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                                                                     Exhibit 4.2

                        AMERIQUEST TECHNOLOGIES, INC.

                        1998 EQUITY COMPENSATION PLAN

                  The purpose of the AmeriQuest Technologies, Inc. 1998 Equity
Compensation Plan (the "Plan") is to provide (i) designated employees of
AmeriQuest Technologies, Inc. (the "Company") and its subsidiaries, (ii)
certain consultants and advisors who perform services for the Company or its
subsidiaries and (iii) non-employee members of the Board of Directors of the
Company (the "Board") with the opportunity to receive grants of incentive
stock options, nonqualified stock options and stock of the Company. The
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefiting the Company's
shareholders, and will align the economic interests of the participants with
those of the shareholders.

                  1.       Administration

                  (a)      Committee. The Plan shall be administered and
interpreted by a committee appointed by the Board (the "Committee"), which may
consist of "outside directors" as defined under section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and related Treasury
regulations and "non-employee directors" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

                  (b)      Committee Authority. The Committee shall have the
sole authority to (i) determine the individuals to whom grants shall be made
under the Plan, (ii) determine the type, size and terms of the grants to be
made to each such individual, (iii) determine the time when the grants will be
made and the duration of any applicable exercise or restriction period,
including the criteria for exercisability and the acceleration of
exercisability and (iv) deal with any other matters arising under the Plan.

                  (c)      Committee Determinations. The Committee shall have
full power and authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding
on all persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to
similarly situated individuals.

                  2.       Grants

                  Awards under the Plan may consist of grants of incentive
stock options ("Incentive Stock Options") and nonqualified stock options
("Nonqualified Stock Options") as described in Section 5 (Incentive Stock
Options and Nonqualified Stock Options are collectively referred to as
"Options") and stock grants as described in Section 6 ("Stock Grants")
(Options and Stock Grants are hereinafter collectively referred to as
"Grants"). All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee
to the individual in a grant instrument or an amendment to the grant
instrument (the "Grant Instrument"). The Committee shall approve the form and
provisions of each Grant Instrument. Grants under a particular Section of the
Plan need not be uniform as among the grantees.

                  3.       Shares Subject to the Plan

                  (a)      Shares Authorized. Subject to adjustment as
described below, the aggregate number of shares of common stock of the Company
("Company Stock") that may be issued or transferred under the Plan are
4,700,000 shares. After a Public Offering, the maximum aggregate number of
shares of Company Stock that shall

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be subject to Grants made under the Plan to any individual during any calendar
year shall be 800,000 shares, subject to adjustment as described below. The
shares may be authorized but unissued shares of Company Stock or reacquired
shares of Company Stock, including shares purchased by the Company on the open
market for purposes of the Plan. If and to the extent Options granted under
the Plan terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised or if any shares subject to a Stock
Grant are forfeited, the shares subject to such Grants shall again be
available for purposes of the Plan.

                  (b)      Adjustments. If there is any change in the number
or kind of shares of Company Stock outstanding (i) by reason of a stock
dividend, spin-off, recapitalization, stock split, or combination or exchange
of shares, (ii) by reason of a merger, reorganization or consolidation in
which the Company is the surviving corporation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a
class without the Company's receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spin-off or the Company's payment of an extraordinary dividend or
distribution, the maximum number of shares of Company Stock available for
Grants, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Grants, the kind of shares issued under the Plan, and
the price per share of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in
the kind or value of, issued shares of Company Stock to preclude, to the
extent practicable, the enlargement or dilution of rights and benefits under
such Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.

                  4.       Eligibility for Participation

                  (a)      Eligible Persons. All employees of the Company and
its subsidiaries ("Employees"), including Employees who are officers or
members of the Board, and members of the Board who are not Employees
("Non-Employee Directors") shall be eligible to participate in the Plan.
Consultants and advisors who perform services for the Company or any of its
subsidiaries ("Key Advisors") shall be eligible to participate in the Plan if
the Key Advisors render bona fide services and such services are not in
connection with the offer or sale of securities in a capital-raising
transaction.

                  (b).     Selection of Grantees. The Committee shall select
the Employees, Non-Employee Directors and Key Advisors to receive Grants and
shall determine the number of shares of Company Stock subject to a particular
Grant in such manner as the Committee determines. Employees, Key Advisors and
Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as "Grantees".

                  5.       Granting of Options

                  (a)      Number of Shares. The Committee shall determine the
number of shares of Company Stock that will be subject to each Grant of
Options to Employees, Non-Employee Directors and Key Advisors.

                  (b)      Type of Option and Price.

                           (i)      The Committee may grant Incentive Stock
Options that are intended to qualify as "incentive stock options" within the
meaning of section 422 of the Code or Nonqualified Stock Options that are not
intended so to qualify or any combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions
set forth herein. Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options may be granted to Employees, Non-Employee Directors
and Key Advisors.

                           (ii)     The purchase price (the "Exercise Price")
of Company Stock subject to an Option shall be determined by the Committee and
may be equal to, greater than, or less than the Fair Market Value (as defined
below) of a share of Company Stock on the date the Option is granted;
provided, however, that (x) the Exercise Price of an Incentive Stock Option
shall be equal to, or greater than, the Fair Market Value of a share of
Company Stock on the date the Incentive Stock Option is granted and (y) an
Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting

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power of all classes of stock of the Company or any parent or subsidiary of the
Company, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of Company Stock on the date of grant.

