Document:

Exhibit 10.7
          NETWOLVES CORPORATION, 2003 STOCK OPTION/STOCK ISSUANCE PLAN

I.  GENERAL PROVISIONS

A.   PURPOSE OF THE PLAN

     This 2003 Stock Option/Stock  Issuance Plan ("Plan") is intended to promote
the interests of NetWolves Corporation, a New York corporation  ("Corporation"),
by providing eligible persons in the employ or service of the Corporation or its
affiliates with the opportunity to acquire a proprietary  interest, or otherwise
increase their proprietary interest, in the Corporation as an incentive for them
to continue in such employ or service.

     Unless  otherwise  defined  herein,  all  capitalized  terms shall have the
meaning assigned to them in the attached Appendix.

B.   STRUCTURE OF THE PLAN

     The Plan shall be divided into two (2) separate equity programs:

     (i) the Option Grant Program  under which  eligible  persons  ("Optionees")
may, at the discretion of the Board,  be granted  options to purchase  shares of
common stock; and

     (ii)  the   Stock   Issuance   Program   under   which   eligible   persons
("Participants") may, at the discretion of the Board, be issued shares of common
stock  directly,  either  through the immediate  purchase of such shares or as a
bonus for services rendered the Corporation (or any Parent or Subsidiary).

     The provisions of Articles One and Four shall apply to both equity programs
under the Plan and shall  accordingly  govern the interests of all persons under
the Plan.

C.   ADMINISTRATION OF THE PLAN

     The Plan shall be  administered  by the  Corporation's  Board of  Directors
("Board"),  or in the discretion of the Board, a committee consisting of no less
than two  Non-Employee  Directors or persons meeting such other  requirements as
may be imposed by Rule 16(b) under the 1934 Act ("Committee").

     The Board or Committee shall have full power and authority  (subject to the
provisions of the Plan) to establish  such rules and  regulations as it may deem
appropriate   for   proper   administration   of  the  Plan  and  to  make  such
determinations  under,  and  issue  such  interpretations  of,  the Plan and any
outstanding  options or stock  issuances  thereunder as it may deem necessary or
advisable.  Decisions of the Board shall be final and binding on all parties who
have an interest in the Plan or any option or stock issuance thereunder.

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D.   ELIGIBILITY

     The persons eligible to participate in the Plan are:

     1.   Employees;

     2.   non-employee  members of the Board or the non-employee  members of the
          board of directors of any Parent or Subsidiary; and

     3.   consultants and other independent advisors who provide services to the
          Corporation, or any parent or subsidiary of the Corporation.

     The Board or Committee  shall have full  authority to  determine,  (i) with
respect to the grants made under the Option Grant Program,  described in Article
Two below,  which eligible persons are to receive the option grants, the time or
times  when those  grants are to be made,  the number of shares to be covered by
each such grant,  the status of the granted option as either an Incentive Option
or a  Non-Statutory  Option,  the time or times  when  each  option is to become
exercisable,  the vesting  schedule (if any) applicable to the option shares and
the maximum  term for which the option is to remain  outstanding,  and (ii) with
respect to stock issuances made under the Stock Issuance  Program,  described in
Article Three,  which eligible persons are to receive such stock issuances,  the
time or times when those  issuances  are to be made,  the number of shares to be
issued to each  Participant,  the vesting  schedule (if any)  applicable  to the
issued  shares  and the  consideration  to be paid by the  Participant  for such
shares.

     The Board or Committee shall have the absolute  discretion  either to grant
options  in  accordance  with the  Option  Grant  Program  or to issue  stock in
accordance with the Stock Issuance Program.

E.   STOCK SUBJECT TO THE PLAN

     The  stock  issuable  under the Plan  shall be shares of the  Corporation's
authorized but unissued or reacquired common stock. The maximum number of shares
of common stock which may be issued under the Plan is 2,400,000 shares.

     Shares of common stock  subject to  outstanding  options shall be available
for  subsequent  issuance under the Plan to the extent (i) the options expire or
terminate  for any reason  prior to  exercise  in full,  or (ii) the options are
cancelled in accordance with the cancellation-regrant provisions of Article Two.
Unvested  shares  issued  under  the Plan and  subsequently  repurchased  by the
Corporation,  at the  option  exercise  or direct  issue  price  paid per share,
pursuant to the  Corporation's  repurchase  rights under the Plan shall be added
back to the number of shares of common stock  reserved  for  issuance  under the
Plan.

     If there is any  change to the common  stock by reason of any stock  split,
stock dividend,  recapitalization,  combination of shares, exchange of shares or
other change  affecting  the  outstanding  common  stock as a class  without the
Corporation's  receipt of consideration,  then appropriate  adjustments shall be
made to (i) the maximum  number  and/or class of securities  issuable  under the
Plan,  and (ii) the number and/or class of securities and the exercise price per
share in effect under each  outstanding  option in order to prevent the dilution
or enlargement of benefits thereunder.

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<PAGE>

     II. OPTION GRANT PROGRAM

     A. OPTION TERMS

     Each  option  shall  be  evidenced  by one or more  documents  in the  form
approved by the Board, and which shall be subject to the provisions of the Plan.

     1.   Exercise Price.

          a.   The  exercise  price  per  share  shall be fixed by the  Board in
               accordance with the following provisions:

               (i)  The exercise price per share shall not be less than the Fair
                    Market  Value per share of common  stock on the option grant
                    date.

               (ii) If the  Optionee  is a 10%  Stockholder,  then the  exercise
                    price per  share  shall  not be less  than one  hundred  ten
                    percent  (110%) of the Fair Market Value per share of common
                    stock on the option grant date for Incentive Options.

          b.   The  exercise  price is payable in cash or check made  payable to
               the  Corporation  upon  exercise  of the  option,  subject to the
               provisions  of  Section  I of  Article  Four  and  the  documents
               evidencing  the option.  If the common stock is registered  under
               Section 12 of the  Securities  Exchange  Act of 1934,  as amended
               ("34 Act") at the time the option is exercised, then the exercise
               price may also be paid as follows:

               (i)  in shares  of common  stock  held for the  requisite  period
                    necessary  to avoid a charge to the  Corporation's  earnings
                    for financial  reporting  purposes and valued at Fair Market
                    Value on the Exercise Date, or

               (ii) to the  extent the option is  exercised  for vested  shares,
                    through a special sale and remittance  procedure pursuant to
                    which the Optionee shall  concurrently  provide  irrevocable
                    instructions (x) to a Corporation-designated  brokerage firm
                    to effect the  immediate  sale of the  purchased  shares and
                    remit to the Corporation, out of the sale proceeds available
                    on the  settlement  date,  sufficient  funds  to  cover  the
                    aggregate  exercise  price payable for the purchased  shares
                    plus all  applicable  Federal,  state and local  income  and
                    employment  taxes required to be withheld by the Corporation
                    by reason of such  exercise  and (y) to the  Corporation  to
                    deliver the  certificates  for the purchased shares directly
                    to such brokerage firm in order to complete the sale.

                                       3
<PAGE>

     Except to the extent the foregoing sale and  remittance  procedure is used,
payment  of the  exercise  price for the  purchased  shares  must be made on the
Exercise Date.

     2. Exercise and Term of Options.  Each option shall be  exercisable at such
time or times,  during  such  period  and for such  number of shares as shall be
determined by the Board or Committee  and set forth in the documents  evidencing
the option  grant.  However,  no option  shall have a term in excess of five (5)
years measured from the option grant date.

     3. Effect of Termination of Service.

          a.   The following  provisions shall govern the exercise of any vested
               option  held  by  the  Optionee  at  the  time  of  cessation  of
               Optionee's employment or rendering of services to the Corporation
               (collectively "Service") or death:

               (i)  Should  the  Optionee  cease to  remain in  Service  for any
                    reason other than death, Disability or Misconduct,  then the
                    Optionee  shall have a period of three (3) months  following
                    the  date of such  cessation  of  Service  during  which  to
                    exercise  each  option  held by such  Optionee to the extent
                    exercisable on the date of such termination.

               (ii) Should Optionee's Service terminate by reason of Disability,
                    then the Optionee  shall have a period of twelve (12) months
                    following the date of such cessation of Service during which
                    to exercise each outstanding option held by such Optionee to
                    the extent exercisable on the date of such termination.

               (iii)If the Optionee  dies while holding an  outstanding  option,
                    then the personal representative of his or her estate or the
                    person or persons to whom the option is transferred pursuant
                    to the Optionee's will or the laws of inheritance shall have
                    a  twelve  (12)-month  period  following  the  date  of  the
                    Optionee's  death to  exercise  such  option  to the  extent
                    exercisable on the date of such termination.

               (iv) Under no  circumstances,  however,  shall any such option be
                    exercisable  after the  specified  expiration  of the option
                    term.

               (v)  All vested  options shall  terminate  upon the expiration of
                    the  applicable  exercise  period or (if  earlier)  upon the
                    expiration of the option term.

          b.   The Board or  Committee  shall have the  discretion,  exercisable
               either at the time an option is  granted or at any time while the
               option remains outstanding, to:

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<PAGE>

               (i)  extend  the period of time for which the option is to remain
                    exercisable  following  Optionee's  cessation  of Service or
                    death from the limited  period  otherwise in effect for that
                    option  to such  greater  period  of time as it  shall  deem
                    appropriate,  but in no event beyond the  expiration  of the
                    option term, and/or

               (ii) permit the  option to be  exercised,  during the  applicable
                    post-Service  exercise period,  not only with respect to the
                    number of  vested  shares  of  common  stock for which  such
                    option  is   exercisable  at  the  time  of  the  Optionee's
                    cessation  of Service  but also with  respect to one or more
                    additional  installments  in which the  Optionee  would have
                    vested  under  the  option  had the  Optionee  continued  in
                    Service.

     4.  Stockholder  Rights.  The holder of an option shall have no stockholder
rights  with  respect to the shares  subject  to the  option  until such  person
exercise the option, pays the exercise price and becomes the recordholder of the
purchased shares.

     5. Limited Transferability of Options. During the lifetime of the Optionee,
the option shall be exercisable only by the Optionee and shall not be assignable
or transferable  other than by will or,  following the Optionee's  death, by the
laws of descent and distribution.

     B.   CORPORATE TRANSACTION

     1. All unvested options shall automatically vest in full if and when either
of the following stockholder approved transactions to which the Corporation is a
party  are  consummated:  (i) a merger  or  consolidation  in  which  securities
possessing  more than fifty percent (50%) of the total combined  voting power of
the Corporation's  outstanding securities are transferred to a person or persons
different from the persons holding those  securities  immediately  prior to such
transaction,  or  (ii)  the  sale,  transfer  or  other  disposition  of  all or
substantially  all  of the  Corporation's  assets  in  complete  liquidation  or
dissolution of the  Corporation.  However,  the shares subject to an outstanding
option  shall not vest on such an  accelerated  basis if and to the extent:  (i)
such option is assumed by the successor  corporation  (or parent thereof) in the
Corporate  Transaction  or  (ii)  such  option  is to be  replaced  with  a cash
incentive  program  of the  successor  corporation  which  preserves  the spread
existing on the unvested option shares at the time of the Corporate  Transaction
and provides for subsequent  payout in accordance with the same vesting schedule
applicable to those  unvested  option shares or (iii) the  acceleration  of such
option is subject to other limitations  imposed by the Board or Committee at the
time of the option grant.

     2. Each option which is assumed in connection with a Corporate  Transaction
shall be appropriately  adjusted,  immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Corporate Transaction,  had the option been
exercised   immediately  prior  to  such  Corporate   Transaction.   Appropriate
adjustments  shall  also be  made to (i) the  number  and  class  of  securities
available  for  issuance  under  the Plan  following  the  consummation  of such
Corporate  Transaction  and (ii) the exercise price payable per share under each
outstanding  option,  provided the  aggregate  exercise  price  payable for such
securities shall remain the same.

                                       5

<PAGE>

     3. The Board or Committee shall have the discretion,  exercisable either at
the time  the  option  is  granted  or at any  time  while  the  option  remains
outstanding,  to  structure  one or more  options  so that those  options  shall
automatically  accelerate  and vest in full  (and any  repurchase  rights of the
Corporation  with respect to the unvested  shares subject to those options shall
immediately terminate) upon the occurrence of a Corporate  Transaction,  whether
or not those options are to be assumed in the Corporate Transaction.

     4. The  Board or  Committee  shall  also have  full  power  and  authority,
exercisable  either at the time the  option is  granted or at any time while the
option remains outstanding,  to structure such option so that the shares subject
to that  option  will  automatically  vest on an  accelerated  basis  should the
Optionee's Service terminate by reason of the Optionee's  involuntary  dismissal
or discharge by the Corporation for reasons other than misconduct  ("Involuntary
Termination")  within a designated period (not to exceed one year) following the
effective  date of any Corporate  Transaction in which the option is assumed and
the repurchase rights applicable to those shares do not otherwise terminate. Any
option so  accelerated  shall remain  exercisable  for the  fully-vested  option
shares until the expiration or sooner termination of the option term.

     5. The portion of any Incentive  Option  accelerated  in connection  with a
Corporate  Transaction  shall remain  exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar  ($100,000.00)  limitation
is not  exceeded.  To  the  extent  such  dollar  limitation  is  exceeded,  the
accelerated  portion of such  option  shall be  exercisable  as a  Non-Statutory
Option under the Federal tax laws.

     6. The grant of options  under the Plan shall in no way affect the right of
the  Corporation  to adjust,  reclassify,  reorganize  or  otherwise  change its
capital or business structure or to merge, consolidate,  dissolve,  liquidate or
sell or transfer all or any part of its business or assets.

                           III. STOCK ISSUANCE PROGRAM

A.   STOCK ISSUANCE TERMS

     Shares of common stock may, upon request by a Participant, be issued at the
discretion of the Board or Committee  under the Stock Issuance  Program  through
direct and immediate  issuances without any intervening option grants. Each such
stock issuance shall comply with the terms specified below.

     1.   Purchase Price.

          a.   The  purchase  price  per  share  shall be fixed by the  Board or
               Committee  but shall not be less than the Fair  Market  Value per
               share of common stock on the issue date.

          b.   Subject to the  provisions  of Section A of Article IV, shares of
               common stock may be issued under the Stock  Issuance  Program for
               any of the following items of  consideration  which the Board may
               deem appropriate in each individual instance:

               (i)  cash or check made payable to the Corporation, or

               (ii) past services  rendered to the Corporation (or any Parent or
                    Subsidiary).

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<PAGE>

     2. Vesting Provisions.

          a.   Shares of common stock issued  under the Stock  Issuance  Program
               shall  vest  at the  discretion  of the  Board  of  Directors  or
               Committee.

          b.   The Participant  shall have full stockholder  rights with respect
               to any shares of common stock issued to the Participant under the
               Stock Issuance Program.  Accordingly,  the Participant shall have
               the right to vote such  shares and to receive  any  regular  cash
               dividends paid on such shares.

                                IV. MISCELLANEOUS
A.   FINANCING

     The Board or Committee  may permit any Optionee or  Participant  to pay the
option  exercise  price under the Option Grant Program or the purchase price for
shares issued under the Stock  Issuance  Program by delivering a  full-recourse,
interest bearing promissory note payable in one or more installments and secured
by the purchased  shares.  The terms of any such  promissory note (including the
interest rate and the terms of repayment)  shall be  established by the Board in
its sole  discretion.  In no  event  may the  maximum  credit  available  to the
Optionee or  Participant  exceed the sum of (i) the  aggregate  option  exercise
price or purchase price payable for the purchased  shares (less the par value of
those shares) plus (ii) any Federal,  state and local income and  employment tax
liability  incurred by the Optionee or the  Participant  in connection  with the
option exercise or share purchase.

B. ADJUSTMENTS DUE TO STOCK SPLITS, MERGERS, CONSOLIDATION, ETC.

     If, at any time,  the  Company  shall  take any  action,  whether  by stock
dividend,  stock split,  combination of shares or otherwise,  which results in a
proportionate  increase  or  decrease  in the  number of shares of common  stock
theretofore issued and outstanding,  the number of shares which are reserved for
issuance  under the Plan and the  number  of shares  which,  at such  time,  are
subject to options shall, to the extent deemed appropriate by the committee,  be
increased or  decreased  in the same  proportion,  provided,  however,  that the
Company shall not be obligated to issue fractional shares.

     Likewise,  in the event of any change in the  outstanding  shares of common
stock by reason of any recapitalization, merger, consolidation,  reorganization,
combination or exchange of shares or other corporate change, the committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of common  stock or other  securities  which are
reserved  for  issuance  under  the  Plan  and the  number  of  shares  or other
securities which, at such time are subject to Options.

     In the  event  of a  change  of  control,  at the  option  of the  board of
directors or committee,  (a) all options  outstanding on the date of such change
of control  shall,  for a period of sixty days following such change of control,
become immediately and fully exercisable,  and (b) an optionee will be permitted
to surrender for cancellation within sixty days after such change of control any
option or portion of any option  which was granted more than six months prior to
the date of such  surrender,  to the extent not yet exercised,  and to receive a
cash payment in an amount equal to the excess,  if any, of the Fair Market Value
(on the date of  surrender)  of the shares of common stock subject to the option
or portion  thereof  surrendered,  over the  aggregate  purchase  price for such
shares under the option.

                                       7
<PAGE>

C.   EFFECTIVE DATE AND TERM OF PLAN

     1. The Plan  shall  become  effective  on April 1, 2003,  provided  that no
Incentive  Options  may be  granted  unless  the Plan is first  approved  by the
Corporation's  stockholders.  The Board may grant options and issue shares under
the Plan at any time  after the  effective  date of the Plan and before the date
fixed herein for termination of the Plan.

     2. The Plan shall  terminate upon the earliest of (i) the expiration of the
ten  (10)-year  period  measured from the date the Plan is adopted by the Board,
(ii) the date on which all shares  available  for issuance  under the Plan shall
have been issued as vested shares or (iii) the  termination  of all  outstanding
options in  connection  with a Corporate  Transaction.  All options and unvested
stock issuances  outstanding at the time of a clause (i) termination event shall
continue to have full force and effect in accordance  with the provisions of the
documents evidencing those options or issuances.

D.   AMENDMENT OF THE PLAN

     The  Board or  Committee  shall  have  complete  and  exclusive  power  and
authority to amend or modify the Plan in any or all respects.  However,  no such
amendment or modification shall adversely affect the rights and obligations with
respect to options or unvested stock issuances at the time outstanding under the
Plan  unless the  Optionee or the  Participant  consents  to such  amendment  or
modification.  In addition,  certain amendments may require stockholder approval
pursuant to applicable laws and regulations.

E.   WITHHOLDING

     The  Corporation's  obligation  to deliver  shares of common stock upon the
exercise of any options or upon the  issuance  of shares  issued  under the Plan
shall be subject to the satisfaction of all applicable Federal,  state and local
income and employment tax withholding requirements.

F.   REGULATORY APPROVALS

     The  implementation of the Plan, the granting of any options under the Plan
and the  issuance  of any shares of common  stock (i) upon the  exercise  of any
option  or (ii)  under  the  Stock  Issuance  Program  shall be  subject  to the
Corporation's  obtaining  all  approvals  and  permits  required  by  regulatory
authorities having  jurisdiction over the Plan, the options granted under it and
the shares of common stock issued pursuant to it.

G.   NO EMPLOYMENT OR SERVICE RIGHTS

     Nothing in the Plan shall confer upon the Optionee or the  Participant  any
right to continue in Service  for any period of specific  duration or  interfere
with or  otherwise  restrict  in any way the rights of the  Corporation  (or any
Parent or Subsidiary  employing or retaining  such person) or of the Optionee or
the  Participant,  which  rights  are  hereby  expressly  reserved  by each,  to
terminate  such  person's  Service at any time for any  reason,  with or without
cause.

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<PAGE>

                                    APPENDIX

The following definitions shall be in effect under the Plan:

Board shall mean the Corporation's Board of Directors.

Change of Control shall mean:

          (i)  any person  who is not  currently  such  becomes  the  beneficial
               owner,  directly  or  indirectly,  of  securities  of the Company
               representing  25% or more of the  combined  voting  power  of the
               Company's then outstanding voting securities; or

          (ii) three  or  more  directors,  whose  election  or  nomination  for
               election is not approved by a majority of the Incumbent Board (as
               defined  in the plan),  are  elected  within any single  12-month
               period to serve on the board of directors; or

          (iii)members of the Incumbent  Board cease to constitute a majority of
               the Board of  Directors  without the  approval  of the  remaining
               members of the Incumbent Board; or

          (iv) any merger (other than a merger where the Company is the survivor
               and   there  is  no   accompanying   change  in   control   under
               subparagraphs   (i),  (ii)  or  (iii)  of  this   paragraph  (b),
               consolidation,  liquidation or dissolution of the Company, or the
               sale of all or substantially all of the assets of the Company.

Code shall mean the Internal Revenue Code of 1986, as amended.

Common Stock shall mean the Corporation's common stock, $.0033 par value.

Corporate  Transaction  shall mean either of the following  stockholder-approved
transactions to which the Corporation is a party:

          (i)  a merger or  consolidation  in which  securities  possessing more
               than fifty  percent (50%) of the total  combined  voting power of
               the  Corporation's  outstanding  securities are  transferred to a
               person  or  persons  different  from the  persons  holding  those
               securities immediately prior to such transaction, or

          (ii) the sale,  transfer or other  disposition of all or substantially
               all  of the  Corporation's  assets  in  complete  liquidation  or
               dissolution of the Corporation.

Corporation shall mean NetWolves Corporation, a New York corporation.

Disability  shall mean the  inability  of Optionee to engage in any  substantial
gainful  activity  by reason of any  medically  determinable  physical or mental
impairment  and shall be  determined by the Plan  Administrator  on the basis of
such  medical  evidence  as the Plan  Administrator  deems  warranted  under the
circumstances.  Disability shall be deemed to constitute Permanent Disability in
the event that such  Disability  is expected to result in death or has lasted or
can be expected to last for a continuous period of twelve (12) months or more.

                                       9
<PAGE>

Eligibility. Incentive Options may only be granted to Employees.

Employee  shall mean an individual who is in the employ of the  Corporation  (or
any Parent or Subsidiary),  subject to the control and direction of the employer
entity  as to both  the  work to be  performed  and the  manner  and  method  of
performance.

Exercise Date shall mean the date on which the option shall have been exercised.

Exercise  Price  shall mean the  exercise  price  payable  per  Option  Share as
specified in the Grant Notice.

Expiration  Date shall mean the date on which the option expires as specified in
the Grant Notice.

Fair  Market  Value per  share of common  stock on any  relevant  date  shall be
determined in accordance with the following provisions:

     (i)  If the common  stock is at the time  traded on the NASDAQ  National or
          SmallCap  Market,  then the Fair  Market  Value  shall be the  closing
          selling  price per share of common stock on the date in  question,  as
          the  price is  reported  by the  National  Association  of  Securities
          Dealers on the NASDAQ  National  or  SmallCap  Market.  If there is no
          closing  selling  price for the common  stock on the date in question,
          then the Fair Market Value shall be the closing  selling  price on the
          last preceding date for which such quotation exists.

     (ii) If the common stock is at the time listed on any Stock Exchange,  then
          the Fair Market Value shall be the closing  selling price per share of
          common stock on the date in question on the Stock Exchange  determined
          by the Plan  Administrator  to be the  primary  market  for the common
          stock,  as such price is officially  quoted in the  composite  tape of
          transactions  on such exchange.  If there is no closing  selling price
          for the common  stock on the date in  question,  then the Fair  Market
          Value shall be the closing  selling price on the last  preceding  date
          for which such quotation exists.

     (iii)If the  common  stock  is at the  time  neither  listed  on any  Stock
          Exchange  nor  traded on the  NASDAQ  National  Market,  then the Fair
          Market  Value  shall be  determined  by the Plan  Administrator  after
          taking into account such factors as the Plan Administrator  shall deem
          appropriate.

Grant Date shall mean the date of grant of the option as  specified in the Grant
Notice.

Grant  Notice shall mean the Notice of Grant of Stock  Option  accompanying  the
Agreement,  pursuant to which  Optionee has been  informed of the basic terms of
the option evidenced hereby.

Incentive  Option shall mean an option which satisfies the  requirements of Code
Section 422.

Misconduct  shall  mean the  commission  of any act of  fraud,  embezzlement  or
dishonesty by the Optionee or Participant, any unauthorized use or disclosure by
such person of confidential  information or trade secrets of the Corporation (or
any Parent or Subsidiary),  or any other  intentional  misconduct by such person
adversely affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner.  The foregoing  definition shall not be deemed
to be  inclusive  of all the acts or  omissions  which the  Corporation  (or any
Parent or Subsidiary)  may consider as grounds for the dismissal or discharge of
any Optionee,  Participant or other person in the Service of the Corporation (or
any Parent or  Subsidiary).  1934 Act shall mean the Securities  Exchange Act of
1934, as amended.

                                       10
<PAGE>

Non-Employee  Director  shall have the meaning  provided under Rule 16(b) or any
successor rule under the 1934 Act.

Non-Statutory   Option  shall  mean  an  option  not  intended  to  satisfy  the
requirements of Code Section 422.

Option  Agreement shall mean the option  agreement  issued pursuant to the Grant
Notice.

Option  Shares  shall mean the number of shares of common  stock  subject to the
option.

Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

Parent shall mean any  corporation  (other than the  Corporation) in an unbroken
chain of corporations ending with the Corporation,  provided each corporation in
the  unbroken  chain  (other  than  the  Corporation)  owns,  at the time of the
determination,  stock  possessing  fifty  percent  (50%)  or more  of the  total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.

Permitted Transfer shall mean (i) a gratuitous transfer of the Purchased Shares,
provided and only if Optionee obtains the Corporation's prior written consent to
such  transfer,  (ii) a  transfer  of title  to the  Purchased  Shares  effected
pursuant  to  Optionee's  will or the  laws of  intestate  succession  following
Optionee's  death or (iii) a transfer to the  Corporation  in pledge as security
for any purchase-money  indebtedness incurred by Optionee in connection with the
acquisition of the Purchased Shares.

Plan shall mean the Corporation's 2003 Stock Option/Stock Issuance Plan.

Plan  Administrator  shall  mean  either the Board or a  committee  of the Board
acting in its capacity as administrator of the Plan.

Purchase Agreement shall mean the stock purchase agreement pursuant to the Grant
Notice.

Service shall mean the Optionee's  performance  of services for the  Corporation
(or any Parent or  Subsidiary)  in the capacity of an Employee,  a  non-employee
member of the board of directors or an independent consultant.

Stock  Exchange  shall  mean the  American  Stock  Exchange,  the New York Stock
Exchange or the NASDAQ SmallCap or National Market.

Subsidiary  shall  mean  any  corporation  (other  than the  Corporation)  in an
unbroken chain of  corporations  beginning with the  Corporation,  provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the  determination,  stock possessing fifty percent (50%) or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in such chain.

Vesting  Commencement  Date  shall  mean  the date on which  the  Option  Shares
commences to vest as specified in the Grant Notice.

Vesting Schedule shall mean the vesting  schedule  specified in the Grant Notice
pursuant to which the  Optionee  is to vest in the Option  Shares in a series of
installments over his or her period of Service.

