Document:

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                                                                    EXHIBIT 10.1

                               LOGICVISION, INC.
                      1994 FLEXIBLE STOCK INCENTIVE PLAN

    1.  Establishment. Purpose, and Definitions.
        ----------------------------------------

    (a)  There is hereby adopted the 1994 Flexible Stock Incentive Plan (the
"Plan") of LogicVision, Inc. (the "Company").

    (b)  The purpose of the Plan is to provide a means whereby eligible
individuals (as defined in paragraph 4, below) can acquire Common Stock of the
Company (the "Stock"). The Plan provides employees (including officers and
directors who are employees) of the Company and of its Affiliates an opportunity
to purchase shares of Stock pursuant to options which may qualify as incentive
stock options (referred to as "incentive stock options") under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and employees,
officers, directors, independent contractors, and consultants of the Company and
of its Affiliates an opportunity to purchase shares of Stock pursuant to options
which are not described in Sections 422 or 423 of the Code (referred to as
"nonqualified stock options"). The Plan also provides for the sale or bonus of
Stock to eligible individuals in connection with the performance of services for
the Company or its Affiliates. Finally, the Plan authorizes the grant of stock
appreciation rights ("SARs"), either separately or in tandem with stock options,
entitling holders to cash compensation measured by appreciation in the value of
the Stock.

    (c)  The term "Affiliates" as used in the Plan means parent or subsidiary
corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.

    2.  Administration of the Plan.
        ---------------------------

    (a)  The Plan shall be administered by the Board of Directors of the Company
(the "Board"). The Board may delegate the responsibility for administering the
Plan to a committee, under such terms and conditions as the Board shall
determine (the "Committee"). The Committee shall consist of two or more members
of the Board or such lesser number of members of the Board as permitted by Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"). None of the members of the Committee shall receive, while serving on
the Committee, or during the one-year period preceding appointment to the
Committee, a grant or award of equity securities under (i) the Plan or (ii) any
other plan of the Company or its Affiliates under which the participants are
entitled to acquire Stock (including restricted Stock), stock options, stock
bonuses, related rights or stock appreciation rights of the Company or any of
its Affiliates, other than pursuant to transactions in any such other plan which
do not disqualify a director from being a disinterested person under Rule 16b-3.
The limitations set forth in this Section 2(a) shall automatically incorporate
any additional requirements that may in the future be necessary for the Plan to
comply with Rule 16b-3. Members of the Committee shall serve at the pleasure of
the Board. The Committee shall select one of its members as chairman, and shall
hold meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum and acts of the Committee at

                                      -1-
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which a quorum is present, or acts reduced to or approved in writing by all the
members of the Committee, shall be the valid acts of the Committee.

    (b)  The Committee shall determine which eligible individuals (as in
paragraph 4, below) shall be granted options under the Plan, the timing of such
grants, the terms thereof (including any restrictions on the Stock), and the
number of shares subject to such options.

    (c)  The Committee may amend the terms of any outstanding option granted
under this Plan, but any amendment which would adversely affect the Optionee's
rights under an outstanding option shall not be made without the Optionee's
written consent. The Committee may, with the Optionee's written consent, cancel
any outstanding stock option or accept any outstanding stock option in exchange
for a new option.

    (d)  The Committee shall also, determine which eligible individuals (as
defined in paragraph 4, below) shall be issued Stock or SARs under the Plan, the
timing of such grants, the terms thereof (including any restrictions), and the
number of shares or SARs to be granted. The Stock shall be issued for such
consideration (if any) as the Committee deems appropriate. Stock issued subject
to restrictions shall be evidenced by a written agreement (the "Restricted Stock
Purchase Agreement" or the "Restricted Stock Bonus Agreement"). The Committee
may amend any Restricted Stock Purchase Agreement or Restricted Stock Bonus
Agreement, but any amendment which would adversely affect the shareholder's
rights to the Stock shall not be made without his or her written consent.

    (e)  The Committee shall have the sole authority, in its absolute discretion
to adopt, amend, and rescind such rules and regulations as, in its opinion, may
be advisable for the administration of the Plan, to construe and interpret the
Plan, the rules and the regulations, and the instruments evidencing options or
Stock granted under the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan. All decisions,
determinations, and interpretations of the Committee shall be binding on all
participants.

    (f)  Without limitation of the foregoing, the Committee shall have the
right, with the Optionee's consent, to accelerate the exercise date of any
options issued pursuant to the Plan or terminate the restrictions applicable to
any stock issued pursuant to the Plan.

    3.  Stock Subject to the Plan.
        --------------------------

    (a)  An aggregate of not more than 5,438,000 shares of Stock shall be
available for the grant of stock options or the issuance of Stock under the
Plan. If an option is surrendered (except surrender for shares of Stock) or for
any other reason ceases to be exercisable in whole or in part, the shares which
were subject to such option but as to which the option had not been exercised
shall continue to be available under the Plan. Any Stock which is retained by
the Company upon exercise of an option in order to satisfy the exercise price
for such option or any withholding taxes due with respect to such option
exercise shall be treated as issued to the Optionee and will thereafter not be
available under the Plan.

    (b)  If there is any change in the Stock subject to the Plan, an Option
Agreement, a Restricted Stock Purchase Agreement, a Restricted Stock Bonus
Agreement, or a SAR Agreement through merger, consolidation, reorganization,
recapitalization, reincorporation, stock

                                      -2-
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split, stock dividend, or other change in the capital structure of the Company,
appropriate adjustments shall be made by the Committee in order to preserve but
not to increase the benefits to the individual, including adjustments to the
aggregate number, kind and price per share of shares subject to the Plan, an
Option Agreement, a Restricted Stock Purchase Agreement, a Restricted Stock
Bonus Agreement, or a SAR Agreement.

    4.  Eligible Individuals. Individuals who shall be eligible to have granted
        --------------------
to them the options, Stock or SARs provided for by the Plan shall be such
employees, officers, directors, independent contractors and consultants of the
Company or an Affiliate as the Committee, in its discretion, shall designate
from time to time. Notwithstanding the foregoing, only employees of the Company
or an Affiliate (including officers and directors who are bona fide employees)
shall be eligible to receive incentive stock options.

    5.  The Option Price. The exercise price of the Stock covered by each
        ----------------
incentive stock option shall be not less than the per share fair market value of
such Stock on the date the option is granted. The exercise price of the Stock
covered by each nonqualified stock option shall be as determined by the
Committee and shall be not less than 85% of the per share fair market value of
such Stock on the date the option is granted. Notwithstanding the foregoing, in
the case of a stock option granted to a person possessing more than ten percent
of the combined voting power of the Company or an Affiliate, the exercise price
shall be not less than 110 percent of the fair market value of the Stock on the
date the option is granted. The exercise price of an option shall be subject to
adjustment to the extent provided in paragraph 3(b), above.

    6.  Terms and Conditions of Options.
        --------------------------------

    (a)  Each option granted pursuant to the Plan will be evidenced by a written
Stock Option Agreement executed by the Company and the person to whom such
option is granted.

    (b)  The Committee shall determine the term of each option granted under the
Plan; provided, however, that such term shall not be for more than 10 years and
that, in the case of an incentive stock option granted to a person possessing
more than ten percent of the combined voting power of the Company or an
Affiliate, the term shall be for no more than five years.

    (c)  In the case of incentive stock options, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which incentive stock options are exercisable for the first time by an eligible
employee in any calendar year (under this Plan and any other plans of the
Company or its Affiliates) shall not exceed $100,000.

    (d)  The Stock Option Agreement may contain such other terms, provisions and
conditions consistent with this Plan as may be determined by the Committee. If
an option, or any part thereof is intended to qualify as an incentive stock
option, the Stock Option Agreement shall contain those terms and conditions
which are necessary to so qualify it. Notwithstanding the foregoing, options
granted under the Plan must provide for the right of the optionee to exercise
the option at the rate of at least 20% per year over 5 years from the date the
option is granted.

                                      -3-
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    7.  Terms and Conditions of Stock Purchases and Bonuses.
        ----------------------------------------------------

    (a)  Each sale or grant of stock pursuant to the Plan will be evidenced by a
written Restricted Stock Purchase Agreement or Restricted Stock Bonus Agreement
executed by the Company and the person to whom such stock is sold or granted.

    (b)  The Restricted Stock Purchase Agreement or Restricted Stock Bonus
Agreement may contain such other terms, provisions and conditions consistent
with this Plan as may be determined by the Committee, including not by way of
limitation, restrictions on transfer, forfeiture provisions, repurchase
provisions and vesting provisions. Notwithstanding the foregoing, any right of
the Company to repurchase stock granted pursuant to a restricted stock purchase
or restricted stock bonus at the original purchase price must lapse at the rate
of at least 20% per year over 5 years from the date the stock was purchased,
which right must be exercised within 90 days of termination of employment for
cash or cancellation of purchase money indebtedness for the shares, and if such
right is assignable, the assignee must pay the Company upon assignment of the
right cash equal to the difference between the original price and fair value if
the original purchase price is less than fair value.

    (c)  The purchase price of Stock sold hereunder pursuant to a Restricted
Stock Purchase Agreement shall be the price determined by the Committee on the
date the right to purchase Stock is granted; provided, however that (i) such
price shall not be less than 85% of the per share fair market value of such
Stock on the date the right to purchase Stock is granted and (ii) in the case of
any person who owns Company stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, such price shall be 110% of
the per share fair market value of such Stock at the time the right to purchase
Stock is granted, or at the time the purchase is consummated.

    8.  Terms and Conditions of SARs. The Committee may, under such terms and
        ----------------------------
conditions as it deems appropriate, authorize the issuance of SARs evidenced by
a written SAR agreement (which, in the case of tandem options, may be part of
the option agreement to which the SAR relates) executed by the Company and the
person to whom such SAR is granted. The SAR agreement may contain such terms,
provisions and conditions consistent with this Plan as may be determined by the
Committee.

    9.  Use of Proceeds. Cash proceeds realized from the sale of Stock under the
        ---------------
Plan shall constitute general funds of the Company.