                           (iii)    If the Company Stock is publicly traded,
then the Fair Market Value per share shall be determined as follows: (x) if
the principal trading market for the Company Stock is a national securities
exchange or the Nasdaq National Market, the last reported sale price thereof
on the relevant date or (if there were no trades on that date) the latest
preceding date upon which a sale was reported, or (y) if the Company Stock is
not principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Company Stock
is not publicly traded or, if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, the Fair
Market Value per share shall be as determined by the Committee.

                  (c) Option Term. The Committee shall determine the term of
each Option. The term of any Option shall not exceed ten years from the date of
grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.

                  (d)      Exercisability of Options. Options shall become
exercisable in accordance with such terms and conditions, consistent with the
Plan, as may be determined by the Committee and specified in the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.

                  (e)      Termination of Employment, Disability or Death.

                           (i)      Except as provided below, an Option may
only be exercised while the Grantee is employed by, or providing service to,
the Company as an Employee, Key Advisor or member of the Board. In the event
that a Grantee ceases to be employed by, or provide service to, the Company
for any reason other than a "disability", death, or termination for "cause",
any Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within 90 days after the date on which the Grantee ceases to
be employed by, or provide service to, the Company (or within such other
period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Company shall terminate as of such date.

                           (ii)     In the event the Grantee ceases to be
employed by, or provide service to, the Company on account of a termination
for "cause" by the Company, any Option held by the Grantee shall terminate as
of the date the Grantee ceases to be employed by, or provide service to, the
Company. In addition, notwithstanding any other provisions of this Section 5,
if the Committee determines that the Grantee has engaged in conduct that
constitutes "cause" at any time while the Grantee is employed by, or providing
service to, the Company or after the Grantee's termination of employment or
service, any Option held by the Grantee shall immediately terminate, and the
Grantee shall automatically forfeit all shares underlying any exercised
portion of an Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the Exercise Price paid by the
Grantee for such shares.

                           (iii)    In the event the Grantee ceases to be
employed by, or provide service to, the Company because the Grantee is
"disabled", any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee
ceases to be employed by, or provide service to, the Company (or within such
other period of time as may be specified by the Committee), but in any event
no later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be
employed by, or provide service to, the Company shall terminate as of such
date.

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                           (iv)     If the Grantee dies while employed by, or
providing service to, the Company or within 90 days after the date on which
the Grantee ceases to be employed or provide service on account of a
termination specified in Section 5(e)(i) above (or within such other period of
time as may be specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or provide
service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Grantee's Options that are not otherwise exercisable as of the date
on which the Grantee ceases to be employed by, or provide service to, the
Company shall terminate as of such date.

                           (v)      For purposes of this Section 5(e) and
                  Section 6:

                           (A)      The term "Company" shall mean the Company
                  and its parent and subsidiary corporations.

                           (B)      "Employed by, or provide service to, the
                  Company" shall mean employment or service as an Employee,
                  Key Advisor or member of the Board (so that, for purposes of
                  exercising Options and satisfying conditions with respect to
                  Stock Grants, a Grantee shall not be considered to have
                  terminated employment or service until the Grantee ceases to
                  be an Employee, Key Advisor and member of the Board), unless
                  the Committee determines otherwise.

                           (C)      "Disability" shall mean a Grantee's
                  becoming disabled within the meaning of section 22(e)(3) of
                  the Code.

                           (D)      "Cause" shall mean, except to the extent
                  specified otherwise by the Committee, a finding by the
                  Committee that the Grantee (i) has breached his or her
                  employment or service contract with the Company, (ii) has
                  been engaged in disloyalty to the Company, including,
                  without limitation, fraud, embezzlement, theft, commission
                  of a felony or proven dishonesty in the course of his or her
                  employment or service, (iii) has disclosed trade secrets or
                  confidential information of the Company to persons not
                  entitled to receive such information, or (iv) has engaged in
                  such other conduct detrimental to the interests of the
                  Company as the Committee considers to be "cause."

                  (f)      Exercise of Options. A Grantee may exercise an
Option that has become exercisable, in whole or in part, by delivering a
notice of exercise to the Company with payment of the Exercise Price. The
Grantee shall pay the Exercise Price for an Option as specified by the
Committee (x) in cash, (y) with the approval of the Committee, by delivering
shares of Company Stock owned by the Grantee (including Company Stock acquired
in connection with the exercise of an Option, subject to such restrictions as
the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the Exercise Price or (z) by such other method as the
Committee may approve, including payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board. Shares of
Company Stock used to exercise an Option shall have been held by the Grantee
for the requisite period of time to avoid adverse accounting consequences to
the Company with respect to the Option. The Grantee shall pay the Exercise
Price and the amount of any withholding tax due (pursuant to Section 7) at the
time of exercise.

                  (g)      Limits on Incentive Stock Options. Each Incentive
Stock Option shall provide that, if the aggregate Fair Market Value of the
stock on the date of the grant with respect to which Incentive Stock Options
are exercisable for the first time by a Grantee during any calendar year,
under the Plan or any other stock option plan of the Company or a parent or
subsidiary, exceeds $100,000, then the Option, as to the excess, shall be
treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be
granted to any person who is not an Employee of the Company or a parent or
subsidiary (within the meaning of section 424(f) of the Code).

