<DOCUMENT>

EX-4.1 3 rightsagreement1.htm RIGHTS AGREEMENT, DATED APRIL 30, 1997 <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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

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).

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.

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>

</DOCUMENT>

</SUBMISSION>