    10.  Amendment, Suspension, or Termination of the Plan.
         --------------------------------------------------

    (a)  The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the Company's shareholders, and provided further that, except as provided in
paragraph 3(b), above, the Board shall in no event amend the Plan in the
following respects without the consent of shareholders then sufficient to
approve the Plan in the first instance:

                                      -4-
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         (i)  To increase the maximum number of shares subject to incentive
    stock options issued under the Plan; or

         (ii) To change the designation or class of persons eligible to receive
    incentive stock options under the Plan.

    (b)  No option may be granted nor any Stock issued under the Plan during any
suspension or after the termination of the Plan, and no amendment, suspension or
termination of the Plan shall, without the affected individual's consent, alter
or impair any rights or obligations under any option previously granted under
the Plan. The Plan shall terminate on July 31, 2004, unless previously
terminated by the Board pursuant to this paragraph 10.

    11.  Assignability. Each option granted pursuant to this Plan shall, during
         -------------
optionee's lifetime, be exercisable only by him, and neither the option nor any
right hereunder shall be transferable by optionee by operation of law or
otherwise other than by will or the laws of descent and distribution. Stock
subject to a Restricted Stock Purchase Agreement or a Restricted Stock Bonus
Agreement shall be transferable only as provided in such Agreement.

    12.  Payment Upon Exercise of Options.
         ---------------------------------

    (a)  Payment of the purchase price upon exercise of any option granted under
this Plan shall be made in cash; provided, however, that the Committee, in its
sole discretion, may permit an optionee to pay the option price in whole or in
part (i) with shares of Stock owned by the Optionee for a period of at least 6
months, (ii) by delivery on a form prescribed by the Committee of an irrevocable
direction to a--securities broker approved by the Committee to sell shares and
deliver all or a portion of the proceeds to the Company in payment for the
Stock; (iii) by delivery of the optionee's promissory note with such recourse,
interest, security, and redemption provisions as the Committee in its discretion
determines appropriate; or (iv) in any combination of the foregoing. Any Stock
used to exercise options shall be valued at its fair market value on the date of
the exercise of the option. In addition, the Committee in its sole discretion,
may authorize the surrender by an optionee of all or part of an unexercised
option and authorize a payment in consideration thereof of an amount equal to
the difference between the aggregate fair market value of the Stock subject to
such option and the aggregate option price of such Stock. In the Committee's
discretion, such payment may be made in cash, shares of Stock with a fair market
value on the date of surrender equal to the payment amount, or some combination
thereof.

    (b)  In the event that the exercise price is satisfied by the Committee
retaining from the shares of Stock otherwise to be issued to Optionee shares of
Stock having a value equal to the exercise price, the Committee may issue
Optionee an additional option, with terms identical to this option agreement,
entitling Optionee to purchase additional Stock in an amount equal to the number
of shares so retained.

    13.  Withholding Taxes.
         ------------------

    (a)  No Stock shall be granted or sold under the Plan to any participant,
and no SAR may be exercised, until the participant has made arrangements
acceptable to the Committee for the satisfaction of federal, state, and local
income and social security tax withholding obligations,

                                      -5-
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including without limitation obligations incident to the receipt of Stock under
the Plan, the lapsing of restrictions applicable to such Stock, the failure to
satisfy the conditions for treatment as incentive stock options under applicable
tax law, or the receipt of cash payments. Upon exercise of a stock option or
lapsing or restriction on stock issued under the Plan, the Company may satisfy
its withholding obligations by withholding from the Optionee or requiring the
Shareholder to surrender shares of the Company's Stock sufficient to satisfy
federal, state, and local income and social security tax withholding
obligations.

    (b)  In the event that such withholding is satisfied by the Company or the
Optionee's employer retaining, from the shares of Stock otherwise to be issued
to Optionee shares of Stock having a value equal to such withholding tax, the
Committee may issue Optionee an additional option, with terms identical to the
option agreement under which the option was received, entitling Optionee to
purchase additional Stock in an amount equal to the number of shares so
retained.

    14.  Restrictions on Transfer of Shares. The Stock acquired pursuant to the
         ----------------------------------
Plan shall be subject to such restrictions and agreements regarding sale,
assignment, encumbrances or other transfer as are in effect among the Company's
shareholders at the time such Stock is acquired, as well as to such other
restrictions as the Committee shall deem advisable.

    15.  Corporate Transaction.
         ----------------------

    (a)  For purposes of this Section 15, a "Corporate Transaction" shall
include any of the following shareholder-approved transactions to which the
Company is a party:

         (i)  a merger or consolidation in which the Company is not the
    surviving entity, except for (1) a transaction the principal purpose of
    which is to change the state of the Company's incorporation, or (2) a
    transaction in which the Company's shareholders immediately prior to such
    merger or consolidation hold (by virtue of securities received in exchange
    for their shares in the Company) securities of the surviving entity
    representing more than fifty percent (50%) of the total voting power of such
    entity immediately after such transaction;

         (ii) the sale, transfer or other disposition of all or substantially
    all of the assets of the Company unless the Company's shareholders
    immediately prior to such sale, transfer or other disposition hold (by
    virtue of securities received in exchange for their shares in the Company)
    securities of the purchaser or other transferee representing more than fifty
    percent (50%) of the total voting power of such entity immediately after
    such transaction; or

         (iii)  any reverse merger in which the Company is the surviving entity
    but in which the Company's shareholders immediately prior to such merger do
    not hold (by virtue of their shares in the Company held immediately prior to
    such transaction) securities of the Company representing more than fifty
    percent (50%) of the total voting power of the Company immediately after
    such transaction.

    (b)  In the event of any Corporate Transaction, any option or outstanding
SAR shall terminate and any restricted stock shall be reconveyed to or
repurchased by the Company

                                      -6-
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immediately prior to the specified effective date of the Corporate Transaction,
unless assumed by the successor corporation or its parent company pursuant to
options, restricted stock agreements or SARs providing substantially equal value
and having substantially equivalent provisions as the options, restricted stock
or SARs granted pursuant to this Plan.

    16.  Shareholder Approval. This Plan shall only become effective with regard
         --------------------
to incentive stock options upon its approval by a majority of the shareholders
voting (in person or by proxy) at a shareholders' meeting held within 12 months
of the Board's adoption of the Plan. The Committee may grant incentive stock
options under the Plan prior to the shareholders' meeting, but until shareholder
approval of the Plan is obtained, no incentive stock option shall be
exercisable.

    17.  Information to Plan Participants. The Company shall provide to each
         --------------------------------
Plan participant, during any period for which said participant has one or more
options or SARs or shares acquired pursuant to the Plan outstanding, copies of
annual reports of the Company issued during said period.

                                      -7-
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                               LOGIC VISION, INC.

                        INCENTIVE STOCK OPTION AGREEMENT

          This Agreement is made as of   _____________  (the "Grant Date"),
between LogicVision, Inc. (the "Company") and  ("Optionee").

                                  WITNESSETH:

          WHEREAS, the Company has adopted the 1994 Flexible Stock Incentive
Plan (the "Plan"), which Plan is incorporated in this Agreement by reference and
made a part of it; and

          WHEREAS, the Company regards Optionee as a valuable employee of the
Company, and has determined that it would be to the advantage and in the
interests of the Company and its shareholders to grant the options provided for
in this Agreement to Optionee as an inducement to remain in the service of the
Company (as defined in the Plan) and as an incentive for increased efforts
during such service;

          NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties to this Agreement hereby agree as follows:

          1.  Option Grant.  The Company hereby grants to Optionee the right and
              ------------
option to purchase from the Company On the terms and conditions hereinafter set
forth, all or any part of an aggregate ________ of shares of the Common Stock of
the Company (the "Stock"). This option is intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
qualify as an incentive stock option.

          2.  Option Price.  The purchase price of the Stock subject to this
              ------------
option shall be $_________ per share, which price is not less than the per share
fair market value of such Stock as of the Grant Date as determined by the Board
of Directors of the Company or a Committee designated by it (the "Committee"),
or, if Optionee possesses more than ten percent of the combined voting power of
the Company or any of its Affiliates, not less than 110 percent of the per share
fair market value of the Stock as of the Grant Date as determined by the
Committee. The term "Option Price" as used in this Agreement refers to the
purchase price of the Stock subject to this option.

          3.  Option Period.  This option shall be exercisable only during the
              -------------
Option Period, and during such Option Period, the exercisability of the option
shall be subject to the limitations of paragraph 4 and the vesting provisions of
paragraph 5. The Option Period shall commence on the Grant Date and except as
provided in paragraph 4, shall terminate (the "Termination Date") ten years from
the Grant Date; provided, however, that the Option Period for a person
possessing more than ten percent of the combined voting power of the Company or
an Affiliate shall terminate five years from the Grant Date.
<PAGE>

          4.  Limits on Option Period.  The Option Period may end before the
              -----------------------
Termination Date, as follows:

              (a)  Optionee ceases to be a bona fide employee of the Company or
an Affiliate for any reason other than disability (within the meaning of
subparagraph (c)) or death during the Option Period, the Option Period shall
terminate three months after the date of such cessation of employment or on the
Termination Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 5 on the date of
Optionee's cessation of employment.

              (b)  If Optionee dies while in the employ of the Company or any of
its Affiliates, the Option Period shall end one year after the date of death or
on the Termination Date, whichever shall first occur, and Optionee's executor or
administrator or the person or persons to whom Optionee's rights under this
option shall pass by will or by the applicable laws of descent and distribution
may exercise this option only to the extent exercisable under paragraph 5 on the
date of Optionee's death.

              (c)  If Optionee's employment is terminated by reason of
disability, the Option Period shall end one year after the date of Optionee's
cessation of employment or on the Termination Date, whichever shall first occur,
and the option shall be exercisable only to the extent exercisable under
paragraph 5 on the date of Optionee's cessation of employment.