                  6.       Stock Grants

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                  The Committee may issue or transfer shares of Company Stock
to an Employee, Non-Employee Director or Key Advisor under a Stock Grant of
restricted or unrestricted stock, upon such terms as the Committee deems
appropriate. The following provisions are applicable to Stock Grants:

                  (a)      General Requirements. Shares of Company Stock
issued or transferred pursuant to Stock Grants may be issued or transferred
for consideration or for no consideration, such as pursuant to a bonus
program, as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Company Stock shall lapse
over a period of time or according to such performance or other criteria as
the Committee deems appropriate. The period of time during which the Company
Stock will remain subject to restrictions will be designated in the Grant
Instrument as the "Restriction Period."

                  (b)      Number of Shares. The Committee shall determine the
number of shares of Company Stock to be issued or transferred pursuant to a
Stock Grant and any restrictions applicable to such shares.

                  (c)      Requirement of Employment or Service. If the
Grantee ceases to be employed by, or provide service to, the Company (as
defined in Section 5(e)) during a period designated in the Grant Instrument as
the Restriction Period, or if other specified conditions are not met, the
Stock Grant shall terminate as to all shares covered by the Grant as to which
the restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.

                  (d)      Restrictions on Transfer and Legend on Stock
Certificate. During the Restriction Period, a Grantee may not sell, assign,
transfer, pledge or otherwise dispose of the shares of restricted stock
covered by the Stock Grant except to a Successor Grantee under Section 8(a).
Each certificate for a share of restricted Company Stock shall contain a
legend giving appropriate notice of the restrictions in the Grant. The Grantee
shall be entitled to have the legend removed from the stock certificate
covering the shares subject to restrictions when all restrictions on such
shares have lapsed. The Committee may determine that the Company will not
issue certificates for shares of restricted Company Stock until all
restrictions on such shares have lapsed, or that the Company will retain
possession of certificates for such shares until all restrictions on such
shares have lapsed.

                  (e)      Right to Vote and to Receive Dividends. Unless the
Committee determines otherwise, during the Restriction Period, the Grantee
shall have the right to vote shares of restricted Company Stock and to receive
any dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee.

                  (f)      Lapse of Restrictions. All restrictions imposed on
restricted Company Stock shall lapse upon the expiration of the applicable
Restriction Period and the satisfaction of all conditions imposed by the
Committee. The Committee may determine, as to any or all restricted Stock
Grants, that the restrictions shall lapse without regard to any Restriction
Period.

                  7.       Withholding of Taxes

                  (a)      Required Withholding. All Grants under the Plan
shall be subject to applicable federal (including FICA), state and local tax
withholding requirements. The Company may require that the Grantee or other
person receiving or exercising Grants pay to the Company the amount of any
federal, state or local taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.

                  (b)      Election to Withhold Shares. If the Committee so
permits, a Grantee may elect to satisfy the Company's income tax withholding
obligation with respect to a Grant by having shares withheld up to an amount
that does not exceed the Grantee's minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities. The election must
be in a form and manner prescribed by the Committee and shall be subject to
the prior approval of the Committee.

                  8.       Transferability of Grants

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                  (a)      Nontransferability of Grants. Except as provided
below, only the Grantee may exercise rights under a Grant during the Grantee's
lifetime. A Grantee may not transfer those rights except by will or by the
laws of descent and distribution or, with respect to Grants other than
Incentive Stock Options, if permitted in any specific case by the Committee,
pursuant to a domestic relations order (as defined under the Code or Title I
of the Employee Retirement Income Security Act of 1974, as amended, or the
regulations thereunder). When a Grantee dies, the personal representative or
other person entitled to succeed to the rights of the Grantee ("Successor
Grantee") may exercise such rights. A Successor Grantee must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Grantee's will or under the applicable laws of descent and distribution.

                   (b)     Transfer of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may provide, in a Grant
Instrument, that a Grantee may transfer Nonqualified Stock Options to family
members, one or more trusts for the benefit of family members, or one or more
partnerships of which family members are the only partners, according to such
terms as the Committee may determine; provided that the Grantee receives no
consideration for the transfer of an Option and the transferred Option shall
continue to be subject to the same terms and conditions as were applicable to
the Option immediately before the transfer.

                  9.       Change of Control of the Company

                  As used herein, a "Change of Control" shall be deemed to
have occurred if:

                  (a)      Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes a "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing more than 50% of the voting power of the then
outstanding securities of the Company (other than pursuant to a merger or
consolidation of the Company where the shareholders of the Company,
immediately prior to the merger or consolidation, will beneficially own,
immediately after the merger or consolidation, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
surviving corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote);

                  (b)      The shareholders of the Company approve (or, if
shareholder approval is not required, the Committee approves) an agreement
providing for (i) the merger or consolidation of the Company with another
corporation where the shareholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such shareholders to more than 50%
of all votes to which all shareholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote), (ii) the sale
or other disposition of all or substantially all of the assets of the Company,
or (iii) a liquidation or dissolution of the Company;

                  (c)      Any person has commenced a tender offer or exchange
offer for 30% or more of the voting power of the then outstanding shares of
the Company; or

                  (d)      After the date this Plan is approved by the
shareholders of the Company, directors are elected such that a majority of the
members of the Board shall have been members of the Board for less than two
years, unless the election or nomination for election of each new director who
was not a director at the beginning of such two-year period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.