                                       11<DOCUMENT>

                                                                                                                            

                                                                                                                                 
   

                                                                                                                                    

                                                                                                                     
               

              
SECURITIES AND EXCHANGE COMMISSION                                                                                   

                     Washington, D.C.  20549                          
EXHIBIT 4.1                             
                                                                                                                                                                          

                            FORM 8-A                                                                                                 

                                                                                                                                    

       
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES                                                                            

                
PURSUANT TO SECTION 12(B) OR 12(G) OF THE                                                                               

                       EXCHANGE ACT OF 1934                                                                                     

                                                                                                                                    

                    LOGIC DEVICES INCORPORATED                                                                                       

             
(Exact name of registrant as specified in its charter)                                                                        

                                                                                                                                     

                                                                                                                                    

     
CALIFORNIA                                    94-2893789                                                                      

 (state
of incorporation or organization)     
(IRS Employer I.D. No.)                                                               

          
                                                                                                                          

    1320
ORLEANS DRIVE, SUNNYVALE, CA                 
94089                                                                        

            (Address
of principal executive offices)          
(Zip Code)                                                                      

                                                                                                                        
            

 If  this 
Form  relates  to 
the        If this Form relates to
the registration                                                      

 registration  of a class of
debt       of a class of debt securities
and  is to                                                      

 securities and is effective upon      become  effective   simultaneously  with                                                      

 filing   pursuant   to  
General        the  effectiveness   of   a   concurrent                                                      

 Instruction   A(c)(1),    please       registration    statement    under  
the                                                      

 check
the following box.             
Securities  Act  of 
1933   pursuant  to                                                      

                                                    General   Instruction   A(c)(2),  please                                                      

                                                    check  the 
following  box.                                                                   

                                                                                                             
                       

                       ____________________________                                                                                 

                                                                                                 
                                   

   
Securities to be registered pursuant to Section 12(g) of the Act:                                                                

                                                                                     
                                               

                                                                             Name of each
on                                                               

    TITLE
OF EACH CLASS                               
WHICH REGISTERED                                                              

         
None                                                                      None                                                                    

                                                                                                                                     

   
Securities to be registered pursuant to Section 12(g) of the Act:                                                                

                                                                                                                                     

                     PREFERRED SHARE PURCHASE RIGHTS                                                                                

                                           
b(Title of Class)                                                                                       

                                                                                                                                    

                                                                                                                                     

             
INFORMATION REQUIRED IN REGISTRATION STATEMENT                                                                   

             
                                                                                                                       

                                                                                                                                    

 ITEM 1.
DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.                                                                   

                                                                                                                           
         

    
On  April  29, 
1997,  the  Board 
of  Directors  of 
Logic  Devices                                                            

 Incorporated (the "Company") declared a dividend of one
preferred  share                                                            

 purchase  right (a
"Right") for each outstanding share of common stock,                                                             

 no par
value  per  share,  of  the 
Company  (the  "Common Stock").  The                                                            

 dividend
of the Rights is payable on May l, 1997, to the shareholders of                                                            

 record
as of May 1, 1997 (the "Record Date").  Each  Right  entitles the                                                            

 registered  holder  thereof, 
under  certain limited circumstances,  to                                                             

 purchase
from the Company one one-hundredth 
of  a  share  of  Series 
B                                                            

 Junior
Participating Preferred Stock, no par value, of the Company (the                                                             

 "Preferred Stock") at a price of $12.00 per one
one-hundredth of a share                                                            

 of  Preferred 
Stock (the "Purchase Price"), subject to adjustment.  The                                                            

 description and  terms of
the Rights are set forth in a Rights Agreement                                                            

 dated as
of April 30, 1997, as the same may be amended from time to time                                                            

 (the
"Rights Agreement"), 
between  the  Company and American Securities                                                            

 Transfer
& Trust, Inc., as Rights Agent (the "Rights Agent").                                                                       

                                                                                                                                    

    
Until  the  earlier 
to  occur  of (i) 10 days  following  a  public                                                            

 announcement that a person or group of  affiliated or associated persons                                                            

 (with
certain exceptions, an "Acquiring Person") has acquired
beneficial                                                            

 ownership of 15% or more of the outstanding  shares 
of  Common Stock or                                                            

 (ii) 10
business days (or such later date as may be determined by action                                                            

 of the
Board of Directors prior to such time as any person  or  group of                                                           

 affiliated   persons   becomes 
an  Acquiring  Person) 
following  the                                                              

 commencement of, or announcement of an intention to make, a tender
offer                                                            

 or  exchange  offer the consummation 
of  which  would 
result  in  the                                                             

 beneficial ownership 
by  a  person  or  group 
of  15%  or  more of the                                                            

 outstanding  shares 
of  Common Stock (the earlier of
such dates  being                                                             

 called
the "Distribution Date"), 
the  Rights  will 
be  evidenced, with                                                  
         

 respect
to any of the Common Stock certificates outstanding  as  of  the                                                            

 Record
Date, by such Common Stock certificate together with a copy of  a                                                            

 Summary  of  Rights 
which  is being mailed to holders
of record of the                                                             

 Company's common stock on the 
Record  Date  or as soon thereafter as is                                                            

 practicable.                                                                                                                       

                                                                                       
                                             

     The
Rights Agreement provides that, until 
the Distribution Date (or                                                            

 earlier
expiration of the Rights), the Rights will 
be  transferred with                                                           

 and only
with the Common Stock.  Until the
Distribution Date (or earlier                                                            

 expiration of the Rights), new Common Stock certificates  issued 
after                                                            

 the  Record 
Date  upon  transfer 
or new issuances of Common Stock will                                                            

 contain
a notation incorporating the 
Rights  Agreement  by 
reference.                                                             

 Until  the  Distribution Date (or earlier expiration of
the Rights), the                        
                                   

 surrender for 
transfer  of  any certificates for shares of Common Stock                                                            

 outstanding as of the Record Date,  even without such notation or a copy                                                            

 of this
Summary of Rights, will also 
constitute  the  transfer 
of  the                                                            

 Rights  associated  with the shares of Common Stock represented
by such                                                             

 certificate.  As soon  as 
practicable  following the Distribution
Date,                                                            

 separate
certificates evidencing the Rights 
("Right Certificates") will                                                            

 be
mailed to holders of record of the Common Stock  as  of  the close of                                                            

 business  on the
Distribution Date and such separate Right Certificates                                                             

 alone
will evidence the Rights.                                                                                                    

                                                                                                                                     

     The
Rights  are  not  exercisable  until the Distribution Date.  The                                                            

 Rights  will expire on April
29, 2007 (the  "Final  Expiration 
Date"),                                                             

 unless
the  Final  Expiration Date is advanced or extended or unless the                                                           

 Rights
are earlier redeemed or exchanged by the Company, in each case as                                                            

 described below.                                                                                                                   

    The Purchase Price  payable 
and  the  number of shares of Preferred                                                            

 Stock or
other securities or property issuable, 
if  the  Rights  become                                                  
         

 exercisable  and  they are properly exercised, is subject to
adjustment                                                            

 from
time to time to  prevent  dilution 
(i)  in  the  event  of a stock                                                            

 dividend
on, or a subdivision, combination or reclassification  of,  the                                                           

 Preferred  Stock, (ii) upon
the grant to holders of the Preferred Stock                                                             

 of
certain rights  or  warrants 
to  subscribe for or purchase
Preferred                                                            

 Stock at
a price, or securities convertible  into
Preferred Stock with a                                                            

 conversion  price,  less 
than  the then-current market  price 
of  the                                                             

 Preferred  Stock  or (iii) upon the  distribution  to  holders 
of  the                                                             

 Preferred  Stock of
evidences  of  indebtedness  or  assets 
(excluding                                                             

 regular
periodic cash dividends or dividends payable in Preferred Stock)                                                            

 or of
subscription  rights  or 
warrants  (other  than those referred to                                                            

 above).                                                                                                                            

                                                                                     
                                               

    
The  number of outstanding Rights
is subject to  adjustment  in 
the                                                            

 event of
a  stock  dividend  on  the 
Common  Stock payable in shares
of                                                            

 Common  Stock or
subdivisions, consolidations or 
combinations  of  the                                                             

 Common
Stock  occurring,  in 
any  such  case, prior to the Distribution                                                            

 Date.                                                                                                                              

                                                                                                                                     

    
Shares of Preferred Stock purchasable 
upon  exercise  of the Rights                                                            

 will not
be redeemable.  Each one one-hundredth
of a share of  Preferred                                                            

 Stock  will  be 
entitled,  when, as and if
declared, to a preferential                                                             

 quarterly dividend payment equal 
to  the  greater of: (a) $0.01 per one                                                            

 one-hundredth   of  a share and (b) an amount  equal 
to  the  dividend                                                             

 declared
per share of  Common  Stock.  
In  the  event  of  liquidation,                                                            

 dissolution or winding up of the Company, the holders of the  each 
one                                                            

 one-hundredth  of 
a  share  of 
Preferred  Stock  will be entitled to a                                                            

 preferential payment equal to the greater of:  (a) $1.00 
per  one  one-                                                            

 hundredth of a share (plus any accrued but unpaid dividends) and
(b) the                                                            

 payment
to be made per share of Common Stock. 
Each one one-hundredth of                                                            

 a share
of Preferred Stock will have one vote, voting together with the                                                             

 Common  Stock.   Finally, 
in  the event of any merger, consolidation
or                                                            

 other  transaction in which
outstanding  shares  of 
Common  Stock  are                                                             

 converted  or  exchanged, each one one-hundredth of a share
of Preferred                                                            

 Stock
will be entitled to receive an amount equal to the amount received                                                            

 per
share of Common  Stock.   These 
rights  are  protected by customary                                                            

 antidilution provisions.                                                                                                
           

                                                                                                                                    

    
Because of the nature of the Preferred Stock's dividend,
liquidation                                    
                       

 and  voting rights, the value of the one
one-hundredth  interest  in 
a                                                             

 share of
Preferred Stock purchasable upon exercise of each Right (if and                                                            

 when  it   becomes 
excercisable  and  is 
properly  exercised)  should                                                             

 approximate the value of one share of Common Stock.                                                                                 

                                                                                                                                    

     In
the event  that  any 
person or group of affiliated or associated                                                            

 persons
becomes an Acquiring Person,  each
holder of a Right, other than                                                            

 Rights
beneficially owned by the Acquiring 
Person (which will thereupon                                                            

 become
void), will thereafter have the right to receive upon exercise of                                                            

 a Right
that number of shares of Common Stock 
having  a market value of                                                            

 two
times the exercise price of the Right.                                                                                         

                                                                                                                                     

     In
the event that, after a person or group has become  an  Acquiring                                                           

 Person,  the  Company 
is  acquired  in 
a  merger  or 
other  business                                                             

 combination 
transaction  or 50% or more of
its consolidated assets  or                                                             

 earning
power are sold, proper  provisions  will 
be  made  so that each                                                            

 holder
of a Right, other than Rights beneficially owned by an  Acquiring                                                            

 Person
(which will have become void), will thereafter have the right  to                                                            

 receive  upon  the 
exercise of a Right that number of shares of common                                                   
         

 stock of
the person with  whom  the Company has engaged in the
foregoing                                                           

 transaction (or its parent) that 
at the time of such transaction have a                                                            

 market
value of two times the exercise price of the Right.                                                                         

     At
any time after any person or  group  becomes 
an Acquiring Person                                                            

 and
prior to the earlier of one of the events described  in the previous                                                            

 paragraph or the acquisition by such Acquiring Person of 50%  or more of                                                            

 the
outstanding shares of Common Stock, the Board of Directors  of 
the                                                 
           

 Company  may  exchange 
the  Rights  (other 
than  Rights  owned by such                                                            

 Acquiring Person which will have become void), in whole or in  part, for                                                            

 shares
of Common Stock or Preferred Stock (or a series of the Company's                                                             

 preferred  stock  having equivalent rights, preferences and
privileges),                                                            

 at an
exchange ratio of one share of Common Stock, or a fractional share                                                            

 of
Preferred Stock  (or  other 
preferred  stock)  equivalent 
in  value                                                            

 thereto,
per Right.                                                                                                                

                                                                         
                                                           

     With
certain exceptions, no adjustment in the Purchase Price will be                                                            

 required
until cumulative adjustments require an adjustment of at least                                                             

 1%  in 
such Purchase Price.  No
fractional shares of Preferred Stock or                                                            

 Common
Stock  will  be  issued  (other than fractions of Preferred
Stock                                                            

 which  are  integral 
multiples of one  one-hundredth  of 
a  share  of                                                             

 Preferred Stock, which may, at the election of the Company, be
evidenced                                                            

 by
depository receipts),  and in lieu
thereof an adjustment in cash will                                                            

 be made
based on the current  market price of
the Preferred Stock or the                                                            

 Common
Stock.                                                                                                                      

             
                                                                                                                       

     At
any time prior to the time  an Acquiring
Person becomes such, the                                                            

 Board of
Directors of the Company may 
redeem  the  Rights in whole, but                                                           

 not in
part, at a price of $.01 per Right (the "Redemption Price").  The                                                            

 redemption of the Rights may be made effective at such  time, 
on  such                                                             

 basis  and  with 
such  conditions as the Board of
Directors in its sole                                                            

 discretion may establish.  
Immediately  upon  any 
redemption  of  the                                                             

 Rights,  the  right 
to  exercise the Rights will
terminate and the only                                                            

 right of
the holders of Rights will be to receive the Redemption Price.                                                             

                                                                                       
                                             

     For
so long as the Rights  are  then 
redeemable,  the  Company may,                                                            

 except
with respect to the redemption price, amend the Rights  Agreement                                                            

 in  any manner. 
After the Rights are no longer redeemable, the Company                                                 
           

 may,
except  with  respect  to  the 
redemption  price, amend the
Rights                                                            

 Agreement in any manner that does not adversely affect  the interests of                                                            

 holders
of the Rights.                                                                                                             

                                                                                                 
                                   

    
Until  a  Right 
becomes  exercisable  and is properly exercised  or                                                            

 exchanged, the holder thereof, as the holder  of 
a  Right, will have no                                                            

 rights
as a shareholder of the Company, including, without  limitation,                                                             

 no right
to vote or to receive dividends.                                                                                           

                                                                                                                                    

    
The  form of Rights Agreement
between the Corporation and the Rights                                                            

 Agent
specifying  the  terms 
of  the  Rights,  together  the 
Exhibit A                                                           

 thereto,
the form of Certificate of Determination specifying the  terms                                                             

 of the
Series B Junior Participating Preferred Stock; Exhibit B thereto,                                                            

 the  form 
of  Right  Certificate;  and  Exhibit  C thereto, the form of                                                            

 Summary  of Rights to
Purchase Series B Junior Participating 
Preferred                                                             

 Stock,
are  attached  hereto  as  exhibits 
and  incorporated  herein by                                                            

 reference.   The  foregoing 
description of the Rights is qualified 
by                                                             

 reference to those exhibits.                                                                                                       

 ITEM 2.
EXHIBITS.                                                                                                                  

                                                                                                                                    

    
(1)  Rights Agreement dated  as 
of  April  30, 
1997, between Logic                                                            

         
Devices Incorporated and American Securities  Transfer & Trust,                                                            

         
Inc.,  as  Rights 
Agent.   The  Rights 
Agreement includes  as                                                            

         
Exhibit A the form of Certificate of Determination  of Series B                                                            

         
Junior Participating Preferred Stock; as Exhibit B, the form of                                                            

         
Right Certificate; and as Exhibit C, the form of the Summary of                                                            

         
Rights  to  Purchase 
Series  B  Junior Participating Preferred                                                            

         
Stock.                                                                                                                    

             
                                                                                                                       

    
(2)  Press Release dated
April  29, 1997.                                                                                      

                                                                                                                                    

                                                                                                                           
         

                                SIGNATURES                                                                                          

                                                                                                               
                     

    
Pursuant to the requirements of Section 12 of the Securities                                                                   

 Exchange
Act of 1934, the registrant has duly caused this registration                                                              

 statement to be signed on its behalf by the undersigned, thereto
duly                                                               

 authorized.                                                                           
                                             

                                             LOGIC DEVICES
INCORPORATED                                                              

                                             By: /s/ Todd J.
Ashford                                                                 

                                                     Todd J.
Ashford                                                                 

                                                 Print Name and Title                                                                

 Date:May
2, 1997                                                                                                                   

 EXHIBIT
1                                         
                                                                                 

                                                                                                                                    

                                                                                                                                     

             
LOGIC DEVICES INCORPORATED                                                                                            

                                                                                                                                     

                                        AND                                                                                                       

               
                                                                                                                     

       
AMERICAN SECURITIES TRANSFER & TRUST, INC.,                                                                                 

                              AS RIGHTS AGENT                                                                                                 

                                                                                                                             
       

                                                                                                                                    

                                                                                                                 
                   

                                                                                                                                    

                              RIGHTS AGREEMENT                                                                                                

                                                                                                                         
           

                           
DATED AS OF APRIL 30, 1997                                                                                           

                                                                                                             
                       

                               TABLE OF CONTENTS                                                                                                

                                                                PAGE                                                                         

                                                                                                                                    

 Section
1. Certain Definitions ..........................1                                                                          

                                                                                                                                    

 Section
2. Appointment of Rights Agent ..........5                                                                          

                                                                                                                                    

 Section
3. Issue of Right Certificates ................5                                                                          

                                                                                                                                    

 Section
4. Form of Right Certificates ...............7                                                                         

                                                                                                                                    

 Section
5. Countersignature and Registration ....7                                                                         

                                                                                                                                    

 Section
6. Transfer, Split Up, Combination and Exchange of Right                                                                   

        
Certificates; Mutilated, Destroyed, Lost or Stolen Right                                                                   

        
Certificates ..............................................8                                                                         

                                                                                                                                    

 Section
7. Exercise of Rights; Purchase Price;                                                                                     

        
Expiration Date of Rights...........................8                                                                          

                                                                                                                                    

 Section
8. Cancellation and Destruction of Right                                                                                    

        
Certificates................................................9                                                                         

                                                                                                   
                                 

 Section
9. Availability of Shares of Preferred Stock ...10                                                                         

                                                                                                                                    

 Section
10. Preferred Stock Record Date ........11                                                                          

                                                                                                                                    

 Section
11. Adjustment of Purchase Price, Number and Kind of Shares and                                                             

        
Number of Rights ....................................11                                                                         

                                                                                                 
                                   

 Section
12. Certificate of Adjusted Purchase Price or Number                                                                       

        
of Shares.................................................18                                                                          

                                                                                                                                    

 Section
13. Consolidation, Merger or Sale or Transfer of Assets or                                                                  

        
Earning Power ........................................18                                                                         

                                                                                                                                     

 Section
14. Fractional Rights and Fractional Shares ....21                                                                         

                                                                                                                                     

 Section
15. Rights of Action ............................22                                                                         

                                                                                                                                     

 Section
16. Agreement of Right Holders ..........23                                                                         

                                                                                                                                     

 Section
17. Right Certificate Holder Not Deemed a                                                                                  

        
Shareholder............................................ 23                                                                         

                                                                                                                                    

 Section
18. Concerning the Rights Agent .........23                                                                         

                                                                                                                           
         

 Section
19. Merger or Consolidation or Change of Name of Rights                                                                    

        
Agent...................................................... 24                                                    
                     

 Section
20. Duties of Rights Agent ...................24                                                                         

                                                                                                   
                                 

 Section
21. Change of Rights Agent .................26                                                                         

                                                                                       
                                             

 Section
22. Issuance of New Right Certificates .27                                                                         

                                                                                                                                    

 Section
23. Redemption ...................................27                                                                          

                                                                                                                                    

 Section
24. Exchange ......................................28                                                                          

                                                                                                                                    

 Section
25. Notice of Certain Events ...............29                                                                          

                                                                                                                                    

 Section
26. Notices ........................................29                                                                          

                                                                                                                                    

 Section
27. Supplements and Amendments .....30                                                                          

                                                                                                                                    

 Section
28. Successors ..................................30                                                                          

                                                                                                                                    

 Section
29. Benefits of this Agreement ............31                                                                         

                                                                                                                                    

 Section
30. Determinations and Actions by the Board of                                                                             

        
Directors................................................ 31                                                                         

                                                                                                                                     

 Section
31. Severability ...................................31                                                                         

             
                                                                                                                       

 Section
32. Governing Law ..............................31                                                                         

                                                                                                                                    

 Section
33. Counterparts ..................................31                                                                          

                                                                                                                                    

 Section
34. Descriptive Headings ......................31                                                                          

                                      RIGHTS AGREEMENT                                                                                       

                                                                                                   
                                 

     THIS
RIGHTS AGREEMENT, dated as of April 30, 1997 (this "Agreement"),                                                           

 is by
and between LOGIC DEVICES INCORPORATED, a California corporation (the                                                         

 "Company"), and AMERICAN SECURITIES TRANSFER &
TRUST, INC., a Colorado                                                              

 corporation, as Rights Agent (the "Rights Agent").                                                                                 

                                                                                                             
                       

                                          RECITALS                                                                                          

                                                                                                 
                                   

     The
Board of Directors of the Company has authorized and declared a                                                             

 dividend  of one preferred
share purchase right (a "Right") for each share                                                          

 of
Common Stock (as hereinafter defined) of the Company outstanding as of                                                           

 the
Close of Business (as defined below) on May 1, 1997 (the "Record                                                                

 Date"), each Right representing the right to purchase one
one-hundredth                                                             

 (subject
to adjustment) of a share of Preferred Stock (as hereinafter                                                               

 defined), upon the terms and subject to the conditions herein set
forth,                                                            

 and has
further authorized and directed the issuance of one Right (subject                                                          

 to
adjustment as provided herein) with respect to each share of Common                                                              

 Stock
that shall become outstanding between the Record Date and the earlier                                                         

 of the
Distribution Date and the Expiration Date (as such terms are                                                                 

 hereinafter defined); PROVIDED, HOWEVER, that Rights may be issued
with                                                             

 respect
to shares of Common Stock that shall become outstanding after the                                                           

 Distribution Date and prior to the Expiration Date in accordance
with                                                               

 Section
22.                                                                                                                        

                                                                                                                                    

    
Accordingly, in consideration of the premises and the mutual
agreements                                                         

 herein
set forth, the parties hereby agree as follows:                                                                             

                                                                                                               
                     

    
SECTION 1.  CERTAIN
DEFINITIONS.  For purposes of this
Agreement, the                                                          

 following terms have the meaning indicated:                                                                                         

                                                                                                                                    

         
(a)   "Acquiring
Person" shall mean any Person (as such term is                                                            

 hereinafter defined) who or which shall be the Beneficial Owner
(as such                                                            

 term is
hereinafter defined) of 15% or more of the shares of Common Stock                                                           

 then
outstanding, but shall not include an Exempt Person (as such term is                                                           

 hereinafter defined); PROVIDED, HOWEVER, that (i) if the Board of
Directors                                                         

 of the
Company determines in good faith that a Person who would otherwise                                                           

 be an
"Acquiring Person" became such inadvertently (including, without                                                              

 limitation, because (A) such Person was unaware that it
beneficially owned                                                          

 a
percentage of Common Stock that would otherwise cause such Person to be                                                           

 an
"Acquiring Person" or (B) such Person was aware of the extent of
its                                                             

 Beneficial Ownership of Common Stock but had no actual knowledge
of the                                                             

 consequences of such Beneficial Ownership under this Agreement)
and without                                                         

 any intention
of changing or influencing control of the Company, and if                                                             

 such
Person as promptly as practicable divested or divests itself of                                                                

 Beneficial Ownership of a sufficient number of shares of Common
Stock so                                                            

 that
such Person would no longer be an "Acquiring Person," then such
Person                                       
                 

 shall
not be deemed to be or to have become an "Acquiring Person" for
any                                                           

 purposes
of this Agreement; (ii) if, as of the date hereof, any Person is                                                           

 the
Beneficial Owner of 15% or more of the shares of Common Stock                                                                   

 outstanding, such Person shall not be or become an "Acquiring
Person"                                                               

 unless
and until such time as such Person shall become the Beneficial Owner                                                         

 of an
additional 1% or more of the shares of Common Stock (other than                                                               

 pursuant
to a dividend or distribution paid or made by the Company on the                                                           

 outstanding Common Stock in shares of Common Stock or pursuant to
a split                                                           

 or
subdivision of the outstanding Common Stock), unless, upon becoming the                                                          

 Beneficial Owner of such additional shares of Common Stock, such
Person is                                                          

 not then
the Beneficial Owner of 15% or more of the shares of Common Stock                                                          

 then
outstanding; (iii) no person shall become an "Acquiring Person"
of                                                             

 shares
of Common Stock of the Company which are acquired by such person                                                             

 pursuant
to a transaction or series of related transactions approved, in                                                            

 advance,
by a majority of the Continuing Directors (as such term is                                                                 

 hereinafter defined) of the Company provided that such majority of
the                                                              

 Continuing Directors also constitutes a majority of the Board of
Directors;                                                         

 (iv) no
Person shall become an "Acquiring Person" as the result of an                                                               

 acquisition of shares of Common Stock by the Company  or a Subsidiary of                                                            

 the
Company which, by reducing the number of shares outstanding, increases                                                          

 the
proportionate number of shares of Common Stock beneficially owned by                                                            

 such
Person to 15% or more of the shares of Common Stock then outstanding,                                                          

 PROVIDED, HOWEVER, that if a Person shall become the Beneficial
Owner of                                                            

 15% or
more of the shares of Common Stock then outstanding by reason of                                                             

 such
share acquisitions by the Company or a Subsidiary of the Company and                                                           

 shall
thereafter become the Beneficial Owner of an additional 1% or more of                                                         

 the
shares of Common Stock (other than pursuant to a dividend or                                                                   

 distribution paid or made by the Company on the outstanding Common
Stock in                                                         

 shares
of Common Stock or pursuant to a split or subdivision of the                                                                 

 outstanding Common Stock), then such Person shall be deemed to be
an                                                                

 "Acquiring Person" unless upon becoming the Beneficial
Owner of such                                                                

 additional shares of Common Stock such Person does not
beneficially own 15%                                                         

 or more
of the shares of Common Stock then outstanding.  For all purposes                                                           

 of this
Agreement, any calculation of the number of shares of Common Stock                                                          

 outstanding at any particular time, including for purposes of
determining                                                           

 the
particular percentage of such outstanding shares of Common Stock of                                                             

 which
any Person is the Beneficial Owner, shall be made in accordance with                                                          

 the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and                                                                   

 Regulations under the Securities Exchange Act of 1934, as amended
(the                                                              

 "Exchange Act"), as in effect on the date hereof.   Notwithstanding the                                                             

 foregoing, neither Stephen A. Hellerstein, as trustee of various
trusts                                                             

 existing
as of the date of this Agreement, BRT Partnership, an Illinois                                                             

 general
partnership, Windy City, Inc., a Delaware corporation, Walnut                                                               

 Capital
Corp., a Delaware corporation, nor any of their respective                                                                  

 officers, directors, trustees, 10% or greater beneficial owners,
Affiliates                                                         

 and
Associates, either individually or together, shall be deemed to be an                                                           

 Acquiring Person.                                                                                           
                       

                                                                                                                                    

       
(b)   "Affiliate" and
"Associate" shall have the respective meanings                                                         

 ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations                                                           

 under
the Exchange Act, as in effect on the date hereof.                                                                            

                                                                                                                                    

       
(c)   A Person shall be deemed
the "Beneficial Owner" of, shall be                                                           

 deemed
to have "Beneficial Ownership" of and shall be deemed to                                                                    

 "beneficially own" any securities:                                                                                                  

                                                                                                                                    

             
(i)  which such Person or any of
such Person's Affiliates or                                                           

 Associates is deemed to beneficially own, directly or indirectly,
within                                                            

 the
meaning of Rule l3d-3 of the General Rules and Regulations under the                                                            

 Exchange
Act as in effect on the date hereof;                                                                                      

                                                                                                                                     