              (d)  If Optionee is on a leave of absence from the Company or an
Affiliate because of his disability, or for the purpose of serving the
government of the country in which the principal place of employment of Optionee
is located, either in a military or civilian capacity, or for such other purpose
or reason as the Committee may approve, Optionee shall not be deemed during the
period of such absence, by virtue of such absence alone, to have terminated
employment with the Company or an Affiliate, except as the Committee may
otherwise expressly provide. However, the option shall cease to qualify as an
incentive stock option under the federal tax laws at the end of the three (3)-
month period measured from the ninety-first (91st) day of such leave, unless the
Optionee's re-employment rights are guaranteed by written contract with the
Company or by law.

          5.  Vesting of Right to Exercise Options.  Subject to other
              ------------------------------------
limitations contained in this Agreement, the Optionee shall have the right to
exercise the option in accordance with the following schedule:

                                  Additional                   Cumulative
             Date             Shares Exercisable           Shares Exercisable
             ----             ------------------           ------------------

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<PAGE>

              (a)  Any portion of the option that is not exercised shall
accumulate and may be exercised at any time during the Option Period prior to
the Termination Date or sooner termination of this option under paragraph 4 or
7. No partial exercise of this option may be for less than 5 percent of the
total number of shares then available under this option. In no event shall the
Company be required to issue fractional shares.

              (b)  Notwithstanding the foregoing, the aggregate fair market
value (determined as of the time such option is granted) of the Stock with
respect to which incentive stock options are exercisable for the first time in
any calendar year (under the Plan and any other incentive stock option plans of
the Company or its Affiliates) shall not exceed $100,000.

          6.  Method of Exercise.  Optionee may exercise the option with respect
              ------------------
to all or any part of the shares of Stock then subject to such exercise as
follows:

              (a)  By giving the Company written notice of such exercise,
specifying the number of such shares as to which this option is exercised. Such
notice shall be accompanied by an amount equal to the Option Price of such
shares, in the form of any one or combination of the following: (i) cash; (ii) a
certified check, bank draft, postal or express money order payable to the order
of the Company in lawful money of the United States; (iii) shares of Stock
valued at fair market value and held for the requisite period necessary to avoid
a charge to the Company's earnings for financial reporting purposes, (iv) if
authorized for Optionee by the Committee, promissory notes; or (v) in any
combination of the foregoing. The shares of Stock shall be valued in accordance
with procedures established by the Committee. Any promissory note used to
exercise this option shall be a full recourse, interest-bearing obligation
containing such terms as the Committee shall determine. If a promissory note is
used, the Optionee agrees to execute such further documents as the Committee may
deem necessary or appropriate in connection with issuing the note, perfecting a
security interest in the Stock purchased with the note, and any related terms or
conditions that the Committee may propose. Such further documents may include,
not by way of limitation, a security agreement, an escrow agreement, a voting
trust agreement and an assignment separate from certificate.

              (b)  Optionee (and Optionee's spouse, if any) shall be required,
as a condition precedent to acquiring Stock through exercise of the option, to
execute one or more agreements relating to obligations in connection with
ownership of the Stock or restrictions on transfer of the Stock no less
restrictive than the obligations and restrictions to which the other
shareholders of the Company are subject at the time of such exercise.

              (c)  If required by the Committee, Optionee shall give the Company
satisfactory assurance in writing, signed by Optionee or his legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (1) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which may hereafter be filed and become effective under the
Securities Act of 1933, as amended, and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (2) any other sale of
such shares with respect to which in the opinion of counsel for the Company,
such assurance is not required to be given in order to comply with the
provisions of the Securities Act of 1933, as amended.

                                      -3-
<PAGE>

          As soon as practicable after receipt of the notice required in
paragraph 6(a) and satisfaction of the conditions set forth in paragraphs 6(b)
and 6(c), the Company shall, without transfer or issue tax and without other
incidental expense to Optionee, deliver to Optionee at the office of the
Company, at 101 Metro Drive, 3rd Floor, San Jose, California 95110, attention of
the Secretary, or such other place as may be mutually acceptable to the Company
and Optionee, a certificate or certificates of such shares of Stock; provided,
however, that the time of such delivery may be postponed by the Company for such
period as may be required for it with reasonable diligence to comply with
applicable registration requirements under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, any applicable listing
requirements of any national securities exchange, and requirements under any
other law or regulation applicable to the issuance or transfer of such shares.

          7.  Corporate Transactions.
              ----------------------

              (a)  If there should be any change in a class of Stock subject to
this option, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock split, stock dividend or other change in the capital
structure of the Company, the Company shall make appropriate adjustments in
order to preserve, but not to increase, the benefits to Optionee, including
adjustments in the number of shares of such Stock subject to this option and in
the price per share. Any adjustment made pursuant to this paragraph 7 as a
consequence of a change in the capital structure of the Company shall not
entitle Optionee to acquire a number of shares of such Stock of the Company or
shares of stock of any successor company greater than the number of shares
Optionee would receive if, prior to such change, Optionee had actually held a
number of shares of such Stock equal to the number of shares then subject to
this option.

              (b)  For purposes of this paragraph 7, a "Corporate Transaction"
shall include any of the following stockholder-approved transactions to which
the Company is a party:

                   (i)    a merger or consolidation in which the Company is not
     the surviving entity, except for (1) a transaction the principal purpose of
     which is to change the state of the Company's incorporation, or (2) a
     transaction in which the Company's shareholders immediately prior to such
     merger or consolidation hold (by virtue of securities received in exchange
     for their shares in the Company) securities of the surviving entity
     representing more than fifty percent (50%) of the total voting power of
     such entity immediately after such transaction;

                   (ii)   the sale, transfer or other disposition of all or
     substantially all of the assets of the Company unless the Company's
     shareholders immediately prior to such sale, transfer or other disposition
     hold (by virtue of securities received in exchange for their shares in the
     Company) securities of the purchaser or other transferee representing more
     than fifty percent (50%) of the total voting power of such entity
     immediately after such transaction; or

                   (iii)  any reverse merger in which the Company is the
     surviving entity but in which the Company's shareholders immediately prior
     to such merger do not hold (by virtue of their shares in the Company held
     immediately prior to such transaction) securities of the Company
     representing more than fifty percent

                                      -4-
<PAGE>

     (50%) of the total voting power of the Company immediately after such
     transaction.

              (c)  In the event of any Corporate Transaction, this option shall
terminate immediately prior to the specified effective date of the Corporate
Transaction, unless assumed by the successor corporation or its parent company
pursuant to options providing substantially equal value and having substantially
equivalent provisions as the options granted pursuant to this Agreement.

          8.  Limitations on Transfer.  This option shall, during Optionee's
              -----------------------
lifetime, be exercisable only by Optionee, and neither this option nor any right
hereunder shall be transferable by Optionee by operation of law or otherwise
other than by will or the laws of descent and distribution. In the event of any
attempt by Optionee to alienate, assign, pledge, hypothecate, or otherwise
dispose of this option or of any right hereunder, except as provided for in this
Agreement, or in the event of the levy of any attachment, execution, or similar
process upon the rights or interest hereby conferred, the Company at its
election may terminate this option by notice to Optionee, and this option shall
thereupon become null and void.

          9.  No Shareholder Rights.  Neither Optionee nor any person entitled
              ---------------------
to exercise Optionee's rights in the event of his death shall have any of the
rights of a shareholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.

          10. NO EFFECT ON TERMS OF EMPLOYMENT.  SUBJECT TO THE TERMS OF ANY
              --------------------------------
WRITTEN EMPLOYMENT CONTRACT TO THE CONTRARY, THE COMPANY (OR ITS AFFILIATE WHICH
EMPLOYS OPTIONEE) SHALL HAVE THE RIGHT TO TERMINATE OR CHANGE THE TERMS OF
EMPLOYMENT OF OPTIONEE AT ANY TIME AND FOR ANY REASON WHATSOEVER, WITH OR
WITHOUT CAUSE.

          11.  Notice.  Any notice required to be given under the terms of this
               ------
Agreement shall be addressed to the Company in care of its Secretary at the
Office of the Company at 101 Metro Drive, Third Floor, San Jose, California
95110, and any notice to be given to Optionee shall be addressed to him at the
address given by him beneath his signature to this Agreement, or such other
address as either party to this Agreement may hereafter designate in writing to
the other. Any such notice shall be deemed to have been duly given when enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, registered or
certified and deposited (postage or registration or certification fee prepaid)
in a post office or branch post office regularly maintained by the United
States.

          12.  Lock-Up Agreement.
               -----------------

               (a)  Optionee, if requested by the Company and the lead
underwriter of any public offering of the Common Stock or other securities of
the Company (the "Lead Underwriter"), hereby irrevocably agrees not to sell,
contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose of
any interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock

                                      -5-
<PAGE>

(except Common Stock included in such public offering or acquired on the public
market after such offering) during the 180-day period following the effective
date of a registration statement of the Company filed under the Securities Act,
or such shorter period of time as the Lead Underwriter shall specify. Optionee
further agrees to sign such documents as may be requested by the Lead
Underwriter to effect the foregoing and agrees that the Company may impose stop
transfer instructions with respect to such Common Stock subject until the end of
such period. The Company and Optionee acknowledge that each Lead Underwriter of
a public offering of the Company's stock, during the period of such offering and
for the 180-day period thereafter, is an intended beneficiary of this Section
12.

               (b)  Notwithstanding the foregoing, Section 12(a) shall not
prohibit Optionee from transferring any shares of Common Stock or securities
convertible into or exchangeable or exercisable for the Company's Common Stock
either during Optionee's lifetime or on death by will or intestacy to Optionee's
immediate family or to a trust the beneficiaries of which are exclusively
Optionee and/or a member or members of Optionee's immediate family; provided,
however, that prior to any such transfer, each transferee shall execute an
agreement pursuant to which each transferee shall agree to receive and hold such
securities subject to the provisions of Section 12 hereof. For the purposes of
this paragraph, the term "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor.

               (c)  During the period from identification as a Lead Underwriter
in connection with any public offering of the Company's Common Stock until the
earlier of (i) the expiration of the lock-up period specified in Section 12(a)
in connection with such offering or (ii) the abandonment of such offering by the
Company and the Lead Underwriter, the provisions of the Section 12 may not be
amended or waived except with the consent of the Lead Underwriter.