                  10.      Consequences of a Change of Control

                  (a)      Notice and Acceleration. Upon a Change of Control,
unless the Committee determines otherwise, (i) the Company shall provide each
Grantee with outstanding Grants written notice of such Change of Control, (ii)
all outstanding Options shall automatically accelerate and become fully
exercisable and (iii) the restrictions and conditions on all outstanding Stock
Grants shall immediately lapse.

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                  (b)      Assumption of Grants. Upon a Change of Control
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options that are not exercised shall be assumed by, or
replaced with comparable options by, the surviving corporation.

                   (c)     Other Alternatives. Notwithstanding the foregoing,
subject to subsection (d) below, in the event of a Change of Control, the
Committee may take one or both of the following actions: the Committee may (i)
require that Grantees surrender their outstanding Options in exchange for a
payment by the Company, in cash or Company Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceeds the Exercise Price of the Options, or (ii) after giving
Grantees an opportunity to exercise their outstanding Options, terminate any
or all unexercised Options at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.

                  (d)      Limitations. Notwithstanding anything in the Plan
to the contrary, in the event of a Change of Control, the Committee shall not
have the right to take any actions described in the Plan (including without
limitation actions described in Subsection (c) above) that would make the
Change of Control ineligible for pooling of interests accounting treatment or
that would make the Change of Control ineligible for desired tax treatment if,
in the absence of such right, the Change of Control would qualify for such
treatment and the Company intends to use such treatment with respect to the
Change of Control.

                  11.      Requirements for Issuance or Transfer of Shares. No
Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance
or transfer of such Company Stock have been complied with to the satisfaction
of the Committee. The Committee shall have the right to condition any Grant
made to any Grantee hereunder on such Grantee's undertaking in writing to
comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as
a result of any applicable law, regulation or official interpretation thereof,
and certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or
transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.

                  12.      Amendment and Termination of the Plan

                  (a)      Amendment. The Committee may amend or terminate the
Plan at any time; provided, however, that the Committee shall not amend the
Plan without shareholder approval if such approval is required in order for
Incentive Stock Options granted or to be granted under the Plan to meet the
requirements of section 422 of the Code or such approval is required in order
to exempt compensation under the Plan from the deduction limit under section
162(m) of the Code.

                  (b)      Termination of Plan. The Plan shall terminate on
the day immediately preceding the tenth anniversary of its effective date,
unless the Plan is terminated earlier by the Committee or is extended by the
Committee with the approval of the shareholders.

                  (c)      Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made shall
not materially impair the rights of a Grantee unless the Grantee consents or
unless the Committee acts under Section 18(b). The termination of the Plan
shall not impair the power and authority of the Committee with respect to an
outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended under Section 18(b) or may be amended by
agreement of the Company and the Grantee consistent with the Plan.

                  (d)      Governing Document.  The Plan shall be the
controlling document.  No other statements, representations, explanatory
materials or examples, oral or written, may amend the Plan in any manner.  The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.

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                  (e)      Funding of the Plan

                  This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under this Plan. In
no event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants.

                  14.      Rights of Participants

                  Nothing in this Plan shall entitle any Employee, Key
Advisor, Non-Employee Director or other person to any claim or right to be
granted a Grant under this Plan. Neither this Plan nor any action taken
hereunder shall be construed as giving any individual any rights to be
retained by or in the employ of the Company or any other employment rights.

                  15.      No Fractional Shares

                  No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu
of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

                  16.      Headings

                  Section headings are for reference only. In the event of a
conflict between a title and the content of a Section, the content of the
Section shall control.

                  17.      Effective Date of the Plan.  Subject to approval by
the Company's shareholders, the Plan shall be effective on January 28, 1999.

                  18.      Miscellaneous

                  (a)      Grants in Connection with Corporate Transactions
and Otherwise. Nothing contained in this Plan shall be construed to (i) limit
the right of the Committee to make Grants under this Plan in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business or assets of any corporation, firm or association, including
Grants to employees thereof who become Employees of the Company, or for other
proper corporate purposes, or (ii) limit the right of the Company to grant
stock options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant made by such corporation. The terms and
conditions of the substitute grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives. The
Committee shall prescribe the provisions of the substitute grants.

                  (b)      Compliance with Law. The Plan, the exercise of
Options and the obligations of the Company to issue or transfer shares of
Company Stock under Grants shall be subject to all applicable laws and to
approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with
all applicable provisions of Rule 16b-3 or its successors under the Exchange
Act. In addition, it is the intent of the Company that the Plan and applicable
Grants under the Plan comply with the applicable provisions of section 162(m)
of the Code and section 422 of the Code. To the extent that any legal
requirement of section 16 of the Exchange Act or section 162(m) or 422 of the
Code as set forth in the Plan ceases to be required under section 16 of the
Exchange Act or section 162(m) or 422 of the Code, that Plan provision shall
cease to apply. The Committee may revoke any Grant if it is contrary to law or
modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.

                                      9

<PAGE>   9

                  (c)      Governing Law. The validity, construction,
interpretation and effect of the Plan and Grant Instruments issued under the
Plan shall be governed and construed by and determined in accordance with the
laws of the State of Delaware, without giving effect to the conflict of laws
provisions thereof.

                                      10<PAGE>

                                                                     Exhibit 4.4

THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT
UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES IS MADE-PURSUANT TO SECURITIES AND EXCHANGE COMMISSION
RULE 144.

             WARRANT TO PURCHASE COMMON STOCK OF LOGICVISION, INC.
                            (Subject to Adjustment)

NO.