             
(ii)  which such Person or any of
such Person's Affiliates or                                                          

 Associates has (A) the right to acquire (whether such right is
exercisable                                                          

 immediately or only after the passage of time) pursuant to any
agreement,                                                           

 arrangement
or understanding (other than customary agreements with and                                                              

 between
underwriters and selling group members with respect to a bona fide                                                
         

 public
offering of securities), or upon the exercise of conversion rights,                                                          

 exchange
rights, rights, warrants or options, or otherwise; PROVIDED,                                                               

 HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to                                                           

 beneficially own, (x) securities tendered pursuant to a tender or
exchange                                                          

 offer
made by or on behalf of such Person or any of such Person's                                                                   

 Affiliates or Associates until such tendered securities are
accepted for                                                            

 purchase, (y) securities which such Person has a right to acquire
upon the                                                          

 exercise
of Rights at any time prior to the time that any Person becomes an                                                         

 Acquiring Person or (z) securities issuable upon the exercise of
Rights                                                             

 from and
after the time that any Person becomes an Acquiring Person if such                                                         

 Rights
were acquired by such Person or any of such Person's Affiliates or                                                           

 Associates prior to the Distribution Date or pursuant to Section
3(a) or                                                            

 Section
22 hereof ("Original Rights") or pursuant to Section 11(i) or                                                               

 Section
11(n) with respect to an adjustment to Original Rights; or (B) the                                                          

 right to
vote pursuant to any agreement, arrangement or understanding;                                                              

 PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner                                                           

 of, or
to beneficially own, any security by reason of such agreement,                                                               

 arrangement or understanding if the agreement, arrangement or
understanding                                                         

 to vote
such security (1) arises solely from a revocable proxy or consent                                                           

 given to
such Person in response to a public proxy or consent solicitation                                                          

 made
pursuant to, and in accordance with, the applicable rules and                                                                  

 regulations promulgated under the Exchange Act and (2) is not also
then                                                             

 reportable on Schedule 13D under the Exchange Act (or any
comparable or                                                             

 successor report); or                                                                                                              

                                                                                                                                     

             
(iii)  which are beneficially
owned, directly or indirectly,                                                           

 by any
other Person and with respect to which such Person or any of such                                                            

 Person's
Affiliates or Associates has any agreement, arrangement or                                                                 

 understanding
(other than customary agreements with and between                                                                    

 underwriters and selling group members with respect to a bona fide
public                                                           

 offering
of securities) for the purpose of acquiring, holding, voting                                                               

 (except
to the extent contemplated by the proviso to Section 1(c)(ii)(B))                                                           

 or
disposing of such securities of the Company; PROVIDED, HOWEVER, that no                                                          

 Person
who is an officer, director, trustee or employee of an Exempt Person                                                         

 shall be
deemed, solely by reason of such Person's status or authority as                                                           

 such, to
be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or                                                         

 to
"beneficially own" any securities that are "beneficially
owned" (as                                                              

 defined
in this Section l(c)), including, without limitation, in a                                                                  

 fiduciary capacity, by an Exempt Person or by any other such
officer,                                       
                       

 director, trustee or employee of an Exempt Person.                                                                                 

                                                                                                 
                                   

       
(d)   "Business Day"
shall mean any day other than a Saturday, a                                                             

 Sunday
or a day on which banking institutions in the State of California or                                                         

 the city
in which the principal office of the Rights Agent is located are                                                           

 authorized or obligated by law or executive order to close.                                                                         

                                                                                                                                    

       
(e)   "Close of
Business" on any given date shall mean 5:00 P.M.,                                                            

 San
Jose, California time, on such date; PROVIDED, HOWEVER, that if such                                                            

 date is
not a Business Day it shall mean 5:00 P.M., San Jose, California                                                            

 time, on
the next succeeding Business Day.                                                                                         

                                                                                                                                     

       
(f)   "Common Stock"
when used with reference to the Company shall                                                           

 mean the
Common Stock, presently no par value per share, of the Company.                                                            

 "Common Stock" when used with reference to any Person
other than the                                                                

 Company
shall mean the common stock (or, in the case of an unincorporated                                                           

 entity,
the equivalent equity interest) with the greatest voting power of                                                           

 such
other Person or, if such other Person is a subsidiary of another                                                               

 Person,
the Person or Persons which ultimately control such first-mentioned                                               
         

 Person.                                                                                                                            

                                                                                                               
                     

       
(g)   "Common Stock
Equivalents" shall have the meaning set forth in                                                         

 Section
11(a)(iii) hereof.                                                                        
                                 

                                                                                                                                    

       
(h)   "Continuing
Director" shall mean any member of the Board of                                                            

 Directors of the Company, while such person is a member of the
Board of                                                             

 Directors, who is not an Acquiring Person, or an Affiliate or
Associate of                                                          

 an
Acquiring Person, and who either (i) was a member of the Board of                                                    
           

 Directors prior to the Stock Acquisition Date, or (ii)
subsequently became                                                          

 a member
of the Board of Directors and whose nomination for election or                                                             

 election
to the Board of Directors was recommended or approved by a                                                                 

 majority
of the Continuing Directors then on the Board of Directors.                                                                

                                                                                                                                    

       
(i)   "Current Value"
shall have the meaning set forth in Section                                                            

 11(a)(iii) hereof.                                                                                                                 

                                                                         
                                                           

       
(j)   "Distribution
Date" shall have the meaning set forth in                                                                

 Section
3 hereof.                                                                                                                   

                                                                                                                                    

       
(k)   "Equivalent Preferred
Shares" shall have the meaning set forth                                                         

 in
Section 11(b) hereof.                                                                                                           

                                                                                                                                     

       
(l)   "Exempt Person"
shall mean the Company or any Subsidiary (as                                                           

 such
term is hereinafter defined) of the Company, in each case including,                                                           

 without
limitation, in its fiduciary capacity, or any employee benefit plan                                                         

 or
employee stock plan of the Company or of any Subsidiary of the Company,                                                          

 or any
entity or trustee holding Common Stock for or pursuant to the terms                                                          

 of any
such plan or for the purpose of funding any such plan or funding                                                             

 other
employee benefits for employees of the Company or of any Subsidiary                                                 
         

 of the
Company.                                                                                                                    

                                                                                                               
                     

       
(m)   "Exchange Ratio"
shall have the meaning set forth in Section                                                           

 24
hereof.                                                                                        
                                 

                                                                                                                                    

       
(n)   "Expiration Date"
shall have the meaning set forth in Section                                                          

 7
hereof.                                                                                                               
           

                                                                                                                                    

       
(o)   "Flip-In Event"
shall have the meaning set forth in Section                                                            

 11(a)(ii) hereof.                                                                                                                  

                                                                                                 
                                   

       
(p)   "Final Expiration
Date" shall have the meaning set forth in                                                            

 Section
7 hereof.                                                                   
                                               

                                                                                                                                    

       
(q)   "Nasdaq" shall
mean The Nasdaq Stock Market.               
                                                           

                                                                                                                                    

       
(r)   "New York Stock
Exchange" shall mean the New York Stock                                                                

 Exchange, Inc.                                                                                                                     

                                                                                                                                     

       
(s)   "Person" shall
mean any individual, firm, corporation,                                                                 

 partnership, limited liability company, trust, bank or other
entity, and                                                            

 shall
include any successor (by merger or otherwise) to such entity.                                                                

                                                                                                                                     

       
(t)   "Preferred Stock"
shall mean the Series B Junior Participating                                                         

 Preferred Stock, no par value, of the Company having the rights
and                                                                 

 preferences set forth in the Form of Certificate of Determination
attached                                                          

 to this
Agreement as Exhibit A.                                                                                                    

                                                                                                                           
         

       
(u)   "Principal Party"
shall have the meaning set forth in Section                                                          

 13(b)
hereof.                                                                                                 
                     

                                                                                                                                    

       
(v)   "Redemption Date"
shall have the meaning set forth in Section                                                          

 7
hereof.                                                                                                                          

                                                                                       
                                             

       
(w)   "Redemption
Price" shall have the meaning set forth in Section                                                         

 23
hereof.                                                                                                                         

                                                                                                                         
           

       
(x)   "Right
Certificate" shall have the meaning set forth in                                                                

 Section
3 hereof.                                                                                           
                       

                                                                                                                                    

       
(y)   "Securities Act"
shall mean the Securities Act of 1933, as                                                             

 amended.                                                                                                                           

       
(z)   "Section 11(a)(ii)
Trigger Date" shall have the meaning set                                                            

 forth in
Section 11(a)(iii) hereof.                                                                                                

                                                                         
                                                           

       
(aa)  "Spread" shall
have the meaning set forth in Section                                                                   

 11(a)(iii) hereof.                                                                                                                  

                                                                                                                                    

       
(bb)  "Stock Acquisition
Date" shall mean the first date of public                                                           

 announcement (which, for purposes of this definition, shall
include,                                                                

 without
limitation, a report filed pursuant to Section 13(d) of the                                                                 

 Exchange
Act) by the Company or an Acquiring Person that an Acquiring                                                               

 Person
has become such, or such earlier date as a majority of the Board of                                                          

 Directors shall become aware of the existence of an Acquiring
Person.                                                               

             
                                                                                                                       

       
(cc)  "Subsidiary" of
any Person shall mean any corporation, bank or                                                         

 other
entity of which securities or other ownership interests having                                                                

 ordinary
voting power sufficient to elect a majority of the board of                                                                

 directors or other persons performing similar functions are
beneficially                                                            

 owned,
directly or indirectly, by such Person, and any corporation, bank or                                                         

 other
entity that is otherwise controlled by such Person.                                                                          

                                                                                                   
                                 

       
(dd)  "Substitution
Period" shall have the meaning set forth in                                                              

 Section
11(a)(iii) hereof.                                                                                                         

                                                                                                                         
           

       
(ee)  "Summary of
Rights" shall have the meaning set forth in                                                                

 Section
3 hereof.                                                                                           
                       

                                                                                                                                    

       
(ff)  "Trading Day"
shall have the meaning set forth in Section                                                              

 11(d)(i)
hereof.                                                                                                                   

                                                                                     
                                               

       
SECTION 2.  APPOINTMENT OF RIGHTS
AGENT.  The Company hereby                                                                

 appoints
the Rights Agent to act as agent for the Company and the holders                                                           

 of the
Rights (who, in accordance with Section 3 hereof, shall prior to the                                                         

 Distribution Date be the holders of Common Stock) in accordance
with the                                                            

 terms
and conditions hereof, and the Rights Agent hereby accepts such                                                               

 appointment.  The Company
may from time to time appoint such co-Rights                                                              

 Agents
as it may deem necessary or desirable.                                                                                      

                                                                                                                                     

       
SECTION 3.  ISSUE OF RIGHT
CERTIFICATES.                                                                                    

                                                                                                                                     

       
(a)   Until the Close of Business
on the earlier of (i) the tenth                                                            

 day
after the Stock Acquisition Date or (ii) the tenth Business Day (or                                                             

 such
later date as may be determined by action of the Board of Directors                                                            

 prior to
such time as any Person becomes an Acquiring Person) after the                                                             

 date of
the commencement by any Person (other than an Exempt Person) of, or                                               
         

 of the
first public announcement of the intention of such Person (other                                                             

 than an
Exempt Person) to commence, a tender or exchange offer the                                                                  

 consummation of which would result in any Person (other than an
Exempt                                                              

 Person)
becoming the Beneficial Owner of shares of Common Stock aggregating                                                         

 15% or
more of the Common Stock then outstanding (including any such date                                                           

 which is
after the date of this Agreement and prior to the issuance of the                                                          

 Rights;
the earlier of such dates being herein referred to as the                                                                   

 "Distribution Date"), (x) the Rights will be evidenced
(subject to the                                                              

 provisions of Section 3(b) hereof) by the certificates for Common
Stock                                                             

 registered in the names of the holders thereof and not by separate
Right                                                            

 Certificates, and (y) the Rights will be transferable only in
connection                                    
                       

 with the
transfer of Common Stock.  As soon as
practicable after the                                                                

 Distribution Date, the Company will prepare and execute, the
Rights Agent                                                           

 will
countersign and the Company will send or cause to be sent (and the                                                             

 Rights
Agent will, if requested, send) by first-class, postage-prepaid mail                                                         

 (insured
if so elected by the Company), to each record holder of Common                                                             

 Stock as
of the close of business on the Distribution Date (other than any                                                          

 Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at                                                          

 the
address of such holder shown on the records of the Company, a Right                                                             

 Certificate, in substantially the form of Exhibit B hereto (a
"Right                                                                

 Certificate"), evidencing one Right (subject to adjustment as
provided                                                              

 herein)
for each share of Common Stock so held. 
As of the Distribution                                                             

 Date,
the Rights will be evidenced solely by such Right Certificates.                                                               

                                                                                                                                    

       
(b)   On the Record Date, or as
soon as practicable thereafter, the                                                          

 Company
will send a copy of a Summary of Rights to Purchase Shares of                                                               

 Preferred Stock, in substantially the form of Exhibit C hereto
(the                                                                 

 "Summary of Rights"), by first-class, postage-prepaid
mail, to each record                                                          

 holder
of Common Stock as of the Close of Business on the Record Date                                                               

 (other
than any Acquiring Person or any Associate or Affiliate of any                                                     
         

 Acquiring Person), at the address of such holder shown on the
records of                                                            

 the
Company.  With respect to certificates
for Common Stock outstanding as                                                          

 of the
Record Date, until the Distribution Date, the Rights will be                                                                 

 evidenced by such certificates registered in the names of the
holders                                                               

 thereof
together with the Summary of Rights. 
Until the Distribution Date                                                           

 (or, if
earlier, the Expiration Date), the surrender for transfer of any                                                            

 certificate for Common Stock outstanding on the Record Date, with
or                                                                

 without
a copy of the Summary of Rights, shall also constitute the transfer                                                         

 of the
Rights associated with the Common Stock represented thereby.                                                                 

                                                                                                                                     

       
(c)   Certificates issued for
Common Stock (including, without                                                               

 limitation, upon transfer of outstanding Common Stock, disposition
of                                                               

 Common
Stock out of treasury stock if then permitted under the California                                                           

 General
Corporation Law or issuance or reissuance of Common Stock out of                                                            

 authorized but unissued shares) after the Record Date but prior to
the                                                              

 earlier
of the Distribution Date and the Expiration Date shall have                                                                 

 impressed on, printed on, written on or otherwise affixed to them
the                                                               

 following legend:                                                                                                                  

                                                                                                       
                             

     This
certificate also evidences and entitles the holder hereof to                                                               

    
certain rights as set forth in a Rights Agreement between Logic                                                                 

    
Devices Incorporated (the "Company") and American
Securities                                                                   

    
Transfer & Trust, Inc., as Rights Agent, dated as of April 30,                                                                  

     1997
as the same may be amended from time to time (the "Rights                                                                  

    
Agreement"), the terms of which are hereby incorporated herein by                                                               

    
reference and a copy of which is on file at the principal                                                                      

    
executive offices of the Company. 
Under certain circumstances,                                                                 

     as
set forth in the Rights Agreement, such Rights will be                                                                      

    
evidenced by separate certificates and will no longer be                                                                       

    
evidenced by this certificate. 
The Company will mail to the                                                                   

    
holder of this certificate a copy of the Rights Agreement without                                                               

    
charge after receipt of a written request therefor.  UNDER                                                                     

    
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,                                                                   

    
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN                                                               

    
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN                                                               

    
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER                                                    
           

     BE
TRANSFERABLE.                                                                                                               

                                                                                                             
                       

 With
respect to such certificates containing the foregoing legend, until                                                            

 the
Distribution Date the Rights associated with the Common Stock                                                                   

<PAGE>                                                                                                                              

 represented by such certificates shall be evidenced by such
certificates                                                            

 alone,
and the surrender for transfer of any such certificate, except as                                                            

 otherwise provided herein, shall also constitute the transfer of
the Rights                                                         

 associated with the Common Stock represented thereby.  In the event that                                                            

 the
Company purchases or otherwise acquires any Common Stock after the                                                              

 Record
Date but prior to the Distribution Date, any Rights associated with                                                          

 such
Common Stock shall be deemed canceled and retired so that the Company                                                          

 shall
not be entitled to exercise any Rights associated with the Common                                                             

 Stock
which are no longer outstanding.                                                                                             

                                                                                                                                    

       
Notwithstanding this paragraph (c), the omission of a legend shall                                                           

 not
affect the enforceability of any part of this Agreement or the rights                                                           

 of any
holder of the Rights.                                                                                                       

                                                                                                                                    

       SECTION 4.  FORM OF RIGHT CERTIFICATES. 
The Right Certificates (and                                                         

 the
forms of election to purchase shares and of assignment to be printed on                                               
         

 the
reverse thereof) shall be substantially in the form set forth in                                                                

 Exhibit
B hereto and may have such marks of identification or designation                                                           

 and such
legends, summaries or endorsements printed thereon as the Company                                                          

 may deem
appropriate and as are not inconsistent with the provisions of                                                             

 this
Agreement, or as may be required to comply with any applicable law or                                                          

 with any
rule or regulation made pursuant thereto or with any rule or                                                               

 regulation of any stock exchange or interdealer quotation system
on which                                                           

 the
Rights may from time to time be listed or quoted, or to conform to                                                              

 usage.  Subject to the
provisions of Sections 11, 13 and 22 hereof, the                                                             

 Right
Certificates shall entitle the holders thereof to purchase such                                                               

 number
of one one-hundredths of a share of Preferred Stock as shall be set                                                          

 forth
therein at the price per one one-hundredth of a share of Preferred                                                            

 Stock
set forth therein (the "Purchase Price"), but the number of such
one                                                          

 one-hundredths of a share of Preferred Stock and the Purchase
Price shall                                                           

 be
subject to adjustment as provided herein.                                                                                        

                                                                                                                                    

 SECTION
5.  COUNTERSIGNATURE AND
REGISTRATION.                                                                                      

                                                                                                                                    

             
(a)  The Right Certificates shall
be executed on behalf of the                                                         

 Company
by the Chairman of the Board, Chief Executive Officer, President,                                                           

 any Vice
President or the Chief Financial Officer of the Company, either                                                            

 manually
or by facsimile signature, shall have affixed thereto the                                                                  

 Company's seal or a facsimile thereof and shall be attested by
the                                                                  

 Secretary or an Assistant Secretary of the Company, either
manually or by                                                           

 facsimile signature. The Right Certificates shall be manually
countersigned                                                         

 by the
Rights Agent and shall not be valid for any purpose unless                                                                   

 countersigned.  In case any
officer of the Company who shall have signed                                                            

 any of
the Right Certificates shall cease to be such officer of the Company                                                         

 before
countersignature by the Rights Agent and issuance and delivery by                                                            

 the
Company, such Right Certificates, nevertheless, may be countersigned by                                               
         

 the
Rights Agent and issued and delivered by the Company with the same                                                              

 force
and effect as though the Person who signed such Right Certificates                                                            

 had not
ceased to be such officer of the Company; and any Right Certificate                                                         

 may be
signed on behalf of the Company by any Person who, at the actual                                                             

 date of
the execution of such Right Certificate, shall be a proper officer                                                          

 of the
Company to sign such Right Certificate, although at the date of the                                                          

 execution of this Agreement any such Person was not such an
officer.                                                                

                                                                                                                                    

       
(b)   Following the Distribution
Date, the Rights Agent will keep or                                                         

 cause to
be kept, at an office or agency designated for such purpose, books                                                         

 for
registration and transfer of the Right Certificates issued hereunder.                                                           

 Such
books shall show the names and addresses of the respective holders of                                                          

 the
Right Certificates, the number of Rights evidenced on its face by each                                                          

 of the
Right Certificates and the date of each of the Right Certificates.                                                           

                                                                         
                                                           

       
SECTION 6.  TRANSFER, SPLIT UP,
COMBINATION AND EXCHANGE OF RIGHT                                                            

 CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.                                                              

                                                                                                                                    

       
(a)   Subject to the provisions
of Sections 7(e), 11(a)(ii), 13 and                                                          

 14
hereof, at any time AFTER the Distribution Date and prior to the                                                                 

 Expiration Date, any Right Certificate or Right Certificates may
be                                                                 

 transferred, split up, combined or exchanged for another Right
Certificate                                                          

 or Right
Certificates, entitling the registered holder to purchase a like                                                           

 number
of one one-hundredths of a share of Preferred Stock as the Right                                                             

 Certificate or Right Certificates surrendered then entitled such
holder to                                                          

 purchase.  Any registered
holder desiring to transfer, split up, combine or                                                         

 exchange
any Right Certificate or Right Certificates shall make such                                                                

 request
in writing delivered to the Rights Agent, and shall surrender the                                                 
         

 Right
Certificate or Right Certificates to be transferred, split up,                                                                

 combined
or exchanged at the office or agency of the Rights Agent                                                                   

 designated for such purpose. 
Thereupon the Rights Agent shall countersign                                                          

 and
deliver to the Person entitled thereto a Right Certificate or Right                                                             

 Certificates, as the case may be, as so requested.  The Company may require                                                         

 payment
of a sum sufficient to cover any tax or governmental charge that                                                            

 may be
imposed in connection with any transfer, split up, combination or                                                            

 exchange
of Right Certificates.                         
                                                                           

                                                                                                                                    

       
(b)   Subject to the provisions
of Section 11(a)(ii) hereof, at any                                                          

 time
after the Distribution Date and prior to the Expiration Date, upon                                                             

 receipt
by the Company and the Rights Agent of evidence reasonably                                                                  

 satisfactory to them of the loss, theft, destruction or mutilation
of a                                                             

 Right
Certificate, and, in case of loss, theft or destruction, of indemnity                                                         

 or
security reasonably satisfactory to them, and, at the Company's request,                                                         

 reimbursement to the Company and the Rights Agent of all
reasonable                                                                 

 expenses
incidental thereto, and upon surrender to the Rights Agent and                                                             

 cancellation of the Right Certificate if mutilated, the Company
will make                                                           

 and
deliver a new Right Certificate of like tenor to the Rights Agent for                                                           

 delivery
to the registered holder in lieu of the Right Certificate so lost,                                                         

 stolen,
destroyed or mutilated.                                                                           
                         

                                                                                                                                    

       
SECTION 7.  EXERCISE OF RIGHTS;
PURCHASE PRICE; EXPIRATION DATE OF                                                           

 RIGHTS.                                                                                                                            

                                                                                   
                                                 

       
(a)   Except as otherwise
provided herein, the Rights shall become                                                           

 exercisable on the Distribution Date, and thereafter the
registered holder                                                          

 of any
Right Certificate may, subject to Section 11(a)(ii) hereof and                                                               

 except
as otherwise provided herein, exercise the Rights evidenced thereby                                                          

 in whole
or in part upon surrender of the Right Certificate, with the form                                                          

 of
election to purchase on the reverse side thereof duly executed, to the                                                           

 Rights
Agent at the office or agency of the Rights Agent designated for                                                             

 such
purpose, together with payment of the aggregate Purchase Price with                                                            

 respect
to the total number of one one-hundredths of a share of Preferred                                                           

 Stock
(or other securities, cash or other assets, as the case may be) as to                                                         

 which
the Rights are exercised, at any time which is both after the                                                                 

 Distribution Date and prior to the time (the "Expiration
Date") that is the                                                         

 earliest
of (i) the Close of Business on April 29, 2007 (the "Final                                                     
           

 Expiration Date"), (ii) the time at which the Rights are
redeemed as                                                                

 provided
in Section 23 hereof (the "Redemption Date") or (iii) the time
at                                                          

 which
such Rights are exchanged as provided in Section 24 hereof.                                                                   

                                                                                                 
                                   

       
(b)   The Purchase Price shall be
initially $12.00 for each one one-                                                         

 hundredths of a share of Preferred Stock purchasable upon the
exercise of a                                                         

 Right.  The Purchase Price
and the number of one one-hundredths of a share                                                          

 of
Preferred Stock or other securities or property to be acquired upon                                                              

 exercise
of a Right shall be subject to adjustment from time to time as                                                             

 provided
in Sections 11 and 13 hereof and shall be payable in lawful money                                                          

 of the
United States of America in accordance with paragraph (c) of this                                                            

 Section
7.                                      
                                                                                   

       
(c)   Except as otherwise
provided herein, upon receipt of a Right                                                           

 Certificate representing exercisable Rights, with the form of
election to                                                           

 purchase
duly executed, accompanied by payment of the aggregate Purchase                                                            

 Price
for the shares of Preferred Stock to be purchased and an amount equal                                                         

 to any
applicable transfer tax required to be paid by the holder of such                                                            

 Right
Certificate in accordance with Section 9 hereof, in cash or by                                                                

 certified check, cashier's check or money order payable to the
order of the                                                         

 Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from                                                         

 any
transfer agent of the Preferred Stock certificates for the number of                                                  
         

 shares
of Preferred Stock to be purchased and the Company hereby                                                                   

 irrevocably authorizes its transfer agent to comply with all such
requests,                                   
                     

 or (B)
requisition from the depositary agent depositary receipts                                                                   

 representing interests in such number of one one-hundredths of a
share of                                                           

 Preferred Stock as are to be purchased (in which case certificates
for the                                                          

 Preferred Stock represented by such receipts shall be deposited by
the                                                              

 transfer
agent with the depositary agent) and the Company hereby directs                                                
           

 the
depositary agent to comply with such request, (ii) when appropriate,                                                            

 requisition from the Company the amount of cash to be paid in lieu
of                                       
                       

 issuance
of fractional shares in accordance with Section 14 hereof, (iii)                                                           

 promptly
after receipt of such certificates or depositary receipts, cause                                                           

 the same
to be delivered to or upon the order of the registered holder of                                                           

 such
Right Certificate, registered in such name or names as may be                                                                  

 designated by such holder and (iv) when appropriate, after
receipt,                                                                 

 promptly
deliver such cash to or upon the order of the registered holder of                                                         

 such
Right Certificate.                                                                                                            

                                                                                                                                     

       
(d)   Except as otherwise
provided herein, in case the registered                                                            

 holder
of any Right Certificate shall exercise less than all of the Rights                                                          

 evidenced thereby, a new Right Certificate evidencing Rights
equivalent to                                                          

 the
exercisable Rights remaining unexercised shall be issued by the Rights                                                          

 Agent to
the registered holder of such Right Certificate or to his duly                                                             

 authorized assigns, subject to the provisions of Section 14
hereof.                                                                 

                                                                                                                                    

       
(e)   Notwithstanding anything in
this Agreement to the contrary,                                                            

 neither
the Rights Agent nor the Company shall be obligated to undertake                                                            

 any
action with respect to a registered holder of Rights upon the                                                                   

 occurrence of any purported transfer or exercise of Rights
pursuant to                                                              

 Section
6 hereof or this Section 7 unless such registered holder shall have                                                         

 (i)
completed and signed the certificate contained in the form of                                                                   

 assignment or form of election to purchase set forth on the
reverse side of                                                         

 the
Right Certificate surrendered for such transfer or exercise and (ii)                                                            

 provided
such additional evidence of the identity of the Beneficial Owner                                                           

 (or
former Beneficial Owner) thereof as the Company shall reasonably                                                                

 request.                                                                                                                           

                                                                                                                                    