          13.  Committee Decisions Conclusive.  All decisions of the Committee
               ------------------------------
upon any question arising under the Plan or under this Agreement shall be
conclusive.

          14.  Successors.  This Agreement shall be binding upon and inure to
               ----------
the benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative or the person or persons to whom
Optionee's rights pass by will or the applicable laws of descent and
distribution.

          15.  Early Dispositions.
               ------------------

               (a)  Optionee agrees, as partial consideration for the
     designation of this option as an incentive stock option under Section 422
     of the Code, to notify the Company in writing within thirty (30) days of
     any disposition of any shares acquired by exercise of this option if such
     disposition occurs within two (2) years from the Grant Date or within one
     (1) year from the date Optionee purchased such shares by exercise of this
     option. If the Company is required to withhold an amount for the purpose of
     income and employment taxes as a result of an early disposition, Optionee
     acknowledges that it will be required to satisfy the amount of such
     withholding in a manner that the Company prescribes.

                                      -6-
<PAGE>

               (b)  Each certificate representing the shares of Stock issued
upon exercise on an incentive stock option shall bear the following legend:

     THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO
     THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED
     IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE
     TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION
     IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF
     MADE ON OR BEFORE ____________.  THE REGISTERED HOLDER SHALL HOLD ALL
     SHARES PURCHASED UNDER THE OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT
     IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE.

          16.  California Law.  The interpretation, performance and enforcement
               --------------
of this Agreement shall be governed by the laws of the State of California.

          IN WITNESS WHEREOF, the Company and Optionee have executed this
agreement as of the day and year first above written.

                                      LogicVision, Inc.

                                      By:
                                         ------------------------------------
                                              Vinod K. Agarwal, President

                                      OPTIONEE

                                      By:
                                         ------------------------------------

                                      Address:
                                              -------------------------------

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

                                      -7-
<PAGE>

                                  ATTACHMENT A

                               CONSENT OF SPOUSE

          I, __________________________, spouse of ______________________ have
read and approved the foregoing Agreement.  In consideration of granting of the
right of my spouse to purchase shares of LogicVision, Inc. as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the
exercise of any rights of the Agreement insofar as I may have any rights under
such community property laws of the State of California or similar laws relating
to marital property in effect in the state of our residence as of the
____________ date _____________ of _______ the _________ signing ________ of
_______ the _________ foregoing ___________ Agreement.

Dated: __________________                 By: __________________________________

                                      -8-
<PAGE>

                               LogicVision, Inc.

                      NONQUALIFIED STOCK OPTION AGREEMENT

     This Agreement is made as of _____________ (the "Grant Date"), between
LogicVision, Inc.  (the "Company") and ("Optionee").

                                  WITNESSETH:

     WHEREAS, the Company has adopted the 1994 Flexible Stock Incentive Plan
(the "Plan"), which Plan is incorporated in this Agreement by reference and made
a part of it; and

     WHEREAS, the Company regards Optionee as a valuable service provider of the
Company, and has determined that it would be to the advantage and in the
interests of the Company and its shareholders to grant the options provided for
in this Agreement to Optionee as an inducement to remain in the service of the
Company (as defined in the Plan) and as an incentive for increased efforts
during such service;

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties to this Agreement hereby agree as follows:

      1.  Option Grant.  The Company hereby grants to Optionee the right and
          ------------
option to purchase from the Company on the terms and conditions hereinafter set
forth, all or any part of an aggregate of shares of the Common Stock of the
Company (the "Stock"). This option is not intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") nor
to qualify as an incentive stock option.

     2.  Option Price.  The purchase price of the Stock subject to this option
         ------------
shall be per share, which price is not less than the per share fair market value
of such Stock as of the Grant Date as determined by the Board of Directors of
the Company or a Committee designated by it (the "Committee"), or, if Optionee
possesses more than ten percent of the combined voting power of the Company or
any of its Affiliates, not less than 110 percent of the per share fair market
value of the Stock as of the Grant Date as determined by the Committee. The term
"Option Price" as used in this agreement refers to the purchase price of the
Stock subject to this option.

     3.  Option Period.  This option shall be exercisable only during the
         -------------
Option Period, and during such Option Period, the exercisability of the option
shall be subject to the limitations of paragraph 4 and the vesting provisions of
paragraph 5. The Option Period shall commence on the Grant Date and except as
provided in paragraph 4, shall terminate (the "Termination Date") ten years from
the Grant Date; provided, however, that the Option Period for a person
possessing more than ten percent of the combined voting power of the Company or
an Affiliate shall terminate five years from the Grant Date.

     4.  Limits on Option Period.  The Option Period may end before the
         -----------------------
Termination Date, as follows:

     (a) If Optionee ceases to be a bona fide service provider of the Company
or an Affiliate for any reason other than disability (within the meaning of
subparagraph (c)) or death during the

                                      -1-
<PAGE>

Option Period, the Option Period shall terminate three months after the date of
such cessation of employment or on the Termination Date, whichever shall first
occur, and the option shall be exercisable only to the extent exercisable under
paragraph 5 on the date of Optionee's cessation as a service provider of the
Company.

     (b) If Optionee dies while a service provider of the Company or any of its
Affiliates, the Option Period shall end one year after the date of death or on
the Termination Date, whichever shall first occur, and Optionee's executor or
administrator or the person or persons to whom Optionee's rights under this
option shall pass by will or by the applicable laws of descent and distribution
may exercise this option only to the extent exercisable under paragraph 5 on the
date of Optionee's death.

     (c)  If Optionee's position as a service provider is terminated by reason
of disability, the Option Period shall end one year after the date of Optionee's
cessation of employment or on the Termination Date, whichever shall first occur,
and the option shall be exercisable only to the extent exercisable under
paragraph 5 on the date of Optionee's cessation of employment.

     5.  Vesting of Right to Exercise Options.  This option shall be fully
         ------------------------------------
exercisable at any time on or after the Grant Date.  This option may be
exercised in whole or in part.

     (a) Any portion of the option may be exercised at any time during the
Option Period prior to the Termination Date. No partial exercise of this option
may be for less than 5 percent of the total number of shares then available
under this option. In no event shall the Company be required to issue fractional
shares.

     (b) Notwithstanding the foregoing, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which incentive stock options are exercisable for the first time in any calendar
year (under the Plan and any other incentive stock option plans of the Company
or its Affiliates) shall not exceed $100,000.

     6.  Method of Exercise.  Optionee may exercise the option with respect to
         ------------------
all or any part of the shares of Stock then subject to such exercise as follows:

     (a) By giving the Company written notice of such exercise, specifying the
number of such shares as to which this option is exercised. Such notice shall be
accompanied by an amount equal to the Option Price of such shares, in the form
of any one or combination of the following: (i) cash, (ii) a certified check,
bank draft, postal or express money order payable to the order of the Company in
lawful money of the United States; (iii) shares of Stock valued at fair market
value; (iv) if authorized for Optionee by the Committee, notes; or (v) in any
combination of the foregoing. The shares of Stock shall be valued in accordance
with procedures established by the Committee. Any note used to exercise this
option shall be a full recourse, interest-bearing obligation containing such
terms as the Committee shall determine. If a note is used, the Optionee agrees
to execute such further documents as the Committee may deem necessary or
appropriate in connection with issuing the note, perfecting a security interest
in the Stock purchased with the note, and any related terms or conditions that
the Committee may propose. Such further documents may include, not by way of
limitation, a security agreement, an escrow agreement, a voting trust agreement
and an assignment separate from certificate.

                                      -2-
<PAGE>

     (b) Optionee (and Optionee's spouse, if any) shall be required, as a
condition precedent to acquiring Stock through exercise of the option, to
execute one or more agreements relating to obligations in connection with
ownership of the Stock or restrictions on transfer of the Stock no less
restrictive than the obligations and restrictions to which the other
shareholders of the Company are subject at the time of such exercise.

     (c) If required by the Committee, Optionee shall give the Company
satisfactory assurance in writing, signed by Optionee or his legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (1) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which may hereafter be filed and become effective under the
Securities Act of 1933, as amended, and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (2) any other sale of
such shares with respect to which in the opinion of counsel for the Company,
such assurance is not required to be given in order to comply with the
provisions of the Securities Act of 1933, as amended.

     As soon as practicable after receipt of the notice required in paragraph
6(a) and satisfaction of the conditions set forth in paragraphs 6(b) and 6(c),
the Company shall, without transfer or issue tax and without other incidental
expense to Optionee, deliver to Optionee at the office of the Company, at 101
Metro Drive, 3rd Floor, San Jose, California 95110, attention of the Secretary,
or such other place as may be mutually acceptable to the Company and Optionee, a
certificate or certificates of such shares of Stock; provided, however, that the
time of such delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to comply with applicable registration
requirements under the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, any applicable listing requirements of any
national securities exchange, and requirements under any other law or regulation
applicable to the issuance or transfer of such shares.

     7.  Corporate Transactions.
         ----------------------

     (a) If there should be any change in a class of Stock subject to this
option, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock split, stock dividend or other change in the capital
structure of the Company, the Company shall make appropriate adjustments in
order to preserve, but not to increase, the benefits to Optionee, including
adjustments in the number of shares of such Stock subject to this option and in
the price per share. Any adjustment made pursuant to this paragraph 7 as a
consequence of a change in the capital structure of the Company shall not
entitle Optionee to acquire a number of shares of such Stock of the Company or
shares of stock of any successor company greater than the number of shares
Optionee would receive if, prior to such change, Optionee had actually held a
number of shares of such Stock equal to the number of shares then subject to
this option.