     THIS CERTIFIES THAT, for value received,           , or its permitted
registered assigns ("Holder"), is entitled, subject to the terms and conditions
                     ------
of this Warrant, at any time or from time to time after January 13, 1999 (the
"Effective Date"), and before 5:00 p.m. Pacific Time on January 13, 2009,
subject early termination pursuant to an Early Termination Event (the

"Expiration Date") to purchase from  LogicVision, Inc., a California corporation
----------------
(the "Company"),                 (      ) shares of Common Stock of the Company
at a price per share of Fifty Cents ($0.50) (the "Purchase Price" ).  Both the
                                                  --------------
number of shares of Common Stock purchasable upon exercise of this Warrant and
the Purchase Price are subject to adjustment and change as provided herein.
This Warrant is issued pursuant to that certain Securities Purchase Agreement,
dated January 13, 1999 (the "Purchase Agreement"), between the Company and
                             ------------------
Holder.

1.   CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have
the following respective meanings:

     "Early Termination Event" shall be the closing of a Sale of the Company.
      -----------------------
In the event of a proposed transaction of the kind described above, the Company
shall notify Holder in writing at least thirty (30) days prior to the
consummation of such event or transaction.  However, if the Holder has sent a
Notice of Exercise on or before the expiration of the Exercise Period and the
Holder is prevented from exercising the Warrant on or before the end of the
Exercise Period due to any applicable waiting periods imposed by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR Act Restrictions") the
Holder may complete the process of exercising the Warrant, for a period of ten
(10) days following termination of the HSR Act Restrictions.

     "Fair Market Value" of a share of Common Stock as of a particular date
      -----------------
shall mean:

          (a) If traded on a securities exchange or the Nasdaq National Market,
the Fair Market Value shall be deemed to be the average of the closing prices of
the Common Stock of the Company on such exchange or market over the 5 business
days ending immediately prior to
<PAGE>

the applicable date of valuation;

          (b) If actively traded over-the-counter, the Fair Market Value shall
be deemed to be the average of the closing bid prices over the 30-day period
ending immediately prior to the applicable date of valuation; and

          (c) If there is no active public market, the Fair Market Value shall
be the value thereof, as agreed upon by the Company and the Holder; provided,
however, that if the Company and the Holder cannot agree on such value, such
value shall be determined by an independent valuation firm experienced in
valuing businesses such as the Company and jointly selected in good faith by the
Company and the Holder. Fees and expenses of the valuation firm shall be paid
for by the Company.

     "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
      -------
1976.

     "IPO" shall mean the Company's first firm commitment underwritten public
      ---
offering of the Company's Common Stock pursuant to a registration statement
filed with the Securities and Exchange Commission.

     "Registered Holder" shall mean any Holder in whose name this Warrant is
      -----------------
registered upon the books and records maintained by the Company.

     "Sale of the Company" shall mean a merger of the Company with or into any
      -------------------
other corporation or corporations (or other Person) in which the shareholders of
this Company immediately before the merger do not hold more than 50% of the
voting power of the surviving corporation immediately after the merger, a
statutory share exchange with any other corporation, or a sale, conveyance or
disposition of all or substantially all of the assets of this Company in which
shareholders of this Company immediately before such exchange hold neither more
than 50% of the voting power of this Company immediately after such exchange nor
more than 50% of the voting power of an entity which holds more than 50% of the
voting power of this Company immediately after the exchange, an exclusive
license of all or substantially all of the Company's intellectual property used
in generating all or substantially all of the Company's revenues for the Company
or the effectuation by this Company of a transaction or series of related
transactions in which more than 50% of the voting power of this Company is
disposed of (a "Sale of the Company").

     "Warrant" as used herein, shall include this Warrant and any warrant
      -------
delivered in substitution or exchange therefor as provided herein.

     "Common Stock" shall mean the Common Stock of the Company and any other
      ------------
securities at any time receivable or issuable upon exercise of this Warrant.

2.   EXERCISE OF WARRANT

     2.1.  Payment.  Subject to compliance with the terms and conditions of this
           -------
Warrant and applicable securities laws, this Warrant may be exercised, in whole
or in part at any time or from time to time, on or before the Expiration Date by
the delivery (including, without limitation, delivery by facsimile) of the form
of Notice of Exercise attached hereto as Exhibit I (the "Notice of

                                       2
<PAGE>

Exercise"), duly executed by the Holder, at the principal office of the Company,
and as soon as practicable after such date, surrendering

          (a) this Warrant at the principal office of the Company, and

          (b) payment, (i) in cash (by check) or by wire transfer, (ii) by
cancellation by the Holder of indebtedness of the Company to the Holder; or
(iii) by a combination of Common_Stock (i) and (ii), of an amount equal to the
product obtained by multiplying the number of shares of Common Stock being
purchased upon such exercise by the then effective Purchase Price (the "Exercise
Amount"), except that if Holder is subject to HSR Act Restrictions (as defined
in Section 2.5 below), the Exercise Amount shall be paid to the Company within
five (5) business days of the termination of all HSR Act Restrictions.

