
                                                   ----------------------------
                                                   Yoido-dong, Youngdeungpo-gu,
                                                   ----------------------------
                                                   Seoul 150-738, Korea
                                                   ----------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                          Jin-Chern Su/EE Solutions Inc.
                                          --------------------------------------
                                                [Print Name of Holder]

                                          By /s/ Jin-Chern Su
                                             -----------------------------------
                                                      Signature

                                          Address   YF-2, No. 105, Deng-Nang St.
                                                    ----------------------------

                                                    Hsin-Chu City, Taiwan
                                                    ----------------------------

                                                    ____________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Eliezer Sternheim
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ E. Sternheim
                                              -----------------------------
                                                       Signature

                                           Address  3489 South Court St.
                                                    -----------------------

                                                    Palo Alto, CA 94306
                                                    -----------------------

                                                    _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Eugene F. Hovawer
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Eugene F. Hovawer
                                              -----------------------------
                                                       Signature

                                           Address   29528 Ridgeway Drive
                                                     -----------------------

                                                     Agoura Hills, CA
                                                     -----------------------

                                                     91301
                                                     -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Future CAD, INC.

                                           Choon Kyung Kim
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Choon Kyung Kim
                                              -----------------------------
                                                       Signature

                                           Address  1030 E. El Cammo Road
                                                    -----------------------

                                                    #305
                                                    -----------------------

                                                     Sunnyvale, CA 94087
                                                    -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           George T. Holber
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ George T. Holber
                                              -----------------------------
                                                       Signature

                                           Address   13164 La Cresta
                                                     -----------------------

                                                     Los Altos, Hills
                                                     -----------------------

                                                     CA 94022
                                                     -----------------------
                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 10, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Gregg Vignos
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Gregg Vignos
                                              -----------------------------
                                                       Signature

                                           Address  631 Greystone Terrace
                                                    -----------------------

                                                    Orinda, CA 94563
                                                    -----------------------

                                                    _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                  Jeffrey S. Harrell
                                           --------------------------------
                                                  [Print Name of Holder]

                                           By /s/ Jeffrey S. Harrell
                                              -----------------------------
                                                       Signature

                                           Address  2550 Hanover Street
                                                    -----------------------

                                                    Palo Alto CA 94304
                                                    -----------------------

                                                    _______________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                  John Sanguinetti
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ John Sanguinetti
                                              ------------------------------
                                                       Signature

                                           Address 12300 Gigli Court
                                                   -------------------------
                                                   Los Altos Hills, CA 94022
                                                   -------------------------

                                                   _________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                  Jorge del Calvo and Gerine
                                                  Ongkeko as husband + wife
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Jorge del Calvo
                                              ------------------------------
                                                       Signature

                                           Address  ________________________

                                                    ________________________

                                                    ________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                               Julia Ryan Yousefi
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ Julia Ryan Yousefi
                                            -----------------------------
                                                    Signature

                                        Address  6006 Pasco Encantada
                                                 ------------------------
                                                 Carnaville, CA 93012
                                                 ------------------------

                                                 ________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 14, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                 Kannan Ayyar
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ K. Ayyar
                                              ------------------------------
                                                       Signature

                                           Address 12121 Oak Park Ct.
                                                   -------------------------
                                                   Los Altos Hills CA
                                                   -------------------------
                                                   94022
                                                   ------------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                 Karen Vahtra
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ Karen Vahtra
                                            -----------------------------
                                                  Signature

                                        Address
                                                 ________________________

                                                 ________________________

                                                 ________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                 Kim Hailey
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Kim Hailey
                                              ------------------------------
                                                       Signature

                                           Address 16496 Hilow Road
                                                   -------------------------
                                                   Los Gatos, CA 95032
                                                   -------------------------

                                                   _________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 7, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                               MKSI-B
                                           ---------------------------------
                                                 [Print Name of Holder]
                                                   Nicholas Mitsakos
                                                    Managing Manager

                                           By /s/ Nicholas Mitsakos
                                              ------------------------------
                                                       Signature

                                           Address 2355 North Point St
                                                   -------------------------

                                                   San Francisco, CA 94123
                                                   -------------------------

                                                   _________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           New Enterprise Associates 9, L.P.
                                             By: NEA Partners 9, L.P.
                                                 Its General Partner
                                           ----------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Mark Perry
                                              -------------------------------
                                                       Signature