     (b) For purposes of this paragraph 7, a "Corporate Transaction" shall
include any of the following stockholder- approved transactions to which the
Company is a party:

         (i)   a merger or consolidation in which the Company is not the
     surviving entity, except for (1) a transaction the principal purpose of
     which is to change the state of the

                                      -3-
<PAGE>

     Company's incorporation, or (2) a transaction in which the
     Company's shareholders immediately prior to such merger or consolidation
     hold (by virtue of securities received in exchange for their shares in the
     Company) securities of the surviving entity representing more than fifty
     percent (50%) of the total voting power of such entity immediately after
     such transaction;

         (ii)  the sale, transfer or other disposition of all or substantially
     all of the assets of the Company unless the Company's shareholders
     immediately prior to such sale, transfer or other disposition hold (by
     virtue of securities received in exchange for their shares in the Company)
     securities of the purchaser or other transferee representing more than
     fifty percent (50%) of the total voting power of such entity immediately
     after such transaction; or

         (iii) any reverse merger in which the Company is the surviving entity
     but in which the Company's shareholders immediately prior to such merger do
     not hold (by virtue of their shares in the Company held immediately prior
     to such transaction) securities of the Company representing more than fifty
     percent (50%) of the total voting power of the Company immediately after
     such transaction,

     (c) In the event of any Corporate Transaction, this option shall terminate
     immediately prior to the specified effective date of the Corporate
     Transaction unless assumed by the successor corporation or its parent
     company, pursuant to options providing substantially equal value and having
     substantially equivalent provisions as the options granted pursuant to this
     Agreement.

     8.  Limitations on Transfer.  This option shall, during Optionee's
         -----------------------
lifetime, be exercisable only by Optionee, and neither this option nor any right
hereunder shall be transferable by Optionee by operation of law or otherwise
other than by will or the laws of descent and distribution. In the event of any
attempt by Optionee to alienate, assign, pledge, hypothecate, or otherwise
dispose of this option or of any right hereunder, except as provided for in this
Agreement, or in the event of the levy of any attachment, execution, or similar
process upon the rights or interest hereby conferred, the Company at its
election may terminate this option by notice to Optionee and this option shall
thereupon become null and void.

     9.  No Shareholder Rights.  Neither Optionee nor any person entitled to
         ---------------------
exercise Optionee's rights in the event of his death shall have any of the
rights of a shareholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.

    10.  NO EFFECT ON TERMS OF MEMBERSHIP IN THE BOARD OF DIRECTORS OF THE
         -----------------------------------------------------------------
COMPANY.  THIS AGREEMENT SHALL NOT CONFER UPON RECIPIENT ANY RIGHT WITH
--------
RESPECT TO CONTINUATION OF RECIPIENT'S MEMBERSHIP IN THE BOARD 0 DIRECTORS OF
THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE RIGHT OF RECIPIENT OR
THE COMPANY TO TERMINATE RECIPIENT'S MEMBERSHIP IN THE BOARD OF DIRECTORS OF THE
COMPANY AT ANY TIME FOR ANY REASON WITH OR WITHOUT CAUSE.

    11.  Notice.  Any notice required to be given under the terms of this
         ------
Agreement shall be addressed to the Company in care of its Secretary at the
Office of the Company at 101 Metro Drive,

                                      -4-
<PAGE>

Third Floor, San Jose, California 95110, and any notice to be given to Optionee
shall be addressed to him at the address given by him beneath his signature to
this Agreement, or such other address as either party to this Agreement may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, registered or certified and deposited (postage or
registration or certification fee prepaid) in a post office or branch post
office regularly maintained by the United States.

     12. Lock-Up Agreement.
         -----------------
     (a) Optionee, if requested by the Company and the lead underwriter of any
public offering of the Common Stock or other securities of the Company (the
"Lead Underwriter"), hereby irrevocably agrees not to sell, contract to sell,
grant any option to purchase, transfer the economic risk of ownership in, make
any short sale of, pledge or otherwise transfer or dispose of any interest in
any Common Stock or any securities convertible into or exchangeable or
exercisable for or any other rights to purchase or acquire Common Stock (except
Common Stock included in such public offering or acquired on the public market
after such offering) during the 180-day period following the effective date of a
registration statement of the Company filed under the Securities Act, or such
shorter period of time as the Lead Underwriter shall specify. Optionee further
agrees to sign such documents as may be requested by the Lead Underwriter to
effect the foregoing and agrees that the Company may impose stop-transfer
instructions with respect to such Common Stock subject until the end of such
period. The Company and Optionee acknowledge that each Lead Underwriter of a
public offering of the Company's stock, during the period of such offering and
for the 180-day period thereafter, is an intended beneficiary of this Section
12.

     (b) Notwithstanding the foregoing, Section 12(a) shall not prohibit
Optionee from transferring any shares of Common Stock or securities convertible
into or exchangeable or exercisable for the Company's Common Stock either during
Optionee's lifetime or on death by will or intestacy to Optionee's immediate
family or to a trust the beneficiaries of which are exclusively Optionee and/or
a member or members of Optionee's immediate family; provided, however, that
prior to any such transfer, each transferee shall execute an agreement pursuant
to which each transferee shall agree to receive and hold such securities subject
to the provisions of Section 12 hereof. For the purposes of this paragraph, the
term "immediate family" shall mean spouse, lineal descendant, father, mother,
brother or sister of the transferor.

     (c) During the period from identification as a Lead Underwriter in
connection with any public offering of the Company's Common Stock until the
earlier of (i) the expiration of the lock-up period specified in Section 12(a)
in connection with such offering or (ii) the abandonment of such offering by the
Company and the Lead Underwriter, the provisions of the Section 12 may not be
amended or waived except with the consent of the Lead Underwriter.

     13. Committee Decisions Conclusive.  All decisions of the Committee upon
         ------------------------------
any question arising under the Plan or under this Agreement shall be conclusive.

     14. Successors.  This Agreement shall be binding upon and inure to the
         ----------
benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative or the

                                      -5-
<PAGE>

person or persons to whom Optionee's rights pass by will or the applicable laws
of descent and distribution.

     15. California Law.  The interpretation, performance and enforcement of
         --------------
this Agreement shall be governed by the laws of the State of California.

     IN WITNESS WHEREOF, the Company and Optionee have executed this agreement
as of the day and year first above written.

                                    LogicVision, Inc.

                                    By ________________________________________
                                                     Vinod K. Agarwal
                                                     President

                                    OPTIONEE

                                    By ________________________________________

                                    Address: __________________________________

                                             __________________________________

                                      -6-
<PAGE>

                                  ATTACHMENT A

                               CONSENT OF SPOUSE

     I, spouse of have read and approved the foregoing Agreement.  In
consideration of granting of the right of my spouse to purchase shares of
LogicVision, Inc.  as set forth in the Agreement, I hereby appoint my spouse as
my attorney-in-fact with respect to the exercise of any rights of the Agreement
insofar as I may have any rights under such community property laws of the State
of California or similar laws relating to marital property in effect in the
state of our residence as of the date of the signing of the foregoing Agreement.

Dated:_____________________          By: _______________________________________

                                      -7-<PAGE>
                                                                    Exhibit 10.4
                                                                    ------------

                               LOGICVISION, INC.

                          SIXTH AMENDED AND RESTATED

                         REGISTRATION RIGHTS AGREEMENT

                            Dated January 28, 2000
<PAGE>

                               TABLE OF CONTENTS

                                                                           Page
                                                                           ----
  1.   Termination of Prior Agreement....................................   1
  2.   Certain Definitions...............................................   1
  3.   Required Registration.............................................   3
  4.   Corporation Registration..........................................   5
  5.   Obligations of the Corporation....................................   6
  6.   Definition of Expenses............................................   7
  7.   Expenses of Registration..........................................   7
  8.   Underwriting Requirements.........................................   7
  9.   Delay of Registration.............................................   8
 10.   Indemnification...................................................   8
 11.   Reports Under Exchange Act........................................   10
 12.   Assignment of Registration Rights.................................   10
 13.   Limitations on Subsequent Registration Rights.....................   10
 14.   Form S-3 Registration.............................................   10
 15.   Limitation on Obligation to Register..............................   11
 16.   "Market Stand-Off" Agreement......................................   11
 17.   Successors........................................................   12
 18.   Entire Agreement..................................................   12
 19.   Notices...........................................................   12
 20.   Confidentiality and Nondisclosure.................................   13
 21.   Changes...........................................................   14
 22.   Counterparts......................................................   15
 23.   Headings..........................................................   15
 24.   Governing Law.....................................................   15

                                      -i-
<PAGE>

           SIXTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     THIS AGREEMENT (the "Agreement") is made and entered into as of January 28,
2000, by and among LogicVision, Inc., a California corporation (the
"Corporation"), and Holders as set forth on Exhibit A hereto and as defined in
Section 2 below.

     In consideration of the mutual covenants set forth in this Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Corporation and the undersigned parties hereby agree
as follows:

     1.   Termination of Prior Agreement. The Prior Agreement (as defined below)
          ------------------------------
is hereby amended and restated and is terminated and shall be of no further
force or effect.

     2.   Certain Definitions. In addition to the definitions set forth above,
          -------------------
as used in this Agreement, the following terms shall have the following
respective meanings:

     "Adjustment Event" shall mean any stock dividend, stock split,
recapitalization or combination of shares.

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

     "Common Stock" shall mean the common stock of the Corporation.

     "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended.

     "Extinguishing Warrants" shall mean (i) the Extinguishing Warrants (as
defined in the Series G Purchase Agreement), (ii) the shares of Common Stock or
other capital stock of the Corporation issuable upon exercise of the
Extinguishing Warrants and (iii) any shares of capital stock of the Corporation
issued in respect of any of the foregoing.

     "Holders" shall mean the holders of Series C, D, E, F, G, H and I
Securities and holders of Warrants, Extinguishing Warrants and Series H Warrants
who are parties to this Agreement, and their assignees permitted in accordance
with Section 12 hereof.

     "Initiating Holder" shall have the meaning given in Section 3.2 hereof.

     "Prior Agreement" shall mean the Fifth Amended and Restated Registration
Rights Agreement dated as of May 7, 1999 among the Corporation and the holders
of Series C, D, E, F, G and H Securities and the holders of Warrants and
Extinguishing Warrants.