     2.2. Net Issue Exercise.  In lieu of the payment methods set forth in
          ------------------
Section 2.1 (b) above, the Holder may elect to exchange all or some of the
Warrant for shares of Common Stock equal to the value of the amount of the
Warrant being exchanged on the date of exchange.  If Holder elects to exchange
this Warrant as provided in this Section 2.2, Holder shall tender to the Company
the Warrant for the amount being exchanged, along with written notice of
Holder's election to exchange some or all of the Warrant, and the Company shall
issue to Holder the number of shares of the Common Stock computed using the
following formula:

          X = Y (A-B)
              -------
                 A

          Where X = the number of shares of Common Stock to be issued to Holder.

          Y = the number of shares of Common Stock purchasable under the amount
          of the Warrant being exchanged (as adjusted to the date of such
          calculation).

          A = the Fair Market Value of one share of the Company's Common Stock.

          B = Purchase Price (as adjusted to the date of such calculation).

          All references herein to an "exercise" of the Warrant shall include an
exchange pursuant to this Section 2.2. Upon receipt of a written notice of the
Company's intention to raise capital by selling shares of Common Stock in an IPO
(the "IPO Notice"), which notice shall be delivered to Holder at least forty-
      ----------
five (45) but not more than ninety (90) days before the anticipated date of the
filing with the Securities and Exchange Commission of the registration statement
associated with the IPO, the Holder shall promptly notify the Company whether or
not the Holder will exercise this Warrant pursuant to this Section 2.2 prior to
consummation of the IPO. Notwithstanding whether or not an IPO Notice has been
delivered to Holder or any other provision of this Warrant to the contrary, if
Holder decides to exercise this Warrant while a registration statement is on
file with the Securities and Exchange Commission (the "SEC") in connection with
                                                       ---
the IPO, this Warrant shall be deemed exercised on the consummation of the IPO
and the Fair Market Value of a share of Common Stock will be the price at which
one share of Common Stock was sold to the public in the IPO. If Holder has
elected to exercise this Warrant

                                       3
<PAGE>

pursuant to this Section 2.2 while a registration statement is on file with the
Securities and Exchange Commission in connection with an IPO and the IPO is not
consummated, then Holder's exercise of this Warrant shall not be effective
unless Holder confirms in writing Holder's intention to go forward with the
exercise of this Warrant.

     2.3.  "Easy Sale" Exercise.  In lieu of the payment methods set forth in
            -------------------
Section 2.1 (b) above, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay the Exercise Amount
through a "same day sale" commitment from the Holder (and if applicable a
broker-dealer that is a member of the National Association of Securities Dealers
(a "NASD Dealer")), whereby the Holder irrevocably elects to exercise this
Warrant and to sell at least that number of Shares so purchased to pay the
Exercise Amount (and up to all of the Shares so purchased) and the Holder (or,
if applicable, the NASD Dealer) commits upon sale (or, in the case of the NASD
Dealer, upon receipt) of such Shares to forward the Exercise Amount directly to
the Company, with any sale proceeds in excess of the Exercise Amount being for
the benefit of the Holder.

     2.4.  Stock Certificates: Fractional Shares.  As soon as practicable on or
           -------------------------------------
after the date this Warrant is exercised, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of whole shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share equal to such fraction of
the current Fair Market Value of one whole share of Common Stock as of the date
of exercise of this Warrant.  No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this Warrant.

     2.5.  HSR Act.  The Company hereby acknowledges that exercise of this
           -------
Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the HSR Act and that Holder may be prevented from exercising
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR Act Restrictions").  If on or before the Expiration
Date Holder has sent the Notice of Exercise to Company and Holder has not been
able to complete the exercise of this Warrant prior to the Expiration Date
because of HSR Act Restrictions, the Holder shall be entitled to complete the
process of exercising this Warrant in accordance with the procedures contained
herein notwithstanding the fact that completion of the exercise of this Warrant
would take place after the Expiration Date.

     2.6.  Partial Exercise; Effective Date of Exercise.  In case of any partial
           --------------------------------------------
exercise of this Warrant, the Company shall cancel this Warrant upon surrender
hereof and shall execute and deliver a new Warrant of like tenor and date for
the balance of the shares of Common Stock purchasable hereunder.  This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above.  However,
if Holder is subject to HSR Act filing requirements this Warrant shall be deemed
to have been exercised on the date immediately following the date of the
expiration of all HSR Act Restrictions. The person entitled to receive the
shares of Common Stock issuable upon exercise of this Warrant shall be treated
for all purposes as the holder of record of such shares as of the close of
business on the date the Holder is deemed to have exercised this Warrant.

                                       4
<PAGE>

     2.7.  Sale of the Company.  In the Event of a Sale of the Company, the
           -------------------
Company shall give written notice to the Holder of such Sale of the Company not
less than thirty (30) days prior to the closing date thereof.  This Warrant
shall automatically be exercised pursuant to Section 2.2 above immediately
preceding the closing of such Sale of the Company (the "Sale"), if not
previously exercised, unless the Holder shall notify the Company prior to the
Sale that this Warrant is not to be so exercised; provided that noting in this
sentence shall extend the term of the Warrant beyond the Expiration Date.  The
exercise pursuant to this Section 2.7 shall be contingent upon the actual
closing of the Sale of the Company.  If such closing does not occur, the
exercise pursuant to this Section 2.7 shall not be effected.

3.   VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the exercise
of this Warrant shall be validly issued, fully paid and non-assessable, and the
Company shall pay all taxes and other governmental charges that may be imposed
in respect of the issue or delivery thereof. The Company shall not be required
to pay any tax or other charge imposed in connection with any transfer involved
in the issuance of any certificate for shares of Common Stock in any name other
than that of the Registered Holder of this Warrant, and in such case the Company
shall not be required to issue or deliver any stock certificate or security
until such tax or other charge has been paid, or it has been established to the
Company's reasonable satisfaction that no tax or other charge is due.