       
SECTION 8.  CANCELLATION AND
DESTRUCTION OF RIGHT CERTIFICATES. 
All                                             
           

 Right
Certificates surrendered for the purpose of exercise, transfer, split                                                         

 up,
combination or exchange shall, if surrendered to the Company or to any                                                          

 of its
agents, be delivered to the Rights Agent for cancellation or in                                                              

 canceled
form, or, if surrendered to the Rights Agent, shall be canceled by                                                         

 it, and
no Right Certificates shall be issued in lieu thereof except as                                                             

 expressly permitted by any of the provisions of this
Agreement.  The                                                                

 Company
shall deliver to the Rights Agent for cancellation and retirement,                                                          

 and the
Rights Agent shall so cancel and retire, any other Right                                                                    

 Certificate purchased or acquired by the Company otherwise than
upon the                                                            

 exercise
thereof.  The Rights Agent shall deliver
all canceled Right                                                                

 Certificates to the Company, or shall, at the written request of
the                                                                

 Company,
destroy such canceled Right Certificates, and in such case shall                                                           

 deliver
a certificate of destruction thereof to the Company.                                                                       

       
SECTION 9.  AVAILABILITY OF SHARES
OF PREFERRED STOCK.                                                                      

                                                                                                                                    

       
(a)   The Company covenants and
agrees that it will cause to be                                                              

 reserved
and kept available out of its authorized and unissued shares of                                                            

 Preferred Stock or, if then permitted, any shares of Preferred
Stock held                                                           

 in its
treasury the number of shares of Preferred Stock that will be                                                                

 sufficient
to permit the exercise in full of all outstanding Rights.                                                                

                                                                                                                           
         

       
(b)   So long as the shares of
Preferred Stock issuable upon the                                                             

 exercise
of Rights may be listed or admitted to trading on any national                                                             

 securities exchange, or quoted on Nasdaq, the Company shall use
its best                                                            

 efforts
to cause, from and after such time as the Rights become                                                                     

 exercisable, all shares reserved for such issuance to be listed or
admitted                                                         

 to
trading on such exchange, or quoted on Nasdaq, upon official notice of                                                           

 issuance
upon such exercise.                                                                                            
           

                                                                                                                                    

             
(c)  From and after such time as
the Rights become                                                                     

 exercisable, the Company shall use its best efforts, if then
necessary to                                                           

 permit
the issuance of shares of Preferred Stock upon the exercise of                                                               

 Rights,
to register and qualify such shares of Preferred Stock under the                                                            

 Securities Act and any applicable state securities or "Blue
Sky" laws (to                                                           

 the
extent exemptions therefrom are not available), cause such registration                                                         

 statement and qualifications to become effective as soon as
possible after                                                          

 such
filing and keep such registration and qualifications effective until                                                           

 the
earlier of the date as of which the Rights are no longer exercisable                                                            

 for such
securities and the Expiration Date.  The
Company may temporarily                                                           

 suspend,
for a period of time not to exceed 90 days, the exercisability of                                                          

 the
Rights in order to prepare and file a registration statement under the                                                          

 Securities Act and permit it to become effective.  Upon any such                                                                   

 suspension, the Company shall issue a public announcement stating
that the                                                          

 exercisability of the Rights has been temporarily suspended, as
well as a                                                           

 public
announcement at such time as the suspension is no longer in effect.                                                          

 Notwithstanding any provision of this Agreement to the contrary,
the Rights                                                         

 shall
not be exercisable in any jurisdiction unless the requisite                                                                   

 qualification
in such jurisdiction shall have been obtained and until a                                                             

 registration statement under the Securities Act (if required)
shall have                                                            

 been
declared effective.                                                                                                           

                                                                                                               
                     

       
(d)   The Company covenants and
agrees that it will take all such                                                            

 action
as may be necessary to ensure that all shares of Preferred Stock                                                             

 delivered upon exercise of Rights shall, at the time of delivery
of the                                                             

 certificates therefor (subject to payment of the Purchase Price),
be duly                                                           

 and
validly authorized and issued and fully paid and nonassessable shares.                                                          

                                                                                                                                    

       
(e)   The Company further
covenants and agrees that it will pay when                                                         

 due and
payable any and all federal and state transfer taxes and charges                                                            

 which
may be payable in respect of the issuance or delivery of the Right                                                            

 Certificates or of any shares of Preferred Stock upon the exercise
of                                                               

 Rights.  The Company shall
not, however, be required to pay any transfer                                                            

 tax
which may be payable in respect of any transfer or delivery of Right                                                            

 Certificates to a Person other than, or the issuance or delivery
of                                                                 

 certificates or depositary receipts for the Preferred Stock in a
name other                                                         

 than
that of, the registered holder of the Right Certificate evidencing                                                             

 Rights
surrendered for exercise or to issue or deliver any certificates or                                                          

 depositary receipts for Preferred Stock upon the exercise of any
Rights                                                             

 until
any such tax shall have been paid (any such tax being payable by that                                                         

 holder
of such Right Certificate at the time of surrender) or until it has                                                          

 been
established to the Company's reasonable satisfaction that no such tax                                                          

 is
due.                                                                                                                             

                                                                                                                                    

       
SECTION 10.  PREFERRED STOCK
RECORD DATE.  Each Person in whose
name                                                         

 any
certificate for Preferred Stock is issued upon the exercise of Rights                                                           

 shall
for all purposes be deemed to have become the holder of record of the                                                         

 shares
of Preferred Stock represented thereby on, and such certificate                                                              

 shall be
dated, the date upon which the Right Certificate evidencing such                                                           

 Rights
was duly surrendered and payment of the Purchase Price (and any                                                    
         

 applicable transfer taxes) was made; PROVIDED, HOWEVER, that if
the date of                                                         

 such
surrender and payment is a date upon which the Preferred Stock                                                                 

 transfer
books of the Company are closed, such Person shall be deemed to                                                            

 have
become the record holder of such shares on, and such certificate shall                                                         

 be
dated, the next succeeding Business Day on which the Preferred Stock                                                             

 transfer
books of the Company are open.  Prior to
the exercise of the                                                               

 Rights
evidenced thereby, the holder of a Right Certificate shall not be                                                
           

 entitled
to any rights of a holder of Preferred Stock for which the Rights                                                          

 shall be
exercisable, including, without limitation, the right to vote or                                                           

 to
receive dividends or other distributions, and shall not be entitled to                                                           

 receive
any notice of any proceedings of the Company, except as provided                                                            

 herein.                                                                                                                            

                                                                                     
                                               

       
SECTION 11.  ADJUSTMENT OF
PURCHASE PRICE, NUMBER AND KIND OF SHARES                                                         

 AND
NUMBER OF RIGHTS.  The Purchase Price,
the number of shares of                                                                  

 Preferred Stock or other securities or property purchasable upon
exercise                                                           

 of each
Right and the number of Rights outstanding are subject to                                                                   

 adjustment from time to time as provided in this Section 11.                                                                       

                                                                                                                                     

       
(a)(i)  In the event the Company
shall at any time after the date of                                                         

 this
Agreement (A) declare and pay a dividend on the Preferred Stock                                                                

 payable
in shares of Preferred Stock, (B) subdivide the outstanding                                                                 

 Preferred Stock, (C) combine the outstanding Preferred Stock into
a smaller                                                         

 number
of shares of Preferred Stock or (D) issue any shares of its capital                                                          

 stock in
a reclassification of the Preferred Stock (including any such                                                              

 reclassification in connection with a consolidation or merger in
which the                                                          

 Company
is the continuing or surviving corporation), except as otherwise                                                            

 provided
in this Section 11(a), the Purchase Price in effect at the time of                                               
         

 the
record date for such dividend or of the effective date of such                                                                  

 subdivision, combination or reclassification, and the number and
kind of                                      
                     

 shares
of capital stock issuable on such date, shall be proportionately                                                             

 adjusted
so that the holder of any Right exercised after such time shall be                                                         

 entitled
to receive the aggregate number and kind of shares of capital                                                              

 stock
which, if such Right had been exercised immediately prior to such                                                             

 date and
at a time when the Preferred Stock transfer books of the Company                                                           

 were
open, the holder would have owned upon such exercise and been entitled                                                         

 to
receive by virtue of such dividend, subdivision, combination or                                                                  

 reclassification; PROVIDED, HOWEVER, that in no event shall
the                                                                    

 consideration to be paid upon the exercise of one Right be less
than the                                    
                       

 aggregate par value of the shares of capital stock of the Company
issuable                                                          

 upon
exercise of one Right.                                                                     
                                   

                                                                                                                                    

       
(ii)  Subject to Section 24 of
this Agreement, in the event any              
                                               

 Person
becomes an Acquiring Person (the first occurrence of such event                                                              

 being
referred to hereinafter as the "Flip-In Event"), then (A) the                                                                 

 Purchase
Price shall be adjusted to be the Purchase Price in effect                                                                 

 immediately prior to the Flip-In Event multiplied by the number of
one one-                                                         

 hundredths of a share of Preferred Stock for which a Right was
exercisable                                                          

 immediately prior to such Flip-In Event, whether or not such Right
was then                                                         

 exercisable, and (B) each holder of a Right, except as otherwise
provided                                                           

 in this
Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter                                                           

 have the
right to receive, upon exercise thereof at a price equal to the                                                            

 Purchase
Price (as so adjusted), in accordance with the terms of this                                                               

 Agreement and in lieu of shares of Preferred Stock, such number of
shares                                                           

 of
Common Stock as shall equal the result obtained by dividing the Purchase                                                         

 Price
(as so adjusted) by 50% of the current per share market price of the                                                          

 Common
Stock (determined pursuant to Section 11(d) hereof) on the date of                                                           

 such
Flip-In Event; PROVIDED, HOWEVER, that the Purchase Price (as so                                                     
         

 adjusted) and the number of shares of Common Stock so receivable
upon                                                               

 exercise
of a Right shall, following the Flip-In Event, be subject to                                                               

 further
adjustment as appropriate in accordance with Section 11(f) hereof.                                                          

 Notwithstanding anything in this Agreement to the contrary,
however, from                                                           

 and
after the Flip-In Event, any Rights that are beneficially owned by (x)                                                          

 any
Acquiring Person (or any Affiliate or Associate of any Acquiring                                                                

 Person),
(y) a transferee of any Acquiring Person (or any such Affiliate or                                                         

 Associate) who becomes a transferee after the Flip-In Event or (z)
a                                                                

 transferee of any Acquiring Person (or any such Affiliate or
Associate) who                                 
                       

 became a
transferee prior to or concurrently with the Flip-In Event                                                                 

 pursuant
to either (I) a transfer from the Acquiring Person to holders of                                                           

 its
equity securities or to any Person with whom it has any continuing                                                              

 agreement, arrangement or understanding regarding the transferred
Rights or                                                         

 (II) a
transfer which the Board of Directors has determined is part of a                                                            

 plan,
arrangement or understanding which has the purpose or effect of                                                               

 avoiding
the provisions of this paragraph, and subsequent transferees of                                                            

 such
Persons, shall be void without any further action and any holder of                                                            

 such
Rights shall thereafter have no rights whatsoever with respect to such                                                         

 Rights
under any provision of this Agreement. 
The Company shall use all                                                            

 reasonable efforts to ensure that the provisions of this Section
11(a)(ii)                                                          

 are
complied with, but shall have no liability to any holder of Right                                                               

 Certificates or other Person as a result of its failure to make
any                                                                 

 determinations with respect to an Acquiring Person or its
Affiliates,                                                               

 Associates or transferees hereunder.  From and after the Flip-In Event, no                                                          

 Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof                                                         

 that
represents Rights that are or have become void pursuant to the                                                                 

 provisions
of this paragraph, and any Right Certificate delivered to the                                                            

 Rights
Agent that represents Rights that are or have become void pursuant                                                 
         

 to the
provisions of this paragraph shall be canceled.  From and after the                                                          

 occurrence of an event specified in Section 13(a) hereof, any
Rights that                                                           

 theretofore have not been exercised pursuant to this Section
11(a)(ii)                                                              

 shall
thereafter be exercisable only in accordance with Section 13 and not                                                          

 pursuant
to this Section 11(a)(ii).                                                                                                

                                                                                       
                                             

       
(iii)  The Company may at its
option substitute for a share of                                                               

 Common
Stock issuable upon the exercise of Rights in accordance with the                                                            

 foregoing subparagraph (ii) a number of shares of Preferred Stock
or                                                                

 fraction
thereof such that the current per share market price of one share                                                          

 of
Preferred Stock multiplied by such number or fraction is equal to the                                                            

 current
per share market price of one share of Common Stock.  In the event                                                          

 that
there shall not be sufficient shares of Common Stock issued but not                                                            

 outstanding or authorized but unissued to permit the exercise in
full of                                                            

 the
Rights in accordance with the foregoing subparagraph (ii), the Board of                                                         

 Directors shall, to the extent permitted by applicable law and any
material                                                         

 agreements then in effect to which the Company is a party (A)
determine the                                                         

 excess
(such excess, the "Spread") of (1) the value of the shares of
Common                                                         

 Stock
issuable upon the exercise of a Right in accordance with the                                                                  

 foregoing subparagraph (ii) (the "Current Value") over
(2) the Purchase                                                             

 Price
(as adjusted in accordance with the foregoing subparagraph (ii)), and                                                         

 (B) with
respect to each Right (other than Rights which have become void                                                            

 pursuant
to the foregoing subparagraph (ii)), make adequate provision to                                                            

 substitute for the shares of Common Stock issuable in accordance
with the                                                           

 foregoing subparagraph (ii) upon exercise of the Right and payment
of the                                                           

 Purchase
Price (as adjusted in accordance therewith), (1) cash, (2) a                                                               

 reduction in such Purchase Price, (3) shares of Preferred Stock or
other                                                            

 equity
securities of the Company (including, without limitation, shares or                                                          

 fractions
of shares of preferred stock which, by virtue of having dividend,                                                         

 voting
and liquidation rights substantially comparable to those of the                                                    
         

 shares
of Common Stock, are deemed in good faith by the Board of Directors                                                          

 to have
substantially the same value as the shares of Common Stock (such                                                            

 shares
of Preferred Stock and shares or fractions of shares of preferred                                                            

 stock
are hereinafter referred to as "Common Stock Equivalents")), (4)
debt                                                         

 securities of the Company, (5) other assets, or (6) any
combination of the                                                          

 foregoing, having a value which, when added to the value of the
shares of                                                           

 Common
Stock issued upon exercise of such Right, shall have an aggregate                                                            

 value
equal to the Current Value (less the amount of any reduction in such                                                          

 Purchase
Price), where such aggregate value has been determined by the                                                              

 Board of
Directors upon the advice of a nationally recognized investment                                                            

 banking
firm selected in good faith by the Board of Directors; PROVIDED,                                                            

 HOWEVER,
that if the Company shall not make adequate provision to deliver                                                           

 value
pursuant to clause (B) above within thirty (30) days following the                                                            

 Flip-In
Event (the "Section 11(a) (ii) Trigger Date"), then the Company                                                             

 shall be
obligated to deliver, to the extent permitted by applicable law                                              
             

 and any
material agreements then in effect to which the Company is a party,                                                         

 upon the
surrender for exercise of a Right and without requiring payment of                                                         

 such
Purchase Price, shares of Common Stock (to the extent available), and                                                          

 then, if
necessary, such number or fractions of shares of Preferred Stock                                                           

 (to the
extent available) and then, if necessary, cash, which shares and/or                                                         

 cash
have an aggregate value equal to the Spread. 
If, upon the occurrence                                                          

 of the
Flip-In Event, the Board of Directors shall determine in good faith                                                          

 that it
is likely that sufficient additional shares of Common Stock could                                                           

 be
authorized for issuance upon exercise in full of the Rights, then, if                                                            

 the
Board of Directors so elects, the thirty (30) day period set forth                                                              

 above
may be extended to the extent necessary, but not more than ninety                                                             

 (90)
days after the Section 11(a) (ii) Trigger Date, in order that the                                                              

 Company
may seek shareholder approval for the authorization of such                                                                 

 additional shares (such thirty (30) day period, as it may be
extended, is                                                           

 herein
called the "Substitution Period"). To the extent that the
Company                                                            

 determines that some action need be taken pursuant to the second
and/or                                                             

 third
sentence of this Section 11(a)(iii), the Company (x) shall provide,                                                           

 subject
to Section 11(a)(ii) hereof and the last sentence of this Section                                                           

 11(a)(iii) hereof, that such action shall apply uniformly to
all                                                                   

 outstanding Rights and (y) may suspend the exercisability of the
Rights                                                             

 until
the expiration of the Substitution Period in order to seek any                                                    
           

 authorization of additional shares and/or to decide the
appropriate form of                                                         

 distribution to be made pursuant to such second sentence and to
determine                                   
                       

 the
value thereof. In the event of any such suspension, the Company shall                                                           

 issue a
public announcement stating that the exercisability of the Rights                                                           

 has been
temporarily suspended, as well as a public announcement at such                                                            

 time as
the suspension is no longer in effect. 
For purposes of this                
                                               

 Section
11(a)(iii), the value of the shares of Common Stock shall be the                                                            

 current
per share market price (as determined pursuant to Section 11(d)(i))                                                         

 on the
Section 11(a)(ii) Trigger Date and the per share or fractional value                                                         

 of any
"Common Stock Equivalent" shall be deemed to equal the current
per                                                           

 share
market price of the Common Stock. The Board of Directors of the                                                               

 Company
may, but shall not be required to, establish procedures to allocate                                                         

 the
right to receive shares of Common Stock upon the exercise of the Rights                                                         

 among
holders of Rights pursuant to this Section 11(a)(iii).                                                                       

                                                                                                                                    

       
(b)   In case the Company shall
fix a record date for the issuance                                                           

 of
rights, options or warrants to all holders of Preferred Stock entitling                                                          

 them
(for a period expiring within 45 calendar days after such record date)                                                         

 to
subscribe for or purchase Preferred Stock (or shares having the same                                                             

 rights,
privileges and preferences as the Preferred Stock ("equivalent                                                              

 preferred shares")) or securities convertible into Preferred
Stock or                                                               

 equivalent preferred shares at a price per share of Preferred
Stock or                                                              

 equivalent preferred shares (or having a conversion price per
share, if a                                                           

 security
convertible into shares of Preferred Stock or equivalent preferred                                                         

 shares)
less than the then current per share market price of the Preferred                                                          

 Stock
(determined pursuant to Section 11(d) hereof) on such record date,                                                            

 the
Purchase Price to be in effect after such record date shall be                                                                  

 determined by multiplying the Purchase Price in effect immediately
prior to                                                         

 such
record date by a fraction, the numerator of which shall be the number                                                          

 of
shares of Preferred Stock and equivalent preferred shares outstanding on                                                         

 such
record date plus the number of shares of Preferred Stock and                                                                   

 equivalent preferred shares which the aggregate offering price of
the total                                 
                       

 number
of shares of Preferred Stock and/or equivalent preferred shares so                                                           

 to be
offered (and/or the aggregate initial conversion price of the                                                                 

 convertible securities so to be offered) would purchase at such
current                                                             

 market
price, and the denominator of which shall be the number of shares of                                                         

 Preferred Stock and equivalent preferred shares outstanding on
such record                                                          

 date
plus the number of additional shares of Preferred Stock and/or                                                                 

 equivalent preferred shares to be offered for subscription or
purchase (or                                                          

 into
which the convertible securities so to be offered are initially                                                                

 convertible); PROVIDED, HOWEVER, that in no event shall the
consideration                                                           

 to be
paid upon the exercise of one Right be less than the aggregate par                                                            

 value of
the shares of capital stock of the Company issuable upon exercise                                                          

 of one
Right.  In case such subscription price
may be paid in a                                                                    

 consideration part or all of which shall be in a form other than
cash, the                                                          

 value of
such consideration shall be as determined in good faith by the                                                             

 Board of
Directors of the Company, whose determination shall be described                                                           

 in a
statement filed with the Rights Agent. 
Shares of Preferred Stock and                                                          

 equivalent preferred shares owned by or held for the account of
the Company                                                         

 shall
not be deemed outstanding for the purpose of any such computation.                                                            

 Such
adjustment shall be made successively whenever such a record date is                                                 
         

 fixed;
and in the event that such rights, options or warrants are not so                                                            

 issued,
the Purchase Price shall be adjusted to be the Purchase Price which                                                         

 would
then be in effect if such record date had not been fixed.                                                                    

                                                                                                   
                                 

       
(c)   In case the Company shall
fix a record date for the making of                                                          

 a
distribution to all holders of the Preferred Stock (including any such                                                            

 distribution made in connection with a consolidation or merger in
which the                                                         

 Company
is the continuing or surviving corporation) of evidences of                                                                 

 indebtedness or assets (other than a regular quarterly cash
dividend or a                                                           

 dividend
payable in Preferred Stock) or subscription rights or warrants                                                             

 (excluding those referred to in Section 11(b) hereof), the
Purchase Price                                                           

 to be in
effect after such record date shall be determined by multiplying                                                           

 the
Purchase Price in effect immediately prior to such record date by a                                                             

 fraction, the numerator of which shall be the then current per
share market                                                         

 price of
the Preferred Stock (determined pursuant to Section 11(d) hereof)                                                          

 on such
record date, less the fair market value (as determined in good                                                              

 faith by
the Board of Directors of the Company whose determination shall be                                                         

 described in a statement filed with the Rights Agent) of the
portion of the                                                         

 assets
or evidences of indebtedness so to be distributed or of such                                                                 

 subscription rights or warrants applicable to one share of
Preferred Stock,                                                         

 and the
denominator of which shall be such current per share market price                                                           

 (determined pursuant to Section 11(d) hereof) of the Preferred
Stock;                                                               

 PROVIDED, HOWEVER, that in no event shall the consideration to be
paid upon                                                         

 the
exercise of one Right be less than the aggregate par value of the                                                               

 shares
of capital stock of the Company to be issued upon exercise of one                                                            

 Right.  Such adjustments
shall be made successively whenever such a record                                                          

 date is
fixed; and in the event that such distribution is not so made, the                                                          

 Purchase
Price shall again be adjusted to be the Purchase Price which would                                               
         

 then be
in effect if such record date had not been fixed.                                                                          

                                                                                                               
                     

       
(d)(i)  Except as otherwise
provided herein, for the purpose of any                                                          

 computation hereunder, the "current per share market price
" of any                               
                                 

 security
(a "Security " for the purpose of this Section 11(d)(i)) on any                                                            

 date
shall be deemed to be the average of the daily closing prices per                                                              

 share of
such Security for the 30 consecutive Trading Days (as such term is                                                         

 hereinafter defined) immediately prior to such date; PROVIDED,
HOWEVER,                                                             

 that in
the event that the current per share market price of the Security                                                           

 is
determined during a period following the announcement by the issuer of                                                           

 such
Security of (A) a dividend or distribution on such Security payable in                                                         

 shares
of such Security or securities convertible into such shares, or (B)                                                          

 any
subdivision, combination or reclassification of such Security, and                                                              

 prior to
the expiration of 30 Trading Days after the ex-dividend date for                                                           

 such
dividend or distribution, or the record date for such subdivision,                                                             

 combination
or reclassification, then, and in each such case, the current                                                           

 per
share market price shall be appropriately adjusted to reflect the                                                     
         

 current
market price per share equivalent of such Security.  The closing                                                            

 price
for each day shall be the last sale price, regular way, or, in case                                                           

 no such
sale takes place on such day, the average of the closing bid and                                                            

 asked
prices, regular way, in either case as reported by the principal                                                              

 consolidated transaction reporting system with respect to
securities listed                                                         

 or
admitted to trading on the New York Stock Exchange or, if the Security                                                           

 is not
listed or admitted to trading on the New York Stock Exchange, as                                                             

 reported
in the principal consolidated transaction reporting system with                                                            

 respect
to securities listed on the principal national securities exchange                                                          

 on which
the Security is listed or admitted to trading or, if the Security                                                          

 is not
listed or admitted to trading on any national securities exchange,                                                           

 the last
quoted price or, if not so quoted, the average of the high bid and                                                         

 low
asked prices in the over-the-counter market, as reported by Nasdaq or                                                           

 such
other system then in use, or, if on any such date the Security is not                                                          

 quoted
by any such organization, the average of the closing bid and asked                                                           

 prices
as furnished by a professional market maker making a market in the                                                           

 Security
selected by the Board of Directors of the Company.  The term                                                               

 "Trading Day" shall mean a day on which the principal
national securities                                                           

 exchange
on which the Security is listed or admitted to trading is open for                                                         

 the
transaction of business or, if the Security is not listed or admitted                                                           

 to
trading on any national securities exchange, a Business Day.                                                                     

                                                                                                                                    

       
(ii)  For the purpose of any
computation hereunder, if the Preferred                                                         

 Stock is
publicly traded, the "current per share market price" of the                                                               

 Preferred Stock shall be determined in accordance with the method
set forth                                                         

 in
Section 11(d)(i).  If the Preferred
Stock is not publicly traded but the                                                         

 Common
Stock is publicly traded, the "current per share market price"
of                                                            

 the
Preferred Stock shall be conclusively deemed to be the current per                                                              

 share
market price of the Common Stock as determined pursuant to Section                                                            

 11(d)(i)
multiplied by the then applicable Adjustment Number (as defined in                                                         

 and
determined in accordance with the Certificate of Determination for the                                                          

 Preferred Stock).  If
neither the Common Stock nor the Preferred Stock is                                                           

 publicly
traded, "current per share market price" shall mean the fair
value                                                         

 per
share as determined in good faith by the Board of Directors of the                                                              

 Company,
whose determination shall be described in a statement filed with                                                           

 the
Rights Agent.                                                                                                                  

                                                                                                                                     

       
(e)   No adjustment in the
Purchase Price shall be required unless                                                           

 such
adjustment would require an increase or decrease of at least 1% in the                                                         

 Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of                                                          

 this
Section 11(e) are not required to be made shall be carried forward and                                                         

 taken
into account in any subsequent adjustment. 
All calculations under                                                            

 this
Section 11 shall be made to the nearest cent or to the nearest one-                                                            

 thousandth of a share of Preferred Stock or one-hundredth of a
share of                                       
                     

 Common
Stock or other share or security as the case may be.                                                                        

 Notwithstanding the first sentence of this Section 11(e), any
adjustment                                                            

 required
by this Section 11 shall be made no later than the earlier of (i)                                                          

 three
years from the date of the transaction which requires such adjustment                                                         

 or (ii)
the Expiration Date.                                                                                            
           

                                                                                                                                    

       
(f)   If as a result of an
adjustment made pursuant to Section 11(a)                                                         

 hereof,
the holder of any Right thereafter exercised shall become entitled                                                          

 to
receive any shares of capital stock of the Company other than the                                                                

 Preferred Stock, thereafter the Purchase Price and the number of
such other                                                         

 shares
so receivable upon exercise of a Right shall be subject to                                                                   

 adjustment from time to time in a manner and on terms as nearly
equivalent                                                          

 as
practicable to the provisions with respect to the Preferred Stock                                                                

 contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and
11(m)                                                            

 hereof,
as applicable, and the provisions of Sections 7, 9, 10, 13 and 14                                                           

 hereof
with respect to the Preferred Stock shall apply on like terms to any                                                         

 such
other shares.                              
                                                                                   

                                                                                                                                    

       
(g)   All Rights originally issued
by the Company subsequent to any                                                          

 adjustment made to the Purchase Price hereunder shall evidence the
right to                                                         

 purchase, at the adjusted Purchase Price, the number of one
one-hundredths                                                          

 of a
share of Preferred Stock purchasable from time to time hereunder upon                                                          

 exercise
of the Rights, all subject to further adjustment as provided                                                               

 herein.                                                                                                                            