                                           Address  1119 St. Paul St.
                                                    -------------------------

                                                    Baltimore, Maryland
                                                    -------------------------
                                                    21202
                                                    -------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                 PM & S Venture Fund II
                                                 PM & S Venture Fund III
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Jorge del Calvo
                                              -----------------------------
                                                       Signature

                                           Address  _______________________

                                                    _______________________

                                                    _______________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Prakash Agarwal
                                           ----------------------------------
                                                 [Print Name of Holder]

                                           By /s/ P. Agarwal
                                              -------------------------------
                                                       Signature

                                           Address   26323 Calle Del Sol
                                                     -------------------------

                                                     Los Altos Hills, CA 94022
                                                     -------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED
                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 8, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                     RAJ RAGHAVAN
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Raj Raghavan
                                              -----------------------------
                                                       Signature

                                           Address  21789 MT. EDEN RD
                                                    -----------------------

                                                    SARATOGA, CA 95070
                                                    -----------------------

                                                    _______________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                    Rajeev Madhavan
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Rajeev Madhavan
                                              -----------------------------
                                                       Signature

                                           Address  _______________________

                                                    _______________________

                                                    _______________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 14, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                            Rajeev & Geetha Madhavan
                                            Trustees, Madhavan & Madhavan
                                            Living Trust UAD
                                            10/29/98
                                            ___________________________________
                                              [Print Name of Holder]

                                            /s/ Rajeev Madhavan
                                            -----------------------------------
                                                     Signature

                                   Address  ___________________________________

                                            ___________________________________

                                            ___________________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Parekh Family Trust
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Raj Parekh, Trustee
                                              -----------------------------
                                                       Signature

                                           Address
                                                     _______________________

                                                     151 Bridgton Ct.
                                                     -----------------------
                                                     Los Altos CA 94022
                                                     -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Rajir Singh
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Rajir Singh
                                              -----------------------------
                                                       Signature

                                           Address   _______________________

                                                     _______________________

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                Rajvir Singh (& Swadesh Singh)
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Rajvir Singh
                                              ------------------------------
                                                       Signature

                                           Address 1055 Fremont Av
                                                   -------------------------
                                                   Los Altos, CA 94024
                                                   -------------------------

                                                   _________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                  Ravi Sethi
                                           ---------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Ravi Sethi
                                              ------------------------------
                                                       Signature

                                           Address 405 Chenab Ct.
                                                   -------------------------
                                                   Fremont, CA 94537
                                                   -------------------------

                                                   _________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                       Raza Venture Fund, A, L.P
                                       --------------------------------------
                                                 [Print Name of Holder]
                                           By: Raza Venture Management
                                               as General Partner

                                       By: /s/ S. Atiq Raza
                                           ----------------------------------
                                                         Signature

                                                S. Atiq Raza, Managing Member

                                       Address  2480 N. First St. Ste. 280
                                                -----------------------------
                                                San Jose, CA 95131
                                                -----------------------------

                                                _____________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Redwood Management III, L.P.
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Raj Parekh
                                              -----------------------------
                                                       Signature

                                           Address   ______________________

                                                     ______________________

                                                     ______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           REDWOOD VENTURE III, L.P.
                                           --------------------------------

                                           By: REDWOOD VENTURE PARTNERS, LLC
                                               -----------------------------
                                               ITS GENERAL PARTNER
\                                              -----------------------------
                                                 [Print Name of Holder]

                                           By /s/ Raj Parekh
                                              -----------------------------
                                                       Signature

                                           Address   4984 El Camino Real
                                                     -----------------------

                                                     Suite #200
                                                     -----------------------

                                                     Los Altos, CA 94022
                                                     -----------------------

                                                     TEL: (650) 335-1111
                                                     -----------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Redwood Ventures IV, L.P.
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Raj Parekh
                                              -----------------------------
                                                       Signature

                                           Address   4984 El Camino Real
                                                     -----------------------

                                                     Suite #200
                                                     -----------------------

                                                     Los Altos, CA 94022
                                                     -----------------------

                                                     TEL: (650) 335-1111
                                                     -----------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                      Robin Neustein
                                          --------------------------------------
                                                   [Print Name of Holder]