4.   ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares of
Common Stock issuable upon exercise of this Warrant (or any shares of stock or
other securities or property receivable or issuable upon exercise of this
Warrant) and the Purchase Price are subject to adjustment upon occurrence of the
following events:

     4.1.  Adjustment for Stock Splits, Stock Subdivisions or Combinations of
           ------------------------------------------------------------------
Shares.  The Purchase Price of this Warrant shall be proportionally decreased
------
and the number of shares of Common Stock issuable upon exercise of this Warrant
(or any shares of stock or other securities at the time issuable upon exercise
of this Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company's Common Stock.  The Purchase Price of this Warrant
shall be proportionally increased and the number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the Company's Common
Stock.

     4.2.  Adjustment for Dividends or Distributions of Stock or Other
           -----------------------------------------------------------
Securities or Property.  In case the Company shall make or issue, or shall fix a
----------------------
record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in (a) securities of the Company or (b) assets (excluding cash dividends
paid or payable solely out of retained earnings), then, in each such case, the
Holder of this Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other distribution, shall
receive, in addition to the shares of Common Stock (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to

                                       5
<PAGE>

which such Holder would have been entitled upon such date if such Holder had
exercised this Warrant on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained such
shares and/or all other additional stock available by it as aforesaid during
such period giving effect to all adjustments called for by this Section 4.

     4.3.  Reclassification.  If the Company, by reclassification of securities
           ----------------
or otherwise, shall change any of the securities as to which purchase rights
under this Warrant exist into the same or a different number of securities of
any other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Purchase Price therefore shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 4.  No adjustment
shall be made pursuant to this Section 4.3 upon any conversion or redemption of
the Common Stock which is the subject of Section 4.5.

     4.4.  Adjustment for Capital Reorganization: Merger Consolidation.  In case
           -----------------------------------------------------------
of any capital reorganization of the capital stock of the Company (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the Company with or into
another corporation, or the sale of all or substantially all the assets of the
Company then, and in each such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the
Holder of this Warrant shall thereafter be entitled to receive upon exercise of
this Warrant, subject to an Early Termination Event, during the period specified
herein and upon payment of the Purchase Price then in effect, the number of
shares of stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon exercise of this Warrant would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 4.  The foregoing provisions of this
Section 4.4 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant.
If the per-share consideration payable to the Holder hereof for shares in
connection with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors.  In all events, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably maybe, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

     4.5.  Conversion of Common Stock.  In case all or any portion of the
           --------------------------
authorized and outstanding shares of Common Stock of the Company are redeemed or
converted or reclassified into other securities or property pursuant to the
Company's Articles of Incorporation or otherwise, or the Common Stock otherwise
ceases to exist, then, in such case, the Holder of this Warrant, upon exercise
hereof at any time after the date on which the Common Stock is so redeemed or
converted, reclassified or ceases to exist (the "Termination Date'), shall
receive, in lieu of the number of shares

                                       6
<PAGE>

of Common Stock that would have been issuable upon such exercise immediately
prior to the Termination Date, the securities or property that would have been
received if this Warrant had been exercised in full and the Common Stock
received thereupon had been simultaneously converted immediately prior to the
Termination Date, all subject to further adjustment as provided in this Warrant.
Additionally, the Purchase Price shall be immediately adjusted to equal the
quotient obtained by dividing (x) the aggregate Purchase Price of the maximum
number of shares of Common Stock for which this Warrant was exercisable
immediately prior to the Termination Date by (y) the number of shares of Common
Stock of the Company for which this Warrant is exercisable immediately after the
Termination Date, all subject to further adjustment as provided herein.

5.   CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.

6.   LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to it, and (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
execute and deliver in lieu thereof a new Warrant of like tenor as the lost,
stolen, destroyed or mutilated Warrant.

7.   RESERVATION OF COMMON STOCK. The Company hereby covenants that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of shares of Common Stock or other shares of capital stock of the
Company as are from time to time issuable upon exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Articles of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon exercise of this Warrant. All such shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and non-
assessable, free and clear of all liens, security interests, charges and other
encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. Issuance of this Warrant shall constitute full authority to the
Company's officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock and
Common Stock upon the exercise of this Warrant.

8.   TRANSFER AND EXCHANGE. Subject to the terms and conditions of this Warrant
and compliance with all applicable securities laws, this Warrant and all rights
hereunder may be transferred to any Registered Holder's parent, subsidiary or
affiliate, in whole or in part, on the books of the Company maintained for such
purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the

                                       7
<PAGE>

Company will issue and deliver to the Registered Holder a new Warrant or
Warrants with respect to the shares of Common Stock not so transferred. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that when this Warrant shall have been so endorsed, the person in
possession of this Warrant may be treated by the Company, and all other persons
dealing with this Warrant, as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented hereby, any notice to the
contrary notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company, the Company may treat
the Registered Holder hereof as the owner for all purposes.