       (h)  
Unless the Company shall have exercised its election as                                                                

 provided
in Section 11(i), upon each adjustment of the Purchase Price as a                                                
         

 result
of the calculations made in Sections 11(b) and 11(c), each Right                                                             

 outstanding immediately prior to the making of such adjustment
shall                                          
                     

 thereafter evidence the right to purchase, at the adjusted
Purchase Price,                                                          

 that
number of one one-hundredth of a share of Preferred Stock (calculated                                                          

 to the
nearest one-thousandth of a share of Preferred Stock) obtained by                                                            

 (i)
multiplying (x) the number of one one-hundredths of a share purchasable                                                         

 upon the
exercise of a Right immediately prior to such adjustment by (y)                                                            

 the
Purchase Price in effect immediately prior to such adjustment of the                                                            

 Purchase
Price and (ii) dividing the product so obtained by the Purchase                                                
           

 Price in
effect immediately after such adjustment of the Purchase Price.                                                            

                                                                                                             
                       

       
(i)   The Company may elect on or
after the date of any adjustment                                                           

 of the
Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust                                                          

 the
number of Rights, in substitution for any adjustment in the number of                                                           

 one
one-hundredths of a share of Preferred Stock purchasable upon the                                                               

 exercise
of a Right.  Each of the Rights
outstanding after such adjustment                                                          

 of the
number of Rights shall be exercisable for the number of one one-                                                             

 hundredths of a share of Preferred Stock for which a Right was
exercisable                                                          

 immediately prior to such adjustment.  Each Right held of record prior to                                                           

 such
adjustment of the number of Rights shall become that number of Rights                                                          

 (calculated to the nearest one-hundredth) obtained by dividing the
Purchase                                                         

 Price in
effect immediately prior to adjustment of the Purchase Price by                                                            

 the
Purchase Price in effect immediately after adjustment of the Purchase                                                           

 Price.  The Company shall
make a public announcement of its election to                                                             

 adjust
the number of Rights, indicating the record date for the adjustment,                                                         

 and, if
known at the time, the amount of the adjustment to be made.  Such                                                           

 record
date may be the date on which the Purchase Price is adjusted or any                                                          

 day
thereafter, but, if the Right Certificates have been issued, shall be                                                           

 at least
10 days later than the date of the public announcement.  If Right                                                          

 Certificates have been issued, upon each adjustment of the number
of Rights                                                         

 pursuant
to this Section 11(i), the Company may, as promptly as                                                                    

 practicable, cause to be distributed to holders of record of
Right                                                                  

 Certificates on such record date Right Certificates evidencing,
subject to                                                          

 Section
14 hereof, the additional Rights to which such holders shall be                                                             

 entitled
as a result of such adjustment, or, at the option of the Company,                                                          

 shall
cause to be distributed to such holders of record in substitution and                                                         

 replacement for the Right Certificates held by such holders prior
to the                                                            

 date of
adjustment, and upon surrender thereof, if required by the Company,                                                         

 new
Right Certificates evidencing all the Rights to which such holders                                                              

 shall be
entitled after such adjustment.  Right
Certificates so to be                                                               

 distributed shall be issued, executed and countersigned in the
manner                                                               

 provided
for herein and shall be registered in the names of the holders of                                                          

 record
of Right Certificates on the record date specified in the public                                                             

 announcement.                                                                                                                      

                                                                         
                                                           

       
(j)   Irrespective of any
adjustment or change in the Purchase Price                                                         

 or the
number of one one-hundredths of a share of Preferred Stock issuable                                                          

 upon the
exercise of a Right, the Right Certificates theretofore and                                                                

 thereafter issued may continue to express the Purchase Price and
the number                                                         

 of one
one-hundredths of a share of Preferred Stock which were expressed in                                                         

 the
initial Right Certificates issued hereunder.                                                                                   

                                                                                                                                    

       
(k)   Before taking any action
that would cause an adjustment                                                                

 reducing
the Purchase Price below the then par value, if any, of the                                                                

 fraction
of Preferred Stock or other shares of capital stock issuable upon                                                          

 exercise
of a Right, the Company shall take any corporate action which may,                                                         

 in the
opinion of its counsel, be necessary in order that the Company may                                                           

 validly
and legally issue fully paid and nonassessable shares of Preferred                                                
         

 Stock or
other such shares at such adjusted Purchase Price.                                                                        

       
(l)   In any case in which this
Section 11 shall require that an                                                             

 adjustment in the Purchase Price be made effective as of a record
date for                                                          

 a
specified event, the Company may elect to defer until the occurrence of                                                           

 such
event issuing to the holder of any Right exercised after such record                                                           

 date the
Preferred Stock and other capital stock or securities of the                                                               

 Company,
if any, issuable upon such exercise over and above the Preferred                                                           

 Stock
and other capital stock or securities of the Company, if any,                                                                 

 issuable
upon such exercise on the basis of the Purchase Price in effect                                                
           

 prior to
such adjustment; PROVIDED, HOWEVER, that the Company shall deliver                                                         

 to such
holder a due bill or other appropriate instrument evidencing such                                                           

 holder's
right to receive such additional shares upon the occurrence of the                                                         

 event
requiring such adjustment.                                                                                                    

                                                                                                                                    

       
(m)   Anything in this Section 11
to the contrary notwithstanding,           
                                               

 the
Company shall be entitled to make such adjustments in the Purchase                                                              

 Price,
in addition to those adjustments expressly required by this Section                                                          

 11, as
and to the extent that it in its sole discretion shall determine to                                                          

 be
advisable in order that any consolidation or subdivision of the                                                                  

 Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock                                                          

 at less
than the current market price, issuance wholly for cash of                                                                  

 Preferred Stock or securities which by their terms are convertible
into or                                                          

 exchangeable for Preferred Stock, dividends on Preferred Stock
payable in                                                           

 shares
of Preferred Stock or issuance of rights, options or warrants                                                                

 referred
to hereinabove in Section 11(b), hereafter made by the Company to                                                          

 holders
of its Preferred Stock shall not be taxable to such shareholders.                                                           

             
                                                                                                                       

       
(n)   Anything in this Agreement
to the contrary notwithstanding, in                                                         

 the
event that at any time after the date of this Rights Agreement and                                                              

 prior to
the Distribution Date, the Company shall (i) declare and pay any                                                 
         

 dividend
on the Common Stock payable in Common Stock or (ii) effect a                                                               

 subdivision, combination or consolidation of the Common Stock
(by                                                                   

 reclassification or otherwise than by payment of a dividend
payable in                                                              

 Common
Stock) into a greater or lesser number of shares of Common Stock,                                                            

 then, in
each such case, the number of Rights associated with each share of                                                         

 Common
Stock then outstanding, or issued or delivered thereafter, shall be                                                          

 proportionately adjusted so that the number of Rights thereafter
associated                                                         

 with
each share of Common Stock following any such event shall equal the                                                            

 result
obtained by multiplying the number of Rights associated with each                                                            

 share of
Common Stock immediately prior to such event by a fraction the                                                             

 numerator of which shall be the total number of shares of Common
Stock                                                              

 outstanding immediately prior to the occurrence of the event and
the                                                                

 denominator of which shall be the total number of shares of Common
Stock                                                            

 outstanding immediately following the occurrence of such
event.                                                                    

                                                                         
                                                           

       
(o)   The Company agrees that,
after the earlier of the Distribution                                                         

 Date or
the Stock Acquisition Date, it will not, except as permitted by                                                             

 Sections
23, 24 or 27 hereof, take (or permit any Subsidiary to take) any                                                           

 action
if at the time such action is taken it is reasonably foreseeable                                                             

 that
such action will diminish substantially or eliminate the benefits                                                              

 intended
to be afforded by the Rights.                                                                                             

                                                                                                                                    

       
SECTION 12.  CERTIFICATE OF
ADJUSTED PURCHASE PRICE OR NUMBER OF                                                             

 SHARES.  Whenever an
adjustment is made as provided in Section 11 or 13                                                             

 hereof,
the Company shall promptly (a) prepare a certificate setting forth                                                          

 such
adjustment, and a brief statement of the facts accounting for such                                                             

 adjustment,
(b) file with the Rights Agent and with each transfer agent for                                                         

 the
Common Stock and the Preferred Stock a copy of such certificate and (c)                                               
         

 mail a
brief summary thereof to each holder of a Right Certificate in                                                               

 accordance with Section 25 hereof (if so required under Section 25
hereof).                                   
                     

 The
Rights Agent shall be fully protected in relying on any such                                                                   

 certificate and on any adjustment therein contained and shall not
be deemed                                                         

 to have
knowledge of any such adjustment unless and until it shall have                                                             

 received
such certificate.                                                                                                          

                                                                                                                                    

       
SECTION 13.  CONSOLIDATION,
MERGER OR SALE OR TRANSFER OF ASSETS OR                                                          

 EARNING
POWER.                                                                                                          
           

                                                                                                                                    

       
(a)   In the event, directly or
indirectly, at any time after the                                                            

 Flip-In
Event (i) the Company shall consolidate with or shall merge into                                                            

 any
other Person, (ii) any Person shall merge with and into the Company and                                                         

 the
Company shall be the continuing or surviving corporation of such merger                                                         

 and, in
connection with such merger, all or part of the Common Stock shall                                                          

 be
changed into or exchanged for stock or other securities of any other                                                             

 Person
(or of the Company) or cash or any other property, or (iii) the                                                              

 Company
shall sell or otherwise transfer (or one or more of its                                                                    

 Subsidiaries shall sell or otherwise transfer), in one or more                                                                     

 transactions, assets or earning power aggregating 50% or more of
the assets                                                         

 or
earning power of the Company and its Subsidiaries (taken as a whole) to                                                          

 any
other Person (other than the Company or one or more wholly-owned                                                                

 Subsidiaries of the Company), then upon the first occurrence of
such event,                                                         

 proper
provision shall be made so that: (A) each holder of a Right (other                                                           

 than
Rights which have become void pursuant to Section 11(a)(ii) hereof)                                                            

 shall
thereafter have the right to receive, upon the exercise thereof at                                                            

 the
Purchase Price (as theretofore adjusted in accordance with Section                                                              

 11(a)(ii) hereof), in accordance with the terms of this Agreement
and in                                                            

 lieu of
shares of Preferred Stock or Common Stock of the Company, such                                                              

 number
of validly authorized and issued, fully paid, non-assessable and                                                   
         

 freely
tradeable shares of Common Stock of the Principal Party (as such                                                             

 term is
hereinafter defined), not subject to any liens, encumbrances,                                                               

 rights
of first refusal or other adverse claims, as shall equal the result                                                          

 obtained
by dividing the Purchase Price (as theretofore adjusted in                                                                 

 accordance with Section 11(a)(ii) hereof) by 50% of the current
per share                                                           

 market
price of the Common Stock of such Principal Party (determined                                                                

 pursuant
to Section 11(d) hereof) on the date of consummation of such                                                   
           

 consolidation, merger, sale or transfer; PROVIDED, HOWEVER, that
the                                                                

 Purchase
Price (as theretofore adjusted in accordance with Section                                                                  

 11(a)(ii) hereof) and the number of shares of Common Stock of
such                                                                  

 Principal Party so receivable upon exercise of a Right shall be
subject to                                                          

 further
adjustment as appropriate in accordance with Section 11(f) hereof                                                           

 to
reflect any events occurring in respect of the Common Stock of such                                                              

 Principal Party after the occurrence of such consolidation,
merger, sale or                                                         

 transfer; (B) such Principal Party shall thereafter be liable for,
and                                                              

 shall
assume, by virtue of such consolidation, merger, sale or transfer,                                                            

 all the
obligations and duties of the Company pursuant to this Rights                                                               

 Agreement; (C) the term "Company" shall thereafter be
deemed to refer to                                                            

 such
Principal Party; and (D) such Principal Party shall take such steps                                                            

 (including, but not limited to, the reservation of a sufficient
number of                                                           

 its
shares of Common Stock in accordance with Section 9 hereof) in                                                                  

 connection with such consummation of any such transaction as may
be                                                                 

 necessary to assure that the provisions hereof shall thereafter
be                                                                  

 applicable, as nearly as reasonably may be, in relation to the
shares of                                                            

 its
Common Stock thereafter deliverable upon the exercise of the Rights;                                                            

 provided
that, upon the subsequent occurrence of any consolidation, merger,                                                         

 sale or
transfer of assets or other extraordinary transaction in respect of                                                         

 such
Principal Party, each holder of a Right shall thereupon be entitled to                                               
         

 receive,
upon exercise of a Right and payment of the Purchase Price as                                                              

 provided
in this Section 13(a), such cash, shares, rights, warrants and                                                             

 other
property which such holder would have been entitled to receive had                                                            

 such
holder, at the time of such transaction, owned the Common Stock of the                                                         

 Principal Party receivable upon the exercise of a Right pursuant
to this                                                            

 Section
13(a), and such Principal Party shall take such steps (including,                                                           

 but not
limited to, reservation of shares of stock) as may be necessary to                                                          

 permit
the subsequent exercise of the Rights in accordance with the terms                                                           

 hereof
for such cash, shares, rights, warrants and other property.                                                                  

       
(b)   "Principal Party"
shall mean:                                                                                         

                                                                                                             
                       

             
(i)  in the case of any
transaction described in (i) or (ii)                                                           

 of the
first sentence of Section 13(a) hereof: (A) the Person that is the                                                           

 issuer
of the securities into which the shares of Common Stock are                                                                  

 converted in such merger or consolidation, or, if there is more
than one                                                            

 such
issuer, the issuer the shares of Common Stock of which have the                                                                

 greatest
aggregate market value of shares outstanding, or (B) if no                                                                 

 securities are so issued, (x) the Person that is the other party
to the                                                             

 merger,
if such Person survives said merger, or, if there is more than one                                                          

 such
Person, the Person the shares of Common Stock of which have the                                                                

 greatest
aggregate market value of shares outstanding or (y) if the Person                                                          

 that is
the other party to the merger does not survive the merger, the                                                              

 Person
that does survive the merger (including the Company if it survives)                                                          

 or (z)
the Person resulting from the consolidation; and                                                                            

                                                                                                                                     

             
(ii)  in the case of any
transaction described in (iii) of the                                                         

 first
sentence in Section 13(a) hereof, the Person that is the party                                                                

 receiving the greatest portion of the assets or earning power
transferred                                                           

 pursuant
to such transaction or transactions, or, if each Person that is a                                                          

 party to
such transaction or transactions receives the same portion of the                                                
         

 assets
or earning power so transferred or if the Person receiving the                                                               

 greatest
portion of the assets or earning power cannot be determined,                                                               

 whichever of such Persons is the issuer of Common Stock having the
greatest                                                         

 aggregate market value of shares outstanding; PROVIDED, HOWEVER,
that in                                                            

 any such
case described in the foregoing clause (b)(i) or (b)(ii), if the                                                           

 Common
Stock of such Person is not at such time or has not been                                                                    

 continuously over the preceding 12-month period registered under
Section 12                                                         

 of the
Exchange Act, then (1) if such Person is a direct or indirect                                                                

 Subsidiary of another Person the Common Stock of which is and has
been so                                                           

 registered, the term "Principal Party" shall refer to
such other Person, or                                                         

 (2) if
such Person is a Subsidiary, directly or indirectly, of more than                                                            

 one
Person, the Common Stock of all of which is and has been so registered,                                                         

 the term
"Principal Party" shall refer to whichever of such Persons is
the                                                          

 issuer
of Common Stock having the greatest aggregate market value of shares                                                         

 outstanding, or (3) if such Person is owned, directly or
indirectly, by a                                                           

 joint
venture formed by two or more Persons that are not owned, directly or                                                         

 indirectly, by the same Person, the rules set forth in clauses (1)
and (2)                                                          

 above
shall apply to each of the owners having an interest in the venture                                                           

 as if
the Person owned by the joint venture was a Subsidiary of both or all                                                         

 of such
joint venturers, and the Principal Party in each such case shall                                                            

 bear the
obligations set forth in this Section 13 in the same ratio as its                                                          

 interest
in such Person bears to the total of such interests.                                                                      

                                                                                                                                     

       
(c)   The Company shall not
consummate any consolidation, merger,                                                            

 sale or
transfer referred to in Section 13(a) hereof unless prior thereto                                                           

 the
Company and the Principal Party involved therein shall have executed                                                            

 and
delivered to the Rights Agent an agreement confirming that the                                                                  

 requirements of Sections 13(a) and (b) hereof shall promptly be
performed                                                           

 in
accordance with their terms and that such consolidation, merger, sale or                                                         

 transfer
of assets shall not result in a default by the Principal Party                                                             

 under
this Agreement as the same shall have been assumed by the Principal                                                           

 Party
pursuant to Sections 13(a) and (b) hereof and providing that, as soon                                                         

 as practicable
after executing such agreement pursuant to this Section 13,                                                          

 the
Principal Party will:                                                                                                   
       

                                                                                                                                    

             
(i)  prepare and file a
registration statement under the                                                               

 Securities Act, if necessary, with respect to the Rights and the
securities                                                         

 purchasable upon exercise of the Rights on an appropriate form,
use its                                                             

 best
efforts to cause such registration statement to become effective as                                                            

 soon as
practicable after such filing and use its best efforts to cause                                                             

 such
registration statement to remain effective (with a prospectus at all                                                           

 times
meeting the requirements of the Securities Act) until the Expiration                                                          

 Date and
similarly comply with applicable state securities laws;                                                                    

                                                                                                                                    

             
(ii)  use its best efforts, if
the Common Stock of the                                                                 

 Principal Party shall be listed or admitted to trading on the New
York                                                              

 Stock
Exchange or on another national securities exchange, to list or admit                                                         

 to
trading (or continue the listing of) the Rights and the securities                                                               

 purchasable upon exercise of the Rights on the New York Stock
Exchange or                                                           

 such
securities exchange, or, if the Common Stock of the Principal Party                                                            

 shall
not be listed or admitted to trading on the New York Stock Exchange                                                           

 or a
national securities exchange, to cause the Rights and the securities                                                           

 receivable upon exercise of the Rights to be authorized for
quotation on                                                            

 Nasdaq
or on such other system then in use;                                                                                        

             
                                                                                                                       

             
(iii)  deliver to holders of the
Rights historical financial                                                           

 statements
for the Principal Party which comply in all respects with the                                                            

 requirements for registration on Form 10 (or any successor form)
under the                                                          

 Exchange
Act; and                                                                                                                  

                                                                                                               
                     

             
(iv)  obtain waivers of any
rights of first refusal or                                                                 

 preemptive rights in respect of the Common Stock of the Principal
Party                                                             

 subject
to purchase upon exercise of outstanding Rights.                                                                           

                                                                                                                                    

       
(d)   In case the Principal Party
has a provision in any of its                                                              

 authorized securities or in its certificate of incorporation or
by-laws or                                                          

 other
instrument governing its corporate affairs, which provision would                                                             

 have the
effect of (i) causing such Principal Party to issue (other than to                                                         

 holders
of Rights pursuant to this Section 13), in connection with, or as a                                                         

 consequence of, the consummation of a transaction referred to in
this                                                               

 Section
13, shares of Common Stock or Common Stock Equivalents of such                                                              

 Principal Party at less than the then current market price per
share                                                                

 thereof
(determined pursuant to Section 11(d) hereof) or securities                                                                 

 exercisable for, or convertible into, Common Stock or Common
Stock                                                                  

 Equivalents of such Principal Party at less than such then current
market                                                           

 price,
or (ii) providing for any special payment, tax or similar provision                                                          

 in
connection with the issuance of the Common Stock of such Principal Party                                                         

 pursuant
to the provisions of Section 13, then, in such event, the Company                                                          

 hereby
agrees with each holder of Rights that it shall not consummate any                                                           

 such
transaction unless prior thereto the Company and such Principal Party                                                          

 shall
have executed and delivered to the Rights Agent a supplemental                                                                

 agreement providing that the provision in question of such
Principal Party                                                          

 shall
have been canceled, waived or amended, or that the authorized                                                                 

 securities shall be redeemed, so that the applicable provision
will have no                                                         

 effect
in connection with, or as a consequence of, the consummation of the                                                          

 proposed
transaction.                                                                                                     
         

                                                                                                                                    

       
(e)   The Company covenants and
agrees that it shall not, at any                                                             

 time
after the Flip-In Event, enter into any transaction of the type                                                                

 described in clauses (i) through (iii) of Section 13(a) hereof if
(i) at                                                            

 the time
of or immediately after such consolidation, merger, sale, transfer                                                         

 or other
transaction there are any rights, warrants or other instruments or                                                         

 securities outstanding or agreements in effect which would
substantially                                                            

 diminish
or otherwise eliminate the benefits intended to be afforded by the                                                         

 Rights,
(ii) prior to, simultaneously with or immediately after such                                                                

 consolidation, merger, sale, transfer or other transaction,
the                                                                    

 stockholders of the Person who constitutes, or would constitute,
the                                                                

 Principal Party for purposes of Section 13(b) hereof shall have
received a                                                          

 distribution of Rights previously owned by such Person or any of
its                                                                

 Affiliates or Associates or (iii) the form or nature of
organization of the                                                         

 Principal Party would preclude or limit the exercisability of the
Rights.                                                           

       
SECTION 14.  FRACTIONAL RIGHTS
AND FRACTIONAL SHARES.                                                                       

                                                                               
                                                     

       
(a)   The Company shall not be
required to issue fractions of Rights                                                         

 or to
distribute Right Certificates which evidence fractional Rights                                                                

 (except
prior to the Distribution Date in accordance with Section 11(n)                                                             

 hereof).  In lieu of such
fractional Rights, there shall be paid to the                                                             

 registered holders of the Right Certificates with regard to which
such                                                              

 fractional Rights would otherwise be issuable, an amount in cash
equal to                                                           

 the same
fraction of the current market value of a whole Right.  For the                                                            

 purposes
of this Section 14(a), the current market value of a whole Right                                                           

 shall be
the closing price of the Rights for the Trading Day immediately                                                            

 prior to
the date on which such fractional Rights would have been otherwise                                                         

 issuable.  The closing
price for any day shall be the last sale price,                                                              

 regular
way, or, in case no such sale takes place on such day, the average                                                          

 of the
closing bid and asked prices, regular way, in either case as                                                                 

 reported
in the principal consolidated transaction reporting system with                                                            

 respect
to securities listed or admitted to trading on the New York Stock                                                           

 Exchange
or, if the Rights are not listed or admitted to trading on the New                                                         

 York
Stock Exchange, as reported in the principal consolidated transaction                                                          

 reporting system with respect to securities listed on the
principal                                                                 

 national
securities exchange on which the Rights are listed or admitted to                                                          

 trading
or, if the Rights are not listed or admitted to trading on any                                                  
           

 national
securities exchange, the last quoted price or, if not so quoted,                                                           

 the
average of the high bid and low asked prices in the over-the-counter                                                            

 market,
as reported by Nasdaq or such other system then in use or, if on                                                            

 any such
date the Rights are not quoted by any such organization, the                                                               

 average
of the closing bid and asked prices as furnished by a professional                                                          

 market
maker making a market in the Rights selected by the Board of                                                                 

 Directors of the Company. 
If on any such date no such market maker is                                                              

 making a
market in the Rights, the fair value of the Rights on such date as                                                         

 determined in good faith by the Board of Directors of the Company
shall be                                                          

 used.                                                                                                                               

                                                                                                                                    

       
(b)   The Company shall not be
required to issue fractions of                                                                

 Preferred Stock (other than fractions which are integral multiples
of one                                                           

 one-hundredth of a share of Preferred Stock) or to distribute
certificates                                                          

 which
evidence fractional shares of Preferred Stock (other than fractions                                                           

 which
are integral multiples of one one-hundredth of a share of Preferred                                                           

 Stock)
upon the exercise or exchange of Rights. 
Interests in fractions of                                                          

 Preferred Stock in integral multiples of one one-hundredth of a
share of                                                            

 Preferred Stock may, at the election of the Company, be evidenced
by                                                                

 depositary
receipts, pursuant to an appropriate agreement between the                                                               

 Company
and a depositary selected by it; PROVIDED, that such agreement                                                    
         

 shall
provide that the holders of such depositary receipts shall have all                                                           

 the
rights, privileges and preferences to which they are entitled as                                                                

 beneficial owners of the Preferred Stock represented by such
depositary                                                             

 receipts.  In lieu of
fractional shares of Preferred Stock that are not                                                             

 integral
multiples of one one-hundredth of a share of Preferred Stock, the                                                          

 Company
shall pay to the registered holders of Right Certificates at the                                                            

 time
such Rights are exercised or exchanged as herein provided an amount in                                                         

 cash
equal to the same fraction of the current market value of a whole                                                              

 share of
Preferred Stock (as determined in accordance with Section 14(a)                                                
           

 hereof
but with Common Stock replacing Rights in such formulation) for the                                                          

 Trading
Day immediately prior to the date of such exercise or exchange.                                                             

                                                                                                                                    

       
(c)   The Company shall not be
required to issue fractions of shares                                                         

 of
Common Stock or to distribute certificates which evidence fractional                                                             

 shares
of Common Stock upon the exercise or exchange of Rights.  In lieu of                                                         

 such
fractional shares of Common Stock, the Company shall pay to the                                                                

 registered holders of the Right Certificates with regard to which
such                                                              

 fractional shares of Common Stock would otherwise be issuable an
amount in                                                          

 cash
equal to the same fraction of the current market value of a whole                                                              

 share of
Common Stock (as determined in accordance with Section 14(a)                                                               

 hereof
but with Common Stock replacing rights in such formulation) for the                                                          

 Trading
Day immediately prior to the date of such exercise or exchange.                                                             

                                                                                                                                     

       
(d)   The holder of a Right by
the acceptance of the Right expressly                                                         

 waives
his right to receive any fractional Rights or any fractional shares                                                          

 upon
exercise or exchange of a Right (except as provided above).                                                                   

             
                                                                                                                       

       
SECTION 15.  RIGHTS OF
ACTION.  All rights of action in respect
of                                                          

 this
Agreement, excepting the rights of action given to the Rights Agent                                                            

 under
Section 18 hereof, are vested in the respective registered holders of                                               
         

 the
Right Certificates (and, prior to the Distribution Date, the registered                                                         

 holders
of the Common Stock); and any registered holder of any Right                                                                

 Certificate (or, prior to the Distribution Date, of the Common
Stock),                                                              

 without
the consent of the Rights Agent or of the holder of any other Right                                                         

 Certificate (or, prior to the Distribution Date, of the Common
Stock), on                                                           

 his own
behalf and for his own benefit, may enforce, and may institute and                                                          

 maintain
any suit, action or proceeding against the Company to enforce, or                                              
           

 otherwise act in respect of, his right to exercise the Rights
evidenced by                                                          

 such
Right Certificate (or, prior to the Distribution Date, such Common                                                             

 Stock)
in the manner provided therein and in this Agreement.  Without                                                               

 limiting
the foregoing or any remedies available to the holders of Rights,                                                          

 it is
specifically acknowledged that the holders of Rights would not have                                                           

 an
adequate remedy at law for any breach of this Agreement and will be                                                              

 entitled
to specific performance of the obligations under, and injunctive                                                           

 relief
against actual or threatened violations of, the obligations of any                                                           

 Person
subject to this Agreement.                                                                                                  

                                                                                                                                     

       
SECTION 16.  AGREEMENT OF RIGHT
HOLDERS.  Every holder of a Right,                                                          

 by
accepting the same, consents and agrees with the Company and the Rights                                                          

 Agent
and with every other holder of a Right that:                                                                                 

                                                                                                                                     

       
(a)   prior to the Distribution
Date, the Rights will be                                                                    

 transferable only in connection with the transfer of the Common
Stock;                                                              

                                                                                                                                    

       
(b)   after the Distribution
Date, the Right Certificates are                                                                

 transferable only on the registry books of the Rights Agent if
surrendered                                                          

 at the
office or agency of the Rights Agent designated for such purpose,                                                            

 duly
endorsed or accompanied by a proper instrument of transfer; and                                                                

                                                                                                                                    