                                          By /s/ Robin Neustein
                                              ----------------------------------
                                                          Signature

                                          Address  Goldman, Sachs & Co.
                                                   -----------------------------
                                                   One New York Plaza
                                                   -----------------------------
                                                   New York, New York 10004
                                                   -----------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                        S. Atiq Raza, Custodian
                                        Nadia N. Raza CAUGTMA
                                        --------------------------------
                                              [Print Name of Holder]

                                        By   /s/ S. Atiq Raza
                                            ----------------------------
                                                     Signature

                                        Address 17550 Manzanita Dr
                                                ------------------------
                                                Morgan Hill, CA 95037
                                                ------------------------

                                                ________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                             Saiyed Atiq Raza and Noreen Tirmizi Raza, Trustees
                             N & A Raza Revocable Trust UAD 03-22-97
                             --------------------------------------------------
                                          [Print Name of Holder]

                             By  /s/ Atiq Raza /s/ Noreen Tirmizi Raza
                                 ----------------------------------------------
                                                 Signature

                             Address  17550 Manzanita Drive
                                      -----------------------------------------
                                      Morgan Hill, CA 95037
                                      -----------------------------------------

                                      _________________________________________

                                    -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                        SAN Management II, LLC
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ S. Atiq Raza
                                            -----------------------------
                                                    Signature

                                        Address  17550  Manzanita Dr.
                                                 ------------------------
                                                 Morgan Hill, CA 95037
                                                 ------------------------

                                                 ________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 11, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           S C Hightech Corporation
                                          --------------------------------------
                                                   [Print Name of Holder]

                                          By  Eiki Suzuki
                                              ----------------------------------
                                                          Signature

                                          Address 2-5-5, Shmyokohama
                                                  ------------------------------
                                                  Kohoka-Ku, Yokohama
                                                  ------------------------------
                                                  Kanagawa - Pref.
                                                  ------------------------------
                                                  Japan
                                                  ------------------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Scott A. Hamm
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Scott A. Hamm
                                              -----------------------------
                                                       Signature

                                           Address   2305 Solano Dr.
                                                     -----------------------

                                                     Camarillo, CA 93012
                                                     -----------------------

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Solebay Design Systems Ltd.
                                              Directors Retirement Plan
                                           ------------------------------------
                                                 [Print Name of Holder]

                                           By /s/ S. David[illegible] Trustee
                                              ---------------------------------
                                                       Signature

                                           Address   The Old [illegible]
                                                     --------------------------
                                                     [illegible]

                                                     Exon, OX93 UK
                                                     --------------------------

                                                     __________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                 Stanton D. Wong
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ Stanton D. Wong
                                            -----------------------------
                                                    Signature

                                        Address    1039 CONTINENTALS WAY
                                                 ------------------------
                                                           #201
                                                 ------------------------
                                                   BELMONT CA 94002
                                                 ------------------------

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                Sumitomo Corporation
                                      ----------------------------------------
                                               [Print Name of Holder]

                                      By /s/ S. Kurimoto
                                         ------------------------------------
                                                      Signature

                                            Shigeo Kurimoto, General Manager
                                            Information Electronics Dept.

                                      Address  1-2-2 Hitotsubashi, Chiyoda-ku
                                              ---------------------------------
                                              Tokyo 100 - 8601 Japan
                                              ---------------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                       Swadesh and Raj Business Management, L.P.
                                       -----------------------------------------
                                             [Print Name of Holder]

                                       By /s/ Raj Singh
                                          --------------------------------------
                                                   Signature

                                       Address   _______________________________

                                                 _______________________________

                                                 _______________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST 14, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                      Texas Instruments Incorporated
                                      ----------------------------------------
                                               [Print Name of Holder]

                                      By  /s/ G. Lowe
                                          ------------------------------------
                                                     Gregg Lowe
                                                      Signature

                                      Address  12500 TI Blvd.
                                              --------------------------------
                                              Dallas, TX 75266
                                              --------------------------------

                                              ________________________________

                                     -22-

<PAGE>

                              SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                      The Sternheim Trust, UDT 12/22/98
                                      ----------------------------------------
                                               [Print Name of Holder]

                                      By /s/ E. Sternheim, Trustee
                                        --------------------------------------
                                                      Signature