9.   RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the SEC under the
Securities Act of 1933, as amended (the "1933 Act), covering the disposition or
sale of this Warrant or the Common Stock issued or issuable upon exercise hereof
or the Common Stock issuable upon conversion thereof, as the case may be, and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer, pledge, or hypothecate any or all such Warrants
or Common Stock, as the case may be, unless either (i) the Company has received
an opinion of counsel, in form and substance reasonably satisfactory to the
Company, to the effect that such registration is not required in connection with
such disposition or (ii) the sale of such securities is made pursuant to SEC
Rule 144.

10.  COMPLIANCE WITH SECURITIES LAWS.  By acceptance of this Warrant, the holder
hereby represents, Warrants and covenants that any shares of stock purchased
upon exercise of this Warrant or acquired upon conversion thereof shall be
acquired for investment only and not with a view to, or for sale in connection
with, any distribution thereof; that the Holder has had such opportunity as such
Holder has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Holder to evaluate the merits and
risks of its investment in the company; that the Holder is able to bear the
economic risk of holding such shares as may be acquired pursuant to the exercise
of this Warrant for an indefinite period; that the Holder understands that the
shares of stock acquired pursuant to the exercise of this Warrant or acquired
upon conversion thereof will not be registered under the 1933 Act (unless
otherwise required pursuant to exercise by the Holder of the registration
rights, if any, previously granted to the registered Holder) and will be
"restricted securities" within the meaning of Rule 144 under the 1933 Act and
that the exemption from registration under Rule 144 will not be available for at
least one year from the date of exercise of this Warrant, subject to
any special treatment by the SEC for exercise of this Warrant pursuant to
Section 2.2, and even then will not be available unless a public market then
exists for the stock, adequate information concerning the Company is then
available to the public, and other terms and conditions of Rule 144 are complied
with; and that all stock certificates representing shares of stock issued to the
Holder upon exercise of this Warrant or upon conversion of such shares may have
affixed thereto a legend substantially in the following form:

     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT), OR UNDER THE SECURITIES LAWS
     OF ANY STATE.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON

                                       8
<PAGE>

     TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
     PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
     TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT
     THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
     INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
     OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
     EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
     AND ANY APPLICABLE STATE SECURITIES LAWS.

11.  NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.
In the absence of affirmative action by such Holder to purchase Common Stock by
exercise of this Warrant no provisions of this Warrant, and no enumeration
herein of the rights or privileges of the Holder hereof shall cause such Holder
hereof to be a stockholder of the Company for any purpose.

12.  REGISTRATION RIGHTS. All shares of Common Stock issuable upon exercise of
this Warrant shall be "Registrable Securities" or such other definition of
securities entitled to registration rights pursuant to the Company's Fourth
Amended and Restated Registration Rights Agreement, dated the date hereof, and
are entitled, subject to the terms and conditions of that agreement, to all
registration rights granted to holders of Registrable Securities thereunder.

13.  NOTICES. All notices and other communication from the Company to the Holder
shall be given in accordance with the Purchase Agreement

14.  HEADINGS. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.

15.  LAW GOVERNING. This Warrant shall be construed and enforced in accordance
with, and governed by, the laws of the State of California.

16.  NO IMPAIRMENT. The Company will not, by amendment of its Articles of
incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Registered Holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock issuable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise, and (b) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and non-
assessable shares of Common Stock upon exercise of this Warrant.

17.  NOTICES OF RECORD DATE.  In case:

                                       9
<PAGE>

     17.1.  the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of this
Warrant), for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities or to receive any other right; or

     17.2.  of any consolidation or merger of the Company with or into another
corporation, any capital reorganization of the Company, any reclassification of
the Capital Stock of the Company, or any conveyance of all or substantially all
of the assets of the Company to another corporation in which holders of the
Company's stock are to receive stock, securities or property of another
corporation; or

     17.3.  of any voluntary dissolution, liquidation or winding-up of the
Company; or

     17.4.  of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or (such stock or
securities as at the time are receivable upon the exercise of this Warrant),
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities), for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up.  Such notice shall be delivered at least
thirty (30) days prior to the date therein specified.

18.  SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.

19.  NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of
this Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to holders of the Company's securities under any other
agreements, except rights that have been waived.

20.  SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. the next business day.

21.  CONFIDENTIALITY AND NONDISCLOSURE. The terms and conditions of this
Warrant, including its existence (the "Warrant Terms-), shall considered
confidential information and any disclosure of the Warrant Terms shall be
governed by Section 9.5 of the Purchase Agreement.

                                       10
<PAGE>

22.  DISPUTE RESOLUTION. The parties agree to negotiate in good faith to resolve
any dispute between them regarding this Warrant. If the negotiations do not
resolve the dispute to the reasonable satisfaction of both parties, then each
party shall nominate one senior officer of the rank of Vice President or higher
as its representative. These representatives shall, within thirty (30) days of a
written request by either party to call such a meeting, meet in person and alone
(except for one assistant for each party) and shall attempt in good faith to
resolve the dispute. If the disputes cannot be resolved by such senior managers
in such meeting, the parties agree that they shall, if requested in writing by
either party, meet within thirty (30) days after such written notification for
one day with an impartial mediator and consider dispute resolution alternatives
other than litigation. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one day mediation, either party
may begin litigation proceedings. This procedure shall be a prerequisite before
taking any additional action hereunder.

                                       11
<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the
Effective Date.

                                    LOGICVISION, INC.

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

                                    -----------------------------------------
                                    Printed Name

                                    -----------------------------------------
                                    Title

              SIGNATURE PAGE TO COMMON STOCK EXTINGUISHING WARRANT

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