       
(c)   the Company and the Rights
Agent may deem and treat the Person                                                         

 in whose
name the Right Certificate (or, prior to the Distribution Date,                                                            

 the
Common Stock certificate) is registered as the absolute owner thereof                                                           

 and of
the Rights evidenced thereby (notwithstanding any notations of                                                               

 ownership or writing on the Right Certificates or the Common
Stock                                                                  

 certificate made by anyone other than the Company or the Rights
Agent) for                                                          

 all
purposes whatsoever, and neither the Company nor the Rights Agent shall                                                         

 be
affected by any notice to the contrary.                                                                              
           

                                                                                                                                    

       
SECTION 17.  RIGHT CERTIFICATE
HOLDER NOT DEEMED A SHAREHOLDER. 
No                                  
                       

 holder,
as such, of any Right Certificate shall be entitled to vote,                                                                

 receive
dividends or be deemed for any purpose the holder of the Preferred                                                          

 Stock or
any other securities of the Company which may at any time be                                                               

 issuable
on the exercise or exchange of the Rights represented thereby, nor                                                         

 shall
anything contained herein or in any Right Certificate be construed to                                                         

 confer
upon the holder of any Right Certificate, as such, any of the rights                                                         

 of a
shareholder of the Company or any right to vote for the election of                                                            

 directors or upon any matter submitted to shareholders at any
meeting                                                               

 thereof,
or to give or withhold consent to any corporate action, or to                                                              

 receive
notice of meetings or other actions affecting shareholders (except                                                          

 as
provided in this Agreement), or to receive dividends or subscription                                                             

 rights,
or otherwise, until the Rights evidenced by such Right Certificate                                                          

 shall
have been exercised or exchanged in accordance with the provisions                                                            

 hereof.                                                                                                                             

                                                                                                                                    

       
SECTION 18.  CONCERNING THE
RIGHTS AGENT.                                                                                   

                                                                                                                                    

       (a)  
The Company agrees to pay to the Rights Agent reasonable                                                               

 compensation for all services rendered by it hereunder and, from
time to                                                            

 time, on
demand of the Rights Agent, its reasonable expenses and counsel                                                            

 fees and
other disbursements incurred in the administration and execution                                                           

 of this
Agreement and the exercise and performance of its duties hereunder.                                                         

 The
Company also agrees to indemnify the Rights Agent for, and to hold it                                                           

 harmless
against, any loss, liability or expense, incurred without                                                                  

 negligence, bad faith or willful misconduct on the part of the
Rights                                                               

 Agent,
for anything done or omitted by the Rights Agent in connection with                                              
           

 the
acceptance and administration of this Agreement, including the costs                                                            

 and
expenses of defending against any claim of liability arising therefrom,                                                         

 directly
or indirectly.                                                                                                            

                                                                                                 
                                   

       
(b)   The Rights Agent shall be
protected and shall incur no                                                                 

 liability for, or in respect of any action taken, suffered or
omitted by it                                                         

 in
connection with, its administration of this Agreement in reliance upon                                                           

 any
Right Certificate or certificate for the Preferred Stock or Common                                                              

 Stock or
for other securities of the Company, instrument of assignment or                                                           

 transfer, power of attorney, endorsement, affidavit, letter, notice,                                                                

 direction, consent, certificate, statement or other paper or
document                                                               

 believed
by it to be genuine and to be signed, executed and, where                                                                  

 necessary, verified or acknowledged, by the proper Person or
Persons, or                                                            

 otherwise upon the advice of counsel as set forth in Section 20
hereof.                                                             

                                                                                                                                    

       
SECTION 19.  MERGER OR
CONSOLIDATION OR CHANGE OF NAME OF RIGHTS                                                             

 AGENT.                                                                                                                             

             
                                                                                                                       

       
(a)   Any bank or corporation
into which the Rights Agent or any                                                             

 successor
Rights Agent may be merged or with which it may be consolidated,                                                          

 or any
corporation or bank resulting from any merger or consolidation to                                                  
         

 which
the Rights Agent or any successor Rights Agent shall be a party, or                                                           

 any bank
or corporation succeeding to the stock transfer or corporate trust                                                         

 powers
of the Rights Agent or any successor Rights Agent, shall be the                                                              

 successor to the Rights Agent under this Agreement without the
execution or                                                         

 filing
of any paper or any further act on the part of any of the parties                                                            

 hereto;
PROVIDED, that such bank or corporation would be eligible for                                                               

 appointment as a successor Rights Agent under the provisions of
Section 21                                                          

 hereof.  In case at the
time such successor Rights Agent shall succeed to                                                           

 the
agency created by this Agreement, any of the Right Certificates shall                                               
           

 have
been countersigned but not delivered, any such successor Rights Agent                                                          

 may
adopt the countersignature of the predecessor Rights Agent and deliver                                                          

 such
Right Certificates so countersigned; and in case at that time any of                                                           

 the
Right Certificates shall not have been countersigned, any successor                                                             

 Rights
Agent may countersign such Right Certificates either in the name of                                                          

 the
predecessor Rights Agent or in the name of the successor Rights Agent;                                                          

 and in
all such cases such Right Certificates shall have the full force                                                             

 provided
in the Right Certificates and in this Agreement.                                                                           

                                                                                                                                    

       
(b)   In case at any time the
name of the Rights Agent shall be                                                              

 changed
and at such time any of the Right Certificates shall have been                                                              

 countersigned but not delivered, the Rights Agent may adopt
the                                                                    

 countersignature under its prior name and deliver Right
Certificates so                                                             

 countersigned; and in case at that time any of the Right
Certificates shall                                                         

 not have
been countersigned, the Rights Agent may countersign such Right                                                            

<PAGE>                                                                                                                               

 Certificates either in its prior name or in its changed name and
in all                                                             

 such
cases such Right Certificates shall have the full force provided in                                                            

 the
Right Certificates and in this Agreement.                                                                                      

                                                                                                                                    

       
SECTION 20.  DUTIES OF RIGHTS
AGENT.  The Rights Agent undertakes                                                  
         

 the
duties and obligations imposed by this Agreement upon the following                                                             

 terms
and conditions, by all of which the Company and the holders of Right                                                          

 Certificates, by their acceptance thereof, shall be bound:                                                                         

                                                                                                   
                                 

                                                                                                                                    

       
(a)   The Rights Agent may
consult with legal counsel (who may be                                                            

 legal
counsel for the Company), and the opinion of such counsel shall be                                                
           

 full and
complete authorization and protection to the Rights Agent as to                                                            

 any
action taken or omitted by it in good faith and in accordance with such                                                         

 opinion.                                                                                                                           

                                                                                                 
                                   

       
(b)   Whenever in the performance
of its duties under this Agreement                                                         

 the
Rights Agent shall deem it necessary or desirable that any fact or                                                              

 matter
be proved or established by the Company prior to taking or suffering                                                         

 any
action hereunder, such fact or matter (unless other evidence in respect                                                         

 thereof
be herein specifically prescribed) may be deemed to be conclusively                                                         

 proved
and established by a certificate signed by the Chairman of the                                                               

 Board,
Chief Executive Officer, President, any Vice President or the Chief                                                          

 Financial Officer and the Secretary or any Assistant Secretary of
the                                                               

 Company
and delivered to the Rights Agent; and such certificate shall be                                                            

 full
authorization to the Rights Agent for any action taken or suffered in                                                          

 good
faith by it under the provisions of this Agreement in reliance upon                                                            

 such
certificate.                                                                                                                   

                                                                                                                                    

       
(c)   The Rights Agent shall be
liable hereunder to the Company and                                                          

 any
other Person only for its own negligence, bad faith or willful                                                                  

 misconduct.                                                                                                                        

                                                                                                                           
         

       
(d)   The Rights Agent shall not
be liable for or by reason of any                                                           

 of the
statements of fact or recitals contained in this Agreement or in the                                                         

 Right
Certificates (except its countersignature thereof) or be required to                                                          

 verify
the same, but all such statements and recitals are and shall be                                                              

 deemed
to have been made by the Company only.                                                                                      

                                                                                       
                                             

       
(e)   The Rights Agent shall not
be under any responsibility in                                                              

 respect
of the validity of this Agreement or the execution and delivery                                                             

 hereof
(except the due execution hereof by the Rights Agent) or in respect                                              
           

 of the
validity or execution of any Right Certificate (except its                                                                   

 countersignature thereof); nor shall it be responsible for any
breach by                                    
                       

 the
Company of any covenant or condition contained in this Agreement or in                                                          

 any
Right Certificate; nor shall it be responsible for any change in the                                                            

 exercisability of the Rights (including the Rights becoming void
pursuant                                                           

 to
Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights                                                           

 provided
for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the                                                           

 existence of facts that would require any such change or
adjustment (except                                                         

 with
respect to the exercise of Rights evidenced by Right Certificates                                                              

 after
receipt of a certificate furnished pursuant to Section 12, describing                                                         

 such
change or adjustment); nor shall it by any act hereunder be deemed to                                                          

 make any
representation or warranty as to the authorization or reservation                                                          

 of any
shares of Preferred Stock or other securities to be issued pursuant                                                          

 to this
Agreement or any Right Certificate or as to whether any shares of                                                           

 Preferred Stock or other securities will, when issued, be
validly                                                                   

 authorized and issued, fully paid and nonassessable.                                                                               

                                                                                                                                    

       
(f)   The Company agrees that it
will perform, execute, acknowledge                                                          

 and
deliver or cause to be performed, executed, acknowledged and delivered                                                          

 all such
further and other acts, instruments and assurances as may                                                                  

 reasonably be required by the Rights Agent for the carrying out
or                                                                  

 performing by the Rights Agent of the provisions of this
Agreement.                                                                 

       
(g)   The Rights Agent is hereby
authorized and directed to accept                                                           

 instructions with respect to the performance of its duties
hereunder from                                                           

 any
person reasonably believed by the Rights Agent to be one of the                                                                 

 Chairman
of the Board, President, Chief Executive Officer, Chief Financial                                                          

 Officer
or the Secretary of the Company, and to apply to such officers for                                                          

 advice
or instructions in connection with its duties, and it shall not be                                               
           

 liable
for any action taken or suffered by it in good faith in accordance                                                           

 with
instructions of any such officer or for any delay in acting while                                                              

 waiting
for those instructions.  Any application
by the Rights Agent for                                                            

 written
instructions from the Company may, at the option of the Rights                                                              

 Agent,
set forth in writing any action proposed to be taken or omitted by                                                           

 the
Rights Agent under this Agreement and the date on and/or after which                                                            

 such
action shall be taken or such omission shall be effective.  The Rights                                                         

 Agent
shall not be liable for any action taken by, or omission of, the                                                              

 Rights
Agent in accordance with a proposal included in any such application                                                         

 on or
after the date specified in such application (which date shall not be                                                         

 less
than five Business Days after the date any officer of the Company                                                              

 actually
receives such application unless any such officer shall have                                                               

 consented in writing to an earlier date) unless, prior to taking
any such                                                           

 action
(or the effective date in the case of an omission), the Rights Agent                                                         

 shall
have received written instructions in response to such application                                                            

 specifying the action to be taken or omitted.                                                                                      

                                                                                                                                    

       
(h)   The Rights Agent and any
stockholder, director, officer or                                                             

 employee
of the Rights Agent may buy, sell or deal in any of the Rights or                                                          

 other
securities of the Company or become pecuniarily interested in any                                                             

 transaction in which the Company may be interested, or contract
with or                                                             

 lend
money to the Company or otherwise act as fully and freely as though it                                                         

 were not
Rights Agent under this Agreement. 
Nothing herein shall preclude                                                          

 the
Rights Agent from acting in any other capacity for the Company or for                                                           

 any
other legal entity.                                                                           
                                 

                                                                                                                                    

       
(i)   The Rights Agent may
execute and exercise any of the rights or                                                         

 powers
hereby vested in it or perform any duty hereunder either itself or                                                           

 by or
through its attorneys or agents, and the Rights Agent shall not be                                                            

 answerable or accountable for any act, default, neglect or
misconduct of                                                            

 any such
attorneys or agents or for any loss to the Company resulting from                                                          

 any such
act, default, neglect or misconduct, provided reasonable care was                                                          

 exercised in the selection and continued employment thereof.                                                                       

                                                                                                 
                                   

       
(j)   If, with respect to any
Rights Certificate surrendered to the                                                          

 Rights
Agent for exercise or transfer, the certificate contained in the                                                             

 form of
assignment or the form of election to purchase set forth on the                                                             

 reverse
thereof, as the case may be, has not been completed to certify the                                                          

 holder
is not an Acquiring Person (or an Affiliate or Associate thereof),                                                           

 the
Rights Agent shall not take any further action with respect to such                                                             

 requested exercise or transfer without first consulting with the
Company.                                                           

                                                                                                                                     

       
SECTION 21.  CHANGE OF RIGHTS
AGENT.  The Rights Agent or any                                                               

 successor Rights Agent may resign and be discharged from its
duties under                                                           

 this
Agreement upon 30 days' notice in writing mailed to the Company and to                                                         

 each
transfer agent of the Common Stock or Preferred Stock by registered or                                                         

 certified mail, and, following the Distribution Date, to the
holders of the                                                         

 Right
Certificates by first-class mail.  The
Company may remove the Rights                                                          

 Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed                                                         

 to the
Rights Agent or successor Rights Agent, as the case may be, and to                                                           

 each
transfer agent of the Common Stock or Preferred Stock by registered or                                               
         

 certified mail, and, following the Distribution Date, to the
holders of the                                                         

 Right
Certificates by first-class mail.  If
the Rights Agent shall resign                                                           

 or be
removed or shall otherwise become incapable of acting, the Company                                                            

 shall
appoint a successor to the Rights Agent. 
If the Company shall fail                                                           

 to make
such appointment within a period of 30 days after giving notice of                                                          

 such
removal or after it has been notified in writing of such resignation                                                           

 or
incapacity by the resigning or incapacitated Rights Agent or by the                                                              

 holder
of a Right Certificate (who shall, with such notice, submit his                                                              

 Right
Certificate for inspection by the Company), then the registered                                                               

 holder
of any Right Certificate may apply to any court of competent                                                                 

 jurisdiction for the appointment of a new Rights Agent.  Any successor                                                              

 Rights
Agent, whether appointed by the Company or by such a court, shall be                                                         

 a bank
or corporation organized and doing business under the laws of the                                                            

 United
States or the laws of any state of the United States or the District                                                         

 of
Columbia, in good standing, which is authorized under such laws to                                                               

 exercise
corporate trust or stock transfer powers and is subject to                                                                 

 supervision or examination by federal or state authority and which
has at                                                           

 the time
of its appointment as Rights Agent a combined capital and surplus                                                          

 of at
least $50 million.  After appointment,
the successor Rights Agent                                                             

 shall be
vested with the same powers, rights, duties and responsibilities                                                           

 as if it
had been originally named as Rights Agent without further act or                                                           

 deed;
but the predecessor Rights Agent shall deliver and transfer to the                                                            

 successor Rights Agent any property at the time held by it
hereunder, and                                                           

 execute
and deliver any further assurance, conveyance, act or deed                                                                  

 necessary for the purpose. 
Not later than the effective date of any such                                                           

 appointment the Company shall file notice thereof in writing with
the                                                               

 predecessor Rights Agent and each transfer agent of the Common
Stock or                                                             

 Preferred Stock, and, following the Distribution Date, mail a
notice                                                                

 thereof
in writing to the registered holders of the Right Certificates.                                                             

 Failure
to give any notice provided for in this Section 21, however, or any                                                         

 defect therein,
shall not affect the legality or validity of the                                                                   

 resignation or removal of the Rights Agent or the appointment of
the                                                                

 successor Rights Agent, as the case may be.                                                                                        

                                                                                                                     
               

       
SECTION 22.  ISSUANCE OF NEW
RIGHT CERTIFICATES. 
Notwithstanding                                                            

 any of
the provisions of this Agreement or of the Rights to the contrary,                                                           

 the
Company may, at its option, issue new Right Certificates evidencing                                                 
           

 Rights
in such forms as may be approved by its Board of Directors to                                                                

 reflect
any adjustment or change in the Purchase Price and the number or                                                            

 kind or
class of shares or other securities or property purchasable under                                                           

 the
Right Certificates made in accordance with the provisions of this                                                               

 Agreement.  In addition, in
connection with the issuance or sale of Common                                                          

 Stock
following the Distribution Date and prior to the Expiration Date, the                                                         

 Company
may with respect to shares of Common Stock so issued or sold                                                                

 pursuant
to (i) the exercise of stock options, (ii) under any employee plan                                                         

 or
arrangement, (iii) upon the exercise, conversion or exchange of                                                                  

 securities, notes or debentures issued by the Company or (iv) a
contractual                                                         

 obligation of the Company, in each case existing prior to the
Distribution                                                          

 Date,
issue Rights Certificates representing the appropriate number of                                                              

 Rights
in connection with such issuance or sale.                                                                                   

                                                                                                                                     

       
SECTION 23.  REDEMPTION.                                                                                                    

                                                                                                                                     

       
(a)   The Board of Directors of
the Company may, at any time prior                                                           

 to the
Flip-In Event, redeem all but not less than all the then outstanding                                                         

 Rights
at a redemption price of $.01 per Right, appropriately adjusted to                                                           

 reflect
any stock split, stock dividend or similar transaction occurring                                                            

 after
the date hereof (the redemption price being hereinafter referred to                                                 
         

 as the
"Redemption Price").  The
redemption of the Rights may be made                                                               

 effective at such time, on such basis and with such conditions as
the Board                                   
                     

 of
Directors in its sole discretion may establish.  The Redemption Price                                                            

 shall be
payable, at the option of the Company, in cash, shares of Common                                                           

 Stock,
or such other form of consideration as the Board of Directors shall                                                          

 determine.                                                                                                                         

                                                                                                                         
           

       
(b)   Immediately upon the action
of the Board of Directors ordering                                                         

 the
redemption of the Rights pursuant to paragraph (a) of this Section 23                                                           

 (or at
such later time as the Board of Directors may establish for the                                                              

 effectiveness of such redemption), and without any further action
and                                                               

 without
any notice, the right to exercise the Rights will terminate and the                                                         

 only
right thereafter of the holders of Rights shall be to receive the                                                              

 Redemption Price.  The
Company shall promptly give public notice of any                                                             

 such
redemption; PROVIDED, HOWEVER, that the failure to give, or any defect                                                         

 in, any
such notice shall not affect the validity of such redemption.                                                               

 Within
10 days after such action of the Board of Directors ordering the                                                             

 redemption of the Rights (or such later time as the Board of
Directors may                                                          

 establish for the effectiveness of such redemption), the Company
shall mail                                                         

 a notice
of redemption to all the holders of the then outstanding Rights at                                                         

 their
last addresses as they appear upon the registry books of the Rights                                                           

 Agent
or, prior to the Distribution Date, on the registry books of the                                                              

 transfer
agent for the Common Stock.  Any notice
which is mailed in the                                                             

 manner
herein provided shall be deemed given, whether or not the holder                                                             

 receives
the notice.  Each such notice of
redemption shall state the method                                                         

 by which
the payment of the Redemption Price will be made.                                                                         

                                                                                                                                    

       
SECTION 24.  EXCHANGE.                                                                                             
         

                                                                                                                                    

       
(a)   The Board of Directors of
the Company may, at its option, at                                                           

 any time
after the Flip-In Event, exchange all or part of the then                                                                  

 outstanding and exercisable Rights (which shall not include Rights
that                                                             

 have
become void pursuant to the provisions of Section 11(a)(ii) hereof)                                                            

 for
Common Stock at an exchange ratio of one share of Common Stock per                                                              

 Right,
appropriately adjusted to reflect any stock split, stock dividend or                                                         

 similar
transaction occurring after the date hereof (such amount per Right                                                          

 being
hereinafter referred to as the "Exchange Ratio").  Notwithstanding                                                            

 the
foregoing, the Board of Directors shall not be empowered to effect such                                                         

 exchange
at any time after an Acquiring Person shall have become the                                                                

 Beneficial Owner of shares of Common Stock aggregating 50% or more
of the                                                           

 shares
of Common Stock then outstanding.  From
and after the occurrence of                                                          

 an event
specified in Section 13(a) hereof, any Rights that theretofore                                                             

 have not
been exchanged pursuant to this Section 24(a) shall thereafter be                                                          

 exercisable only in accordance with Section 13 and may not be
exchanged                                                             

 pursuant
to this Section 24(a).  The exchange of
the Rights by the Board of                                                         

 Directors may be made effective at such time, on such basis and
with such                                                           

 conditions as the Board of Directors in its sole discretion may
establish.                                                          

                                                                                                                                    

       
(b)   Immediately upon the
effectiveness of the action of the Board                                                          

 of
Directors of the Company ordering the exchange of any Rights pursuant to                                                         

 paragraph (a) of this Section 24 and without any further action
and without                                                         

 any
notice, the right to exercise such Rights shall terminate and the only                                                          

 right
thereafter of a holder of such Rights shall be to receive that number                                                         

 of
shares of Common Stock equal to the number of such Rights held by such                                                           

 holder
multiplied by the Exchange Ratio.  The
Company shall promptly give                                                           

 public
notice of any such exchange; PROVIDED, HOWEVER, that the failure to                                                          

 give, or
any defect in, such notice shall not affect the validity of such                                                           

 exchange.  The Company
shall promptly mail a notice of any such exchange to                                                         

 all of
the holders of the Rights so exchanged at their last addresses as                                                            

 they
appear upon the registry books of the Rights Agent.  Any notice which                                                          

 is
mailed in the manner herein provided shall be deemed given, whether or                                                           

 not the
holder receives the notice.  Each such
notice of exchange will                                                              

 state
the method by which the exchange of the shares of Common Stock for                                                            

 Rights
will be effected and, in the event of any partial exchange, the                                                              

 number
of Rights which will be exchanged.  Any
partial exchange shall be                                                            

 effected
pro rata based on the number of Rights (other than Rights which                                                            

 have
become void pursuant to the provisions of Section 11(a)(ii) hereof)                                                            

 held by
each holder of Rights.                                                                                                     

                                                                                                 
                                   

       
(c)   The Company may at its
option substitute, and, in the event                                                            

 that
there shall not be sufficient shares of Common Stock issued but not                                                            

 outstanding or authorized but unissued to permit an exchange of
Rights for                                                          

 Common
Stock as contemplated in accordance with this Section 24, the                                                                

 Company
shall substitute to the extent of such insufficiency, for each                                                              

 share of
Common Stock that would otherwise be issuable upon exchange of a                                                           

 Right, a
number of shares of Preferred Stock or fraction thereof (or                                                                

 equivalent preferred shares, as such term is defined in Section
11(b)) such                                                         

 that the
current per share market price (determined pursuant to Section                                                             

 11(d)
hereof) of one share of Preferred Stock (or equivalent preferred                                                              

 share)
multiplied by such number or fraction is equal to the current per                                                            

 share
market price of one share of Common Stock (determined pursuant to                                                             

 Section
11(d) hereof) as of the date of such exchange.                                                                             

             
                                                                                                                       

       
SECTION 25.  NOTICE OF CERTAIN
EVENTS.                                                                                      

                                                                                                                                    

       
(a)   In case the Company shall
at any time after the earlier of the                                                         

 Distribution Date or the Stock Acquisition Date propose (i) to pay
any                                                              

 dividend
payable in stock of any class to the holders of its Preferred                                                              

 Stock or
to make any other distribution to the holders of its Preferred                                                             

 Stock
(other than a regular quarterly cash dividend), (ii) to offer to the                                                          

 holders
of its Preferred Stock rights or warrants to subscribe for or to                                                            

 purchase
any additional shares of Preferred Stock or shares of stock of any                                                         

 class or
any other securities, rights or options, (iii) to effect any                                                               

 reclassification of its Preferred Stock (other than a
reclassification                                                              

 involving only the subdivision or combination of outstanding
Preferred                                                              

 Stock),
(iv) to effect the liquidation, dissolution or winding up of the                                                            

 Company,
or (v) to pay any dividend on the Common Stock payable in Common                                                           

 Stock or
to effect a subdivision, combination or consolidation of the                                                               

 Common
Stock (by reclassification or otherwise than by payment of dividends                                                         

 in
Common Stock), then, in each such case, the Company shall give to each                                                           

 holder
of a Right Certificate, in accordance with Section 26 hereof, a                                                              

 notice
of such proposed action, which shall specify the record date for the                                                         

 purposes
of such stock dividend, or distribution of rights or warrants, or                                                          

 the date
on which such liquidation, dissolution or winding up is to take                                                            

 place
and the date of participation therein by the holders of the Common                                                            

 Stock
and/or Preferred Stock, if any such date is to be fixed, and such                                                             

 notice
shall be so given in the case of any action covered by clause (i) or                                                         

 (ii)
above at least 10 days prior to the record date for determining                                                                

 holders
of the Preferred Stock for purposes of such action, and in the case                                                         

 of any
such other action, at least 10 days prior to the date of the taking                                                          

 of such
proposed action or the date of participation therein by the holders                                                         

 of the
Common Stock and/or Preferred Stock, whichever shall be the earlier.                                                         

                                                                                   
                                                 

       
(b)   In case any event described
in Section 11(a)(ii) or Section 13                                                         

 shall
occur, then the Company shall as soon as practicable thereafter give                                                          

 to each
holder of a Right Certificate (or if occurring prior to the                                                                 

 Distribution Date, the holders of the Common Stock), in accordance
with                                                             

 Section
26 hereof, a notice of the occurrence of such event, which notice                                                           

 shall
describe such event and the consequences of such event to holders of                                                          

 Rights
under Section 11(a)(ii) and Section 13 hereof.                                                                              

                                                                                                                                     

       
SECTION 26.  NOTICES.  Notices or demands authorized by this                                                                

 Agreement to be given or made by the Rights Agent or by the holder
of any                                                           

 Right
Certificate to or on the Company shall be sufficiently given or made                                              
           

 if sent
by first-class mail, postage prepaid, addressed (until another                                                              

 address
is filed in writing with the Rights Agent) as follows:                                              
                       

                                                                                                                                    

                                                                                                 
                                   

     
LOGIC DEVICES INCORPORATED                                                                                                    

     
1320 Orleans Drive                                                                                                             

     
Sunnyvale, CA  94089                                                                                                          

     
Attention:  Mr. William Volz                                                                                                   

               
President and CEO                                                                                                   

                                                                                                                                     

 Subject
to the provisions of Section 21 hereof, any notice or demand                                                                

 authorized by this Agreement to be given or made by the Company or
by the                                                           

 holder
of any Right Certificate to or on the Rights Agent shall be                                                                  

 sufficiently given or made if sent by first-class mail, postage
prepaid,                                                            

 addressed (until another address is filed in writing with the
Company) as                                                           

 follows:                                                                                                                            

                                                                                                                                    

      
AMERICAN SECURITIES TRANSFER & TRUST, INC.                                                                                   

      
1825 Lawrence Street                                                                                                         

      Suite 444                                                                                                                    

      
Denver, CO  80202                                                                                                   
         

                                                                                                                                    

 Notices
or demands authorized by this Agreement to be given or made by the                                                          

 Company
or the Rights Agent to the holder of any Right Certificate shall be                                                         

 sufficiently given or made if sent by first-class mail, postage
prepaid,                                                            

 addressed to such holder at the address of such holder as shown on
the                                                              

 registry
books of the Company.                                                                                                     