     "Registrable Securities" shall mean shares of Common Stock issuable upon
conversion of Series C, D, E, F, G, H or I Securities (including those Series H
Securities issuable upon exercise of the Series H Warrants) and upon exercise of
the Warrants and Extinguishing Warrants and any shares of capital stock issued
in respect of Registrable Securities held by the Holders; provided that with
respect to any registration statement described in Section 3 hereof

                                      -1-
<PAGE>

that includes equity securities other than Common Stock, "Registrable
Securities" shall also include Series C, D, E, F, G, H or I Securities and the
Warrants, Extinguishing Warrants and Series H Warrants.

     "Registration Expenses" and "Selling Expenses" shall mean the expenses
described in Section 6 hereof.

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

     "Series C Securities" shall mean (i) the Series C-1 Convertible Preferred
Stock, Series C-2 Convertible Preferred Stock and Series C-3 Convertible
Preferred Stock (collectively, the "Series C Preferred Stock") of the
Corporation, (ii) the shares of Common Stock or other capital stock of the
Corporation issuable upon conversion of the Series C Preferred Stock and (iii)
any shares of capital stock of the Corporation issued in respect of any of the
foregoing.

     "Series D Securities" shall mean (i) the Series D Convertible Preferred
Stock of the Corporation (the "Series D Preferred Stock"), (ii) the shares of
Common Stock or other capital stock of the Corporation issuable upon conversion
of the Series D Preferred Stock and (iii) any shares of capital stock of the
Corporation issued in respect of any of the foregoing.

     "Series E Securities" shall mean (i) the Series E Convertible Preferred
Stock of the Corporation (the "Series E Preferred Stock"), (ii) the shares of
Common Stock or other capital stock of the Corporation issuable upon conversion
of the Series E Preferred Stock and (iii) any shares of capital stock of the
Corporation issued in respect of any of the foregoing.

     "Series F Securities" shall mean (i) the Series F Convertible Preferred
Stock of the Corporation (the "Series F Preferred Stock"), including shares of
Series F Convertible Preferred Stock issued pursuant to exercise of the warrants
sold under the Series F Preferred Stock Purchase Agreement dated as of May 14,
1997, as amended for subsequent closings, (ii) the shares of Common Stock or
other capital stock of the Corporation issuable upon conversion of the Series F
Preferred Stock and (iii) any shares of capital stock of the Corporation issued
in respect of any of the foregoing.

     "Series G Purchase Agreement" shall mean the Securities Purchase Agreement
dated as of January 13, 1999 by and among the Corporation and the purchasers of
Units thereunder (the "Series G Investors") with each such Unit consisting of
one share of the Corporation's Series G Preferred Stock, a warrant to purchase
 .25 of a share of Common Stock, and an extinguishing warrant to purchase .45 of
a share of Common Stock.

     "Series G Securities" shall mean (i) the Series G Convertible Preferred
Stock of the Corporation (the "Series G Preferred Stock"), (ii) the shares of
Common Stock or other capital stock of the Corporation issuable upon conversion
of the Series G Preferred Stock and (iii) any shares of capital stock of the
Corporation issued in respect of any of the foregoing.

     "Series H Purchase Agreement" shall mean the Securities Purchase Agreement
dated as of May 7, 1999, by and among the Corporation and the purchasers of
Series H Convertible Preferred Stock hereunder (the "Series H Investors" and
together with the Series G and Series I Investors, the "Investors").

                                      -2-
<PAGE>

     "Series H Securities" shall mean (i) the Series H-1 Preferred Stock and
Series H2 Preferred Stock issued pursuant to exercise of the warrants sold under
the Series H Purchase Agreement of the Corporation (the "Series H Preferred
Stock"), (ii) the shares of Common Stock or other capital stock of the
Corporation issuable upon conversion of the Series H-1 Preferred Stock and
Series,H-2 Preferred Stock and (iii) any shares of Capital Stock of the
Corporation issued in respect of any of the foregoing.

     "Series H Warrants" shall mean (i) Warrants to purchase Series H-2
Preferred Stock (as defined in the Series H Purchase Agreement), (ii) the shares
of Series H-2 Preferred Stock issuable upon exercise thereof, (iii) the shares
of Common Stock issuable upon conversion thereof and (iv) any shares of capital
stock of the Corporation issued in respect of any of the foregoing.

     "Series I Purchase Agreement" shall mean the Securities Purchase Agreement
dated as of the date hereof by and among the Corporation and the purchasers of
Series I Convertible Preferred Stock hereunder (the "Series I Investors").

     "Series I Securities" shall mean (i) the Series I Convertible Preferred
Stock of the Corporation, (ii) the shares of Common Stock or other capital stock
of the Corporation issuable upon conversion of the Series I Preferred Stock and
(iii) any shares of capital stock of __ the Corporation issued in respect of any
of the foregoing.

     "Transfer" shall mean any disposition of any capital stock of the
Corporation or any interest therein which would constitute a sale thereof within
the meaning of the Securities Act.

     "Warrants" shall mean (i) the Warrants (as defined in the Series G Purchase
Agreement), (ii) the shares of Common Stock or other capital stock of the
Corporation issuable upon exercise of the Warrants and (iii) any shares of
capital stock of the Corporation issued in respect of any of the foregoing.

     3.  Required Registration.
         ----------------------

          3.1  At any time after the earlier of (a) January 1, 2002 or (b) six
(6) months after the effective date of the Corporation's initial registration
statement under the Securities Act if the Corporation receives a written request
from the holders of more than thirty-three percent (33%) of the Registrable
Securities then outstanding, that the Corporation file a registration statement
under the Securities Act covering the registration of Registrable Securities,
with an anticipated aggregate offering price of at least ten million dollars
($10,000,000), then the Corporation shall promptly give written notice of such
request (together with a list of the jurisdictions in which the Corporation
intends to attempt to qualify such securities under the applicable state
securities laws) to all holders of Registrable Securities. As soon as
practicable (but in no event later than ninety (90) days after the receipt by
the Corporation of such request), and subject to the limitations of Subsection
3.2 hereof, the Corporation shall file a registration statement in accordance
with Section 5 hereof, with respect to the registration under the Securities Act
of all Registrable Securities which the holders of Registrable Securities may
specify in such request in writing within thirty (30) days after receipt of such
notice from the Corporation.

                                      -3-
<PAGE>

          3.2 If the Holders initiating the registration request (the
"Initiating Holders") intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Corporation
as a part of their request, and the Corporation shall include such information
in the written notice referred to in Subsection 3.1 hereof. In such event, the
right of any holder of Registrable Securities to include securities in such
registration shall be conditioned upon the inclusion of such securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders). The Corporation shall (together with all Holders proposing
to distribute their securities in such offering) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by a majority in interest of the Initiating Holders, but subject to
the Corporation's reasonable approval.

          3.3 If other holders of Registrable Securities request inclusion in
such registration, the Initiating Holders shall offer to such holders of
Registrable Securities the opportunity to include Registrable Securities held by
them in the underwriting, and may condition such offer on the acceptance by such
other holders of Registrable Securities of the further provisions of this
Section 3. All holders of Registrable Securities proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the representative of the underwriter(s) selected for
such underwriting by the Initiating Holders and reasonably acceptable to the
Corporation.

          3.4 Notwithstanding any other provision of this Section 3, if the
managing underwriter of any such offering advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, the securities of the Corporation other than Registrable
Securities shall be excluded from such registration and underwriting to the
extent so required by such limitation. If, in the opinion of the managing
underwriter of any such offering, a limitation of the number of shares to be
underwritten is still required, the Initiating Holders shall so advise all
holders of Registrable Securities, and the number of Registrable Securities to
be included in the underwriting will be allocated among all such holders of
Registrable Securities on a pro rata basis among such Holders, in proportion of
the number of shares of Registrable Securities then owned by each; provided,
however, in the event that less than fifty percent (50%) of the Registrable
Securities requested to be registered are permitted by the managing underwriter
be included in such registration statement, then a majority in interest of the
Initiating Holders may withdraw their request to register Registrable Securities
and their request shall not count as a registration for the purposes of
Subsection 3.5 hereof. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. If any holder of securities to be included in such registration
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Corporation, the underwriter and the
Initiating Holders. The securities so withdrawn shall also be withdrawn from
registration. If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Corporation may include
its securities for its own account in such registration if the underwriter so
agrees, and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and underwriting will
not thereby be limited.

                                      -4-
<PAGE>

          3.5  The Corporation is obligated to effect an aggregate of two (2)
such registrations at the request of the Holders, in each instance pursuant to
this Section 3.

          3.6  Notwithstanding the foregoing, if the Corporation shall furnish
to the Initiating Holders a certificate signed by the President of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be detrimental to the Corporation and its shareholders
for such registration statement to be filed, the Corporation shall have the
right to defer such filing for a period of not more than one hundred twenty
(120) days after receipt of the request from the Initiating Holders; provided,
however, that the Corporation may not utilize this right more than once in any
twelve (12) month period.

     4.  Corporation Registration.
         -------------------------

          4.1  If the Corporation proposes to register any of its capital stock
or other securities under the Securities Act in connection with the public
offering of such securities (other than a registration on Form S-8, Form S-4 or
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the public sale of
Common Stock), the Corporation shall, each such time, promptly give each holder
of Registrable Securities written notice of such registration, together with a
list of the jurisdictions in which the Corporation intends to attempt to qualify
such securities under applicable state securities laws. Upon the written request
of each holder of Registrable Securities given within thirty (30) days after
mailing of such written notice from the Corporation in accordance with this
Section 4, the Corporation shall, subject to the provisions of Section 4.2 and
Section 8 hereof, use its best efforts to include in such registration all of
the Registrable Securities that each such holder has requested to be registered.

          4.2  Notwithstanding the foregoing, in the event the proposed
registration is in whole or in part an underwritten public offering, if the
managing underwriter determines and advises in writing that the inclusion of
such shares of requesting holders of Registrable Securities, together with all
shares of the Corporation's capital stock to be offered by the Corporation,
would interfere with the successful marketing of such securities, then the
number of shares of Registrable Securities otherwise to be included in the
registration statement by Holders shall be reduced pro rata among such Holders,
in the proportion of the number of shares of Registrable Securities then owned
by each. The parties agree that in a registration for an initial public offering
the managing underwriter may reduce to zero (0) the number of shares to be
included by Holders, but in all other registrations pursuant to this Section 4,
the number of shares to be included by Holders shall not be reduced to below
thirty percent (30%), or such lesser number of shares as are requested to be
included by the Holders.