                                      Address 3489 South Court St.
                                              --------------------------------
                                              Palo Alto, CA 94306
                                              --------------------------------

                                              ________________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                      The Swadesh Family Trust
                                      ----------------------------------------
                                               [Print Name of Holder]

                                      By /s/ Rajvir Singh
                                        --------------------------------------
                                                      Signature

                                      Address 1055 Fremont Av
                                              --------------------------------
                                              Los Altos
                                              --------------------------------
                                              CA 94024
                                              --------------------------------

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                           THE UJJAL & SARITA KOHLI

                                              TRUST dated 3-25-98
                                        ----------------------------------------
                                              [Print Name of Holder]

                                        By   /s/ Ujjal Kohli UJJAL KOHLI TRUSTEE
                                            ------------------------------------
                                                   Signature

                                        Address    20415 Franklin Ave.
                                                 -------------------------------
                                                   Saratoga, CA 95070
                                                 -------------------------------

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

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                                 Therese Mrozek
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ Therese Mrozek
                                            -----------------------------
                                                  Signature

                                        Address
                                                 ________________________

                                                 ________________________

                                                 ________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement,
which Agreement and Signature Page, together with all counterparts of such
Agreement and signature pages of the other Investors named in such Agreement,
shall constitute one and the same document in accordance with the terms of such
Agreement.

                                                      Thomas V. Loran
                                               ---------------------------------
                                                       [Print Name of Holder]

                                               By /s/ Thomas V. Loran
                                                 -------------------------------
                                                           Signature

                                               Address    5856 Virmor Ave.
                                                       -------------------------

                                                          Oakland CA 94618
                                                       -------------------------

                                                       _________________________

                                     -22-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Tomasetta Family Partnership, LP
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ J.R. Tomasitta
                                              -------------------------------
                                                       Signature

                                           Address 3651 Via De Costa
                                                   --------------------------

                                                   Thousand Oaks, CA 91360
                                                   --------------------------

                                                   __________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                        DATED AS OF SEPTEMBER 13, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                     Toshiba America Electronic Components, Inc.
                                     -------------------------------------------
                                               [Print Name of Holder]

                                     By /s/ K.[illegible]
                                        ----------------------------------------
                                                     Signature

                                     Address   9775 Toledo Way
                                               ---------------------------------

                                               Irvme, California, 92618-1811
                                               ---------------------------------

                                               _________________________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                           DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

     The undersigned hereby executes and delivers the Magma Design Automation,
Inc. Amended and Restated Investors' Rights Agreement (the "Agreement") to which
this Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Investors named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.

                                        William R. Salvagno, Jr.
                                        ---------------------------------
                                              [Print Name of Holder]

                                        By   /s/ William R. Salvagno, Jr.
                                            -----------------------------
                                                    Signature

                                        Address    3585 Keefer Rd
                                                 ------------------------
                                                   Chico, CA 95973
                                                 ------------------------

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

                                      -41-
<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                           Yagyensh C. Pati
                                           --------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Yagyensh C. Pati
                                              -----------------------------
                                                       Signature

                                           Address   151 Marva Oaks Dr.
                                                     -----------------------

                                                     Woodside, CA 94062
                                                     -----------------------

                                                     _______________________

                                     -22-

<PAGE>

                               SIGNATURE PAGE TO

                             AMENDED AND RESTATED

                          INVESTORS' RIGHTS AGREEMENT

                          DATED AS OF AUGUST __, 2000

                                 BY AND AMONG

                         MAGMA DESIGN AUTOMATION, INC.

                        AND EACH INVESTOR NAMED THEREIN

          The undersigned hereby executes and delivers the Magma Design
Automation, Inc. Amended and Restated Investors' Rights Agreement (the
"Agreement") to which this Signature Page is attached effective as of the date
of the Agreement, which Agreement and Signature Page, together with all
counterparts of such Agreement and signature pages of the other Investors named
in such Agreement, shall constitute one and the same document in accordance with
the terms of such Agreement.

                                                 Yona Sternheim
                                              ------------------------------
                                                 [Print Name of Holder]

                                           By /s/ Y. Sternheim
                                              ------------------------------
                                                       Signature

                                           Address 3489 South Court St.
                                                   -------------------------

                                                   Palo Alto, CA 94306
                                                   -------------------------

                                                   _________________________

                                     -22-

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