       
SECTION 27.  SUPPLEMENTS AND
AMENDMENTS.  Except as provided in
the                                              
           

 penultimate sentence of this Section 27, for so long as the Rights
are then                                                         

 redeemable, the Company may in its sole and absolute discretion,
and the                                    
                       

 Rights
Agent shall if the Company so directs, supplement or amend any                                                               

 provision of this Agreement in any respect without the approval of
any                                                              

 holders
of the Rights.  At any time when the
Rights are no longer                                                                   

 redeemable, except as provided in the penultimate sentence of this
Section                                                          

 27, the
Company may, and the Rights Agent shall, if the Company so directs,                                                         

 supplement or amend this Agreement without the approval of any
holders of                                                           

 Rights
in order to (i) cure any ambiguity, (ii) correct or supplement any                                                           

 provision contained herein which may be defective or inconsistent
with any                                                          

 other
provision herein, (iii) shorten or lengthen any time period                                                                   

 hereunder, or (iv) change or supplement the provisions hereunder
in any                                                             

 manner
which the Company may deem necessary or desirable; PROVIDED that no                                                          

 such
supplement or amendment shall adversely affect the interests of the                                                            

 holders
of Rights as such (other than an Acquiring Person or an Affiliate                                                           

 or
Associate of an Acquiring Person), and no such amendment may cause the                                                           

 Rights
again to become redeemable or cause this Agreement again to become                                                           

 amendable other than in accordance with this sentence.  Notwithstanding                                                             

 anything
contained in this Agreement to the contrary, no supplement or                                                              

 amendment
shall be made which changes the Redemption Price.  Upon the                                                               

 delivery
of a certificate from an appropriate officer of the Company which                                                
         

 states
that the proposed supplement or amendment is in compliance with the                                                          

 terms of
this Section 27, the Rights Agent shall execute such supplement or                                                         

 amendment.                                                                                                                         

                                                                                                   
                                 

       
SECTION 28.  SUCCESSORS.  All the covenants and provisions of
this                                                          

 Agreement by or for the benefit of the Company or the Rights Agent
shall                                                            

 bind and
inure to the benefit of their respective successors and assigns                                                            

 hereunder.                                                                                                                         

                                                                                                                         
           

       
SECTION 29.  BENEFITS OF THIS
AGREEMENT.  Nothing in this
Agreement                                                         

 shall be
construed to give to any Person other than the Company, the Rights                                                         

 Agent
and the registered holders of the Right Certificates (and, prior to                                                           

 the
Distribution Date, the Common Stock) any legal or equitable right,                                                              

 remedy
or claim under this Agreement; but this Agreement shall be for the                                                           

 sole and
exclusive benefit of the Company, the Rights Agent and the                                                                 

 registered holders of the Right Certificates (and, prior to
the                                                                    

 Distribution Date, the Common Stock).                                                                                               

                                                                                                                                    

       
SECTION 30.  DETERMINATIONS AND
ACTIONS BY THE BOARD OF DIRECTORS.                                                           

 The
Board of Directors of the Company shall have the exclusive power and                                                            

 authority to administer this Agreement and to exercise the rights
and                                                               

 powers
specifically granted to the Board of Directors of the Company or to                                                          

 the
Company, or as may be necessary or advisable in the administration of                                                           

 this
Agreement, including, without limitation, the right and power to (i)                                                           

 interpret the provisions of this Agreement and (ii) make all
determinations                                                         

 deemed
necessary or advisable for the administration of this Agreement                                                              

 (including, without limitation, a determination to redeem or not
redeem the                                                         

 Rights
or to amend this Agreement).  All such
actions, calculations,                                                                

 interpretations
and determinations (including, for purposes of clause (y)                                                           

 below,
all omissions with respect to the foregoing) that are done or made                                                 
         

 by the
Board of Directors of the Company in good faith, shall (x) be final,                                                         

 conclusive and binding on the Company, the Rights Agent, the
holders of the                                                         

 Rights,
as such, and all other parties, and (y) not subject the Board of                                                            

 Directors to any liability to the holders of the Rights.                                                                            

                                                                                                                                    

       
SECTION 31.  SEVERABILITY. If any
term, provision, covenant or                                                               

 restriction of this Agreement is held by a court of competent
jurisdiction                                                          

 or other
authority to be invalid, void or unenforceable, the remainder of                                                           

 the
terms, provisions, covenants and restrictions of this Agreement shall                                                           

 remain
in full force and effect and shall in no way be affected, impaired                                                           

 or
invalidated.                                                                                 
                                   

       
SECTION 32.  GOVERNING LAW.  This Agreement and each Right                                                                  

 Certificate issued hereunder shall be deemed to be a contract made
under                                                            

 the laws
of the State of California and for all purposes shall be governed                                                          

 by and
construed in accordance with the laws of such State applicable to                                                            

 contracts to be made and performed entirely within such
State.                                                                     

                                                                                                                                     

       
SECTION 33.  COUNTERPARTS.  This Agreement may be executed in any                                                           

 number
of counterparts and each of such counterparts shall for all purposes                                                         

 be
deemed to be an original, and all such counterparts shall together                                                               

 constitute but one and the same instrument.                                                                                        

                                                                                                                                    

       
SECTION 34.  DESCRIPTIVE
HEADINGS.  Descriptive headings of
the                                                              

 several
Sections of this Agreement are inserted for convenience only and                                                            

 shall
not control or affect the meaning or construction of any of the                                                               

 provisions hereof.                                                                                                                 

                                                                                                                                    

       
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to                                                         

 be duly
executed, all as of the day and year first above written.                                                                   

                                                                                                               
                     

                                                                                                                                    

 LOGIC
DEVICES INCORPORATED                                                                        
                                 

                                                                                                                                    

                                                                                       
                                             

 By:                                                                                                                                

 Name:                                                                                                                              

 Title:                                                                                                                  
           

                                                                                                                                    

                                                                                                             
                       

                                                                                                                                    

                                                                                                 
                                   

 AMERICAN
SECURITIES TRANSFER & TRUST, INC.                                                                                         

 AS
RIGHTS AGENT                                                                     
                                               

                                                                                                                                    

                                                                         
                                                           

 By:                                                                                                                                

 Name:                                                                                                                               

 Title:                                                                                                                             

                                                                                                                                     

                                                                                                                                    

                                                                                                                                     

                                                        EXHIBIT
A                                                                   

                                                                                                                                     

             
FORM OF CERTIFICATE OF DETERMINATION                                                                                  

             
                                                                                                                       

                                                      OF                                                                                                  

                                                                                                                                    

          
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK                                                                   
         

                                                                                                                                    

                                                    OF                                                                             
                     

                                                                                                                                    

                             LOGIC DEVICES INCORPORATED                                                     
                                 

                                                                                                                                    

         
PURSUANT TO SECTION 401 OF THE GENERAL CORPORATION LAW                                                                    

                                  OF THE STATE OF CALIFORNIA                                                                       
           

                                                                                                                                    

     The
undersigned, being the President and Secretary, respectively, of                                                            

 LOGIC
DEVICES INCORPORATED, a corporation organized 
and  existing under                                                           

 the  General 
Corporation  Law  ("Corporations  Code") of the State  of                                                             

 California in accordance with the provisions of Section  401 thereof, DO                                                            

 HEREBY
CERTIFY THAT:                                                                                                                

                                                                                                                                    

    
A.   Pursuant to the authority
vested in the Board of  Directors  in                                                            

 accordance with the provisions of the Restated Articles of
Incorporation                                                            

 of the
said Corporation, the said Board of Directors on April 29, 1997,                                                             

 adopted  the  following resolution creating a series of
70,000 shares of                                                            

 Preferred Stock 
designated  as "Series B
Junior Participating Preferred                                                            

 Stock":                                                                                                                            

                                                                                                                                     

         
RESOLVED, that pursuant  to  the 
authority  vested in the                                                                 

    
Board of Directors of this Corporation in accordance  with 
the                                                                 

    
provisions  of the Restated
Articles of Incorporation, a series                                                                 

     of
Preferred  Stock,  no 
par  value, of the Corporation be
and                                                                

    
hereby  is  created, and that the  designation 
and  number  of                                                                 

    shares thereof and the voting and other
powers, preferences and                                                                 

    
relative, participating, optional or other rights of the shares                                                                 

    
of  such  series  
and   the  qualifications,  limitations  and                                                                 

    
restrictions thereof are as follows:                                                                      
                     

                                                                                                                                    

          
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK                                                                             

                                                                                                                                    

    
1.   DESIGNATION AND AMOUNT.   There 
shall be a series of Preferred                                                            

 Stock  that  shall 
be  designated  as "Series B  Junior  Participating                                                             

 Preferred  Stock," and
the number of shares  constituting  such 
series                                                             

 shall be
70,000.  Such number of shares may be
increased or decreased by                                                            

 resolution of  the  Board 
of  Directors;  PROVIDED, 
HOWEVER,  that  no                                                            

 decrease  shall  reduce 
the  number  of 
shares  of  Series 
B  Junior                                                             

 Participating  
Preferred  Stock to less than the
number of shares then                                                             

 issued
and outstanding plus the  number of
shares issuable upon exercise                                                            

 of  outstanding 
rights, options or  warrants  or 
upon  conversion  of                                                             

 outstanding securities issued by the Corporation.                                                                                   

                                                                                                                                    

    
2.   DIVIDENDS AND
DISTRIBUTIONS.                                                                                               

                                                                                                                                    

         
(A)  Subject to the prior and
superior rights of the holders of                                                            

 any
shares of any class  or  series 
of stock of the Corporation ranking                                                            

 prior  and  superior 
to the shares of Series  B  Junior 
Participating                                                             

 Preferred Stock with respect 
to  dividends,  the 
holders  of shares of                                                            

 Series  B Junior
Participating  Preferred Stock, in
preference  to  the                                                             

 holders
of  shares  of  any  class or series of stock of the
Corporation                                                            

 ranking
junior to the Series B  Junior  Participating Preferred Stock in                                                            

 respect
thereof, shall be entitled to receive, 
when, as and if declared                                                            

 by  the 
Board  of  Directors 
out of funds legally available 
for  the                                                             

 purpose,
quarterly dividends payable  in  cash on the 20th day of April,                                                           

 July,
October and January, in each year (each 
such  date being referred                                                            

 to  herein as a "Quarterly Dividend Payment
Date"), commencing  on  the                                                             

 first  Quarterly  Dividend 
Payment  Date  after the first issuance of a                                                            

 share or
fraction of a share of Series B Junior 
Participating Preferred                                                            

 Stock,
in an amount per share (rounded to the nearest cent) equal to the                                                            

 greater
of (a) $1.00 and (b) the Adjustment Number 
(as  defined  below)                                                            

 times  the  aggregate 
per  share amount of all cash
dividends, and the                                                             

 Adjustment Number times the aggregate per share amount (payable in
kind)                                                            

 of all
non-cash dividends or other 
distributions  other than a
dividend                                                
           

 payable
in shares of Common Stock or a subdivision of 
the  outstanding                                                            

 shares  of  Common Stock (by reclassification or
otherwise), declared on                                                            

 the
Common Stock,  no  par 
value  per  share, 
of  the Corporation (the                                                            

 "Common 
Stock")  since  the 
immediately preceding Quarterly 
Dividend                         
                                   

 Payment
Date, or, with respect to  the  first Quarterly Dividend Payment                                                           

 Date,
since the first issuance of any share 
or  fraction  of a share of                                                            

 Series B
Junior Participating Preferred Stock. 
The "Adjustment 
Number"                                                           

 shall
initially be 100.  In the event the
Corporation shall at any  time                                                            

 after  May  1, 1997 (the "Rights Declaration
Date") (i) declare and pay                                                             

 any
dividend on  Common  Stock 
payable  in shares of Common Stock,
(ii)                                                            

 subdivide the outstanding Common Stock or  (iii) combine the outstanding                                                            

 Common
Stock into a smaller number of shares, then in each such case the                                                            

 Adjustment Number in effect immediately prior  to 
such  event  shall be                                                            

 adjusted  by  multiplying 
such  Adjustment  Number 
by  a fraction the                                                             

 numerator of which is the number of shares of Common Stock  outstanding                                                             

 immediately  after such event
and the denominator of which is the number                                                            

 of
shares of Common  Stock  that 
were  outstanding immediately
prior to                                                            

 such
event.                                                                                                                         

                                                                                                                                    

         (B) 
The Corporation shall declare 
a  dividend or distribution                                                            

 on  the Series B Junior Participating Preferred
Stock  as  provided  in                                                   
         

 paragraph  (A)  above 
immediately  after  it 
declares  a  dividend 
or                                                            

 distribution  on  the 
Common  Stock  (other than a dividend payable in                                                             

 shares
of Common Stock).                                                                                                           

                                                                                                   
                                 

         
(C)   Dividends shall begin
to  accrue  and  be  cumulative 
on                                                            

 outstanding shares of Series B Junior Participating Preferred
Stock from                                                            

 the
Quarterly Dividend Payment Date next preceding the date of issue of                                                             

 such
shares of Series B Junior Participating Preferred Stock, unless the                                                            

 date  of  issue of such shares is prior to the record
date for the first                                                            

 Quarterly Dividend  Payment
Date, in which case dividends on such shares                                                            

 shall
begin to accrue  from  the date of issue of such shares, or
unless                                    
                       

 the date
of issue is a Quarterly  Dividend  Payment 
Date  or  is a date                                                            

 after  the  record 
date for the determination of holders of shares  of                                                             

 Series B
Junior Participating  Preferred  Stock 
entitled  to  receive a                                                            

 quarterly dividend and before such Quarterly Dividend Payment
Date,  in                                                             

 either  of  which 
events  such  dividends 
shall begin to accrue and be                                                            

 cumulative  from  such Quarterly Dividend Payment  Date.  
Accrued  but                                                             

 unpaid
dividends shall  not bear interest.  Dividends paid on the shares                                                           

 of
Series B Junior Participating  Preferred
Stock in an amount less than                                                            

 the
total amount of such dividends  at  the 
time accrued and payable on                                                            

 such
shares shall be allocated pro rata on a share-by-share  basis among                                                            

 all such
shares at the time outstanding.  The
Board of Directors may fix                                                            

 a  record 
date for the determination of holders of shares of Series  B                                                             

 Junior
Participating  Preferred  Stock 
entitled to receive payment of a                                                            

 dividend
or distribution declared thereon, which record date shall be no                                                            

 more
than 60 days prior to the date fixed for the payment thereof.                                                                  

             
                                                                                                                       

    
3.   VOTING  RIGHTS.  
The  holders of shares  of 
Series  B  Junior                                                            

 Participating
Preferred Stock shall have the following voting rights:                                                               

                                                                                                                           
         

         
(A)  Each  share of Series  B  Junior  Participating  Preferred                                                            

 Stock
shall entitle the holder thereof to a number of votes equal to the                                                            

 Adjustment Number on all matters submitted to a vote of the
shareholders                                                            

 of the
Corporation.                                                                               
                                 

                                                                                                                                    

         
(B)  Except  as 
required  by  law 
and  by  Section 10 hereof,                                                            

 holders
of Series B Junior Participating Preferred Stock  shall  have no                                                           

 special
voting rights and their consent shall not be required (except to                                                            

 the
extent they are entitled to vote with holders of Common Stock as set                                                            

 forth
herein) for taking any corporate action.                                                                                     

                                                                                                                                    

    
4.   CERTAIN RESTRICTIONS.                                                                                                     

                                                                                                                                    

         
(A)  Whenever   quarterly  
dividends  or  other 
dividends  or                                                            

 distributions payable on the Series B  Junior  Participating  Preferred                                                             

 Stock  as provided in
Section 2 are in arrears, thereafter and until all                                                            

 accrued
and unpaid dividends and distributions, whether or not declared,                                              
             

 on
shares  of  Series B Junior Participating Preferred Stock outstanding                                                           

 shall
have been paid in full, the Corporation shall not:                                                                            

                                                                                                                                    

              
(i)  declare   or  
pay   dividends  on, 
make  any  other                                                            

 distributions  on,  or 
redeem  or purchase or  otherwise 
acquire  for                                                             

 consideration any shares of stock ranking junior (either as to
dividends                                                            

 or upon
liquidation, dissolution or 
winding  up) to the Series B
Junior                                                           

 Participating Preferred Stock;                                                                                                      

                                                                                                                                    

              
(ii)   declare  or 
pay dividends on  or  make 
any  other                                                            

 distributions on any shares of stock  ranking  on a parity
(either as to                                                           

 dividends  or  upon liquidation, dissolution or
winding  up)  with  the                                                             

 Series B
Junior Participating  Preferred  Stock, 
except  dividends paid                                                            

 ratably  on the Series B
Junior Participating Preferred Stock 
and  all                                                             

 such
parity  stock  on  which  dividends 
are  payable  or in arrears in                                                            

 proportion to the total amounts to which the holders of all  such shares                                                            

 are then
entitled; or                                                                                                              

                                                                                                                                    

              
(iii)  purchase or otherwise
acquire for consideration any                                                            

 shares
of Series B Junior Participating Preferred Stock, or any  shares                                                             

 of  stock 
ranking  on  a 
parity with the Series B Junior Participating                                                            

 Preferred Stock, except in accordance  with  a  purchase 
offer  made in                                                            

 writing
or by publication (as determined by the Board of Directors)  to                                                             

 all
holders of Series B Junior Participating Preferred Stock, or to such                                                            

 holders  and  holders 
of any such shares ranking on a parity therewith,                                                            

 upon
such terms as the Board  of  Directors, 
after consideration of the                                                            

 respective  annual  dividend 
rates  and  other 
relative   rights  and                                                             

 preferences  of  the respective series and classes, shall
determine  in                                                             

 good
faith will result  in  fair 
and  equitable  treatment 
among  the                                                             

 respective series or classes.                                                                                                      

                                                                                                                                     

              
(B)  The  Corporation 
shall  not permit any subsidiary
of                                                            

 the
Corporation to purchase or otherwise acquire 
for  consideration any                                                            

 shares
of stock of the Corporation unless the Corporation  could,  under                                                           

 paragraph  (A)  of 
this  Section 4, purchase or
otherwise acquire such                                                             

 shares
at such time and in such manner.                                                                                            

             
                                                                                                                       

         
5.   REACQUIRED  SHARES.   
Any   shares  of 
Series  B  Junior                                                            

 Participating
Preferred Stock purchased or otherwise 
acquired  by  the                                                             

 Corporation in any manner whatsoever shall be retired promptly
after the                                                            

 acquisition thereof.  All
such shares shall upon their retirement become                                                            

 authorized  but  unissued shares of  Preferred Stock and may be reissued                                                            

 as part
of a new series  of  Preferred Stock to be created by
resolution                                                           

 or
resolutions of the Board  of Directors,
subject to any conditions and                                                            

 restrictions on issuance set forth herein.                                                                                         

                                                                                       
                                             

         
6.   LIQUIDATION,
DISSOLUTION  OR  WINDING 
UP.  (A)  Upon 
any                                                            

 liquidation, dissolution or winding up of the Corporation,
voluntary or                                                             

 otherwise,  no  distribution  shall  be made to the
holders of shares of                                                            

 stock  ranking  junior 
(either as to dividends  or  upon 
liquidation,                                                             

 dissolution  or  winding up) 
to  the  Series  B  Junior 
Participating                                                             

 Preferred Stock unless, prior thereto, the holders of shares of
Series B                                                            

 Junior
Participating  Preferred  Stock shall have received an amount per                                                            

 share
(the "Series B Liquidation Preference")  equal  to  the greater of                                                            

 (i)  $100 
plus  an  amount 
equal to accrued and unpaid dividends 
and                                                             

 distributions thereon, whether 
or  not  declared,  to  the date of such                                                            

 payment,
or (ii) the Adjustment Number times the per share amount of all                                                            

 cash and
other property to be distributed in respect of the Common Stock                                                            

 upon
such liquidation, dissolution or winding up of the Corporation.                                                                

                                                                                                                                    

              
(B)  In the event, however, that
there are  not sufficient                                                            

 assets
available to permit payment in full of the Series B  Liquidation                                                             

 Preference  and  the 
liquidation  preferences  of all other classes and                                                            

 series
of stock of the Corporation, if any, that 
rank  on a parity with                                                           

 the  Series B Junior Participating Preferred
Stock in respect  thereof,                                                             

 then
the  assets  available  for  such distribution shall be distributed                                                            

 ratably
to the holders of the Series  B  Junior 
Participating Preferred                                                            

 Stock  and  the 
holders of such parity shares in proportion  to  their                                                             

 respective
liquidation preferences.                                                                                                

                                                                                                                           
         

              
(C)  Neither   the  
merger   or   consolidation   of  the                                                            

 Corporation  into  or 
with  another  corporation 
nor  the  merger 
or                                                             

 consolidation  of  any 
other  corporation into or with
the Corporation                                                             

 shall be
deemed to be a liquidation, 
dissolution  or  winding up of the                                                            

 Corporation within the meaning of this Section 6.                                                                                  

                                                                                                                                    

         
7.   CONSOLIDATION, MERGER,
ETC.  In case the Corporation shall                                                
           

 enter
into any consolidation, merger, combination or other  transaction                                                             

 in  which 
the  outstanding  shares of Common Stock are exchanged for
or                                                            

 changed
into other stock or securities,  cash
and/or any other property,                                                            

 then  in  any 
such case each share of Series  B  Junior 
Participating                         
                                   

 Preferred Stock shall at the same time be similarly exchanged or
changed                                                            

 in an
amount per  share  equal 
to  the  Adjustment  Number  times 
the                                                             

 aggregate  amount  of 
stock, securities, cash and/or any other property                                                            

 (payable
in kind), as the  case  may 
be,  into  which or for which each                                                            

 share of
Common Stock is changed or exchanged.                                                                                     

                                                                                                                                     

         
8.   NO  REDEMPTION.   Shares of
Series B Junior  Participating                                                            

 Preferred Stock shall not be subject to redemption by the
Company.                                                                  

                                                                                                                                    

         
9.   RANKING.   The Series 
B  Junior  Participating  Preferred                                                            

 Stock
shall rank junior to all other series of the Preferred Stock as to                                                            

 the
payment of dividends and  as  to 
the  distribution  of 
assets upon                                                            

 liquidation, 
dissolution  or winding up,
unless the terms of any  such                                                             

 series
shall provide otherwise,  and  shall 
rank  senior  to the Common                                                            

 Stock as
to such matters.                                                                                                          

                                                                                                                                    

         
10.  AMENDMENT.  At any time that any shares of Series B
Junior                                                  
         

 Participating Preferred Stock are outstanding, the Restated  Articles of                                                            

 Incorporation  of  the 
Corporation  shall not be amended
in any manner                                                             

 which  would  materially alter or change  the 
powers,  preferences  or                                                             

 special
rights of  the  Series B Junior Participating Preferred Stock so                                                            

 as to
affect them adversely  without the
affirmative vote of the holders                                                            

 of a
majority of the outstanding shares of Series B Junior Participating                                                            

 Preferred Stock, voting separately as a class.                                                                                     

                                                                                                                                     

         
11.  FRACTIONAL  SHARES.   
Series   B   Junior  
Participating                                                            

 Preferred Stock may be issued in fractions of a share that shall
entitle                                                            

 the  holder, 
in  proportion  to 
such  holder's fractional
shares,  to                                                             

 exercise
voting rights, receive dividends, 
participate in distributions                                                            

 and  to have the benefit of all other rights
of  holders  of  Series  B                                                             

 Junior
Participating Preferred Stock.                                                                                              

                                                                                                                                    

         
12.  CONSENT  FOR CERTAIN REPURCHASES OF COMMON STOCK
DEEMED TO                                                            

 BE
DISTRIBUTIONS.  Each  holder 
of  an  outstanding  shares of
Series B                                                            

 Junior
Participating Preferred Stock shall be deemed to  have consented,                                                            

 for
purposes of Sections 502, 503 and 506 of the Corporations  Code, 
to                                                  
         

 distributions made by the Corporation in connection with the
repurchase                                                             

 of  shares 
of  Common  issued 
to  or  held  by employees,
consultants,                                      
                     

 officers
and directors upon termination of their 
employment or services                                                            

 pursuant
to agreements providing for the rights of 
repurchase  between                                                             

 the
Corporation and such persons.                                                                                                  

                                                                                       
                                             

    
B.   The   number  
of  shares  constituting  the  Series  B 
Junior                                                            

 Participating Preferred Stock 
shall  be  70,000. 
Such number of shares                                                            

 may be
increased or decreased by resolution 
of  the Board of Directors;                                                           

 provided, however, that no decrease shall reduce the  number of Series B                                                            

 Junior
Participating Preferred Stock to less than the number  of  shares                                                           

 then  issued  and 
outstanding  plus the number of shares
issuable upon                                                             

 exercise
of outstanding rights, options  or  warrants or upon conversion                                                           

 of
outstanding securities issued by the Corporation.                                                                               

                                                                                                                                    

    
C.        None  of 
the  shares  of 
Series  B Junior  Participating                                                            

 Preferred Stock has been issued.                                                                                                   

                                                                                                                                    

         
IN   WITNESS   WHEREOF, 
the  undersigned  has 
executed   this                                                
           

 Certificate of Determination 
this  29th day of April, 1997 and
declares                                                           

 under
penalty of perjury that the matters 
set  forth  in 
the foregoing                                                            

 certificate are true to their knowledge.                                                                                           

                                                                                                 
                                   

                                                                                                                                    

                                                                                     
                                               

                                                                                                                                    

                                                                         
                                                           

                                                                                                                                    

 Name:                            
Name:                                                                                             

 Title:    PRESIDENT               Title: SECRETARY                                                                                 

                                                                                                                                     

                                                       EXHIBIT
B                                                                    

                                                                                                                                     

                     FORM OF RIGHT CERTIFICATE                                                                                      

                                                                                                                                     

 CERTIFICATE NO. R-______                   NO. OF RIGHTS:_______                                                                   

             
                                                                                                                       

         
NOT  EXERCISABLE  AFTER ___________ __, 2007 OR EARLIER                                                                   

         IF 
REDEMPTION  OR EXCHANGE  OCCURS.  
THE  RIGHTS  ARE                                                                   

         
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE                                                                    

         
ON THE TERMS SET  FORTH IN THE
RIGHTS AGREEMENT.  UNDER                                                                   

         
CERTAIN CIRCUMSTANCES,  AS  SET 
FORTH  IN  THE 
RIGHTS                                                                    

         
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON                                                                   

         
WHO  IS  OR BECOMES AN ACQUIRING PERSON (AS DEFINED  IN                                  
                                 

         
THE RIGHTS  AGREEMENT)  AND CERTAIN TRANSFEREES THEREOF                                                                   

         
WILL  BECOME  NULL 
AND VOID  AND  WILL 
NO  LONGER  BE                                                                   

         
TRANSFERABLE.                                                                                                  
           

                                                                                                                                    

                                                                                                             
                       

                         RIGHT CERTIFICATE                                                                                          

                                                                                                 
                                   

                    LOGIC DEVICES INCORPORATED                                                                                      

                                                                                     
                                               