          4.3  No outstanding securities that are not Registrable Securities
shall be included in any registration statement unless all Registrable
Securities of requesting Holders are included.

                                      -5-
<PAGE>

     5.  Obligations of the Corporation. Whenever required under this Agreement
         -------------------------------
to effect the registration of any Registrable Securities, the Corporation shall,
as expeditiously as reasonably possible:

          5.1  Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective. Upon the request of the holders
of a majority of the Registrable Securities then outstanding registered
thereunder, the Corporation shall keep such registration statement effective for
up to one hundred eighty (180) days.

          5.2  Prepare and file with the Commission such amendments and
supplements to the registration statement, and to the prospectus used in
connection with the registration statement, as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by the registration statement.

          5.3  Furnish to the holders of such Registrable Securities such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request, in order to facilitate the disposition of their
Registrable Securities covered by the registration statement.

          5.4  Use its best efforts to register and qualify the Registrable
Securities covered by such registration statement under the securities laws of
such states as shall be reasonably requested by the holders of such securities;
provided, however, that the Corporation shall not be required to qualify to do
business or to file a general consent to service of process in any such state;
and provided, further, that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any state in which
the Registrable Securities shall be qualified shall require that all or any
portion of the Registration Expenses (as defined in Section 6) be borne by
selling shareholders, then to the extent required by that state, such
Registration Expenses shall be payable by the selling shareholders pro rata.

          5.5  In the event of a public offering, on the closing date thereof if
such Registrable Securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such Registrable Securities becomes
effective, the Company shall furnish (i) an opinion dated such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the holders of
Registrable Securities requesting registration of Registrable Securities and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the holders requesting
registration of such Registrable Securities.

          5.6  In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.

                                      -6-
<PAGE>

          5.7  Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act or 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 in the light of the circumstances then existing.

          5.8  Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Corporation are then listed.

          5.9  Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.

          5.10  Notwithstanding the above, no holder of Registrable Securities
shall be entitled to include such Registrable Securities in any registration
pursuant to this Agreement unless such selling holder shall furnish to the
Corporation such information regarding such holder, the securities held by such
holder, and the intended method of disposition of such Registrable Securities
held by such holder, as shall be required to effect the registration of such
 .securities held by such holder.

     6.  Definition of Expenses.
         -----------------------
                (a)  "Registration Expenses" shall mean all expenses, incurred
by the Corporation in complying with Sections 3, 4 and 14 hereof, including,
without limitation registration and filing fees, printing expenses, accounting
fees and disbursements of counsel for the Corporation, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Corporation which would be paid in any event by the Corporation) and the fees
and disbursements of one special counsel for the participating Holders
designated by the majority in interest thereof.

                (b)  "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale, and all fees and disbursements
of separate counsel for any holder other than as set forth in Section 6.1(a).

     7.  Expenses of Registration. All Registration Expenses incurred in
         -------------------------
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Corporation, except as provided in Subsection
5.4 hereof to the extent required by applicable state securities laws. All
Selling Expenses shall be borne by the holders of the securities so registered
pro rata on the basis of the number of shares so registered.

     8.  Underwriting Requirements. The right of any holder to registration
         --------------------------
pursuant to Section 4 hereof shall be conditioned upon the holder's
participation in the underwriting and the inclusion of the holder's Registrable
Securities in the underwriting to the extent provided herein. All holders
proposing to distribute their Registrable Securities through the underwriting
shall (together with the Corporation and the other holders distributing their
Registrable Securities

                                      -7-
<PAGE>

through such underwriting) enter into an underwriting agreement in customary
form with the underwriter(s). Notwithstanding any other provision of Section 4
hereof and this Section 8, if the managing underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, then
the managing underwriter may (subject to the allocation priority and cutback
limitations set forth in Subsection 4.2 hereof) exclude some or all Registrable
Securities from such registration and underwriting. The Corporation shall so
advise all holders requesting registration of any such limitations imposed by
the managing underwriter.

     9.  Delay of Registration. No Holder shall have any right to seek or to
         ----------------------
obtain a court order restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.

     10.  Indemnification. In the event any Registrable Securities are included
          ----------------
in a registration statement under this Agreement:

          10.1  To the extent permitted by law, the Corporation will indemnify
and hold harmless each holder of Registrable Securities and the partners,
officers and directors of each such holder, any underwriter (as defined in the
Securities Act) for such holder and each -person, if any, who controls such
holder or underwriter within the meaning of the Act or the Exchange Act, against
any losses, claims, damages, or liabilities joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state statute, regulation, or rule, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof arise out of or are based upon any of
the following statements, omissions or violations (collectively a "Violation"):
(a) any untrue statement or alleged untrue statement of a material fact
contained in the registration statement including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto; (b)
the 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
(c) any violation or alleged violation by the Corporation of the Securities Act,
the Exchange Act, or any other federal or state statute, regulation or rule. The
Corporation will reimburse each such holder, officer, director, underwriter or
controlling person for any legal or other expenses reasonably incurred in
connection with investigating or defending any such loss, claim, damage,
liability, or action. The indemnity agreement contained in this Subsection 10.1
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if the settlement is effected without the consent of the
Corporation (which consent shall not be unreasonably withheld), nor shall the
Corporation be liable to a holder of Registrable Securities, underwriter or
controlling person for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reasonable reliance upon written information furnished to the Corporation
expressly for use in connection with such registration by such holder,
underwriter or controlling person.

          10.2  To the extent permitted by law, each selling holder will
indemnify and hold harmless the Corporation, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Corporation within the meaning of the Securities Act, each
underwriter (as defined in the Securities Act) for the Corporation or such

                                      -8-
<PAGE>

other holders, any person who controls such underwriter (as defined in the
Securities Act or the Exchange Act), and any other holder selling securities in
such registration statement or its directors, officers or any person who
controls such holder, against any losses, claims, damages, or liabilities joint
or several) to which the Corporation or any such director, officer, controlling
person, or underwriter or controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statute, regulation
or rule, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any Violation, in each case only
to the extent that such Violation occurs in reasonable reliance upon written
information furnished to- the Corporation by such holder expressly for use in
connection with such registration. Each such holder will reimburse any legal or
other expenses reasonably incurred by the Corporation or any such director,
officer, controlling person, underwriter or controlling person, other holder,
officer, director, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action. The indemnity
agreement contained in this Subsection 10.2 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if the
settlement is effected without the consent of the holder of Registrable
Securities, which consent shall not be unreasonably withheld; provided, further,
however, that in no event shall any indemnity under this subsection 10.2 exceed
the gross proceeds from the offering received by such holder.

          10.3  Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10, so notify
the indemnifying party in writing. The indemnifying party shall have the right
to participate in and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with legal counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of the indemnified party by the counsel for the indemnifying
party would be inappropriate due to actual or potential differing interests
between the indemnified party and any other party represented by such counsel in
such proceeding. The failure to notify an indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve the indemnifying party of any liability to the
indemnified party under this Section 10, but the omission to notify the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.

          10.4  If the indemnification provided for in this Section 10 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
herein, 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

                                      -9-
<PAGE>

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.

          10.5  The obligations of the Corporation and holders of Registrable
Securities under this Section 10 shall survive the completion of any offering of
Registrable Securities in a registration statement pursuant to this Agreement
and otherwise.

     11.  Reports Under Exchange Act.  With a view to making available to the
          ---------------------------
Holders the benefits of Rule 144 promulgated under the Securities Act ("Rule
144") and any other rule or regulation that may permit a Holder to sell
securities of the Corporation to the public without registration, the
Corporation agrees to:

          11.1  Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of (i) the initial registration statement filed by the
Corporation for the offering of its securities to the general public, or (ii)
any registration statement filed under the Exchange Act.

          11.2  File with the Commission in a timely manner all reports and
other documents required of the Corporation under the Securities Act and the
Exchange Act.

          11.3  Upon request, furnish promptly to any Holder: (a) a written
statement by the Corporation that it has complied with the reporting
requirements of Rule 144 (at any time subsequent to ninety (90) days after the
effective date of the first registration statement filed by the Corporation),
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); (b) a copy of the most recent annual or
quarterly report of the Corporation and such other reports and documents so
filed by the Corporation; and (c) such other information as may be reasonably
requested in availing any Holder of any rule or regulation which permits the
selling of any such securities without registration.

     12.  Assignment of Registration Rights. The right to cause the Corporation
          ---------------------------------
to register Registrable Securities, pursuant to this Agreement may be assigned
by a Holder to a transferee or assignee of such securities upon the transfer or
assignment of securities to such transferee or assignee, provided (i) that the
transferee or assignee agrees in writing to be bound by Section 16 of this
Agreement and (ii) that the Corporation is, within a reasonable time after such
transfer or assignment, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if, immediately following such transfer, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.

     13.  Limitations on Subsequent Registration Rights. The Corporation shall
          ----------------------------------------------
not enter into any agreement with any holder or prospective holder of any
securities of the Corporation pursuant to which such holder or prospective
holder may require the Corporation to initiate any registration of any
securities of the Corporation unless such agreement is approved by Holders who
represent a majority of the voting power of the Registrable Securities then
outstanding.

     14.  Form S-3 Registration. In case the Corporation shall receive from any
Holder a written request that the Corporation effect a registration on Form S-3
(or any successor short-

                                      -10-
<PAGE>

form registration statement adopted by the Commission for the resale of
securities) or any related qualification or compliance with respect to all or a
part of the Registrable Securities, the Corporation will:

          14.1  Promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other holders of Registrable
Securities.

          14.2  As soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder joining in such
request, as are specified in a written request given within thirty (30) days
after mailing of such written notice by the Corporation.