         
This  certifies that
____________________________  or  registered                                                          

 assigns,
is the  registered owner of the number
of Rights set forth above,                                                          

 each of
which entitles the owner thereof, subject to the terms, provisions                                                          

 and
conditions of  the Rights Agreement,
dated as of April 29 1997, as the                                                          

 same may
be amended  from  time 
to time (the "Rights Agreement"), between                                                          

 Logic
Devices Incorporated, a California 
corporation (the "Company"), and                                                          

 American
Securities Transfer & Trust, Inc., 
as  Rights Agent (the
"Rights                                                         

 Agent"), to purchase from the Company at any time  after 
the Distribution                                                          

 Date (as
such term is defined in the Rights Agreement) and  prior  to 5:00                                                         

 P.M.,
San Jose, California time, on April 29, 2007 at the office or agency                                                          

 of  the Rights Agent designated for such
purpose, or of its successor  as                                                         

 Rights  Agent,  one 
one-hundredth of a fully paid non-assessable share of                                                          

 
Series  B  Junior 
Participating  Preferred  Stock, 
no  par  value  (the                                                          

 "Preferred
Stock"), of  the  Company at a purchase price of $12.00 per
one                                                          

 one-hundredth of a share of Preferred  Stock  (the "Purchase
Price"), upon                                                
         

 
presentation and surrender of this Right Certificate  with 
the  Form  of                                                          

 Election  to  Purchase 
duly  executed.  The number of Rights evidenced by                                                          

 this
Right Certificate (and the number of one one-hundredths of a share of                                                          

 Preferred Stock which may be purchased  upon  exercise  hereof) 
set forth                        
                                 

 above,
and the Purchase Price set forth above, are the number and Purchase                                                          

 
Price  as of May 1, 1997, based
on the Preferred Stock as constituted 
at                                                          

 such
date.   As  provided in the Rights Agreement, the Purchase Price, the                                                         

 number
of one one-hundredths  of  a 
share  of  Preferred 
Stock (or other                                                          

 
securities or property) which may be purchased upon the exercise  of 
the                                              
           

 Rights  and  the 
number of Rights evidenced by this Right Certificate are                                                          

 subject
to modification  and  adjustment 
upon  the  happening 
of certain                                                          

 events.                                                                                                                            

                                                                                                 
                                   

         
This Right Certificate is subject to all of the terms, provisions                                                          

 
and  conditions  of 
the  Rights  Agreement, 
which terms, provisions and          
                                               

 conditions are hereby incorporated herein by reference  and 
made  a  part                                                          

 
hereof  and to which Rights
Agreement reference is hereby made for a full                                                          

 description  of the rights,
limitations of rights, obligations, duties and                                                          

 immunities hereunder 
of  the Rights Agent, the Company
and the holders of                                                          

 the
Right Certificates.  Copies of the
Rights Agreement are on file at the                                                          

 principal executive offices 
of the Company and the above-mentioned office                                                          

 or
agency of the Rights Agent.   The  Company 
will  mail to the holder of                                                          

 this
Right Certificate a copy of the Rights Agreement without charge after                                                          

 receipt
of a written request therefor.                                                                                             

                                                                                                                                     

         
This Right Certificate, with or without other Right Certificates,                                                          

 upon
surrender at the office or agency of the Rights Agent  designated for                                                          

 
such  purpose,  may be exchanged for another Right
Certificate  or  Right                                                          

 Certificates
of like tenor and date evidencing Rights entitling the holder                                                          

 to
purchase a like  aggregate  number 
of shares of Preferred Stock as the                                                          

 
Rights  evidenced  by 
the  Right  Certificate   or   Right  Certificates                                                          

 surrendered shall have entitled such holder to purchase.   If 
this  Right                                                          

 
Certificate  shall  be exercised in part, the holder shall be
entitled to                                                         

 
receive  upon  surrender  
hereof  another  Right 
Certificate  or  Right                                                          

 Certificates for the number of whole Rights not exercised.                                                                         

                                                                                                                                    

         
Subject to the provisions 
of  the  Rights  Agreement, the
Rights                                                          

 
evidenced  by this Certificate
(i) may be redeemed by the  Company  at 
a                                                          

 redemption price of $.01 per Right or (ii) may be exchanged in
whole or in                                  
                       

 part for
shares  of  the  Company's  Common Stock, no par value per share,                                                          

 and/or
shares of Preferred Stock.                                                                                                   

                                                                                                                                    

         
No fractional shares of Preferred 
Stock  or Common Stock will
be                                                          

 
issued  upon  the exercise or exchange of any Right
or  Rights  evidenced                                                          

 hereby
(other than  fractions  of 
Preferred  Stock  which 
are  integral                                                          

 multiples  of  one one-hundredth of a share of Preferred
Stock, which may,                                                         

 at the
election  of the Company, be evidenced
by depository receipts), but                                                          

 in lieu
thereof a  cash  payment 
will  be made, as provided in the
Rights                                                          

 Agreement.                                                                                                                          

                                                                                                                                    

         
No holder of this Right Certificate, 
as  such, shall be entitled                                                          

 to vote
or receive dividends or be deemed for any purpose  the  holder  of                                                          

 the
Preferred Stock or of any other securities of the Company which may at                                                          

 
any  time  be 
issuable  on  the 
exercise  or exchange hereof, nor
shall                                                          

 
anything  contained in the Rights
Agreement or  herein  be 
construed  to                                                         

 confer
upon the holder hereof, as such, any of the rights of a shareholder                                                          

 of the
Company  or any right to vote for the
election of directors or upon                                                          

 any
matter submitted to shareholders at any meeting thereof, or to give or                                                
         

 withhold
consent to any corporate action, or to receive notice of meetings                                                          

 or other
actions  affecting shareholders (except
as provided in the Rights                                                          

 Agreement) or to receive 
dividends  or subscription
rights, or otherwise,                                                          

 until
the Right or Rights evidenced by 
this  Right Certificate shall
have                                                          

 been
exercised or exchanged as provided in the Rights Agreement.                                                                   

                                                                                       
                                             

         
This Right Certificate shall not be valid  or  obligatory for
any                                                         

 purpose
until it shall have been countersigned by the Rights Agent.                                                                 

                                                                                                                         
           

                                                                                                                                    

                                                                                                             
                       

                                                                                                                                    

                                                                                                 
                                   

         
WITNESS  the  facsimile signature of the proper
officers  of  the                                                          

 Company
and its corporate seal.  Dated as of
___________ __, 199__.                                                                 

                                                                                                                                    

                              LOGIC DEVICES INCORPORATED                                                                             

                                                                                                                                    

                              By:__________________________________                                                                  

                                   [Title]                                                                                          

 ATTEST:                                                                                                                             

                                                                                                                                    

                                                                                                                                     

                                                                                                                                    

 ____________________________________                                                                                               

 [Title]                                                                                                                            

             
                                                                                                                       

                                                                                                                                    

 Countersigned:                                                                                                                     

                                                                                                                           
         

                                                                                                                                    

 AMERICAN
SECURITIES TRANSFER & TRUST, INC., as Rights Agent                                                   
                     

                                                                                                                                    

                                                                                                   
                                 

                                                                                                                                    

 By:__________________________________                                                                                              

    
[Title]                                                                                                             
           

                                                                                                                                    

                                                                                                             
                       

            
Form of Reverse Side of Right Certificate                                                                              

                                                                                                 
                                   

                        FORM OF ASSIGNMENT                                                                                          

                                                                                     
                                               

        
(To be executed by the registered holder if such                                                                           

        
holder desires to transfer the Right Certificate)                                                                           

                                                                                                                                    

         
FOR  VALUE  RECEIVED  
__________________________  hereby  sells,                                                          

            
assigns             and             transfers             unto                                                          

 ______________________________________________________                                                                             

 _________________________________________________________________________                                                           

          
(Please print name and address of transferee)                                                                            

 _________________________________________________________________________                                                           

 
Rights  represented  by  this Right Certificate, together with all right,                                                          

 title
and interest therein,  and  does 
hereby  irrevocably constitute
and                                                          

             
                                                      appoint                                                          

                                                                                                                                    

 Attorney,  to 
transfer  said  Rights 
on  the  books of the within-named                                                          

 Company,
with full power of substitution.                                                                                 
         

                                                                                                                                    

 Dated: 
____________________________                                                                          
                     

                                                                                                                                    

                                                                                                   
                                 

                                  
____________________________________                                                              

                                        Signature                                                                                    

                                                                                                                                    

 Signature Guaranteed:                                                                                                              

                                                                                                                         
           

                                                                                                                                    

         
Signatures must be guaranteed by a bank,  trust  company,
broker,                                  
                       

 
dealer  or  other 
eligible  institution  participating  in  a recognized                                                          

 signature guarantee medallion program.                                                                                              

                                                                                                                                    

                                                                                     
                                               

                                                                                                                                    

                                                                         
                                                           

                              (To be completed)                                                                                     

                                                                                                                                     

         
The  undersigned  hereby 
certifies that the Rights evidenced 
by                                                          

 this
Right Certificate are not beneficially owned by, were not acquired by                                                          

 the
undersigned from, and are not being assigned to an Acquiring Person or                                                          

 an
Affiliate or Associate thereof (as defined in the Rights Agreement).                                                             

                                                                                                                                    

                                                                                                                                     

                                  
____________________________________                                                              

             
                          Signature                                                                                   

                                                                                                                                    

                                                                                                                                    

                                                                                                                           
         

                                                                                                                                    

      
Form of Reverse Side of Right Certificate - continued                                                   
                     

                                                                                                                                    

                   FORM OF ELECTION TO PURCHASE                                                    
                                 

                                                                                                                                    

          
(To be executed if holder desires to exercise                                                                            

          
Rights represented by the Right Certificate)                                                                              

                                                                                                                                    

 To LOGIC
DEVICES INCORPORATED:                                                                              
                       

                                                                                                                                    

         
The undersigned hereby irrevocably 
elects  to  exercise ________                                                          

 Rights  represented by this
Right Certificate to purchase the 
shares  of                                                           

 Preferred  Stock  (or 
other  securities  or 
property)  issuable upon the                                                          

 exercise
of such Rights and requests that certificates for  such shares of                                                          

 Preferred Stock (or such other securities) be issued in the name
of:                                                                

                                                                                                                                    

 _________________________________________________________________________                                                           

                  (Please print name and address)                                                                                   

                                                                                                                                     

 _________________________________________________________________________                                                           

                                                                                                                                     

 If  such number of Rights shall not be all the
Rights evidenced  by  this                                                           

 Right  Certificate,  a  new
Right Certificate for the balance remaining of                                                          

 such
Rights shall be registered in the name of and delivered to:                                                                   

             
                                                                                                                       

 Please
insert social security                                                                                                      

 or other
identifying number                                                                                                        

                                                                                                                           
         

 _________________________________________________________________________                                                           

                  (Please print name and address)                                                                                    

                                                                                                                                    

 _________________________________________________________________________                                                           

                                                                                                                                    

 Dated:________________________                                                                                                      

                                                                                                                                    

                                  
____________________________________                                                              

                                        Signature                                                                        
           

 
(Signature must conform to holder specified on Right Certificate)                                                                  

                                                                                                             
                       

 Signature Guaranteed:                                                                                                              

                                                                                                 
                                   

         
Signature must be 
guaranteed  by  a bank, trust company, broker,                                                          

 
dealer  or  other 
eligible  institution
participating  in  a 
recognized                                                          

 signature guarantee medallion program.                                                                                             

                                                                         
                                                           

      
Form of Reverse Side of Right Certificate - continued                                                                        

                                                                                                                                     

 _________________________________________________________________________                                                           

                         (To be completed)                                                                                           

                                                                                                                                    

         
The undersigned certifies that the Rights evidenced by this Right                                                          

 Certificate are not beneficially 
owned  by,  and were not acquired by the                                                          

 undersigned from, an Acquiring Person or an Affiliate or Associate
thereof                                                          

 (as
defined in the Rights Agreement).                                                                                              

             
                                                                                                                       

                                                                                                                                    

                                  ____________________________________                                                              

                                        Signature                                                                          
         

                                                                                                                                    

 _________________________________________________________________________                                                           

                                                                                                                                    

                                                                                                   
                                 

                              NOTICE                                                                                                

                                                                                                                                     

         
The signature in the Form of Assignment 
or  Form  of Election to                                                          

 Purchase, as the case may be, must conform to the name as written
upon the                                                          

 face of
this Right Certificate in every particular, without alteration  or                                                          

 enlargement or any change whatsoever.                                                                                              

                                                                                                                                    

         
In  the  event  the  certification set forth above in the Form
of                                                         

 Assignment or the Form of Election to Purchase, as the case may
be, is not                                                          

 completed,
such Assignment or Election to Purchase will not be honored.                                                             

                                                                                                                           
         

                                                              
EXHIBIT C                                                             

                                                                                                               
                     

         
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS                                                                   

         
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON                                                                    

         
WHO  IS  OR  BECOMES AN ACQUIRING
PERSON (AS DEFINED IN                                                                   

         
THE RIGHTS AGREEMENT)  AND  CERTAIN TRANSFEREES THEREOF                                                                    

         
WILL  BECOME  NULL 
AND  VOID AND  WILL 
NO  LONGER  BE                                                                   

         
TRANSFERABLE.                                                                                                              

                                                                                                                                    

                   SUMMARY OF RIGHTS TO PURCHASE                                                                                     

                   SHARES OF PREFERRED STOCK OF                                                                                     

                    LOGIC DEVICES INCORPORATED                                                                                       

                                                                                                                                    

         
On  April  29, 1997, the Board  of 
Directors  of  Logic 
Devices                                                          

 Incorporated (the "Company")  declared  a  dividend of one preferred share                                                          

 purchase
right (a "Right") for each outstanding  share of common stock, no                                                          

 par
value per share, of the Company (the "Common Stock").  The dividend is                                                          

 payable
on May 1, 1997 (the "Record Date") to the  shareholders  of
record                                                          

 on that
date.  Each Right entitles the
registered holder to purchase  from                                                         

 the
Company one one-hundredth of a share of Series B Junior Participating                                                          

 Preferred Stock, no par value, of the Company (the "Preferred
Stock") at a                                                          

 price  of  $12.00 per one one-hundredth of a share of
Preferred Stock (the                                                          

 "Purchase Price"), 
subject  to  adjustment. 
The description and terms of                                                          

 the
Rights are set forth in a Rights Agreement dated as of April 30, 1997,                                                          

 as the
same may be amended from time  to  time 
(the  "Rights
Agreement"),                                                          

 between
the Company and American Securities Transfer &  Trust,  Inc.,  as                                                          

 Rights
Agent (the "Rights Agent").                                                                                                  

                                                                                                                                    

         
Until  the  earlier 
to  occur  of (i) 10 days following a public                                                          

 announcement that a person or group of affiliated  or 
associated  persons                                                          

 
(with  certain  exceptions 
as  set  forth  in  the 
Rights Agreement, an                                                          

 "Acquiring Person") has acquired beneficial ownership
of  15% 
or  more of                                                          

 the
outstanding shares of Common Stock or (ii) 10 business days (or  such                                                          

 later  date as may be
determined by action of the Board of Directors prior                                                          

 to
such  time  as  any  person 
or  group of affiliated persons
becomes an                                                          

 Acquiring Person) following the commencement  of, 
or  announcement  of an                                                          

 
intention  to  make, a tender offer or exchange offer the
consummation of                                                          

 which
would result in the beneficial ownership by a person or group of 15%                                                          

 or more
of the outstanding  shares  of 
Common  Stock (the earlier of
such                                                         

 dates
being called the "Distribution Date"), the Rights will be
evidenced,                                                          

 with
respect to any of the Common Stock certificates outstanding as of the                                                          

 Record
Date, by such Common Stock certificate together with a copy of this                                                
         

 Summary
of Rights.                                                                                                                 

                                                                                                               
                     

         
The Rights Agreement provides that, until  the  Distribution
Date                                                         

 (or
earlier expiration of the Rights), the Rights will be transferred with                                                          

 and only
with the Common Stock.  Until the
Distribution Date  (or  earlier                                                          

 expiration of the Rights), new Common Stock certificates issued
after  the                                                          

 Record
Date upon transfer or new issuances of Common Stock will contain  a                                                          

 
notation  incorporating  the 
Rights  Agreement  by reference.  Until the                                                          

 Distribution Date (or earlier expiration of the Rights), the
surrender for                                                          

 transfer
of any certificates for shares of Common Stock 
outstanding as of                                                          

 the
Record Date, even without such notation or a copy of this  Summary 
of                                  
                       

 
Rights,  will  also constitute the transfer of the Rights
associated with                                                         

 the
shares of Common  Stock  represented 
by such certificate.  As soon
as                                                          

 
practicable  following  the 
Distribution  Date,   separate 
certificates                                                          

 evidencing the Rights ("Right Certificates") will
be  mailed to holders of                                                          

 record
of the Common Stock as of the close of business on the Distribution                                                          

 Date and
such separate Right Certificates alone will evidence the Rights.                                                           

                                                                                                                                    

         
The Rights are not exercisable until the Distribution  Date. 
The                                                          

 Rights
will expire on April 29, 2007 (the "Final Expiration Date"),
unless                                                          

 the
Final Expiration Date is advanced or extended or unless the Rights are                                                          

 
earlier  redeemed  or exchanged by the Company, in each case as
described                                                         

 below.                                                                                                                              

                                                                                                                                    

         
The Purchase Price payable, and the number of shares of Preferred                                                          

 Stock or
other securities  or  property 
issuable,  upon  exercise 
of the                                                          

 Rights
is subject to adjustment from time to time to prevent dilution  (i)                                                          

 in  the 
event  of  a stock dividend on, or a subdivision,
combination or                                                          

 reclassification
of, the  Preferred  Stock, (ii) upon the grant to holders                                                          

 of the
Preferred Stock of certain rights 
or  warrants to subscribe for
or                                                
         

 
purchase  Preferred  Stock 
at  a price, or securities  convertible 
into                                                          

 Preferred Stock with a conversion price, less than the
then-current market                                                          

 price of
the Preferred Stock or (iii)  upon the
distribution to holders of                                                          

 
the  Preferred Stock of evidences
of indebtedness  or  assets 
(excluding                        
                                 

 regular  periodic  cash dividends or dividends payable in
Preferred Stock)                                                         

 or of
subscription rights  or  warrants 
(other  than  those 
referred  to                                                          

 above).                                                                                                                 
           

                                                                                                                                    

         
The  number of outstanding Rights
is subject to adjustment in the                                                          

 event of
a stock  dividend on the Common Stock
payable in shares of Common                                                          

 Stock or
subdivisions,  consolidations or
combinations of the Common Stock                                                          

 occurring, in any such case, prior to the Distribution Date.                                                                       

                                                                                     
                                               

         
Shares of Preferred Stock purchasable upon exercise of the Rights                                                          

 will not
be redeemable.   Each  share of Preferred Stock will be entitled,                                                          

 when,
as and if declared, to a preferential 
quarterly  dividend  payment                                                          

 equal  to  the 
greater  of:  (a) 
$1.00  per  share and (b) 100 times the                                                          

 dividend
declared per share of Common Stock.  In
the event of liquidation,                                                          

 
dissolution or winding up of the Company, the holders  of 
the  Preferred                                                          

 Stock  will be entitled to
a preferential payment equal to the greater of:                                                          

 (a)
$100  per  share  (plus  any accrued but unpaid dividends) and (b)
100                                                          

 times
the payment made per share of Common Stock. 
Each share of Preferred                                                          

 
Stock  will  have 
100 votes, voting  together  with 
the  Common  Stock.                                                          

 Finally,
in the event of any merger, consolidation or other transaction in                                                          

 which
outstanding shares  of Common Stock are
converted or exchanged, each                                                          

 share of
Preferred Stock will  be entitled to
receive 100 times the amount                                                          

 received  per 
share of Common Stock.  
These  rights  are 
protected  by                                                          

 customary antidilution provisions.                                                                                        
         

                                                                                                                                    

         
Because   of  the 
nature  of  the 
Preferred  Stock's  dividend,                                                          

 liquidation and voting rights, the value of the one one-hundredth
interest                                                          

 in a
share of Preferred  Stock  purchasable 
upon  exercise  of each Right                                                          

 should
approximate the value of one share of Common Stock.                                                                         

                                                                                       
                                             

         
In the event that any person or group of affiliated or associated                                                          

 
persons  becomes an Acquiring
Person, each holder of a Right, other 
than                                                          

 Rights
beneficially  owned  by 
the Acquiring Person (which will thereupon                                                          

 become
void), will thereafter have the right to receive upon exercise of a                                                          

 Right
that number of shares of Common 
Stock  having a market value of
two                                                         

 times
the exercise price of the Right or shares 
of  Preferred Stock (or a                                                          

 
series  of  the 
Company's  preferred  stock 
having  equivalent  rights,                                                          

 preferences and privileges) equivalent in value thereto.                                                                           

                                                                                                                                    

          In 
the  event  that, 
after  a  person 
or group has  become  an                                                          

 Acquiring Person, the Company is acquired in a merger  or 
other  business                                                    
     

 
combination  transaction  or 
50%  or  more of its consolidated assets or                                                          

 earning
power are sold, proper provisions will be made so that each holder                                                          

 of a
Right (other than Rights beneficially 
owned  by  an Acquiring Person                                                          

 
which  will have become void)
will thereafter have the right  to  receive                                                          

 upon
the  exercise of a Right that number of
shares of common stock of the                                                          

 person
with  whom the Company has engaged in
the foregoing transaction (or                
                                         

 its
parent) that  at  the 
time of such transaction have a market value of                                                          

 two
times the exercise price of the Right.                                                                                          

                                                                                                                                    

         
At any time after any person or group becomes an Acquiring Person                                                          

 and
prior to the earlier of  one  of 
the events described in the previous                                                          

 paragraph or the acquisition by such Acquiring  Person  of  50% or more of                                                          

 
the  outstanding  shares of Common Stock, the Board of
Directors  of  the                                                          

 Company
may exchange the Rights (other than Rights owned by such Acquiring                                                          

 Person
which will have  become  void), 
in whole or in part, for shares of                                                          

 Common
Stock or Preferred Stock (or a series 
of  the  Company's preferred                                                          

 
stock  having  equivalent 
rights,  preferences  and privileges),  at  an                                                          

 
exchange  ratio  of one share of Common Stock, or a
fractional  share  of                                                          

 Preferred Stock (or 
other  preferred  stock) equivalent in value thereto,                                                          

 per
Right.                                                                                                                         

                                                                                                                         
           

         
With certain exceptions, no adjustment in the Purchase Price will                                                          

 be
required until cumulative adjustments require an adjustment of at least                                                          

 1% in
such Purchase Price.  No fractional  shares 
of  Preferred  Stock or                                                          

 Common
Stock will be issued (other than fractions of Preferred Stock which                                                          

 are
integral multiples of one one-hundredth of a share of Preferred Stock,                                                          

 
which  may,  at 
the  election of the Company, be
evidenced by depositary                                                          

 receipts), and in lieu thereof an adjustment in cash will be made
based on                                                          

 the
current market price of the Preferred Stock or the Common Stock.                                                                

                                                                                                                                    

         
At any time prior  to  the time an Acquiring Person becomes
such,                                                          

 the
Board of Directors of the Company  may
redeem the Rights in whole, but                                                          

 not in
part, at a price of $.01 per Right 
(the  "Redemption
Price").  The                                                          

 redemption of the Rights may be made effective at such time, on
such basis                                                          

 and with
such conditions as the Board of Directors 
in its sole discretion                                                          

 may
establish.  Immediately upon any
redemption of the  Rights,  the right                                                          

 to
exercise the Rights will terminate and the only right of the holders of                                                          

 Rights
will be to receive the Redemption Price.                                                                                    

             
                                                                                                                       

         
For  so long as the Rights are
then redeemable, the Company  may,                                                         

 except
with respect to the redemption price, amend the Rights Agreement in                                                          

 any
manner.  After  the  Rights are no longer
redeemable, the Company may,                                                          

 except
with respect to the redemption price, amend the Rights Agreement in                                                          

 any
manner that does not adversely  affect
the interests of holders of the                                                          

 Rights.                                                                                                                            

                                                                                                   
                                 

         
Until a Right is exercised or 
exchanged,  the holder thereof,
as                                                         

 
such,  will  have 
no rights as a shareholder of the Company,  including,                                                          

 without
limitation, the right to vote or to receive dividends.                                                                      

                                                                                                                                    

         
A copy of the Rights Agreement has been filed with the Securities                                                          

 and
Exchange Commission  as an Exhibit to a
Registration Statement on Form                                                          

 8-A
dated May 2, 1997.   A copy of the
Rights Agreement is available                                                                

 free of
charge from the Company.   This  summary description of the Rights                                                         

 
does  not  purport to be complete and is qualified  in  its  entirety 
by                                                          

 reference to the Rights Agreement, as the same may be amended from
time to                                                          

 time,
which is hereby incorporated herein by reference.                                                                             

 EXHIBIT
2                                                                                                                         

 PRESS
RELEASE                                                                                                                      

                                                                                                                                    

                         LOGIC DEVICES INCORPORATED                                                                                 

                      ADOPTS SHAREHOLDERS' RIGHTS PLAN                                                                              

                                                                                                                                     

    
April  29,  1997, 
Sunnyvale, California.   Logic
Devices Incorporated                                                          

 (NASDAQ:
LOGC) announced  today that it has
adopted a Shareholders' Rights                                                          

 Plan.  The Plan is
intended  to  discourage  persons,  groups and entities                                                          

 from
acquiring large stakes in Logic Devices or making a  tender offer for                                                          

 its
stock without first convincing the Board of Directors that such action                                                          

 is in
the best interests of Logic Devices and its shareholders.                                                                    

                                                                                                                           
         

     In
general, the Rights Plan provides that if a person, group or entity                                                          

 
acquires  a 15% or larger stake
in Logic Devices, or announces  a  tender                                                          

 offer
and Logic  Devices'  Board chooses not to redeem the Rights
within a                                                         

 specified time period, all holders  of  Rights, other than the
15% or more                                                          

 shareholder or the tender offeror, will be  able 
to  purchase  a 
certain                                                          

 amount
of Logic Devices' common stock for one half of its market price.                                                             

                                                                                                                                    

    
The  Rights  Plan 
provides for the distribution of one Right for each                                                          

 share of
Logic Devices'  outstanding  common stock as of May 1, 1997.  The                                                          

 Rights
presently have no economic value 
because  they cannot be
exercised                                                         

 unless
and until a person, group or entity acquires 
15%  or more of Logic                                                          

 Devices'
common stock or announces a tender offer. 
The Plan  also permits                                                         

 Logic
Devices' Board of Directors to redeem the Rights for one  cent 
per                                                          

 Right
under various circumstances.                                                                                                 

                                                                                     
                                               

    
William  Volz, Logic Devices'
President, said "Studies have shown that                                                          

 Rights
Plans can  enhance shareholder value in
a variety of ways.  That is                                                          

 why
hundreds of publicly-held companies have adopted them.  Logic Devices'                                                          

 Rights
Plan was adopted  simply  as 
a  precautionary  measure 
to  better                                                          

 
position  our  shareholders  to  realize  the 
long  term  value of their                                                          

 
investment,  and  to 
provide  an additional level of
protection  against                                                          

 coercive
or abusive tactics."                                                                                                      

                                                                                                                                     

     Mr.
Volz also said that Logic  Devices'
Rights Plan was not adopted in                                                          

 response
to any specific event or circumstance. 
The Rights will expire no                                                          

 later
than ten years from the date of 
the  Plan's adoption.  The creation                                                          

 of the
Rights is not a taxable event for Logic Devices' shareholders.                                                               

                                                                                                                                    

    For additional information, please
contact  William Volz, President or                                                          

 Todd
Ashford, CFO at (408) 542 5400.                                                                                      
         

                                                                                                                                    

    
LOGIC  Devices  develops 
and  markets  high 
performance   integrated                                                          

 
circuits  which address
computational intensive digital signal processing                                                          

 application  in  industrial 
and military markets.  Interested
customer or                                                          

 investors may contact the Company 
at:  Logic  Devices 
Incorporated, 1320                                                          

 Orleans
Drive, Sunnyvale, CA  94089, (408)
542-5400.                                                                               

                                                                                                                         
           

                                                                                                                                    

</TEXT>                                                                                                      
                       

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