          14.3  The Corporation shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 14: (a) if
the Corporation is not qualified as a registrant entitled to use Form S-3 (or
any similar successor form of registration statement); (b) if the holders of
Registrable Securities; together with the holders of any other securities of the
Corporation entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) aggregating less than
two percent (2%) of the Registrable Securities then outstanding; (c) if the
Corporation shall furnish to the holders of Registrable Securities a certificate
signed by the President of the Corporation stating that in the good faith
judgment of the Board of Directors of the Corporation, it would be seriously
detrimental to the Corporation and its shareholders for such Form S-3 or similar
registration to be effected at such time, in which event the Corporation shall
have the right to defer the filing of the registration statement for a period of
not more than one hundred twenty (120) days after receipt of the request of the
holder of Registrable Securities under this Section 14; provided, however, that
the Corporation shall not utilize this right more than once in any twelve (12)
month period; or (d) if the Corporation has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for any holders of Registrable Securities pursuant to this Section 14.

          14.4  Registrations effected pursuant to this Section 14 shall not be
counted as demands for registration or registrations effected pursuant to
Section 3.5 hereof.

          15.   Limitation on Obligation to Register. The Corporation shall have
no obligation under this Agreement to register, or to include in a registration,
any Registrable Securities held or entitled to be held upon conversion of any
holder who may immediately sell all of such holder's Registrable Securities
under Rule 144(k) promulgated under the Securities Act (or any successor
provision) during any 90-day period, except (i) in connection with the
Corporation's initial public offering and (ii) in connection with any subsequent
public offering in connection with which such holder agrees in writing at the
request of the underwriters not to sell such Registrable Securities for a period
of at least 90-days after such offering.

          16.   "Market Stand-Off ` Agreement. Each holder of Registrable
Securities hereby agrees that during the 180-day period following the effective
date of a registration statement of the Corporation filed under the Securities
Act (each a "Registration Statement"), it shall not, to the

                                      -11-
<PAGE>

extent requested by the Corporation or the lead underwriter with respect to such
Registration Statement (the "Lead Underwriter"), sell, contract to sell, make
any short sale of, pledge or otherwise transfer or dispose of (other than to
transferees who agree to be similarly bound) any Common Stock of the Corporation
held by it at any time during such period except Common Stock included in such
registration; provided, however, that:

          (a)  such agreement shall be applicable only to the initial public
offering of the Corporation which covers Common Stock; and

          (b)  all officers and directors of the Corporation enter into similar
agreements.

     In order to enforce the foregoing covenant, each holder of Registrable
Securities further agrees to sign such documents as may be reasonably requested
by the Lead Underwriter and the Corporation may impose stop-transfer
instructions with respect to the Registrable Securities of each holder of
Registrable Securities (and the shares or securities of every owner person
subject to the foregoing restriction) until the end of such period. The
Corporation and the holders of Registrable Securities acknowledge that each Lead
Underwriter of a public offering of the Company's stock, during the period of
such offering and for the 180-day period thereafter, is an intended third party
beneficiary of this Section 16.

     During the period from identification as a Lead Underwriter in connection
with a Registration Statement until, the earlier of (i) expiration of the lock-
up period specified in this Section 16 in connection with such Registration
Statement, or (ii) the abandonment of such Registration Statement by the
Corporation and such Lead Underwriter, the provisions of this Section 16 may not
be amended without the consent of such Lead Underwriter.

     17.  Successors. Subject to Section 12 hereof, this Agreement shall bind
          -----------
and inure to the benefit of the Corporation and each Holder, and their
successors and assigns.

     18.  Entire Agreement.  This Agreement constitutes the entire agreement
          -----------------
among the parties with respect to the subject matter hereof and supersedes all
prior arrangements or understandings.

     19.  Notices. All `notices, requests, consents and other communications
          --------
required or provided for herein to any party shall be deemed to be sufficient if
contained in a written instrument, and shall be deemed to be given when: (a)
delivered in person; (b) sent by first-class registered or certified mail with
postage prepaid; (c) delivered by overnight courier service; or (d) sent by
facsimile transmission with delivery confirmed and followed by delivery pursuant
to (c) hereof, which notice is addressed to the party at the address set forth
below, or such other address as may hereafter be designated in writing by the
party.

                               (i)  If to the Corporation:

                         LogicVision, Inc.
                         101 Metro Drive, 3rd Floor
                         San Jose, CA 95110
                         Attn.:    Vinod Agarwal

                                      -12-
<PAGE>

                         Facsimile:    (408) 467-1180
                         Telephone:    (408) 453-0146

                         with a copy to:

                         Brobeck, Phleger & Harrison LLP
                         Two Embarcadero Place
                         2200 Geng Road
                         Palo Alto, California 94303
                         Attn:    Warren T. Lazarow, Esq.
                         Facsimile No: (650) 496-2733
                         Telephone No: (650) 496-2887

                              (ii)  If to the Holders: `

                         The respective addresses set forth on the signature
                         pages hereto.

                              (iii)  If to Intel:

                         Intel Corporation
                         2200 Mission College Blvd.
                         Santa Clara, CA 95052
                         Attn: Treasurer
                         Facsimile No: (408) 765-6038

                         With copies to:

                         Intel Corporation
                         2200 Mission College Blvd.
                         Santa Clara, CA 95052
                         Attn: General Counsel
                         Facsimile No: (408) 765-1859

     20.  Confidentiality and Nondisclosure
          ---------------------------------

          20.1  Disclosure of Terms. The terms and conditions of this Agreement,
                -------------------
the Series G Purchase Agreement, the Series H Purchase Agreement, the Amended
and Restated Shareholders' Agreement dated the date hereof, the Amended Restated
Right of First Offer Agreement dated the date hereof, the Warrants, the
Extinguishing Warrants and the Series H Warrants (collectively, the "Financing
Terms"), including their existence, shall be considered confidential information
and shall not be disclosed by any party hereto to any third party except in
accordance with the provisions set forth below.

          20.2  Press Releases, Etc. Except as provided in the Series G Purchase
                -------------------
Agreement, no announcement regarding any Investor in a press release,
conference, advertisement, announcement, professional or trade publication, mass
marketing materials or otherwise to the general public may be made without such
Investor's prior written consent.

                                      -13-
<PAGE>

          20.3  Permitted Disclosures. Notwithstanding the foregoing, (i) any
                ---------------------
party may disclose any of the Financing Terms to its current or bona fide
prospective investors, employees, investment bankers, lenders, accountants and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations; (ii) any party may disclose (other than
in a press release or other public announcement described in Section 9.6(b) of
the Series G Purchase Agreement) solely the fact that the Investors are
investors in the Corporation to any third parties without the requirement for
the consent of any other party or nondisclosure obligations; and (iii) each of
Intel and Teradyne may disclose its investment in the Corporation and the
financing terms from the Series G Preferred Stock financing and Series H
Preferred Stock financing, respectively, to third parties or to the public at
its sole discretion and, if it does so, the other parties hereto shall have the
right to disclose to third parties any such information disclosed in a press
release or other public announcement by Intel or Teradyne, as the case may -be.

          20.4  Legally Compelled Disclosure. In the event that any party is
                ----------------------------
requested or becomes legally compelled (including without limitation, pursuant
to securities laws and regulations) to disclose the existence of this Agreement,
the Series G Purchase Agreement, the Series H Purchase Agreement, the Amended
and Restated Shareholders' Agreement dated the date hereof, the Amended Restated
Right of First Offer Agreement dated the date hereof, the Warrants, the
Extinguishing Warrants, the Series H Warrants or any of the Financing Terms
hereof in contravention of the provisions of this Section 20, such party (the
"Disclosing Party") shall provide the other parties (the "Non-Disclosing
Parties") with prompt written notice of that fact so that the appropriate party
may seek (with the cooperation and reasonable efforts of the other parties) a
protective order, confidential treatment or other appropriate remedy. In such
event, the Disclosing Party shall furnish only that portion of the information
which is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such information
to the extent reasonably requested by any Non-Disclosing Party.

          20.5  Other Information. The provisions of this Section 20 shall be in
                -----------------
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby. Additional disclosures and exchange of
confidential information between the Corporation and Intel (including without
limitation, any exchanges of information with any Intel board observer) shall be
governed by the terms of the Corporate Non-Disclosure Agreement No. 119947,
dated July 1, 1998, executed by the Corporation and Intel, and any Confidential
Information Transmittal Records (CITR) provided in connection therewith.
Furthermore, additional disclosures and exchange of confidential information
between the Corporation and Teradyne (including without limitation, any
exchanges of information with any Teradyne board member) shall be governed by
the terms of the Non-Disclosure Agreement executed by the Corporation and
Teradyne.

          20.6  All notices required under this section shall be made pursuant
to Section 19 of this Agreement.

     21.  Changes. Except as otherwise expressly set forth herein, the terms of
          -------
this Agreement may not be modified or amended, or any of the provisions hereof
waived, temporarily or permanently, except pursuant to the written consent of
the Corporation and of the Holders who

                                      -14-
<PAGE>

represent at least two-thirds (2/3) of the Registrable Securities then
outstanding; provided, however, (i) the provisions of Section 20 shall not be
modified, amended or waived without the prior written consent of Intel with
respect to financing terms from the Series G financing or the prior written
consent of Teradyne with respect to financing terms of the Series H financing,
as the case may be, and (ii) any amendment to this Agreement shall treat all
similarly situated Holders equally.

     22.  Counterparts.  This Agreement may be executed in any number of
          ------------
counterparts, and each such counterpart shall be deemed to be an original
instrument. All such counterparts together shall constitute one agreement.

     23.  Headings.  The headings of the various sections of this Agreement have
          --------
been inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.

     24.  Governing Law.  This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of California.

                    [Remainder of page intentionally blank]
     I

                                      -15-
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Fifth Amended and
Restated Registration Rights Agreement as of the date set forth above.

                              CORPORATION:

                              LOGICVISION, INC.

                              By /s/ Vinod K. Agarwal
                                 ---------------------------------
                              Vinod K. Agarwal, President

               SIGNATURE PAGE TO LOGICVISION, INC. SIXTH AMENDED
                   AND RESTATED REGISTRATION RIGHTS AGREEMENT

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